Florida | 65-0701248 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) |
4400 Biscayne Boulevard, 12th Floor | |
Miami, Florida | 33137 |
(Address of principal executive offices) | (Zip Code) |
Title of each class | Name of each exchange on which registered |
Common Stock, par value $.0001 per share | NYSE American |
8.00% Series A Cumulative Redeemable Preferred Stock, Liquidation Preference $25.00 per share | NYSE American |
6.50% Senior Notes due 2027 | NYSE American |
Page | ||
PART 1 | ||
PART II | ||
PART III | ||
PART IV | ||
• | Provide our advisors with a differentiated independent platform. We believe we have built a meaningfully differentiated platform by offering our independent financial advisors the unique and valued benefits of the "Ladenburg Advantage" -- access to Ladenburg’s wealth management division, capital markets products, investment banking services, proprietary investment research and fixed income trading desk, Highland's insurance solutions, LTAIS' marketing strategies, product expertise and back-office processing for fixed and equity-indexed annuities, and Premier Trust's trust services and planning capabilities. |
• | Provide technological solutions to independent financial advisors and home-office employees. We believe that it is imperative that our independent advisory and brokerage firms possess state-of-the-art technology so their employees and independent financial advisors can effectively transact, facilitate, measure and record business activity in a timely, accurate and efficient manner. By continuing our commitment to provide a highly capable technology platform to process business, we believe our independent advisory and brokerage firms can achieve economies of scale and potentially reduce the need to hire additional back-office personnel. We continue to automate time-consuming processes to assist our advisors in their efforts to improve efficiency and accuracy. |
• | Assist financial advisors to expand their business. Our independent advisory and brokerage firms are aligned with their financial advisors in seeking to increase their revenues and improve efficiency. Each of our independent advisory and brokerage firms undertakes initiatives to assist their financial advisors with client recruitment, education, compliance and product support. Our practice management programs accelerate our advisors' efforts to grow their businesses by providing customized coaching and consulting services, study groups and conferences, educational workshops, publications and web resources and other productivity tools. Our independent advisory and brokerage firms also focus on improving back-office support to allow financial advisors more time to focus on serving their clients, rather than attending to administrative matters. |
• | Build recurring revenue. We have recognized the trend toward increased investment advisory business and are focused on providing fee-based investment advisory services, which may better suit certain clients. While these fee-based accounts generate substantially lower first year revenue than accounts invested in most commission-based products, the recurring nature of these fees provides a platform that generates recurring revenue. |
• | Expand our financial advisor base through recruiting and acquisitions. Each of our independent advisory and brokerage firms actively recruits experienced financial professionals. These efforts are supported by advertising, targeted direct mail and outbound telemarketing. Our independent firms’ recruitment efforts are enhanced by their ability to serve a variety of independent advisor models, including independent financial advisors, registered investment advisors and independent registered investment advisors. Securities America has developed strong expertise in transitioning large groups of financial advisors as part of transactions whereby the firm acquires certain assets of small brokerage firms. Securities America has completed 10 such deals since 2008, including two in 2016, and has developed detailed processes, led by a cross-departmental team of more than 25 people, to transition such groups effectively. We anticipate there will continue to be opportunities to acquire groups of financial advisors through transactions of this type, or otherwise, as increasing compliance costs disproportionately impact smaller brokerage firms and the level of services and resources they can provide to their advisors. |
• | Acquire independent advisory and brokerage firms and complementary businesses. We also may pursue the acquisition of other independent advisory and brokerage firms and other complementary businesses. Our ability to realize growth through acquisitions depends, among other things, on the availability of suitable candidates and our ability to successfully negotiate favorable terms. There can be no assurance that we will be able to consummate any such acquisitions. Further, the costs associated with the integration of new businesses and personnel may be greater than anticipated. |
• | expert wealth management advice; |
• | market analysis; |
• | due diligence; |
• | fund selection and asset allocation; and |
• | diversification strategies. |
• | reviews and analyzes general market conditions and industry groups; |
• | issues written reports on companies; |
• | furnishes information to retail and institutional customers; and |
• | responds to inquiries from customers and advisors. |
• | sales methods and supervision; |
• | trading practices among broker-dealers; |
• | use and safekeeping of customers’ funds and securities; |
• | capital structure of securities firms; |
• | record keeping; |
• | conduct of directors, officers and employees; and |
• | advertising, including regulations related to telephone solicitation. |
• | limitations on the ability of investment advisors to charge clients performance-based or non-refundable fees; |
• | record-keeping and reporting requirements; |
• | disclosure requirements; |
• | limitations on principal transactions between an advisor or its affiliates and advisory clients; and |
• | general anti-fraud prohibitions. |
• | a market downturn could lead to a decline in the volume of transactions executed for customers and, therefore, to a decline in the revenues we receive from commissions and spreads; |
• | low interest rates adversely impact interest sharing revenues received from our clearing firms and other cash sweep programs; |
• | adverse changes in the market could lead to a reduction in revenues from asset management fees. Even in the absence of a market downturn, below-market investment performance by portfolio managers could reduce asset management revenues and assets under management and result in reputational damage that might make it more difficult to attract new investors; |
• | unfavorable financial or economic conditions could reduce the number and size of transactions in which we provide underwriting, financial advisory and other services. Our investment banking revenues, in the form of financial advisory and underwriting or placement fees, are directly related to the number and size of the transactions in which we participate and therefore could be adversely affected by unfavorable financial or economic conditions; |
• | increases in credit spreads, as well as limitations on the availability of credit, can affect our ability to borrow on a secured or unsecured basis, which may adversely affect our liquidity and results of operations; |
• | adverse changes in the market could lead to losses from principal transactions. To the extent that we own assets, i.e., have long positions, a downturn in the market could result in losses from a decline in the value of those long positions. Conversely, to the extent that we have sold assets that we do not own, i.e., have short positions, an upturn in the market could expose us to potentially unlimited losses as we attempt to cover our short positions by acquiring assets in a rising market; and |
• | new or increased taxes on compensation payments such as bonuses or securities transactions may adversely affect our financial results. |
• | requires us to dedicate a substantial portion of cash flows from operations to the payment of debt service and dividends, resulting in less cash available for operations and other purposes; and |
• | limits our ability to obtain additional financing for working capital, regulatory capital requirements, acquisitions or general corporate purposes. |
• | recommending transactions that are not suitable for the client or in the client’s best interests; |
• | engaging in fraudulent or otherwise improper activity; |
• | binding us to transactions that exceed authorized limits; |
• | hiding unauthorized or unsuccessful activities, resulting in unknown and unmanaged risks or losses; |
• | improperly using or disclosing confidential information; |
• | failure, whether negligent or intentional, to effect securities transactions on behalf of clients; |
• | failure to perform reasonable diligence on a security, product or strategy; |
• | failure to supervise a financial advisor; |
• | failure to provide insurance carriers with complete and accurate information; |
• | engaging in unauthorized or excessive trading to the detriment of clients; |
• | engaging in improper transactions with clients; or |
• | otherwise not complying with laws or our control procedures. |
• | trading counterparties; |
• | customers; |
• | clearing agents; |
• | other broker-dealers; |
• | exchanges; |
• | clearing houses; and |
• | other financial intermediaries as well as issuers whose securities we hold. |
• | holding securities of third parties; |
• | executing securities trades that fail to settle at the required time due to non-delivery by the counterparty or systems failure by clearing agents, exchanges, clearing houses or other financial intermediaries; and |
• | extending credit to clients through bridge or margin loans or other arrangements. |
• | the volatility of domestic and international financial, bond and stock markets; |
• | extensive governmental regulation; |
• | litigation; |
• | intense competition; |
• | poor performance of investment products our advisors recommend or sell; |
• | substantial fluctuations in the volume and price level of securities; and |
• | dependence on the solvency of various third parties. |
• | sales methods and supervision; |
• | trading practices among broker-dealers; |
• | use and safekeeping of customers’ funds and securities; |
• | capital structure of securities firms; |
• | record keeping; |
• | conduct of directors, officers and employees; and |
• | advertising, including regulations related to telephone solicitation. |
• | censure; |
• | fines; |
• | civil penalties, including treble damages in the case of insider trading violations; |
• | the issuance of cease-and-desist orders; |
• | the termination or suspension of our broker-dealer activities; |
• | the suspension or disqualification of our officers, employees or financial advisors; or |
• | other adverse consequences. |
• | variations in quarterly operating results; |
• | general economic and business conditions, including conditions in the securities brokerage and investment banking markets; |
• | prevailing interest rates, increases in which may have an adverse effect on the market price of the Series A Preferred Stock and senior notes; |
• | trading prices of similar securities; |
• | the annual yield from dividends on the Series A Preferred Stock and interest on the senior notes as compared to yields on other comparable financial instruments; |
• | our announcements of significant contracts, milestones or acquisitions; |
• | our relationships with other companies; |
• | our ability to obtain needed capital; |
• | additions or departures of key personnel; |
• | the initiation or outcome of litigation or arbitration proceedings; |
• | sales of common stock, conversion of securities convertible into common stock, exercise of options and warrants to purchase common stock or termination of stock transfer restrictions; |
• | our level of indebtedness; |
• | legislation or regulatory policies, practices or actions; |
• | changes in financial estimates by securities analysts; and |
• | fluctuations in stock market prices and volume. |
Subsidiary | Location | Approximate Square Footage | Lease Expiration Date | |||
Securities America | La Vista, NE | 81,424 | January 2030 | |||
Triad | Norcross, GA | 21,835 | February 2025 | |||
SSN | Knoxville, TN | 15,000 | March 2020 (1) | |||
Investacorp | Miami, FL | 11,475 | September 2020 (2) | |||
KMS | Seattle, WA | 8,575 | September 2024 | |||
Premier Trust | Las Vegas, NV | 14,455 | September 2019 |
(1) | The lessor is Cogdill Capital LLC, an entity of which SSN's CFO and CEO are members. |
(2) | The lessor is Frost Real Estate Holdings, LLC, an entity affiliated with Dr. Phillip Frost, our Chairman of the Board and principal shareholder. |
ITEM 5. | MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. |
2017 | 2016 | |||||||||||||||
Period | High | Low | High | Low | ||||||||||||
First Quarter | $ | 2.59 | $ | 2.05 | $ | 2.72 | $ | 1.86 | ||||||||
Second Quarter | 2.82 | 2.11 | 2.80 | 2.25 | ||||||||||||
Third Quarter | 2.98 | 2.21 | 2.56 | 2.07 | ||||||||||||
Fourth Quarter | 3.48 | 2.75 | 2.87 | 1.63 |
Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs(1) | |||||||||
October 1 to October 31, 2017 | 96,500 | $ | 2.93 | 96,500 | 8,324,825 | ||||||||
November 1 to November 30, 2017 | 88,500 | 3.21 | 88,500 | 8,236,325 | |||||||||
December 1 to December 31, 2017 | 86,540 | 3.20 | 86,540 | 8,149,785 | |||||||||
Total | 271,540 | $ | 3.10 | 271,540 |
(1) | In March, 2007, our board of directors authorized the repurchase of up to 2,500,000 shares of our common stock from time to time on the open market or in privately negotiated transactions depending on market conditions. In each of October 2011, November 2014 and November 2016, our board approved an amendment to the repurchase program to permit the repurchase of an additional 5,000,000 shares, 10,000,000 shares and 10,000,000 shares, respectively. As of |
Year Ended December 31, | |||||||||||||||||||||
2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||||
(In thousands, except share and per share amounts) | |||||||||||||||||||||
Operating Results: | |||||||||||||||||||||
Total revenues | $ | 1,268,152 | $ | 1,106,953 | $ | 1,152,118 | $ | 921,253 | (1) | $ | 793,116 | ||||||||||
Total expenses | 1,266,991 | 1,119,023 | 1,163,868 | 911,259 | 790,591 | ||||||||||||||||
Income (loss) before item shown below | 1,161 | (12,070 | ) | (11,750 | ) | 9,994 | 2,525 | ||||||||||||||
Change in fair value of contingent consideration | 19 | (216 | ) | 55 | 12 | (121 | ) | ||||||||||||||
Income (loss) before income taxes | 1,180 | (12,286 | ) | (11,695 | ) | 10,006 | 2,404 | ||||||||||||||
Net income (loss) | 7,682 | (22,311 | ) | (11,213 | ) | 33,352 | (522 | ) | |||||||||||||
Per common and equivalent share: | |||||||||||||||||||||
(Loss) income per common share - basic | $ | (0.13 | ) | $ | (0.29 | ) | $ | (0.21 | ) | $ | 0.09 | $ | (0.04 | ) | |||||||
(Loss) income per common share - diluted | $ | (0.13 | ) | $ | (0.29 | ) | $ | (0.21 | ) | $ | 0.08 | $ | (0.04 | ) | |||||||
Cash dividend declared per common share | $ | 0.02 | $ | — | $ | — | $ | — | $ | — | |||||||||||
Basic weighted average common shares | 193,064,550 | 182,987,850 | 183,660,993 | 182,768,494 | 182,295,476 | ||||||||||||||||
Diluted weighted average common shares | 193,064,550 | 182,987,850 | 183,660,993 | 206,512,437 | 182,295,476 | ||||||||||||||||
Balance Sheet Data: | |||||||||||||||||||||
Total assets | $ | 632,025 | $ | 546,003 | $ | 574,105 | $ | 510,758 | $ | 360,820 | |||||||||||
Total liabilities | 261,634 | 183,502 | 198,074 | 174,287 | 167,407 | ||||||||||||||||
Shareholders’ equity | 370,379 | 362,474 | 376,002 | 336,460 | 193,361 | ||||||||||||||||
Other Data: | |||||||||||||||||||||
Book value per common share | $ | 1.87 | $ | 1.87 | $ | 2.06 | $ | 1.82 | $ | 1.06 |
(1) | Includes $26,164 of revenue from Highland (acquired July 31, 2014) and $19,840 of revenue from KMS (acquired October 15, 2014). |
ITEM 7. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. |
Year Ended December 31, | |||||||||||||
2017 | 2016 | 2015 | |||||||||||
Total revenues | $ | 1,268,152 | $ | 1,106,953 | $ | 1,152,118 | |||||||
Total expenses | 1,266,991 | 1,119,023 | 1,163,868 | ||||||||||
Income (loss) before income taxes | 1,180 | (12,286 | ) | (11,695 | ) | ||||||||
Net income (loss) attributable to the Company | 7,697 | (22,269 | ) | (11,151 | ) | ||||||||
Reconciliation of net income (loss) attributable to the Company to EBITDA, as adjusted: | |||||||||||||
Net income (loss) attributable to the Company | 7,697 | (22,269 | ) | (11,151 | ) | ||||||||
Less: | |||||||||||||
Interest income | (506 | ) | (672 | ) | (254 | ) | |||||||
Change in fair value of contingent consideration | (19 | ) | 216 | (55 | ) | ||||||||
Add: | |||||||||||||
Loss on extinguishment of debt | — | — | 252 | ||||||||||
Interest expense | 2,710 | 4,262 | 5,169 | ||||||||||
Income tax (benefit) expense | (6,502 | ) | 10,025 | (482 | ) | ||||||||
Depreciation and amortization | 28,835 | 28,334 | 27,077 | ||||||||||
Non-cash compensation expense | 5,539 | 5,311 | 8,759 | ||||||||||
Amortization of retention and forgivable loans | 7,396 | 5,472 | 9,238 | ||||||||||
Financial advisor recruiting expense | 5,721 | 1,882 | 2,387 | ||||||||||
Acquisition-related expense | 3,469 | 1,357 | 940 | (4) | |||||||||
Other | 1,661 | (1) | 1,853 | (2) | 2,165 | (3) | |||||||
EBITDA, as adjusted | $ | 56,001 | $ | 35,771 | $ | 44,045 |
Year Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Revenues: | |||||||||||
Independent advisory and brokerage services | $ | 1,140,380 | $ | 1,003,282 | $ | 1,035,365 | |||||
Ladenburg | 66,680 | 49,425 | 61,841 | ||||||||
Insurance Brokerage | 57,132 | 50,483 | 49,573 | ||||||||
Corporate | 3,960 | 3,763 | 5,339 | ||||||||
Total revenues | $ | 1,268,152 | $ | 1,106,953 | $ | 1,152,118 | |||||
Income (loss) before income taxes: | |||||||||||
Independent advisory and brokerage services | $ | 19,858 | $ | 15,071 | $ | 7,735 | |||||
Ladenburg | 6,346 | (3,674 | ) | 3,095 | |||||||
Insurance Brokerage | (5,338 | ) | (6,074 | ) | (6,701 | ) | |||||
Corporate (1) | (19,686 | ) | (17,609 | ) | (15,824 | ) | |||||
Total income (loss) before income taxes | $ | 1,180 | $ | (12,286 | ) | $ | (11,695 | ) | |||
EBITDA, as adjusted (2) | |||||||||||
Independent advisory and brokerage services | $ | 59,756 | $ | 47,977 | $ | 46,462 | |||||
Ladenburg | 8,115 | (1,676 | ) | 6,052 | |||||||
Insurance Brokerage | 2,698 | 2,255 | 1,170 | ||||||||
Corporate | (14,568 | ) | (12,785 | ) | (9,639 | ) | |||||
Total EBITDA, as adjusted | $ | 56,001 | $ | 35,771 | $ | 44,045 |
(1) | Includes interest expense, compensation, professional fees and other general administrative expenses. |
(2) | See Note 19, "Segment Information," to the consolidated financial statements included in Part II, Item 8 of this annual report on Form 10-K for a reconciliation of income (loss) before income taxes to EBITDA, as adjusted. |
Year Ended December 31, | ||||||||||||
2017 | 2016 | 2015 | ||||||||||
Net cash provided by (used in): | ||||||||||||
Operating activities | $ | 16,215 | $ | 14,246 | $ | 19,319 | ||||||
Investing activities | (9,824 | ) | (11,229 | ) | (28,211 | ) | ||||||
Financing activities | 66,782 | (22,764 | ) | 24,482 | ||||||||
Net increase (decrease) in cash and cash equivalents | $ | 73,173 | $ | (19,747 | ) | $ | 15,590 | |||||
Cash and cash equivalents, beginning of period | 98,930 | 118,677 | 103,087 | |||||||||
Cash and cash equivalents, end of period | $ | 172,103 | $ | 98,930 | $ | 118,677 |
Payments Due By Period | ||||||||||||||||||||
Total | Less than 1 year | 1 – 3 years | 4 – 5 years | After 5 years | ||||||||||||||||
Revolving credit agreement with affiliate of our principal shareholder (1) | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||
Notes payable to clearing firm under forgivable loans (2) | 2,284 | 2,284 | — | — | — | |||||||||||||||
Operating leases (3) | 73,617 | 7,632 | 16,311 | 13,105 | 36,569 | |||||||||||||||
Deferred compensation plan (4) | 19,617 | 908 | 6,348 | 2,885 | 9,476 | |||||||||||||||
Note payable under subsidiary's term loan with bank (5) | 7,052 | 2,918 | 4,134 | — | — | |||||||||||||||
Notes payable under subsidiary's revolver with bank (6) | 228 | 136 | 92 | — | — | |||||||||||||||
Notes payable to Highland's former shareholders (7) | 7,686 | 676 | 7,010 | — | — | |||||||||||||||
Notes payable to KMS' former shareholders (8) | 2,077 | 2,077 | — | — | — | |||||||||||||||
Notes payable to SSN's former shareholders (9) | 6,478 | 5,187 | 1,291 | — | — | |||||||||||||||
Senior notes (10) | 125,924 | 4,977 | 9,954 | 9,954 | 101,039 | |||||||||||||||
Total | $ | 244,963 | $ | 26,795 | $ | 45,140 | $ | 25,944 | $ | 147,084 |
(1) | The revolving credit agreement has an August 25, 2021 maturity date and bears interest at a rate of 11% per annum, payable quarterly. Assumes no payments of principal prior to maturity. See Note 12, "Notes Payable," to the consolidated financial statements included in Part II, Item 8 of this annual report on Form 10-K. |
(2) | The 2011 Fidelity forgivable loan ($2,143 at December 31, 2017) bears interest at the federal funds rate plus 6% per annum and is payable in seven annual installments if not forgiven. See Note 12, "Notes Payable," to the consolidated financial statements included in Part II, Item 8 of this annual report on Form 10-K. |
(3) | Includes lease obligation of approximately $24,000 related to a twelve-year lease for a new office building to be built for Securities America. This lease obligation commences upon the completion of the construction of such building, which is currently estimated to be in 2020. Also includes $2,727 for the Miami office space which was renewed in March 2018 and excludes sublease revenues of $109. See Note 13, "Commitments and Contingencies," to the consolidated financial statements included in Part II, Item 8 of this annual report on Form 10-K. |
(4) | See Note 10, "Deferred Compensation Plan," to the consolidated financial statements included in Part II, Item 8 of this annual report on Form 10-K. |
(5) | Note bears interest at 5.75% and is payable in monthly installments until the maturity date of May 1, 2020. See Note 12, "Notes Payable," to the consolidated financial statements included in Part II, Item 8 of this annual report on Form 10-K. |
(6) | Note bears interest at 5.5% per annum and is payable in 54 monthly installments. See Note 12, "Notes Payable," to the consolidated financial statements included in Part II, Item 8 of this annual report on Form 10-K. |
(7) | Notes bear interest at 10% per annum and mature on February 26, 2019. See Note 12, "Notes Payable," to the consolidated financial statements included in Part II, Item 8 of this annual report on Form 10-K. |
(8) | Notes bear interest at 1.84% per annum and are payable in 16 quarterly installments. See Note 12, "Notes Payable," to the consolidated financial statements included in Part II, Item 8 of this annual report on Form 10-K. |
(9) | Notes bear interest at 1.74% per annum and are payable in 16 quarterly installments. See Note 12, "Notes Payable," to the consolidated financial statements included in Part II, Item 8 of this annual report on Form 10-K. |
(10) | Senior notes bear interest at 6.5% per annum and mature on November 30, 2027. Interest will be paid quarterly in arrears. See Note 12, "Notes Payable," to the consolidated financial statements included in Part II, Item 8 of this annual report on Form 10-K. |
(i) | pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; |
(ii) | provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of our management and directors; and |
(iii) | provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements. |
ITEM 10. | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE. |
ITEM 11. | EXECUTIVE COMPENSATION. |
ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS. |
ITEM 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE. |
Exhibit No. | Description | Incorporated By Reference from Document | No. in Document | |||
2.1 | V | 2.2 | ||||
2.2 | U | 2.1 | ||||
2.3 | K | 2.1 | ||||
3.1 | A | 3.1 | ||||
3.2 | B | 3.2 | ||||
3.3 | C | 3.1 | ||||
3.4 | O | 3.1 | ||||
3.5 | P | 3.6 | ||||
3.6 | Q | 3.1 | ||||
3.7 | R | 3.1 | ||||
3.8 | T | 3.1 | ||||
3.9 | W | 3.1 | ||||
3.10 | AA | 3.1 | ||||
3.11 | CC | 3.1 | ||||
3.12 | DD | 3.1 | ||||
3.13 | D | 3.2 |
4.1 | A | 4.1 | ||||
4.2 | P | 4.1 | ||||
4.3 | U | 4.1 | ||||
4.4 | X | 4.2 | ||||
4.5 | FF | 4.1 | ||||
4.6 | FF | 4.2 | ||||
4.7 | FF | 4.2 | ||||
10.1 | E | 4.1 | ||||
10.2 | S | Exhibit A | ||||
10.3 | F | Appendix A | ||||
10.4 | G | 10.1 | ||||
10.5 | N | 10.1 | ||||
10.6 | II | 10.1 | ||||
10.7 | H | 10.1 | ||||
10.8 | Y | 10.2 | ||||
10.9 | Y | 10.1 | ||||
10.10 | M | 10.1 | ||||
10.11 | I | 10.1 | ||||
10.12 | GG | 10.1 | ||||
10.13 | J | 10.1 | ||||
10.14 | EE | 10.1 | ||||
10.15 | L | 10.33 |
10.16 | DD | 1.1 | ||||
10.17 | X | 10.1 | ||||
10.18 | Z | 10.4 | ||||
10.19 | BB | 10.1 | ||||
10.20 | HH | 1.1 | ||||
12.1 | ** | |||||
21 | ** | — | ||||
23.1 | ** | — | ||||
24 | Power of Attorney | *** | — |
31.1 | ** | — | |||||
31.2 | ** | — | |||||
32.1 | **** | — | |||||
32.2 | **** | — | |||||
101.INS | XBRL Instance Document | ** | — | ||||
101.SCH | XBRL Taxonomy Extension Schema | ** | — | ||||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase | ** | — | ||||
101.DEF | XBRL Taxonomy Extension Definition Linkbase | ** | — | ||||
101.LAB | XBRL Taxonomy Extension Label Linkbase | ** | — | ||||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase | ** | — |
* | Management Compensation Contract |
** | Filed herewith |
*** | Contained on the signature page hereto |
**** | Furnished herewith |
A. | Registration statement on Form SB-2 (File No. 333-31001). |
B. | Annual report on Form 10-K for the year ended August 24, 1999. |
C. | Quarterly report on Form 10-Q for the quarter ended June 30, 2006. |
D. | Current report on Form 8-K, dated September 20, 2007 and filed with the SEC on September 21, 2007. |
E. | Registration statement on Form S-8 (File No. 333-139254). |
F. | Definitive proxy statement filed with the SEC on August 27, 2012 relating to the annual meeting of shareholders held on September 28, 2012. |
G. | Current report on Form 8-K, dated March 30, 2007 and filed with the SEC on April 2, 2007. |
H. | Current report on Form 8-K, dated February 26, 2014 and filed with the SEC on February 28, 2014. |
I. | Current report on Form 8-K, dated March 27, 2008 and filed with the SEC on March 28, 2008. |
J. | Current report on Form 8-K, dated August 10, 2010 and filed with the SEC on August 13, 2010. |
K. | Current report on Form 8-K, dated August 16, 2011 and filed with the SEC on August 18, 2011. |
L. | Annual report on Form 10-K, for the year ended December 31, 2011. | |
M. | Current report on Form 8-K, dated January 30, 2013 and filed with the SEC on February 4, 2013. | |
N. | Current report on Form 8-K, dated March 8, 2013 and filed with the SEC on March 8, 2013. | |
O. | Current report on Form 8-K, dated May 9, 2013 and filed with the SEC on May 15, 2013. | |
P. | Registration statement on Form 8-A, filed with the SEC on May 24, 2013. | |
Q. | Current report on Form 8-K, dated June 24, 2013 and filed with the SEC on June 25, 2013. |
R. | Current report on Form 8-K, dated June 12, 2014 and filed with the SEC on June 13, 2014. |
S. | Definitive proxy statement filed with the SEC on May 19, 2014 relating to the annual meeting of shareholders held on June 25, 2014. |
T. | Current report on Form 8-K, dated June 25, 2014 and filed with the SEC on June 27, 2014. |
U. | Current report on Form 8-K, dated October 15, 2014 and filed with the SEC on October 16, 2014. |
V. | Quarterly report on Form 10-Q for the quarter ended September 30, 2014. |
W. | Current report on Form 8-K, dated November 21, 2014 and filed with the SEC on November 21, 2014. |
X. | Current report on Form 8-K, dated January 2, 2015 and filed with the SEC on January 6, 2015. |
Y. | Current report on Form 8-K, dated January 20, 2015 and filed with the SEC on January 23, 2015. |
Z. | Quarterly report on Form 10-Q for the quarter ended March 31, 2015. |
AA. | Current report on Form 8-K, dated May 22, 2015 and filed with the SEC on May 22, 2015. |
BB. | Current report on Form 8-K, dated February 22, 2016 and filed with the SEC on February 26, 2016. |
CC. | Current report on Form 8-K, dated May 18, 2016 and filed with the SEC on May 20, 2016. |
DD. | Current report on Form 8-K, dated May 22, 2017 and filed with the SEC on May 22, 2017. |
EE. | Current report on Form 8-K, dated November 8, 2017 and filed with the SEC on November 9, 2017. |
FF. | Current report on Form 8-K, dated November 21, 2017 and filed with the SEC on November 21, 2017. |
GG. | Current report on Form 8-K, dated January 16, 2018 and filed with the SEC on January 22, 2018. |
HH. | Current report on Form 8-K, dated February 15, 2018 and filed with the SEC on February 16, 2018. |
II. | Current report on Form 8-K, dated February 28, 2018 and filed with the SEC on March 6, 2018. |
LADENBURG THALMANN FINANCIAL SERVICES INC. | ||||||
(Registrant) | ||||||
Dated: March 15, 2018 | ||||||
By: | /s/ Brett H. Kaufman | |||||
Name: Brett H. Kaufman | ||||||
Title: Senior Vice President and Chief Financial Officer | ||||||
(Principal Financial and Accounting Officer) |
Signatures | Title | |
/s/ Richard J. Lampen Richard J. Lampen | President, Chief Executive Officer and Director (Principal Executive Officer) | |
/s/ Brett H. Kaufman Brett H. Kaufman | Senior Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | |
/s/ Henry C. Beinstein Henry C. Beinstein | Director | |
/s/ Phillip Frost, M.D. Phillip Frost, M.D. | Director | |
/s/ Brian S. Genson Brian S. Genson | Director | |
/s/ Saul Gilinski Saul Gilinski | Director | |
/s/ Dr. Richard M. Krasno Dr. Richard M. Krasno | Director | |
/s/ Howard M. Lorber Howard M. Lorber | Director | |
/s/ Jeffrey S. Podell Jeffrey S. Podell | Director | |
/s/ Jacqueline M. Simkin Jacqueline M. Simkin | Director | |
/s/ Mark Zeitchick Mark Zeitchick | Director |
December 31, | |||||||
2017 | 2016 | ||||||
ASSETS | |||||||
Cash and cash equivalents | $ | 172,103 | $ | 98,930 | |||
Securities owned, at fair value | 3,881 | 3,543 | |||||
Receivables from clearing brokers | 48,543 | 41,492 | |||||
Receivables from other broker-dealers | 2,822 | 853 | |||||
Notes receivable from financial advisors, net | 46,778 | 32,611 | |||||
Other receivables, net | 60,707 | 54,634 | |||||
Fixed assets, net | 23,621 | 21,253 | |||||
Restricted assets | 760 | 1,011 | |||||
Intangible assets, net | 103,611 | 124,938 | |||||
Goodwill | 124,210 | 124,031 | |||||
Cash surrender value of life insurance | 12,711 | 10,210 | |||||
Other assets | 32,278 | 32,497 | |||||
Total assets | $ | 632,025 | $ | 546,003 | |||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
Securities sold, but not yet purchased, at fair value | $ | 231 | $ | 382 | |||
Accrued compensation | 33,343 | 26,299 | |||||
Commissions and fees payable | 67,221 | 60,594 | |||||
Accounts payable and accrued liabilities | 40,478 | 39,876 | |||||
Deferred rent | 2,151 | 1,764 | |||||
Deferred income taxes | 2,968 | 10,642 | |||||
Deferred compensation liability | 18,161 | 17,247 | |||||
Accrued interest | 232 | 281 | |||||
Notes payable, net of unamortized discount of$424 and $872 in 2017 and 2016, respectively, and net of debt issuance costs of $3,412 and $0 in 2017 and 2016, respectively. | 96,849 | 26,417 | |||||
Total liabilities | 261,634 | 183,502 | |||||
Commitments and contingencies (Note 13) | |||||||
Shareholders’ equity: | |||||||
Preferred stock, $.0001 par value; authorized 50,000,000 shares: 8% Series A cumulative redeemable preferred stock; designated 23,844,916 shares in 2017 and 17,290,000 shares in 2016; shares issued and outstanding 17,012,075 in 2017 and 15,844,916 in 2016 (liquidation preference $425,302 in 2017 and $396,123 in 2016) | 2 | 1 | |||||
Common stock, $.0001 par value; authorized 1,000,000,000 shares in 2017 and 2016; shares issued and outstanding, 198,583,941 in 2017 and 194,057,738 in 2016 | 20 | 19 | |||||
Additional paid-in capital | 520,135 | 519,879 | |||||
Accumulated deficit | (149,778 | ) | (157,425 | ) | |||
Total shareholders’ equity of the Company | 370,379 | 362,474 | |||||
Noncontrolling interest | 12 | 27 | |||||
Total shareholders' equity | 370,391 | 362,501 | |||||
Total liabilities and shareholders' equity | $ | 632,025 | $ | 546,003 |
Year Ended December 31, | |||||||||||||
2017 | 2016 | 2015 | |||||||||||
Revenues: | |||||||||||||
Commissions | $ | 535,979 | $ | 510,023 | $ | 558,683 | |||||||
Advisory fees | 560,930 | 464,136 | 462,087 | ||||||||||
Investment banking | 46,453 | 25,453 | 35,145 | ||||||||||
Principal transactions | 857 | 747 | 602 | ||||||||||
Interest and dividends | 25,049 | 10,256 | 3,842 | ||||||||||
Service fees and other income | 98,884 | 96,338 | 91,759 | ||||||||||
Total revenues | 1,268,152 | 1,106,953 | 1,152,118 | ||||||||||
Expenses: | |||||||||||||
Commissions and fees | 928,430 | 818,000 | 857,842 | ||||||||||
Compensation and benefits | 171,344 | 152,592 | 149,786 | ||||||||||
Non-cash compensation | 5,539 | 5,311 | 8,759 | ||||||||||
Brokerage, communication and clearance fees | 18,124 | 15,719 | 20,727 | ||||||||||
Rent and occupancy, net of sublease revenue | 9,356 | 9,673 | 9,797 | ||||||||||
Professional services | 19,630 | 14,126 | 14,156 | ||||||||||
Interest | 2,710 | 4,262 | 5,169 | ||||||||||
Depreciation and amortization | 28,835 | 28,334 | 27,077 | ||||||||||
Acquisition-related expenses | 3,469 | 1,357 | 940 | ||||||||||
Loss on extinguishment of debt | — | — | 252 | ||||||||||
Amortization of retention and forgivable loans | 7,396 | 5,472 | 9,238 | ||||||||||
Other | 72,158 | 64,177 | 60,125 | ||||||||||
Total expenses | 1,266,991 | 1,119,023 | 1,163,868 | ||||||||||
Income (loss) before item shown below | 1,161 | (12,070 | ) | (11,750 | ) | ||||||||
Change in fair value of contingent consideration | 19 | (216 | ) | 55 | |||||||||
Income (loss) before income taxes | 1,180 | (12,286 | ) | (11,695 | ) | ||||||||
Income tax (benefit) expense | (6,502 | ) | 10,025 | (482 | ) | ||||||||
Net income (loss) | 7,682 | (22,311 | ) | (11,213 | ) | ||||||||
Net loss attributable to noncontrolling interest | (15 | ) | (42 | ) | (62 | ) | |||||||
Net income (loss) attributable to the Company | $ | 7,697 | $ | (22,269 | ) | $ | (11,151 | ) | |||||
Dividends declared on preferred stock | (32,482 | ) | (30,438 | ) | (28,108 | ) | |||||||
Net loss available to common shareholders | $ | (24,785 | ) | $ | (52,707 | ) | $ | (39,259 | ) | ||||
Net loss per share available to common shareholders (basic) | $ | (0.13 | ) | $ | (0.29 | ) | $ | (0.21 | ) | ||||
Net loss per share available to common shareholders (diluted) | $ | (0.13 | ) | $ | (0.29 | ) | $ | (0.21 | ) | ||||
Weighted average common shares used in computation of per share data: | |||||||||||||
Basic | 193,064,550 | 182,987,850 | 183,660,993 | ||||||||||
Diluted | 193,064,550 | 182,987,850 | 183,660,993 |
Preferred Stock | Common Stock | ||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Additional Paid-in Capital | Accumulated Deficit | Noncontrolling Interest | Total | ||||||||||||||||||||||
Balance - December 31, 2014 | 11,096,231 | $ | 1 | 184,968,487 | $ | 18 | $ | 460,446 | $ | (124,005 | ) | $ | 11 | $ | 336,471 | ||||||||||||||
Issuance of common stock under employee stock purchase plan | — | — | 192,978 | — | 545 | — | 545 | ||||||||||||||||||||||
Exercise of stock options | — | — | 1,194,425 | — | 1,471 | — | — | 1,471 | |||||||||||||||||||||
Exercise of warrants, net of 196,518 shares tendered in payment of exercise price | — | — | 449,482 | — | — | — | — | — | |||||||||||||||||||||
Stock-based compensation to consultants and independent financial advisors | — | — | — | — | 3,183 | — | — | 3,183 | |||||||||||||||||||||
Stock-based compensation to employees | — | — | — | — | 5,576 | — | — | 5,576 | |||||||||||||||||||||
Issuance of restricted stock | — | — | 1,206,081 | 1 | — | — | — | 1 | |||||||||||||||||||||
Repurchase and retirement of common stock | — | — | (5,673,415 | ) | — | (16,355 | ) | — | — | (16,355 | ) | ||||||||||||||||||
Third party investment in noncontrolling interest | — | — | — | — | — | — | 80 | 80 | |||||||||||||||||||||
Preferred stock issued, net of underwriting discount and expense of $1,972 | 3,586,790 | — | — | — | 84,380 | — | — | 84,380 | |||||||||||||||||||||
Preferred stock dividends declared and paid | — | — | — | — | (28,108 | ) | — | — | (28,108 | ) | |||||||||||||||||||
Net loss | — | — | — | — | — | (11,151 | ) | (62 | ) | (11,213 | ) | ||||||||||||||||||
Balance - December 31, 2015 | 14,683,021 | $ | 1 | 182,338,038 | $ | 19 | $ | 511,138 | $ | (135,156 | ) | $ | 29 | $ | 376,031 | ||||||||||||||
Issuance of common stock under employee stock purchase plan | — | — | 210,330 | — | 481 | — | — | 481 | |||||||||||||||||||||
Exercise of stock options, net of 1,129,195 shares tendered in payment of exercise price | — | — | 3,920,950 | — | 2,580 | — | — | 2,580 |
Preferred Stock | Common Stock | ||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Additional Paid-in Capital | Accumulated Deficit | Noncontrolling Interest | Total | ||||||||||||||||||||||
Exercise of warrants, net of 846,789 shares tendered in payment of exercise price | — | — | 12,389,544 | — | 17,976 | — | — | 17,976 | |||||||||||||||||||||
Stock-based compensation to consultants and independent financial advisors | — | — | — | — | 50 | — | — | 50 | |||||||||||||||||||||
Stock-based compensation to employees | — | — | — | — | 5,261 | — | — | 5,261 | |||||||||||||||||||||
Issuance of restricted stock | — | — | 1,331,000 | — | — | — | — | — | |||||||||||||||||||||
Repurchase and retirement of common stock, including 901,691 shares surrendered for tax withholding of $2,038 | — | — | (6,132,124 | ) | — | (14,749 | ) | — | — | (14,749 | ) | ||||||||||||||||||
Third party investment in noncontrolling interest | — | — | — | — | — | — | 40 | 40 | |||||||||||||||||||||
Preferred stock issued, net of underwriting discount and expense of $723 | 1,161,895 | — | — | — | 27,580 | — | — | 27,580 | |||||||||||||||||||||
Preferred stock dividends declared and paid | — | — | — | — | (30,438 | ) | — | — | (30,438 | ) | |||||||||||||||||||
Net loss | — | — | — | — | — | (22,269 | ) | (42 | ) | (22,311 | ) | ||||||||||||||||||
Balance - December 31, 2016 | 15,844,916 | $ | 1 | 194,057,738 | $ | 19 | $ | 519,879 | $ | (157,425 | ) | $ | 27 | $ | 362,501 | ||||||||||||||
Issuance of common stock under employee stock purchase plan | — | — | 167,016 | — | 420 | — | — | 420 | |||||||||||||||||||||
Exercise of stock options, net of 1,715,019 shares tendered in payment of exercise price | — | — | 2,661,647 | 1 | 4,825 | — | — | 4,826 | |||||||||||||||||||||
Exercise of warrants | — | — | 2,000,000 | — | 3,820 | — | — | 3,820 |
Preferred Stock | Common Stock | ||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Additional Paid-in Capital | Accumulated Deficit | Noncontrolling Interest | Total | ||||||||||||||||||||||
Stock-based compensation to consultants and independent financial advisors | — | — | — | — | 57 | — | — | 57 | |||||||||||||||||||||
Stock-based compensation to employees | — | — | — | — | 5,482 | — | — | 5,482 | |||||||||||||||||||||
Issuance of restricted stock | — | — | 1,791,000 | — | — | — | — | — | |||||||||||||||||||||
Restricted stock forfeitures | — | — | (5,000 | ) | — | — | — | — | — | ||||||||||||||||||||
Repurchase and retirement of common stock, including 218,587 shares surrendered for taxes and expenses and 19,658 shares tendered in payment of exercise price | — | — | (2,088,460 | ) | — | (5,293 | ) | — | — | (5,293 | ) | ||||||||||||||||||
Repurchase of option award for cash | — | — | — | — | (850 | ) | — | — | (850 | ) | |||||||||||||||||||
Preferred stock issued, net of underwriting discount and expense of $958 | 1,167,159 | 1 | — | — | 28,094 | — | — | 28,095 | |||||||||||||||||||||
Preferred stock dividends declared and paid | — | — | — | — | (32,482 | ) | — | — | (32,482 | ) | |||||||||||||||||||
Commons stock dividends declared and paid | — | — | — | — | (3,880 | ) | — | — | (3,880 | ) | |||||||||||||||||||
Cumulative effect of adoption of ASU 2016-09 (Note 1) | 63 | (50 | ) | 13 | |||||||||||||||||||||||||
Net income | — | — | — | — | — | 7,697 | (15 | ) | 7,682 | ||||||||||||||||||||
Balance - December 31, 2017 | 17,012,075 | $ | 2 | 198,583,941 | $ | 20 | $ | 520,135 | $ | (149,778 | ) | $ | 12 | $ | 370,391 |
Year Ended December 31, | |||||||||||
2017 | 2016 | 2015 | |||||||||
Cash flows from operating activities: | |||||||||||
Net income (loss) | $ | 7,682 | $ | (22,311 | ) | $ | (11,213 | ) | |||
Adjustments to reconcile net income (loss) to | |||||||||||
net cash provided by operating activities: | |||||||||||
Change in fair value of contingent consideration | (19 | ) | 216 | (55 | ) | ||||||
Adjustment to deferred rent | 387 | 213 | 37 | ||||||||
Amortization of intangible assets | 21,327 | 20,703 | 20,650 | ||||||||
Depreciation and other amortization | 7,508 | 7,631 | 6,427 | ||||||||
Loss on extinguishment of debt | — | — | 252 | ||||||||
Amortization of debt discount | 449 | 620 | 666 | ||||||||
Amortization of debt issue cost | 41 | 253 | 376 | ||||||||
Amortization of retention and forgivable loans | 7,396 | 5,472 | 9,238 | ||||||||
Deferred income taxes | (7,662 | ) | 9,096 | (400 | ) | ||||||
Benefit attributable to reduction of goodwill | — | — | 78 | ||||||||
Non-cash interest expense on forgivable loan | 24 | 43 | 21 | ||||||||
Gain on forgiveness of accrued interest under forgivable loans | (295 | ) | (408 | ) | (619 | ) | |||||
Gain on forgiveness of principal of note payable under forgivable loans | (2,143 | ) | (2,143 | ) | (3,928 | ) | |||||
Non-cash compensation expense | 5,539 | 5,311 | 8,759 | ||||||||
Loss on write-off of receivable from subtenant | — | — | 855 | ||||||||
Loss on write-off of furniture, fixtures and leasehold improvements, net | 21 | 1 | 9 | ||||||||
(Increase) decrease in operating assets, net of effects of acquisitions: | |||||||||||
Securities owned, at fair value | (338 | ) | 536 | 1,989 | |||||||
Receivables from clearing brokers | (7,051 | ) | 2,974 | (5,076 | ) | ||||||
Receivables from other broker-dealers | (1,969 | ) | 1,297 | (362 | ) | ||||||
Other receivables, net | (6,073 | ) | (6,070 | ) | 19 | ||||||
Notes receivable from financial advisors, net | (21,563 | ) | (11,116 | ) | (9,828 | ) | |||||
Cash surrender value of life insurance | (2,501 | ) | (963 | ) | 1,172 | ||||||
Other assets | 219 | 1,191 | (5,381 | ) | |||||||
Increase (decrease) in operating liabilities, net of effects of acquisitions: | |||||||||||
Securities sold, but not yet purchased, at fair value | (151 | ) | 144 | 8 | |||||||
Accrued compensation | 7,044 | (2,816 | ) | 5,632 | |||||||
Accrued interest | 222 | (177 | ) | 292 | |||||||
Commissions and fees payable | 6,627 | 599 | 2,139 | ||||||||
Deferred compensation liability | 914 | 36 | (429 | ) | |||||||
Accounts payable and accrued liabilities | 580 | 3,914 | (2,009 | ) | |||||||
Net cash provided by operating activities | 16,215 | 14,246 | 19,319 | ||||||||
Cash flows from investing activities: | |||||||||||
Acquisition of SSN, net of cash received | — | — | (16,919 | ) | |||||||
Other business acquisitions | (179 | ) | (4,097 | ) | (2,603 | ) | |||||
Purchases of fixed assets | (9,896 | ) | (7,132 | ) | (8,298 | ) | |||||
Decrease (increase) in restricted assets | 251 | — | (391 | ) | |||||||
Net cash used in investing activities | (9,824 | ) | (11,229 | ) | (28,211 | ) | |||||
Cash flows from financing activities: | |||||||||||
Issuance of Series A preferred stock | 28,095 | 27,580 | 84,380 | ||||||||
Issuance of common stock | 9,066 | 3,061 | 2,016 | ||||||||
Series A preferred stock dividends paid | (32,482 | ) | (30,438 | ) | (28,108 | ) | |||||
Common stock dividends paid | (3,880 | ) | — | — | |||||||
Repurchases and retirement of common stock | (5,293 | ) | (14,749 | ) | (16,355 | ) | |||||
Repurchase of stock option award for cash | (850 | ) | — | — | |||||||
Additional issuance costs related to SSN notes | (40 | ) | — | — | |||||||
Issuance of senior notes | 73,197 | — | — | ||||||||
Borrowings on term loan | 8,000 | — | — | ||||||||
Principal repayments on notes payable | (7,039 | ) | (7,516 | ) | (17,639 | ) | |||||
Principal (repayments) borrowings under a revolving credit facility, net | — | (114 | ) | 495 | |||||||
Bank loan and revolver repayments | (1,992 | ) | (628 | ) | (387 | ) | |||||
Third party investment in subsidiary | — | 40 | 80 | ||||||||
Net cash provided (used in) by financing activities | 66,782 | (22,764 | ) | 24,482 | |||||||
Net increase (decrease) in cash and cash equivalents | 73,173 | (19,747 | ) | 15,590 | |||||||
Cash and cash equivalents, beginning of period | 98,930 | 118,677 | 103,087 | ||||||||
Cash and cash equivalents, end of period | $ | 172,103 | $ | 98,930 | $ | 118,677 | |||||
Supplemental cash flow information: | |||||||||||
Interest paid | $ | 1,974 | $ | 3,523 | $ | 3,807 | |||||
Taxes paid | 1,487 | 1,036 | 2,313 | ||||||||
Acquisition of SSN: | |||||||||||
Assets acquired | $ | — | $ | — | $ | 61,759 | |||||
Liabilities assumed | — | — | (14,472 | ) | |||||||
Net assets acquired | — | — | 47,287 | ||||||||
Due to selling shareholders | — | — | (3,590 | ) | |||||||
Promissory note | — | — | (18,697 | ) | |||||||
Cash paid in acquisition | — | — | 25,000 | ||||||||
Cash acquired in acquisition | — | — | (8,081 | ) | |||||||
Net cash paid in acquisition | $ | — | $ | — | $ | 16,919 | |||||
Acquisition of Dalton: | |||||||||||
Assets acquired | $ | — | $ | — | $ | 2,689 | |||||
Payable to seller | — | — | (589 | ) | |||||||
Net cash paid in acquisition | $ | — | $ | — | $ | 2,100 | |||||
Acquisition of Select: | |||||||||||
Assets acquired | $ | — | $ | — | $ | 2,019 | |||||
Payable to seller | — | — | (1,516 | ) | |||||||
Net cash paid in acquisition | $ | — | $ | — | $ | 503 | |||||
Acquisition of Wall Street Financial Group: | |||||||||||
Assets acquired | $ | — | $ | 3,468 | — | ||||||
Payable to seller | — | (2,276 | ) | — | |||||||
Net cash paid in acquisition | $ | — | $ | 1,192 | $ | — | |||||
Acquisition of Foothill Securities Inc: | |||||||||||
Assets acquired | $ | — | $ | 5,571 | — | ||||||
Payable to seller | (179 | ) | (2,666 | ) | — | ||||||
Net cash paid in acquisition | $ | (179 | ) | $ | 2,905 | $ | — | ||||
Non-cash financing activities: | |||||||||||
Cancellation of promissory notes as consideration for exercise price of warrants | — | $ | 17,976 | — |
Cash | $ | 8,081 | ||
Securities owned, at fair value | 158 | |||
Receivables from clearing broker | 630 | |||
Other receivables, net | 11,711 | (2) | ||
Fixed assets, net | 57 | |||
Notes receivable | 225 | |||
Identifiable intangible assets | 30,901 | |||
Goodwill | 9,282 | (1) | ||
Other assets | 714 | |||
Total assets acquired | 61,759 | |||
Commissions and fees payable | (12,562 | ) | (2) | |
Deferred income | (44 | ) | ||
Accounts payable and accrued liabilities | (1,866 | ) | (1) | |
Total liabilities assumed | (14,472 | ) | ||
Total purchase price | $ | 47,287 |
Estimated Useful Life | ||||||
(years) | ||||||
Relationships with financial advisors | $ | 26,654 | 20 | |||
Technology | 2,080 | 12.5 | ||||
Trade name | 1,756 | 9 | ||||
Non-compete agreements | 411 | 3 | ||||
Total identifiable intangible assets | $ | 30,901 |
December 31, 2017 | ||||||||||||||||
Assets | Carrying Value | Level 1 | Level 2 | Total Estimated Fair Value | ||||||||||||
Cash and cash equivalents | $ | 172,103 | $ | 172,103 | $ | — | $ | 172,103 | ||||||||
Receivables from clearing brokers | 48,543 | — | 48,543 | 48,543 | ||||||||||||
Receivables from other broker-dealers | 2,822 | — | 2,822 | 2,822 | ||||||||||||
Notes receivables, net (1) | 46,778 | — | 46,778 | 46,778 | ||||||||||||
Other receivables, net | 60,707 | — | 60,707 | 60,707 | ||||||||||||
$ | 330,953 | $ | 172,103 | $ | 158,850 | $ | 330,953 | |||||||||
Liabilities | ||||||||||||||||
Accrued compensation | $ | 33,343 | $ | — | $ | 33,343 | $ | 33,343 | ||||||||
Commissions and fees payable | 67,221 | — | 67,221 | 67,221 | ||||||||||||
Accounts payable and accrued liabilities (2) | 38,374 | — | 38,374 | 38,374 | ||||||||||||
Accrued interest | 232 | — | 232 | 232 | ||||||||||||
Notes payable, net (3) | 96,849 | — | 99,129 | 99,129 | ||||||||||||
$ | 236,019 | $ | — | $ | 238,299 | $ | 238,299 |
December 31, 2016 | ||||||||||||||||
Assets | Carrying Value | Level 1 | Level 2 | Total Estimated Fair Value | ||||||||||||
Cash and cash equivalents | $ | 98,930 | $ | 98,930 | $ | — | $ | 98,930 | ||||||||
Receivables from clearing brokers | 41,492 | — | 41,492 | 41,492 | ||||||||||||
Receivables from other broker-dealers | 853 | — | 853 | 853 | ||||||||||||
Notes receivables, net (1) | 32,611 | — | 32,611 | 32,611 | ||||||||||||
Other receivables, net | 54,634 | — | 54,634 | 54,634 | ||||||||||||
$ | 228,520 | $ | 98,930 | $ | 129,590 | $ | 228,520 | |||||||||
Liabilities | ||||||||||||||||
Accrued compensation | $ | 26,299 | $ | — | $ | 26,299 | $ | 26,299 | ||||||||
Commissions and fees payable | 60,594 | — | 60,594 | 60,594 | ||||||||||||
Accounts payable and accrued liabilities (2) | 32,732 | — | 32,732 | 32,732 | ||||||||||||
Accrued interest | 281 | — | 281 | 281 | ||||||||||||
Notes payable, net (3) | 26,417 | — | 24,494 | 24,494 | ||||||||||||
$ | 146,323 | $ | — | $ | 144,400 | $ | 144,400 |
December 31, 2017 | ||||||||||||||||||||
Assets | Carrying Value | Level 1 | Level 2 | Level 3 | Total Estimated Fair Value | |||||||||||||||
Certificates of deposit | $ | 568 | $ | 568 | $ | — | $ | — | $ | 568 | ||||||||||
Debt securities | 1,918 | — | 1,918 | — | 1,918 | |||||||||||||||
U.S. Treasury notes | — | — | — | — | — | |||||||||||||||
Common stock and warrants | 1,395 | 765 | 630 | — | 1,395 | |||||||||||||||
Total | $ | 3,881 | $ | 1,333 | $ | 2,548 | $ | — | $ | 3,881 | ||||||||||
Liabilites | ||||||||||||||||||||
Contingent consideration payable | $ | 2,104 | $ | — | $ | — | $ | 2,104 | $ | 2,104 | ||||||||||
Debt securities | 151 | — | 151 | — | 151 | |||||||||||||||
U.S. Treasury notes | — | — | — | — | — | |||||||||||||||
Common stock and warrants | 80 | 80 | — | — | 80 | |||||||||||||||
Total | $ | 2,335 | $ | 80 | $ | 151 | $ | 2,104 | $ | 2,335 |
December 31, 2016 | ||||||||||||||||||||
Assets | Carrying Value | Level 1 | Level 2 | Level 3 | Total Estimated Fair Value | |||||||||||||||
Certificates of deposit | $ | 443 | $ | 443 | $ | — | $ | — | $ | 443 | ||||||||||
Debt securities | 1,850 | — | 1,850 | — | 1,850 | |||||||||||||||
U.S. Treasury notes | 101 | — | 101 | — | 101 | |||||||||||||||
Common stock and warrants | 1,149 | 494 | 655 | — | 1,149 | |||||||||||||||
Total | $ | 3,543 | $ | 937 | $ | 2,606 | $ | — | $ | 3,543 | ||||||||||
Liabilites | ||||||||||||||||||||
Contingent consideration payable | $ | 7,144 | $ | — | $ | — | $ | 7,144 | $ | 7,144 | ||||||||||
Debt securities | 25 | — | 25 | — | 25 | |||||||||||||||
U.S. Treasury notes | 96 | — | 96 | — | 96 | |||||||||||||||
Common stock | 261 | 261 | — | — | 261 | |||||||||||||||
Total | $ | 7,526 | $ | 261 | $ | 121 | $ | 7,144 | $ | 7,526 |
Fair value of contingent consideration as of December 31, 2014 | $ | 3,212 | ||
Payments | (1,945 | ) | ||
Change in fair value of contingent consideration | (55 | ) | ||
Fair value of contingent consideration in connection with 2015 acquisitions | 1,601 | |||
Fair value of contingent consideration as of December 31, 2015 | 2,813 | |||
Payments | (827 | ) | ||
Change in fair value of contingent consideration | 216 | |||
Fair value of contingent consideration in connection with 2016 acquisitions | 4,942 | |||
Fair value of contingent consideration as of December 31, 2016 | 7,144 | |||
Payments | (5,021 | ) | ||
Change in fair value of contingent consideration | (19 | ) | ||
Fair value of contingent consideration as of December 31, 2017 | $ | 2,104 |
December 31, | ||||||||
2017 | 2016 | |||||||
Cost: | ||||||||
Leasehold improvements | $ | 4,112 | $ | 4,829 | ||||
Computer equipment | 18,604 | 16,782 | ||||||
Furniture and fixtures | 3,816 | 3,418 | ||||||
Software | 25,115 | 19,161 | ||||||
Other | 5,003 | 4,063 | ||||||
56,650 | 48,253 | |||||||
Less: accumulated depreciation and amortization | (33,029 | ) | (27,000 | ) | ||||
Total | $ | 23,621 | $ | 21,253 |
Weighted-Average | December 31, 2017 | December 31, 2016 | ||||||||||||||||
Estimated Useful Life (years) | Gross Carrying Amount | Accumulated Amortization | Gross Carrying Amount | Accumulated Amortization | ||||||||||||||
Technology | 7.9 | $ | 25,563 | $ | 19,020 | $ | 25,563 | $ | 15,754 | |||||||||
Relationships with financial advisors | 14.7 | 117,995 | 49,925 | 117,995 | 40,505 | |||||||||||||
Vendor relationships | 7 | 3,613 | 3,613 | 3,613 | 3,613 | |||||||||||||
Covenants not-to-compete | 3.9 | 6,421 | 5,732 | 6,421 | 4,638 | |||||||||||||
Customer accounts | 8.3 | 2,029 | 2,029 | 2,029 | 1,971 | |||||||||||||
Trade names | 7.7 | 16,910 | 12,245 | 16,910 | 10,017 | |||||||||||||
Renewal revenue | 7.9 | 41,381 | 17,737 | 41,381 | 12,481 | |||||||||||||
Relationships with investment banking clients | 4 | 2,586 | 2,586 | 2,586 | 2,586 | |||||||||||||
Leases | 6 | 861 | 861 | 861 | 861 | |||||||||||||
Referral agreement | 6.6 | 124 | 124 | 124 | 119 | |||||||||||||
Other | 6 | 67 | 67 | 67 | 67 | |||||||||||||
Total | $ | 217,550 | $ | 113,939 | $ | 217,550 | $ | 92,612 |
2018 | $ | 20,462 | |
2019 | 16,987 | ||
2020 | 15,400 | ||
2021 | 10,687 | ||
2022 | 7,798 | ||
Thereafter | 32,277 | ||
$ | 103,611 |
Ladenburg | Independent Advisory and Brokerage Services | Insurance Brokerage | Total | |||||||||||||
Balance as of January 1, 2016 | $ | 301 | $ | 112,572 | $ | 12,699 | $ | 125,572 | ||||||||
Correction related to Securities America acquisition purchase price allocation (1) | — | (2,870 | ) | — | (2,870 | ) | ||||||||||
Business acquisitions | — | 1,329 | — | 1,329 | ||||||||||||
Balance as of December 31, 2016 | $ | 301 | $ | 111,031 | $ | 12,699 | $ | 124,031 | ||||||||
Correction related to Foothill acquisition purchase price allocation (2) | — | 179 | — | 179 | ||||||||||||
Balance as of December 31, 2017 | $ | 301 | $ | 111,210 | $ | 12,699 | $ | 124,210 |
Federal | State and Local | Total | ||||||||||
2017: | ||||||||||||
Current | $ | 364 | $ | 807 | $ | 1,171 | ||||||
Deferred | (7,695 | ) | 22 | (7,673 | ) | |||||||
$ | (7,331 | ) | $ | 829 | $ | (6,502 | ) | |||||
2016: | ||||||||||||
Current | $ | — | $ | 929 | $ | 929 | ||||||
Deferred | 8,992 | 104 | 9,096 | |||||||||
$ | 8,992 | $ | 1,033 | $ | 10,025 | |||||||
2015: | ||||||||||||
Current | $ | (1,491 | ) | $ | 1,331 | $ | (160 | ) | ||||
Deferred | (1,623 | ) | 1,223 | (400 | ) | |||||||
Benefit applied to reduce goodwill | — | 78 | 78 | |||||||||
$ | (3,114 | ) | $ | 2,632 | $ | (482 | ) |
2017 | 2016 | 2015 | |||||||||
Income (loss) before income taxes | $ | 1,180 | $ | (12,286 | ) | $ | (11,695 | ) | |||
Expense (benefit) under statutory U.S. tax rates | 413 | (4,300 | ) | (4,093 | ) | ||||||
Increase (decrease) in taxes resulting from: | |||||||||||
(Decrease) increase in valuation allowance | (11,261 | ) | 12,540 | 79 | |||||||
Nondeductible items | 4,475 | 1,323 | 1,701 | ||||||||
State taxes, net of federal benefit | 431 | 671 | 1,600 | ||||||||
Impact of tax reform | (660 | ) | — | — | |||||||
Other, net | 100 | (209 | ) | 231 | |||||||
Income tax (benefit) expense | $ | (6,502 | ) | $ | 10,025 | $ | (482 | ) |
2017 | 2016 | |||||||
Deferred tax assets (liabilities): | ||||||||
Net operating loss carryforwards | $ | 8,642 | $ | 14,132 | ||||
AMT credit carryforward | 440 | 76 | ||||||
Accrued expenses | 4,105 | 5,084 | ||||||
Compensation and benefits | 10,877 | 18,333 | ||||||
Deferred compensation liability | 4,492 | 6,496 | ||||||
Securities owned | 514 | 900 | ||||||
Total deferred tax assets | 29,070 | 45,021 | ||||||
Valuation allowance | (5,520 | ) | (13,766 | ) | ||||
Net deferred tax assets | 23,550 | 31,255 | ||||||
Fixed assets | (4,707 | ) | (6,025 | ) | ||||
Intangibles | (13,589 | ) | (25,097 | ) | ||||
Goodwill | (8,222 | ) | (10,775 | ) | ||||
Total deferred liabilities | (26,518 | ) | (41,897 | ) | ||||
Net deferred tax liability | $ | (2,968 | ) | $ | (10,642 | ) |
2017 | 2016 | |||||
Balance at January 1, | $ | 503 | $ | 423 | ||
Increases in tax positions for prior years | (33 | ) | 9 | |||
Increases in tax positions for current years | 56 | 71 | ||||
Balance at December 31, | $ | 526 | $ | 503 |
12. | Notes Payable |
December 31, | ||||||||
2017 | 2016 | |||||||
Notes payable to clearing firm under forgivable loans | $ | 2,143 | $ | 4,285 | ||||
Notes payable under subsidiary's term loan with bank | 6,563 | 153 | ||||||
Note payable under subsidiary's revolver with bank | 216 | 620 | ||||||
Notes payable by subsidiary to certain former shareholders of Highland | 6,738 | 6,738 | ||||||
Notes payable to KMS's former shareholders, net of $98 and $221 of unamortized discount in 2017 and 2016, respectively | 1,958 | 3,852 | ||||||
Notes payable to SSN's former shareholders, net of $326 and $651 unamortized discount in 2017 and 2016, respectively | 6,074 | 10,769 | ||||||
Senior notes | 76,569 | — | ||||||
Less: Unamortized debt issuance costs | (3,412 | ) | — | |||||
Total | $ | 96,849 | $ | 26,417 |
Year Ending December 31, | Lease Commitments | Sublease Rentals | Net | |||||||||
2018 | $ | 7,632 | $ | 40 | $ | 7,592 | ||||||
2019 | 7,795 | 41 | 7,754 | |||||||||
2020(2) | 8,516 | 28 | 8,488 | |||||||||
2021(2) | 6,808 | — | 6,808 | |||||||||
2022(2) | 6,297 | — | 6,297 | |||||||||
Thereafter(2) | 36,569 | — | 36,569 | |||||||||
Total (1)(2) | $ | 73,617 | $ | 109 | $ | 73,508 |
Year Ended December 31, | |||||||||
2017 | 2016 | 2015 | |||||||
Basic weighted-average common shares outstanding - basic | 193,064,550 | 182,987,850 | 183,660,993 | ||||||
Effect of dilutive securities: | |||||||||
Options to purchase common stock | — | — | — | ||||||
Warrants to purchase common stock | — | — | — | ||||||
Restricted shares | — | — | — | ||||||
Dilutive potential common shares | — | — | — | ||||||
Weighted average common shares outstanding and dilutive potential common shares | 193,064,550 | 182,987,850 | 183,660,993 | ||||||
Shares | Weighted- Average Exercise Price | Weighted- Average Remaining Contractual Term (Years) | Aggregate Intrinsic Value | ||||||||||
Options outstanding, December 31, 2016 | 12,122,500 | $ | 1.62 | ||||||||||
Exercised | (3,300,500 | ) | 2.25 | ||||||||||
Forfeited | (10,000 | ) | 2.30 | ||||||||||
Expired | (180,000 | ) | 2.63 | ||||||||||
Options outstanding, December 31, 2017 | 8,632,000 | $ | 1.36 | 1.87 | $ | 15,556 | |||||||
Options exercisable, December 31, 2017 | 8,632,000 | $ | 1.36 | 1.87 | $ | 15,556 |
Shares | Weighted- Average Exercise Price | Weighted- Average Remaining Contractual Term (Years) | Aggregate Intrinsic Value | ||||||||||
Options outstanding, December 31, 2016 | 21,836,053 | $ | 2.24 | ||||||||||
Exercised | (1,076,166 | ) | 1.61 | ||||||||||
Forfeited | (271,026 | ) | 2.34 | ||||||||||
Options outstanding, December 31, 2017 | 20,488,861 | $ | 2.28 | 4.93 | $ | 20,033 | |||||||
Options exercisable, December 31, 2017 | 18,344,361 | $ | 2.15 | 4.68 | $ | 19,672 |
Shares | Weighted- Average Exercise Price | Weighted- Average Remaining Contractual Term (Years) | Aggregate Intrinsic Value | |||||||||||
Options outstanding, December 31, 2016 | 3,000,000 | $ | 1.91 | |||||||||||
Forfeited | (3,000,000 | ) | $ | 1.91 | ||||||||||
Options outstanding, December 31, 2017 | — | $ | — | — | $ | — |
2016 | 2015 | |||||
Dividend yield | — | % | — | % | ||
Expected volatility | 50.38 | % | 61.10 | % | ||
Risk-free interest rate | 1.67 | % | 1.63 | % | ||
Expected life (in years) | 6.11 | 6.15 |
Restricted Stock | Weighted-Average Grant Date Fair Value Per Share | ||||||
Nonvested at December 31, 2016 | 2,233,219 | $ | 2.92 | ||||
Issued during 2017 | 1,791,000 | 2.35 | |||||
Vested during 2017 | (639,073 | ) | 3.04 | ||||
Forfeited during 2017 | (5,000 | ) | 2.24 | ||||
Nonvested at December 31, 2017 | 3,380,146 | $ | 2.60 |
Independent Advisory and Brokerage Services | Ladenburg | Insurance Brokerage | Corporate | Total | ||||||||||||||||
2017 | ||||||||||||||||||||
Revenues | $ | 1,140,380 | $ | 66,680 | $ | 57,132 | $ | 3,960 | $ | 1,268,152 | ||||||||||
Income (loss) before income taxes | 19,858 | 6,346 | (5,338 | ) | (19,686 | ) | (1) | 1,180 | ||||||||||||
EBITDA, as adjusted (2) | 59,756 | 8,115 | 2,698 | (14,568 | ) | 56,001 | ||||||||||||||
Identifiable assets | 443,670 | 43,148 | 47,166 | 98,041 | 632,025 | |||||||||||||||
Depreciation and amortization | 21,455 | 505 | 6,841 | 34 | 28,835 | |||||||||||||||
Interest | 1,157 | — | 683 | 870 | 2,710 | |||||||||||||||
Capital expenditures | 8,923 | 753 | 216 | 4 | 9,896 | |||||||||||||||
Non-cash compensation | 1,035 | 629 | 183 | 3,692 | 5,539 | |||||||||||||||
2016 | ||||||||||||||||||||
Revenues | $ | 1,003,282 | $ | 49,425 | $ | 50,483 | $ | 3,763 | $ | 1,106,953 | ||||||||||
Income (loss) before income taxes | 15,071 | (3,674 | ) | (6,074 | ) | (17,609 | ) | (1) | (12,286 | ) | ||||||||||
EBITDA, as adjusted (2) | 47,977 | (1,676 | ) | 2,255 | (12,785 | ) | 35,771 | |||||||||||||
Identifiable assets | 423,288 | 38,665 | 54,166 | 29,884 | 546,003 | |||||||||||||||
Depreciation and amortization | 20,406 | 703 | 7,161 | 64 | 28,334 | |||||||||||||||
Interest | 2,828 | 4 | 682 | 748 | 4,262 | |||||||||||||||
Capital expenditures | 6,784 | 139 | 209 | — | 7,132 | |||||||||||||||
Non-cash compensation | 1,010 | 537 | 245 | 3,519 | 5,311 | |||||||||||||||
2015 | ||||||||||||||||||||
Revenues | $ | 1,035,365 | $ | 61,841 | $ | 49,573 | $ | 5,339 | $ | 1,152,118 | ||||||||||
Income (loss) before income taxes | 7,735 | 3,095 | (6,701 | ) | (15,824 | ) | (1) | (11,695 | ) | |||||||||||
EBITDA, as adjusted (2) | 46,462 | 6,052 | 1,170 | (9,639 | ) | 44,045 | ||||||||||||||
Identifiable assets | 417,367 | 44,050 | 61,689 | 50,999 | 574,105 | |||||||||||||||
Depreciation and amortization | 19,373 | 703 | 6,949 | 52 | 27,077 | |||||||||||||||
Interest | 3,532 | 7 | 683 | 947 | 5,169 | |||||||||||||||
Capital expenditures | 7,341 | 87 | 783 | 87 | 8,298 | |||||||||||||||
Non-cash compensation | 3,836 | 638 | 239 | 4,046 | 8,759 |
(1) | Includes interest on revolving credit and forgivable loan notes, compensation, professional fees and other general and administrative expenses. |
(2) | The following table reconciles income (loss) before income taxes to EBITDA, as adjusted, for the years ended December 31, 2017, 2016 and 2015: |
Year Ended December 31, | |||||||||||||
2017 | 2016 | 2015 | |||||||||||
Income (loss) before income taxes | $ | 1,180 | $ | (12,286 | ) | $ | (11,695 | ) | |||||
Adjustments: | |||||||||||||
Interest income | (506 | ) | (672 | ) | (254 | ) | |||||||
Change in fair value of contingent consideration | (19 | ) | 216 | (55 | ) | ||||||||
Loss on extinguishment of debt | — | — | 252 | ||||||||||
Interest expense | 2,710 | 4,262 | 5,169 | ||||||||||
Depreciation and amortization | 28,835 | 28,334 | 27,077 | ||||||||||
Non-cash compensation expense | 5,539 | 5,311 | 8,759 | ||||||||||
Amortization of retention and forgivable loans | 7,396 | 5,472 | 9,238 | ||||||||||
Financial advisor recruiting expense | 5,721 | 1,882 | 2,387 | ||||||||||
Acquisition-related expense | 3,469 | 1,357 | 940 | (6) | |||||||||
Loss attributable to noncontrolling interest | 15 | 42 | 62 | ||||||||||
Other | 1,661 | (3) | 1,853 | (4) | 2,165 | (5) | |||||||
EBITDA, as adjusted | $ | 56,001 | $ | 35,771 | $ | 44,045 | |||||||
EBITDA, as adjusted | |||||||||||||
Independent Advisory and Brokerage Services | $ | 59,756 | $ | 47,977 | $ | 46,462 | |||||||
Ladenburg | 8,115 | (1,676 | ) | 6,052 | |||||||||
Insurance Brokerage | 2,698 | 2,255 | 1,170 | ||||||||||
Corporate | (14,568 | ) | (12,785 | ) | (9,639 | ) | |||||||
Total segments | $ | 56,001 | $ | 35,771 | $ | 44,045 |
(6) | Includes $409 for acquisition-related expense that was previously included in professional services expense and other expense. |
Quarters | |||||||||||||||||
1st | 2nd | 3rd | 4th | ||||||||||||||
2017: | |||||||||||||||||
Revenues | $ | 290,291 | $ | 311,536 | $ | 322,309 | $ | 344,016 | |||||||||
Expenses (1) | 294,961 | 310,286 | 317,649 | 344,095 | |||||||||||||
(Loss) income before item shown below | (4,670 | ) | 1,250 | 4,660 | (79 | ) | |||||||||||
Change in fair value of contingent consideration | 152 | (63 | ) | (3 | ) | (67 | ) | ||||||||||
(Loss) income before income taxes | $ | (4,518 | ) | $ | 1,187 | $ | 4,657 | $ | (146 | ) | |||||||
Net (loss) income | $ | (3,679 | ) | $ | 1,325 | $ | 3,402 | $ | 6,634 | ||||||||
Loss (income) attributable to noncontrolling interest | 5 | 3 | (3 | ) | 10 | ||||||||||||
Net (loss) income attributable to the Company | $ | (3,674 | ) | $ | 1,328 | $ | 3,399 | $ | 6,644 | ||||||||
Dividends declared on preferred stock | (7,924 | ) | (7,953 | ) | (8,149 | ) | (8,456 | ) | |||||||||
Net loss available to common shareholders | $ | (11,598 | ) | $ | (6,625 | ) | $ | (4,750 | ) | $ | (1,812 | ) | |||||
Basic loss per common share (2) | $ | (0.06 | ) | $ | (0.03 | ) | $ | (0.02 | ) | $ | (0.01 | ) | |||||
Diluted loss per common share (2) | $ | (0.06 | ) | $ | (0.03 | ) | $ | (0.02 | ) | $ | (0.01 | ) | |||||
Basic weighted average common shares | 192,270,615 | 192,304,828 | 192,912,643 | 194,749,001 | |||||||||||||
Diluted weighted average common shares | 192,270,615 | 192,304,828 | 192,912,643 | 194,749,001 |
(1) | Includes a $1,429, $1,378, $1,341 and $1,391 charge for non-cash compensation in the first, second, third and fourth quarters of 2017, respectively. |
(2) | Due to rounding, the sum of the quarters' basic and diluted loss per common share do not equal the full fiscal year amount. |
Quarters | |||||||||||||||||
1st | 2nd | 3rd | 4th | ||||||||||||||
2016: | |||||||||||||||||
Revenues | $ | 265,796 | $ | 269,775 | $ | 274,323 | $ | 297,059 | |||||||||
Expenses (1) | 272,124 | 271,302 | 281,162 | 294,435 | |||||||||||||
Loss before item shown below | (6,328 | ) | (1,527 | ) | (6,839 | ) | 2,624 | ||||||||||
Change in fair value of contingent consideration | (57 | ) | (49 | ) | (72 | ) | (38 | ) | |||||||||
Loss before income taxes | $ | (6,385 | ) | $ | (1,576 | ) | $ | (6,911 | ) | $ | 2,586 | ||||||
Net income (loss) | $ | 2,384 | $ | (17,801 | ) | $ | (7,515 | ) | $ | 621 | |||||||
Loss attributable to noncontrolling interest | 18 | 14 | 1 | 9 | |||||||||||||
Net income (loss) attributable to the Company | $ | 2,402 | $ | (17,787 | ) | $ | (7,514 | ) | $ | 630 | |||||||
Dividends declared on preferred stock | (7,345 | ) | (7,389 | ) | (7,780 | ) | (7,924 | ) | |||||||||
Net loss available to common shareholders | $ | (4,943 | ) | $ | (25,176 | ) | $ | (15,294 | ) | $ | (7,294 | ) | |||||
Basic loss per common share | $ | (0.03 | ) | $ | (0.14 | ) | $ | (0.08 | ) | $ | (0.04 | ) | |||||
Diluted loss per common share | $ | (0.03 | ) | $ | (0.14 | ) | $ | (0.08 | ) | $ | (0.04 | ) | |||||
Basic weighted average common shares | 181,363,446 | 180,674,937 | 181,032,730 | 188,837,490 | |||||||||||||
Diluted weighted average common shares | 181,363,446 | 180,674,937 | 181,032,730 | 188,837,490 |
(1) | Includes a $1,355, $1,341, $1,300 and $1,315 charge for non-cash compensation in the first, second, third and fourth quarters of 2016, respectively. |
Year Ended December 31, | |||||||||||||||||||||
2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||||
Ratio of Earnings to Fixed Charges | |||||||||||||||||||||
Income (loss) before income taxes | $ | 1,180 | $ | (12,286 | ) | $ | (11,695 | ) | $ | 10,006 | $ | 2,404 | |||||||||
Add: Fixed charges | 5,829 | 7,486 | 8,435 | 9,337 | 17,534 | ||||||||||||||||
Income (loss) before income taxes and fixed charges | $ | 7,009 | $ | (4,800 | ) | $ | (3,260 | ) | $ | 19,343 | $ | 19,938 | |||||||||
Fixed Charges: | |||||||||||||||||||||
Total interest expense | $ | 2,710 | $ | 4,262 | $ | 5,169 | $ | 6,990 | $ | 15,438 | |||||||||||
Interest factor in rents (1) | 3,119 | 3,224 | 3,266 | 2,347 | 2,096 | ||||||||||||||||
Total fixed charges | 5,829 | $ | 7,486 | $ | 8,435 | $ | 9,337 | $ | 17,534 | ||||||||||||
Ratio of earnings to fixed charges | 1.2 | * | * | 2.1 | 1.1 | ||||||||||||||||
* Deficiency of earnings available to cover fixed charges | $ | — | $ | (12,286 | ) | $ | (11,695 | ) | $ | — | $ | — | |||||||||
Ratio of Earnings to Combined Fixed Charges and Preferred Stock Dividends | |||||||||||||||||||||
Income (loss) before income taxes | $ | 1,180 | $ | (12,286 | ) | $ | (11,695 | ) | $ | 10,006 | $ | 2,404 | |||||||||
Add: Fixed charges | 5,829 | 7,486 | 8,435 | 9,337 | 17,534 | ||||||||||||||||
Income (loss) before income taxes and combined fixed charges | $ | 7,009 | $ | (4,800 | ) | $ | (3,260 | ) | $ | 19,343 | $ | 19,938 | |||||||||
Fixed Charges: | |||||||||||||||||||||
Total interest expense | $ | 2,710 | $ | 4,262 | $ | 5,169 | $ | 6,990 | $ | 15,438 | |||||||||||
Interest factor in rents (1) | 3,119 | 3,224 | 3,266 | 2,347 | 2,096 | ||||||||||||||||
Preferred stock dividends (2) | 54,137 | 50,730 | 46,847 | 28,740 | 11,518 | ||||||||||||||||
Total combined fixed charges and preferred stock dividends | $ | 59,966 | $ | 58,216 | $ | 55,282 | $ | 38,077 | $ | 29,052 | |||||||||||
Ratio of earnings to combined fixed charges and preferred stock dividends | * | * | * | * | * | ||||||||||||||||
* Deficiency of earnings available to cover fixed charges and preferred stock dividends | $ | (52,957 | ) | $ | (63,016 | ) | $ | (58,542 | ) | $ | (18,734 | ) | $ | (9,114 | ) | ||||||
NAME | STATE OF ORGANIZATION |
HCHC Acquisition Inc. | Delaware |
Highland Capital Brokerage, Inc. | Delaware |
Highland Capital Holding Corporation | Delaware |
KMS Financial Services, Inc. | Washington |
Securities America Financial Corporation | Nebraska |
Securities America, Inc. | Delaware |
Securities America Advisors, Inc. | Nebraska |
Securities Service Network, LLC | Tennessee |
Ladenburg Thalmann Advisor Network LLC | Florida |
Ladenburg Thalmann & Co. Inc. | Delaware |
Ladenburg Thalmann Asset Management Inc. | New York |
Ladenburg Thalmann Annuity Insurance Services, LLC | Florida |
Investacorp, Inc. | Florida |
Investacorp Advisory Services Inc. | Florida |
Triad Advisors, LLC | Florida |
Triad Hybrid Solutions, LLC | Florida |
Premier Trust, Inc. | Nevada |
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Document and Entity Information - USD ($) |
12 Months Ended | ||
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Dec. 31, 2017 |
Mar. 09, 2018 |
Jun. 30, 2017 |
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Document And Entity Information [Abstract] | |||
Entity Registrant Name | LADENBURG THALMANN FINANCIAL SERVICES INC. | ||
Entity Central Index Key | 0001029730 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Document Fiscal Year Focus | 2017 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | LTS | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 200,283,645 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 247,728,046 |
CONSOLIDATED STATEMENT OF CHANGESIN SHAREHOLDERS’ EQUITY (Parenthetical) - USD ($) $ in Thousands |
12 Months Ended | ||
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Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
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Exercise of stock options, shares tendered in payment of exercise price (in shares) | 19,658 | 846,789 | 196,518 |
Shares paid for tax withholding for share-based compensation | 218,587 | 901,691 | |
Shares surrendered for tax withholding | $ 2,038 | ||
Preferred Stock | |||
Underwriting discount and expenses | $ 958 | $ 723 | $ 1,972 |
Option | |||
Exercise of stock options, shares tendered in payment of exercise price (in shares) | 1,715,019 | 1,129,195 | |
Warrant | |||
Exercise of stock options, shares tendered in payment of exercise price (in shares) | 846,789 | 196,518 |
Description of Business |
12 Months Ended |
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Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | Description of Business Ladenburg Thalmann Financial Services Inc. (the “Company”or "LTS") is a holding company. Its principal operating subsidiaries are Securities America (“Securities America”), Triad Advisors (“Triad”), Securities Service Network (“SSN”), Investacorp (“Investacorp”), KMS Financial Services (“KMS”), Ladenburg Thalmann & Co. (“Ladenburg”), Ladenburg Thalmann Asset Management (“LTAM”), Premier Trust ("Premier Trust"), Highland Capital Brokerage (“Highland”) and Ladenburg Thalmann Annuity Insurance Services ("LTAIS"). Securities America, Triad, Investacorp, KMS and SSN are registered broker-dealers and investment advisors that serve the independent financial advisor community. The independent financial advisors of these independent advisory and brokerage firms primarily serve retail clients. Such entities derive revenue from advisory fees and commissions, primarily from the sale of mutual funds, variable annuity products and other financial products and services. Ladenburg is a full service registered broker-dealer that has been a member of the New York Stock Exchange since 1879. Broker-dealer activities include sales and trading and investment banking. Ladenburg provides its services principally to middle-market and emerging growth companies and high net worth individuals through a coordinated effort among corporate finance, capital markets, brokerage and trading professionals. LTAM is a registered investment advisor. It offers various asset management products utilized by Ladenburg and Premier Trust’s clients, as well as clients of the Company's independent financial advisors. Premier Trust, a Nevada trust company, provides wealth management services, including administration of personal trusts and retirement accounts, estate and financial planning and custody services. Highland is an independent insurance broker that delivers life insurance, fixed and equity indexed annuities and long-term care solutions to investment and insurance providers. Highland provides specialized point-of-sale support along with advanced marketing and estate and business planning techniques, delivering customized insurance solutions to both institutional clients and independent producers. LTAIS provides marketing strategies, product expertise, and back-office processing for fixed and equity-indexed annuities. Securities America's, Triad's, Investacorp's, KMS', SSN's and Ladenburg's customer transactions are cleared through clearing brokers on a fully-disclosed basis and such entities are subject to regulation by, among others, the Securities and Exchange Commission (“SEC”), the Financial Industry Regulatory Authority (“FINRA”) and the Municipal Securities Rulemaking Board. Each entity is a member of the Securities Investor Protection Corporation. Highland and LTAIS are subject to regulation by various regulatory bodies, including state attorneys general and insurance departments. Premier Trust is subject to regulation by the Nevada Department of Business and Industry Financial Institutions Division. |
Summary of Significant Accounting Policies |
12 Months Ended |
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Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Principles of Consolidation The consolidated financial statements include the accounts of the Company and its subsidiaries, all of which are wholly- owned, except for one subsidiary organized in 2013, which is 80% owned, after elimination of all significant intercompany balances and transactions. Certain amounts in the prior period financial statements were reclassified to conform with the current period financial statement presentation. Use of Estimates The preparation of these consolidated financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Cash Equivalents The Company considers all highly liquid financial instruments with a maturity of three months or less when acquired to be cash equivalents. Cash equivalents at December 31, 2017 and 2016 consist of money market funds which are carried at fair value of $30,030 and $43,484, respectively. Fair value is based on quoted prices in active markets (Level 1). Revenue Recognition Commissions revenue results from transactions in equity securities, mutual funds, variable annuities and other financial products and services. Most of the commission and advisory fee revenue generated by independent contractor financial advisors is paid to the advisors as commissions and fees for initiating the transactions. Commission revenue is generated from front-end sales commissions that occur at the point of sale, as well as trailing commissions. Front-end sales commission revenue and related clearing and other expenses on transactions introduced to its clearing broker are recognized on a trade date basis. Front-end sales commissions and related expenses on transactions initiated directly between the financial advisors and product sponsors are recognized upon receipt of notification from sponsors of the commission earned. Commission revenue also includes 12b-1 fees, and fixed and variable product trailing fees, collectively considered as trailing fees, which are recurring in nature. These trailing fees are earned based on a percentage of the current market value of clients' investment holdings in trail eligible assets. Because trail commission revenues are generally paid in arrears, management estimates commission revenues earned during each period. These estimates are based on a number of factors including investment holdings and the applicable commission rate and the amount of trail commission revenue received in prior periods. Estimates are subsequently adjusted to actual based on notification from the sponsors of trail commissions earned. Commissions are also earned on the sale of insurance policies. Commissions are generally paid each year as long as the client continues to use the product. Commissions paid by insurance companies are based on a percentage of the premium that the insurance company charges to the policyholder. First-year commissions are calculated as a percentage of the first twelve months’ premium on the policy and earned in the year that the policy is originated. In many cases, renewal commissions are received for a period following the first year, if the policy remains in force. Insurance commissions are recognized as revenue when the following criteria are met: (1) the policy application and other carrier delivery requirements are substantially complete, (2) the premium is paid and (3) the insured party is contractually committed to the purchase of the insurance policy. Carrier delivery requirements may include additional supporting documentation, signed amendments and premium payments. Commissions earned on renewal premiums are generally recognized upon receipt from the carrier, since that is typically when notification is first received that such commissions have been earned. Advisory fee revenue represents fees charged by registered investment advisors to their clients based upon the value of advisory assets. Advisory fees are recorded as earned. Since advisory fees are based on assets under management, significant changes in the fair value of these assets will have an impact on the fees earned in future periods. Incentive fees are also earned based upon the performance of investment funds and accounts. Investment banking revenue consists of underwriting revenue, strategic advisory revenue and private placement fees. Underwriting revenues arise from securities offerings in which Ladenburg acts as an underwriter and include management fees, selling concessions and underwriting fees, net of related syndicate expenses. Underwriting revenues are recorded at the time the underwriting is completed and the income is reasonably determined. Strategic advisory revenue primarily consists of success fees on completed mergers and acquisitions transactions, and retainer and periodic fees earned by advising buyers and sellers in transactions. Fees are also earned for related strategic advisory work and other services such as providing fairness opinions and valuation analyses. Strategic advisory revenues are recorded when the transactions or the services (or, if applicable, separate components thereof) to be performed are substantially complete, the fees are determinable and collection is reasonably assured. Private placement fees, net of expenses, are recorded on the closing date of the transaction. Principal transactions revenue includes realized and unrealized net gains and losses resulting from investments in equity securities and equity-linked warrants received from certain investment banking assignments. Interest is recorded on an accrual basis and dividends are recorded on an ex-dividend date basis. Service fees and other income principally includes amounts charged to independent financial advisors for processing of securities trades and for providing administrative and compliance services and also includes marketing allowances earned from product sponsor programs. All such amounts are recorded as earned. As a result of adopting ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” effective January 1, 2018, the Company will amend its accounting policies on the recognition and presentation of certain revenues and related expenses. See “Recent Accounting Pronouncements” for further information. Fixed Assets Fixed assets are carried at cost net of accumulated depreciation and amortization. Depreciation is provided by the straight-line method over the estimated useful lives of the related assets. Leasehold improvements are amortized on a straight-line basis over the lease term, or their estimated useful lives, whichever is shorter. Share-Based Compensation The Company measures the cost of employee, officer and director services received in exchange for an award of equity instruments, including stock options and restricted stock, based on the grant-date fair value of the award. The cost is recognized as compensation expense over the service period, which would normally be the vesting period of the equity instruments. Compensation expense for share-based awards granted to independent contractors is measured at their vesting date fair value. The compensation expense recognized each period prior to vesting is based on the awards' estimated value at the most recent reporting date. Intangible Assets Intangible assets are amortized over their estimated useful lives, generally on a straight-line basis. Intangible assets subject to amortization are tested for recoverability whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The Company assesses the recoverability of its intangible assets by determining whether the unamortized balance can be recovered over the assets’ remaining life through undiscounted forecasted cash flows. If undiscounted forecasted cash flows indicate that the unamortized amounts will not be recovered, an adjustment will be made to reduce such amounts to fair value determined based on forecasted future cash flows discounted at a rate commensurate with the risk associated with achieving such cash flows. Future cash flows are based on trends of historical performance and the Company’s estimate of future performance, giving consideration to existing and anticipated competitive and economic conditions. See Note 7. Goodwill Goodwill, which was recorded in connection with acquisitions of subsidiaries (see Notes 3 and 8), is not subject to amortization and is tested for impairment annually, or more frequently if events or changes in circumstances indicate that the asset may be impaired. The impairment test consists of a comparison of the fair value of the reporting unit with its carrying amount. Fair value is typically based upon forecasted future cash flows discounted at a rate commensurate with the risk involved or market based comparables. If the carrying amount of the reporting unit exceeds its fair value then an analysis will be performed to compare the implied fair value of goodwill with the carrying amount of goodwill. An impairment loss will be recognized in an amount equal to the excess of the carrying amount over the implied fair value. After an impairment loss is recognized, the adjusted carrying amount of goodwill is its new accounting basis. Accounting guidance on the testing of goodwill for impairment allows entities the option of performing a qualitative assessment to determine the likelihood of goodwill impairment and whether it is necessary to perform such two-step quantitative impairment test. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers (the “Standard”), which completes the joint effort by the FASB and the International Accounting Standards Board to improve financial reporting by creating common revenue recognition guidance for GAAP and the International Financial Reporting Standards. The FASB has subsequently issued several amendments, including deferral of the effective date until January 1, 2018, clarification of principal versus agent considerations, narrow scope improvements and other technical corrections. The Standard also requires new qualitative and quantitative disclosures, including disaggregation of revenues and descriptions of performance obligations. The Standard, including clarifying amendments, became effective for fiscal years and interim periods within those years, beginning after December 15, 2017, with early adoption permitted. Amongst other things, the guidance provides for (i) determining whether revenue should be recognized at a point in time or over time, which replaces the previous distinction between goods and services, (ii) identifies distinct performance obligations, accounting for contract modifications and accounting for the time value of money and (iii) new, increased requirements for disclosure of revenue in the financial statements. Furthermore, the standard specifies how to account for the incremental costs of obtaining a contract and the costs directly associated with fulfilling a contract. Provided these costs are expected to be recovered, such costs will be capitalized, subsequently amortized over the useful life of customers and tested for impairment. The Company will adopt the provisions of this guidance on January 1, 2018, using the modified retrospective approach, with a cumulative-effect adjustment of approximately $29,344 increase to opening retained earnings. The impact of adoption is primarily related to the following areas: Gross vs. Net Reporting of Revenues - The presentation of revenues in the statement of operations on a gross basis or net of commissions earned by third party advisors and brokers, as follows: (a) presentation of a portion of advisory services revenue on a net basis which have historically been reported on a gross basis; and (b) presentation of a portion of insurance commissions revenue on a gross basis which have historically been reported on a net basis. While the Company’s total revenue is expected to be reduced by these changes prospectively, there will be offsetting impact to reduce operating expenses and no impact to operating profit. Renewal Commissions - The timing of revenue recognized for commissions on future renewals of insurance policies sold will be accelerated, as these future commissions represent variable consideration under the Standard and are required to be estimated and included in the transaction price, subject to the constraint. This change of accounting resulted in the recognition of a renewal commission receivable asset of approximately $58,788 and a corresponding renewal commission payable liability for the payments owed to the Company’s brokers of approximately $29,395, a removal of the previous net intangible of approximately $23,645 and an increase to opening retained earnings of approximately $5,748. Contract Origination Costs - The Company will capitalize certain incremental costs to obtain a customer contract or portfolio of customer contracts which have historically been recorded as a period expense. Recruitment fees consist primarily of fees paid to third party recruiters and compensation paid to employees for successful recruiting of financial advisors to join the Company’s independent advisory and brokerage services firms. Notes receivable from financial advisors consist of loans provided to newly recruited financial advisors to assist in the transition process, which are forgiven over a multi-year period subject to certain restrictions. Each of these costs is deferred and amortized over the estimated customer relationship period, which ranges from 6 to 10 years. This change of accounting resulted in the recognition of a contract asset and an increase to opening retained earnings of approximately $23,516. Contract Fulfillment Costs - The Company’s investment banking business includes underwriting services under contingent fee arrangements. Revenue and direct costs, except for a portion of employee compensation, associated with the underwriting service contract are deferred until the transaction is completed. If an underwritten securities transaction is not completed, the deferred costs are expensed. Effective January 1, 2018, the Company will include direct costs of the dedicated underwriting personnel in the determination of contract fulfillment costs required to be deferred under the Standard and recognized along with the associated revenue upon satisfaction of the performance obligation, subject to a recoverability assessment. Since the Company’s underwriting contracts are generally very short-term in duration, the recoverability assessment does not require a significant degree of estimation. This change of accounting resulted in the recognition of a contract asset and an increase to opening retained earnings of approximately $80. The adoption of the Standard is not expected to have other material impacts on the Company’s consolidated results of operations and financial condition. In January 2016, the FASB issued ASU 2016-01, Financial Instruments--Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, which amends the guidance in U.S. GAAP on the classification and measurement of financial instruments. Changes to the current guidance primarily affect the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. In addition, the ASU clarifies guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. The new standard is effective for fiscal years and interim periods beginning after December 15, 2017, and upon adoption, an entity should apply the amendments by means of a cumulative-effect adjustment to the balance sheet at the beginning of the first reporting period in which the guidance is effective. Early adoption is not permitted except for the provision to record fair value changes for financial liabilities under the fair value option resulting from instrument-specific credit risk in other comprehensive income. The Company does not expect a material effect on its consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which supersedes the existing guidance for lease accounting, Leases (Topic 840). ASU 2016-02 requires lessees to recognize leases on their balance sheets, and leaves lessor accounting largely unchanged. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Early application is permitted for all entities. ASU 2016-02 requires a modified retrospective approach for all leases existing at, or entered into after, the date of initial application, with an option to elect to use certain transition relief. The Company's current lease arrangements expire through 2030 and the Company is currently assessing the impact that the adoption of ASU 2016-02 will have on its consolidated financial statements. In March 2016, the FASB amended the existing accounting standards for stock-based compensation, ASU 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The amendments impact several aspects of accounting for share-based payment transactions, including the income tax consequences, forfeitures, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The Company adopted the amendments in the first quarter of 2017. Prior to adoption of ASU 2016-009, tax attributes related to stock option windfall deductions were not recorded until they resulted in a reduction of cash tax payable. As of December 31, 2016, the tax benefit related to the excluded windfall deductions for federal and state purposes was approximately $4,458. Upon adoption of ASU 2016-09, the Company recognized the tax benefit related to the excluded windfall deductions as a deferred tax asset with a corresponding offset of $4,446 to valuation allowance. In regards to the forfeiture policy election, the Company is not continuing to estimate the number of awards expected to be forfeited, rather the Company will elect to account for forfeitures as they occur. As of December 31, 2016, additional compensation cost related to the elimination of estimated forfeitures was $63, net of estimated tax benefit of $12, which is reflected in the statement of changes in shareholders' equity. No other terms of the adopted guidance resulted in an impact on the Company's consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments, ASU 2016-15 is intended to reduce diversity in practice on how certain cash receipts and payments are presented and classified in the statement of cash flows. The standard provides guidance in a number of situations including, among others, settlement of zero-coupon bonds, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, and distributions received from equity method investees. ASU 2016-15 also provides guidance for classifying cash receipts and payments that have aspects of more than one class of cash flows. ASU 2016-15 is effective for the Company's fiscal year beginning January 1, 2018. Early adoption is permitted. The standard requires application using a retrospective transition method. The adoption of this guidance is not expected to have a material impact on the Company's consolidated financial statements. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230). ASU 2016-18 provides guidance on the classification of restricted cash to be included with cash and cash equivalents when reconciling the beginning of period and end of period total amounts on the statement of cash flows. This pronouncement is effective for reporting periods beginning after December 15, 2017 using a retrospective adoption method and early adoption is permitted. The adoption of this guidance is not expected to have a material impact on the Company's consolidated financial statements. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. ASU 2017-01 provides that when substantially all the fair value of the assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. ASU 2017-01 became effective for transactions beginning in the first quarter of 2017 and is being applied prospectively. The adoption of ASU 2017-01 did not have any impact on the Company’s consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, an amendment to simplify the subsequent quantitative measurement of goodwill by eliminating step two from the goodwill impairment test. As amended, an entity will recognize an impairment charge for the amount by which the carrying amount of a reporting unit exceeds its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. An entity still has the option to perform the qualitative test for a reporting unit to determine if the quantitative impairment test is necessary. This amendment is effective for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019 and applies prospectively. Early adoption is permitted, including in an interim period, for impairment tests performed after January 1, 2017. The Company has not elected to early adopt ASU 2017-04. The adoption of this guidance is not expected to have a material impact on the Company's consolidated financial statements. |
Acquisitions |
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Acquisitions | Acquisitions SSN On January 2, 2015, the Company acquired the capital stock of SSN and an affiliated company, Renaissance Capital Corporation ("RCC"). SSN is an independent registered investment advisor, broker-dealer, and insurance agency based in Knoxville, TN. RCC is a corporation that owns fixed assets leased to SSN. The purchase price was approximately $47,287, including $25,000 principal amount of secured short-term promissory notes, paid in full on the business day following the closing date, and $20,000 principal amount of secured four-year promissory notes, bearing interest at 1.74% per annum and payable in 16 equal quarterly installments of principal and interest (valued at $18,697 based on the imputed interest rate of 5.10%). The promissory notes are secured by a pledge of the shares of SSN and RCC purchased in the acquisition pursuant to a stock pledge agreement. The Company paid approximately $3,590 subsequent to the closing date, which is included in the purchase price above, based on the amount by which the aggregate net worth of SSN and RCC as of the closing date of the acquisition exceeded a targeted amount. Legal and other related acquisition costs of approximately $51 and $523 were incurred and charged to expenses in 2015 and 2014, respectively. The Company conducted a valuation study to determine the acquisition-date fair value of assets acquired and liabilities assumed and related allocation of purchase price of SSN. The following table summarizes the fair value of assets acquired and liabilities assumed at the acquisition date:
(1) Increased by $484 from amounts originally reported. (2) Increased by $9,100 from amounts originally reported. The Company has elected under Section 338 of the Internal Revenue Code to treat the acquisition as an asset acquisition and, accordingly, goodwill will be deductible for income tax purposes over 15 years. Goodwill was assigned to the independent advisory and brokerage services segment. Factors that contributed to a purchase price resulting in the recognition of goodwill includes SSN's strategic fit with the Company's existing businesses, including the resulting synergies and economies of scale expected from the acquisition. Identifiable intangible assets as of the acquisition date consist of:
Fair value amounts (Level 3 inputs) were determined using an income approach for relationships with financial advisors and non-compete agreements, the relief from royalty method for trade names and the cost approach for developed technology. Other In September 2016, Securities America Financial Corporation ("SAFC"), which is the parent of Securities America, purchased certain assets of Wall Street Financial Group, Inc. ("Wall Street"), which was deemed to be a business acquisition. Relationships with certain registered representatives and investment advisor representatives including their client accounts were acquired. The consideration for the transaction was $3,468, consisting of cash of $1,192 and contingent consideration having a fair value of $2,276, for which a liability was recognized based on the estimated acquisition-date fair value of the potential earn-out. The liability was valued using a Monte Carlo simulation based option pricing model. The fair value measurement of the earn-out, which relates to the three-year period following closing, is based on unobservable inputs (Level 3) and reflects the Company’s own assumptions. The purchase price was allocated as follows: $3,070 to identifiable intangibles and $398 to goodwill. In December 2016, SAFC purchased certain assets of Foothill Securities, Inc. ("Foothill"), which was deemed to be a business acquisition. Relationships with certain registered representatives and investment advisor representatives including their client accounts were acquired. The consideration for the transaction was $5,571, consisting of cash of $2,905 and contingent consideration having a fair value of $2,666, for which a liability was recognized based on the estimated acquisition-date fair value of the potential earn-out. The liability was valued using a Monte Carlo simulation based option pricing model. The fair value measurement of the earn-out, which relates to the three-year period following closing, is based on unobservable inputs (Level 3) and reflects the Company’s own assumptions. The purchase price was allocated as follows: $4,640 to identifiable intangibles and $931 to goodwill. In July 2015, Highland purchased certain assets of the insurance brokerage business of Select Brokerage Services Inc. ("Select"), which was deemed to be a business acquisition. The consideration for the transaction was $2,019, consisting of cash of $503 paid upon closing, a deferred payment of $504 due on the first anniversary of the closing date and contingent consideration having a fair value of $1,012 for which a liability was recognized based on estimated acquisition-date fair value of the potential earn-out. The liability was valued using an income-based approach of the earn-out’s probability-weighted expected payout using three earn-out scenarios. The measurement of the earn-out, which relates to a four-year period, is based on unobservable inputs (Level 3) and reflects the Company’s own assumptions. The purchase price was allocated $2,019 to identifiable intangibles and other assets. In June 2015, Securities America purchased certain assets of Dalton Strategic Investment Services, Inc. ("Dalton"), which was deemed to be a business acquisition. Relationships with certain registered representatives and investment advisor representatives including their client accounts were acquired. The consideration for the transaction was $2,689, consisting of cash of $2,100 and contingent consideration having a fair value of $589, for which a liability was recognized based on the estimated acquisition-date fair value of the potential earn-out. The liability was valued using an income-based approach discounting to present value the earn-out’s probability weighted expected payout using three earn-out scenarios. The fair value measurement of the earn-out which relates to a three-year period, is based on unobservable inputs (Level 3) and reflects the Company’s own assumptions. The purchase price was allocated as follows: $2,675 to identifiable intangibles and other assets and $14 to goodwill. Results of operations relating to Wall Street, Foothill, Sunset, Select and Dalton, which are included in the accompanying consolidated statements of operations from their respective dates of acquisition, were not material. In addition, based on materiality, pro forma results were not presented. |
Fair Value of Assets and Liabilities |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Assets and Liabilities | Fair Value of Assets and Liabilities Authoritative accounting guidance defines fair value, establishes a framework for measuring fair value, and establishes a fair value hierarchy which prioritizes the inputs to valuation techniques. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market. Valuation techniques that are consistent with the market or income approach are used to measure fair value. The fair value hierarchy ranks the quality and reliability of the information used to determine fair values. Financial assets and liabilities carried at fair value are classified and disclosed in one of the following three categories: Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 — Inputs other than quoted market prices that are observable, either directly or indirectly, and reasonably available. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability and are developed based on market data obtained from sources independent of the Company. Level 3 — Unobservable inputs which reflect the assumptions that the Company develops based on available information about what market participants would use in valuing the asset or liability. The following tables presents the carrying values and estimated fair values at December 31, 2017 and December 31, 2016 of financial assets and liabilities, excluding financial instruments that are carried at fair value on a recurring basis, and information is provided on their classification within the fair value hierarchy. Such instruments are carried at amounts that approximate fair value due to their short-term nature and generally negligible credit risk.
(1) Carrying value approximates fair value, which is determined based on a valuation technique to convert future cash payments or forgiveness transactions to a single discounted preset value amount. (2) Excludes contingent consideration liabilities of $2,104. (3) Estimated fair value based on then current rates at which similar amounts of debt could be borrowed.
(1) Carrying value approximates fair value, which is determined based on a valuation technique to convert future cash payments or forgiveness transactions to a single discounted preset value amount. (2) Excludes contingent consideration liabilities of $7,144. (3) Estimated fair value based on then current rates at which similar amounts of debt could be borrowed. The following tables presents the financial assets and liabilities measured at fair value on a recurring basis at December 31, 2017 and December 31, 2016:
As of December 31, 2017 and December 31, 2016, approximately $3,265 and $3,161, respectively, of securities owned were deposited with clearing brokers and may be sold or hypothecated by the clearing brokers pursuant to clearing agreements with such clearing brokers. Securities sold, but not yet purchased, at fair value represents obligations of the Company’s subsidiaries to purchase the specified financial instrument at the then current market price. Accordingly, these transactions result in off-balance-sheet risk as the Company’s subsidiaries’ ultimate obligation to repurchase such securities may exceed the amount recognized in the consolidated statements of financial condition. Debt securities and U.S. Treasury notes are valued based on recently executed transactions, market price quotations, and pricing models that factor in, as applicable, interest rates and bond default risk spreads. Warrants are carried at a discount to fair value as determined by using the Black-Scholes option pricing model due to illiquidity. This model takes into account the underlying securities current market values, the underlying securities market volatility, the terms of the warrants, exercise prices, and risk-free return rate. As of December 31, 2017 and December 31, 2016, the fair values of the warrants were $475 and $252, respectively, and are included in common stock and warrants (level 2) above. From time to time, Ladenburg receives common stock as compensation for investment banking services. These securities are restricted under applicable securities laws and may be freely traded only upon the effectiveness of a registration statement covering them or upon the satisfaction of the requirements of Rule 144, including the requisite holding period. Restricted common stock is classified as Level 2 securities. Set forth below are changes in the carrying value of contingent consideration related to acquisitions, which is included in accounts payable and accrued liabilities:
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Net Capital Requirements |
12 Months Ended |
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Dec. 31, 2017 | |
Regulatory Capital Requirements [Abstract] | |
Net Capital Requirements | Net Capital Requirements The Company’s broker-dealer subsidiaries are subject to the SEC’s Uniform Net Capital Rule 15c3-1, which requires the maintenance of minimum net capital. Each of Securities America, Triad, Investacorp, KMS, SSN and Ladenburg has elected to compute its net capital under the alternative method allowed by this rule, and, at December 31, 2017, each had a $250 minimum net capital requirement. At December 31, 2017, Securities America had regulatory net capital of $8,628, Triad had regulatory net capital of $6,935, Investacorp had regulatory net capital of $8,777, KMS had regulatory net capital of $6,470, SSN had regulatory net capital of $6,604 and Ladenburg had regulatory net capital of $24,265. Securities America, Triad, Investacorp, KMS, SSN and Ladenburg claim exemptions from the provisions of the SEC’s Rule 15c3-3 pursuant to paragraph (k)(2)(ii) as they clear their customer transactions through correspondent brokers on a fully disclosed basis. On February 26, 2016, Triad sent written notification to FINRA of a net capital deficiency of $1,579 at January 31, 2016, which arose from changing its methodology of recognizing intra-quarterly revenue and related commission expense. Such methodology resulted in the recording of a non-allowable asset for purposes of computing net capital. At February 29, 2016, the deficiency had been cured through the amortization of the non-allowable asset and Triad has taken steps to prevent recurrence. Also, the Company contributed $2,500 to Triad to increase its capital for purposes of maintaining excess net capital prospectively. Premier Trust, chartered by the state of Nevada, is subject to regulation by the Nevada Department of Business and Industry Financial Institutions Division. Under Nevada law, Premier Trust must maintain minimum stockholders’ equity of at least $1,000, including at least $250 in cash. At December 31, 2017, Premier Trust had stockholders’ equity of $2,312, including at least $250 in cash. |
Fixed Assets |
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Property, Plant and Equipment [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fixed Assets | Fixed Assets Components of fixed assets, net included in the consolidated statements of financial condition were as follows:
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Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intangible Assets | Intangible Assets At December 31, 2017 and 2016, intangible assets subject to amortization consisted of the following:
Aggregate amortization expense amounted to $21,327, $20,703 and $20,650 for the years ended December 31, 2017, 2016 and 2015, respectively. The weighted-average amortization period for total amortizable intangibles at December 31, 2017 is 8.82 years. Estimated amortization expense for each of the five succeeding years and thereafter is as follows:
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Goodwill |
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Goodwill and Intangible Asset Impairment [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill | Goodwill Changes to the carrying amount of goodwill during the years ended December 31, 2017 and 2016 are as follows:
(1) During 2016, the Company corrected the allocation of purchase price related to the Securities America acquisition, which resulted in a decrease of $2,870 in goodwill and related decrease in deferred tax liability. (2) During 2017, Securities America corrected the allocation of purchase price related to the Foothill acquisition, which resulted in an increase in goodwill and related increase in contingent deferred liability. The annual impairment tests performed at December 31, 2017 and 2016, based on quantitative assessments, did not indicate that the carrying value of goodwill had been impaired. However, changes in circumstances or business conditions could result in an impairment of goodwill. |
Notes Receivable from Financial Advisors |
12 Months Ended |
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Dec. 31, 2017 | |
Receivables [Abstract] | |
Notes Receivable from Financial Advisors | Notes Receivable from Financial Advisors From time to time, the Company’s subsidiaries may make loans to their financial advisors. These loans are primarily given to newly-recruited advisors to assist in the transition process. The notes receivable balance is comprised of unsecured non-interest-bearing and interest-bearing loans (interest of up to 10.0%) to the financial advisors. These notes have various schedules for repayment or forgiveness and mature at various dates through 2025. The notes are amortized over the forgiveness period which generally ranges from 3 to 5 years. Receivables are continually evaluated for collectability and possible write-offs and an allowance for doubtful accounts is provided where a loss is considered probable. As of December 31, 2017 and 2016, the allowance amounted to $416 and $371, respectively. |
Deferred Compensation Plan |
12 Months Ended |
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Dec. 31, 2017 | |
Deferred Compensation Plans Disclosure [Abstract] | |
Deferred Compensation Plan | Deferred Compensation Plan Securities America has a deferred compensation plan which allowed certain members of management and qualified financial advisors to defer a portion of their compensation and commissions. Participants were able to elect various distribution options, but must be a plan participant for five years before any distributions can be made. Securities America has purchased variable life insurance contracts with cash surrender values that are designed to replicate the gains and losses of the deferred compensation liability and are held in a consolidated Rabbi Trust. The cash surrender values of the life insurance contracts held in the Rabbi Trust are intended to informally fund a portion of the deferred compensation liability. Securities America is the owner and beneficiary of these policies, for which the aggregated cash surrender value totaled $12,711 and $10,210 as of December 31, 2017 and 2016, respectively. The deferred compensation liability of $18,161 and $17,247 as of December 31, 2017 and 2016, respectively, reflects the current value of the deferred compensation benefits, which is subject to change with market value fluctuations. The deferred compensation liability is equal to the theorized value of the underlying employee investment fund elections in the plan. Changes in the value of the assets or liabilities are recognized in the consolidated statements of operations. |
Income Taxes |
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Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes The provision for income taxes for 2017, 2016 and 2015 consisted of the following:
The difference between the income taxes expected at the U.S. federal statutory income tax rate of 35% and the reported income tax expense (benefit) is summarized as follows:
On December 22, 2017, the U.S. government enacted comprehensive tax reform commonly referred to as the Tax Cuts and Jobs Act (“TCJA”). Under GAAP, the effects of changes in tax rates and laws are recognized in the period which the new legislation is enacted. The Tax Act makes broad and complex changes to the U.S. tax code, including, but not limited to: (1) reducing the U.S. federal corporate tax rate from 35% to 21%; (2) changing rules related to uses and limitations of net operating loss carryforwards created in tax years beginning after December 31, 2017; (3) bonus depreciation that will allow for full expensing of qualified property; (4) creating a new limitation on deductible interest expense; (5) eliminating the corporate alternative minimum tax; (6) allowing for unused alternative minimum tax credit carryovers to be refunded over a period of time or available to offset any future federal tax liabilities; (7) limitation on the deductibility of executive compensation under IRC §162(m); and (8) new tax rules related to foreign operations. On December 22, 2017 ,the SEC staff issued Staff Accounting Bulletin No. (SAB 118), which provides guidance on accounting for the tax effects of TCJA. The purpose of SAB 118 was to address any uncertainty or diversity of view in applying GAAP in the reporting period in which the TCJA was enacted. SAB 118 addresses situations where the accounting is incomplete for certain income tax effects of the TJCA upon issuance of a company’s financial statements for the reporting period which include the enactment date. SAB 118 allows for a provisional amount to be recorded if it is a reasonable estimate of the impact of the TCJA. Additionally, SAB 118 allows for a measurement period to finalize the impacts of the TCJA, not to extend beyond one year from the date of enactment. The Company recognized an income tax benefit of $6,502 million for the year ended December 31, 2017 related to (i) a deferred tax benefit related to the reduction in the deferred tax liability of $3,364 attributable to the re-measurement of the deferred tax liability for indefinite lived intangibles and goodwill for the reduced federal tax rate of 21% as a result of the TCJA; (ii) a deferred tax benefit related to the reduction of the valuation allowance of $4,837 attributable to deferred tax liabilities associated with indefinite lived intangibles and goodwill that became available as a source of income to offset existing deferred tax assets due to the modifications in the net operating loss carryforwards period as a result of the TCJA; (iii) deferred tax provision of $937 related to the current year tax amortization of indefinite lived intangibles and goodwill and changes in separate state taxing jurisdiction deferred tax liabilities; (iv) a deferred tax benefit of $411 related to Alternative Minimum Tax credits carryforwards that will be refundable as a result of the TCJA; and (v) an income tax provision of $1,171 for current federal and state taxes. The Company accounts for income taxes under the asset and liability method, which requires the recognition of tax benefits or expense on the temporary differences between the tax basis and financial statement basis of its assets and liabilities as well as tax loss carryforwards. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those differences are expected to be recovered or settled. Significant components of the Company's deferred tax assets and liabilities as of December 31, 2017 and December 31, 2016 are as follows:
At December 31, 2017, the Company had a consolidated federal net operating loss carryforward of approximately $29,756, which expires in various years from 2031 to 2036. The annual utilization of the net operating loss carryforward may be limited in future years due to the change in ownership provisions prescribed by Section 382 of the U.S. Internal Revenue Code. In addition, the Company has a Florida state net operating loss carryforward of approximately $22,731 expiring between 2031 and 2036; a New York state net operating loss carryforward of approximately $41,580 expiring in 2036; and a New York City net operating loss carryforward of approximately $42,007 expiring in 2036. Goodwill for tax purposes recognized in connection with the acquisition of Triad by the Company, all of which is tax deductible, exceeded the amount of goodwill recognized in the financial statements. Authoritative accounting guidance in effect when the acquisition was consummated requires the tax benefit for the excess goodwill to be recognized when realized and applied first to reduce goodwill and thereafter reduce non-current intangible assets with the remaining benefit recognized as a reduction of income tax expense. In assessing the Company's ability to recover its deferred tax assets, the Company evaluated whether it is more likely than not that some portion or the entire deferred tax asset will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income in those periods in which temporary differences become deductible and/or net operating losses can be utilized. The Company considered all positive and negative evidence when determining the amount of the net deferred tax assets that are more likely than not to be realized. This evidence includes, but is not limited to, historical earnings, scheduled reversal of taxable temporary differences, tax planning strategies and projected future taxable income. As of December 31, 2017, the Company continued to have a cumulative three year loss. As such, the Company has recorded a valuation allowance against its net deferred tax assets with the exception of Alternative Minimum Tax credit carryforwards. As of December 31, 2017, the deferred tax liability of $2,968 relates to (i) a deferred tax liability of $7,415 related to the tax effects of differences between the financial reporting and tax basis of indefinite-lived intangible assets and goodwill; (ii) a deferred tax liability of $801 related to subsidiaries which file in separate state jurisdictions; (iii) a deferred tax asset of $4,837 for certain existing deferred tax assets that are expected to have an indefinite life as result of the TCJA modifications to the federal net operating loss carryforward rules as the indefinite-lived intangibles and goodwill are now a source of future taxable income; and (iv) $411 related to Alternative Minimum Tax credits which are refundable in future years as a result of modifications made by the TCJA . During 2017, the Company’s valuation allowance decreased by approximately $8.2 million, $11.2 million primarily related to re-measurement due to the reduction as a result of the TCJA in the U.S. federal corporate income tax rate from 35% to 21% and the realization of certain existing deferred tax assets that are expected to have an indefinite life as the indefinite lived intangibles and goodwill may now be considered a source of future taxable income, offset by $3.0 million related to accounting for stock based compensation under ASU 2016-09. The Company applied the "more-likely-than-not" recognition threshold to all tax positions taken or expected to be taken in a tax return, which resulted in unrecognized state tax benefits as of December 31, 2017 and December 31, 2016. The Company has elected to classify interest and penalties that would accrue with respect to unrecognized tax benefits as interest and other expense, respectively. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
Of the amounts reflected in the above table at December 31, 2017, the entire amount would reduce the Company’s annual effective tax rate if recognized. As of December 31, 2017, the Company accrued interest and penalties of approximately $181. As of December 31, 2017, the Company does not anticipate a significant change in unrecognized tax benefits within 12 months of the reporting date. The Company files income tax returns in the United States and various state jurisdictions. The Company's tax years 2012 through 2017 remain open to examination by most taxing authorities. Prior to being acquired by the Company in November 2011, Securities America was included in consolidated federal and state income tax returns filed by its parent Ameriprise Financial, Inc. ("Ameriprise"). Accordingly, Securities America is jointly, with other members of the consolidated group, and severally liable for any additional taxes that may be assessed against the group. In connection with the acquisition, Ameriprise has agreed to indemnify the Company for any such assessments imposed on any members of the group other than Securities America. Ameriprise has disclosed that in 2017 the IRS completed auditing its U.S. income tax returns for 2008 through 2010. However, the years remain open because of certain un-agreed upon issues. Ameriprise has also disclosed that its, or certain of its subsidiaries’, state income tax returns are currently under examination by various jurisdictions for years ranging from 2005 through 2011 and remain open for all years after 2011. |
Notes Payable |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Notes Payable | Notes Payable Notes payable consisted of the following:
Revolving Credit Agreement In 2007, the Company entered into a $40,000 revolving credit agreement with Frost Gamma Investments Trust (“Frost Gamma”), an affiliate of the Company’s chairman of the board and principal shareholder. Borrowings of up to $40,000 are permitted under the Frost Gamma credit agreement and bear interest at a rate of 11% per annum, payable quarterly. The Company may repay outstanding amounts at any time prior to the maturity date of August 25, 2021, without penalty, and may re-borrow up to the full amount of the agreement. At December 31, 2017 and 2016, the Company had no outstanding balance under the revolving credit agreement. The Company borrowed and repaid $25,000 in November 2016. Interest expense amounted to $0, $113 and $0 in 2017, 2016 and 2015, respectively. The note issued under the credit agreement contains customary events of default, which, if uncured, entitle the holder to accelerate the due date of the unpaid principal amount of, and all accrued and unpaid interest on, such note. Under the revolving credit agreement, Frost Gamma received a warrant to purchase 2,000,000 shares of LTS common stock. The warrant was exercised on October 19, 2017 at an exercise price of $1.91 per share. The warrant, which was classified as debt issue cost, was valued at $3,200 based on the Black-Scholes option pricing model, and was amortized under the straight-line method over the remaining term of the revolving credit agreement. NFS Forgivable Loans On November 4, 2011, National Financial Services LLC (“NFS”), which is now known as Fidelity Clearing & Custody Solutions ("Fidelity"), a Fidelity Investments® company, provided the Company with a seven-year, $15,000 forgivable loan. The Company used the proceeds to fund expenses related to the Securities America acquisition. Interest on the loan accrues at the average annual Federal Funds effective rate plus 6% per annum, subject to the maximum rate of 11% per annum. If Securities America meets certain annual clearing revenue targets set forth in the loan agreement, the principal balance of the loan is forgiven in seven equal yearly installments of $2,143 through November 2018. Interest payments due with respect to each such year will also be forgiven if the annual clearing revenue targets are met. The Company continues to expense interest under this loan agreement until such time as such interest is forgiven. Securities America met the annual clearing revenue target for the period ending November 4, 2012, 2013, 2014, 2015, 2016 and 2017 resulting in the forgiveness of $2,143 of the aggregate principal amount of the loan in November of each period. Upon meeting annual revenue targets, principal and interest, respectively, of $2,143 and $295 in 2017, $2,143 and $408 in 2016 and $2,143 and $525 in 2015 were forgiven and included in other income. Principal and interest, respectively, of $1,786 and $94, were also forgiven and included in other income in 2015 in connection with a prior forgivable loan with NFS. The 2011 forgivable loan agreement contain other covenants, including limitations on the incurrence of additional indebtedness, maintaining minimum adjusted shareholders’ equity levels and a prohibition on the termination of our $40,000 revolving credit agreement prior to its current maturity. Upon the occurrence of an event of default, the outstanding principal and interest under the 2011 forgivable loan agreements may be accelerated and become due and payable. If the clearing agreements between Fidelity and certain of our broker-dealer subsidiaries are terminated prior to the loan maturity date, all amounts then outstanding must be repaid on demand. The clearing agreements contain customary termination provisions. Fidelity is permitted to terminate such agreements following certain termination events, including, but not limited to, our breach of such agreements that is not cured within any applicable time periods. The Fidelity loan is conditioned upon the continuation of the clearing agreements with Fidelity and any termination of the clearing agreements by Fidelity prior to the loan maturity date wold require us to repay any outstanding amount under the Fidelity loan. The 2011 loan agreement is secured by the Company’s, but not its subsidiaries’, deposits and accounts held at Fidelity or its affiliates, which amounted to $91,975 at December 31, 2017. In November 2017, the Company amended its 2011 forgivable loan agreement with Fidelity to confirm the annual clearing revenue target for 2017 had been satisfied and to permit the incurrence of certain additional indebtedness. Securities America Notes On November 4, 2011 (the “Closing Date”), in connection with the Securities America acquisition, the Company entered into a loan agreement with various lenders (the “Lenders”), under which the Lenders provided a loan to the Company in an aggregate principal amount of $160,700 (the "November 2011 Loan"), a portion of which was used to fund the cash purchase price payable on the Closing Date. Interest on the November 2011 Loan was payable quarterly at 11% per annum. The remaining balance of the loan, together with accrued and unpaid interest thereon, was paid on November 10, 2016. On the Closing Date, the Company paid a one-time aggregate funding fee of $804 to the Lenders and issued warrants to purchase an aggregate of 10,713,332 shares of the Company's common stock. The warrants were valued at $9,428 utilizing the Black-Scholes option pricing model. The value of the warrants were credited to additional paid-in capital with a corresponding reduction in the carrying value of the notes as debt discount, which was amortized over the term of the notes by the interest method. On October 26, 2016, holders of the remaining unexercised warrants to purchase an aggregate of 10,699,999 shares of our common stock exercised such warrants in full. Each holder paid the exercise price by cancellation of indebtedness represented by the remaining balance of the promissory note held by such lender. Accordingly, promissory notes with an aggregate remaining outstanding balance of $17,976 were canceled and no indebtedness related to the November 2011 Loan remained outstanding. The Company prepaid during 2015 $11,852 principal amount of the November 2011 Loan. In connection with the prepayment, the Company recorded a loss on extinguishment of debt for the year ended December 31, 2015 of $252, which included unamortized discounts and the write-off of debt issuance costs. Interest paid to Frost Nevada and Vector Group Ltd ("Vector") amounted to $1,779 and $198 in 2016, $2,034 and $226 in 2015, respectively. Bank Loans - Securities America On November 6, 2013, SAFC entered into a loan agreement (the "SA Loan Agreement") with a third-party financial institution for (i) a term loan in the aggregate principal amount of approximately $1,709 and (ii) a revolving credit facility. The term loan bore interest at 5.5%, and was re-paid in full in May 2017. At December 31, 2016, $153 was outstanding under this term loan. Revolving loans bear interest at 5.5% per annum over a 5-year term. At December 31, 2017 and 2016, repectively, $216 and $620 were outstanding under the revolving credit facility. On April 21, 2017, the SA Loan Agreement was amended to modify the interest rate for new revolving loans to prime plus 2.25%. The SA Loan Agreement was also amended to provide for an additional term loan in the aggregate principal amount of $8,000, subject to certain conditions. This $8,000 term loan bears interest at 5.75% and matures on May 1, 2020. At December 31, 2017, $6,563 was outstanding under this term loan. The loans are collateralized by Securities America's assets. The SA Loan Agreement contains certain affirmative and negative covenants, including covenants regarding Securities America's client asset levels and number of financial advisors. Promissory Notes - Highland As of December 31, 2017 and 2016, HCHC Acquisition, as successor in interest to Highland's parent, had outstanding $6,738 of its 10% promissory notes due February 26, 2019. Accrued interest on the promissory notes is payable quarterly. Promissory Notes - KMS On October 15, 2014, as part of the consideration paid for the acquisition of KMS, the Company issued four-year promissory notes to the former shareholders of KMS in the aggregate principal amount of $8,000, bearing interest at 1.84% per annum and payable in equal quarterly installments of principal and interest which were valued at $7,508 based on an imputed interest rate of 5.5%. The notes mature in October 2018. The carrying value of promissory notes at December 31, 2017 and 2016, respectively, net of $98 and $221 unamortized discount, amounts to $1,958 and $3,852. The former shareholders of KMS who hold such notes at December 31, 2017 include KMS's chairman $612 and president $225. Total interest expense to former shareholders who are current officers of KMS was $22, $37 and $51, respectively, for the years ended 2017, 2016 and 2015. Promissory Notes - SSN On January 2, 2015, as part of the consideration paid for the acquisition of SSN, the Company issued four-year promissory notes to the former shareholders of SSN in the aggregate principal amount of $20,000, bearing interest at 1.74% per annum and payable in equal quarterly installments of principal and interest, which were valued at $18,697 based on an imputed interest rate of 5.1%. The notes mature in January 2019. The carrying value of promissory notes at December 31, 2017 and 2016, respectively, net of $326 and $651 of unamortized discount, amounts to $6,074 and $10,769. The former shareholders of SSN who hold such notes include SSN's president and chief executive officer $128. Total interest expense to former shareholders who are current officers of SSN was $3 and $5, respectively, for the years ended 2017 and 2016. Senior Notes On November 21, 2017, the Company sold $72,500 principal amount of its 6.5% senior notes due November 2027 ("Notes"). Interest on the Notes accrues from November 21, 2017 and paid quarterly in arrears on March 31, June 30, September 30 and December 31 of each year, commencing on December 31, 2017. The Company may redeem the Notes in whole or in part on or after November 30, 2020, at its option, at a redemption price equal to 100% of their principal amount, plus accrued and unpaid interest. On December 12, 2017, the underwriters exercised their option to purchase an additional $4,069 principal amount of the notes, which brought the total gross proceeds to $76,569, before deducting the underwriting discount paid to unaffiliated underwriters and offering expenses aggregating $3,313, including $1,187 of brokerage commissions earned by employees of Ladenburg, which served as the lead underwriter in the offering. In February 2018, the Company entered into a note distribution agreement under which the Company may sell up to $25,000 principal amount of additional senior notes in an "at the market" offering. Ladenburg is acting as agent in the at the offering and may receive commissions of up to 2% of gross sales. In connection with the offering of Notes, certain members of the Company's management and Board of Directors purchased $10,400 of the Notes offered by the Company. |
Commitments and Contingencies |
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Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | Commitments and Contingencies Operating Leases The Company and certain of its subsidiaries are obligated under several non-cancelable lease agreements for office space, expiring in various years through January 2032. Certain leases have provisions for escalation based on specified increases in costs incurred by the landlord. The Company is a sublessor to third parties for a portion of its office space as described below. The subleases expire at various dates through August 2020. As of December 31, 2017, minimum lease payments (net of lease abatement and exclusive of escalation charges) and sublease rentals are as follows:
(1) Includes $2,727 for the Miami office space which was renewed in March 2018. (2) In connection with a new office lease entered into in March 2016, Securities America has exercised an option to lease additional office space, which has not yet been constructed, for 12 years and would require the payment of an estimated average annual rent of $2,000, subject to certain adjustments. The Company currently expects that this lease would commence in 2020 upon the completion of the construction. Such estimated rent amounts are included in the lease commitment table above. Deferred rent of $2,151 and $1,764 at December 31, 2017 and 2016, respectively, represents lease incentives related to the value of landlord financed improvements together with the difference between rent payable calculated over the life of the leases on a straight-line basis (net of lease incentives), and rent payable on a cash basis. Litigation and Regulatory Matters In December 2014 and January 2015, two purported class action suits were filed in the U.S. District Court for the Southern District of New York against American Realty Capital Partners, Inc. (“ARCP”), certain affiliated entities and individuals, ARCP’s auditing firm, and the underwriters of ARCP’s May 2014 $1,656,000 common stock offering (“May 2014 Offering”) and three prior note offerings. The complaints have been consolidated. Ladenburg was named as a defendant as one of 17 underwriters of the May 2014 Offering and as one of eight underwriters of ARCP’s July 2013 offering of $300,000 in convertible notes. The complaints allege, among other things, that the offering materials were misleading based on financial reporting of expenses, improperly-calculated AFFO (adjusted funds from operations), and false and misleading Sarbanes-Oxley certifications, including statements as to ARCP’s internal controls, and that the underwriters are liable for violations of federal securities laws. The plaintiffs seek an unspecified amount of compensatory damages, as well as other relief. In June 2016, the court denied the underwriters’ motions to dismiss the complaint. In August 2017, the court granted the plaintiffs' motion for class certification, which is currently pending appeal. Ladenburg intends to vigorously defend against these claims. In September 2015, Securities America was named as a defendant in lawsuits brought by the bankruptcy trustee of a broker-dealer (U.S. Bankruptcy Court for the District of Minnesota) and a putative class action by the shareholders of that broker-dealer (U.S. District Court for the District of Minnesota). The lawsuits allege that certain of the debtor broker-dealer’s assets were transferred to Securities America in June 2015 for inadequate consideration. In October 2016, a settlement was reached with the bankruptcy trustee resolving those claims; the amount paid in connection with the settlement was not material. In May 2017, the remaining complaint was dismissed by the court, with no payment by Securities America. In November 2015, two purported class action complaints were filed in state court in Tennessee against officers and directors of Miller Energy Resources, Inc. (“Miller”), as well as Miller’s auditors and nine firms that underwrote six securities offerings in 2013 and 2014, and raised approximately $151,000. Ladenburg was one of the underwriters of two of the offerings. The complaints allege, among other things, that the offering materials were misleading based on the purportedly overstated valuation of certain assets, and that the underwriters are liable for violations of federal securities laws. The plaintiffs seek an unspecified amount of compensatory damages, as well as other relief. In December 2015 the defendants removed the complaints to the U.S. District Court for the Eastern District of Tennessee; in November 2016, the cases were consolidated. In August 2017, the court granted in part and denied in part the underwriters' motion to dismiss the complaint. Ladenburg intends to vigorously defend against these claims. In January 2016, an amended complaint was filed in the U.S. District Court for the Southern District of Texas against Plains All American Pipeline, L.P. and related entities as well as their officers and directors. The amended complaint added Ladenburg and other underwriters of securities offerings in 2013 and 2014 that in the aggregate raised approximately $2,900,000 as defendants to the purported class action. Ladenburg was one of the underwriters of the October 2013 initial public offering. The complaints allege, among other things, that the offering materials were misleading based on representations concerning the maintenance and integrity of the issuer’s pipelines, and that the underwriters are liable for violations of federal securities laws. In March 2017, the court granted the defendants' motions to dismiss without prejudice, and granted the plaintiffs leave to file an amended complaint. In May 2017, the plaintiffs filed a second amended complaint seeking an unspecified amount of compensatory damages, as well as other relief. In July 2017, the defendants filed motions to dismiss the second amended complaint, which are pending. If the motions to dismiss are not granted, Ladenburg intends to vigorously defend against these claims. During the period from May 2016 to January 2017, five arbitration claims were filed against Ladenburg by former customers concerning purported unauthorized trading, excessive trading and mishandling of their accounts by a former Ladenburg registered representative, and asserting compensatory damages in excess of $5,400. In July, October and December 2017, settlements were reached resolving four of the claims; the amount paid by Ladenburg in connection with these settlements was not material. The total amount of compensatory damages asserted in connection with the remaining claim is $300. Ladenburg intends to vigorously defend against this claim. SEC examination reports provided to Triad and Securities America Advisors, Inc. in May and August 2016, respectively, asserted that the firms had acted inconsistently with their fiduciary duties (including the requirement to seek best execution) in recommending and selecting mutual fund share classes that paid 12b-1 fees where lower cost share classes also were available in those same funds. The SEC also asserted that the firms’ disclosures of potential conflicts of interest and compensation related to the mutual fund share classes that paid 12b-1 fees were insufficient. Triad has revised its disclosures and has completed restitution to its affected clients. Securities America Advisors continues to review the amounts of such payments to its affected clients, the contents of disclosures to clients, and is in the process of finalizing remedial actions, including restitution to clients. Securities America Advisors is in communication with the SEC staff to seek to resolve the matter. In November 2016, a consolidated class action complaint was filed in U.S. District Court for the Western District of Washington against CTI Biopharma Corp., its directors and officers, as well as the underwriters of two securities offerings in 2015 that raised approximately $105,000. Ladenburg was one of the underwriters of the offerings. The complaint alleged, among other things, that the offering materials were misleading in their descriptions of safety results of Phase 3 clinical drug trials for the issuer’s lead drug candidate for myelofibrosis, and that the underwriters were liable for violations of federal securities laws. The plaintiffs sought an unspecified amount of compensatory damages, as well as other relief. In September 2017, the parties entered into a settlement agreement to resolve the class action complaint, subject to court approval, which provides for no contribution from Ladenburg or the other underwriter defendants. In February 2018, the court issued its final approval of the settlement agreement. In the ordinary course of business, in addition to the above disclosed matters, the Company's subsidiaries are defendants in other litigation, arbitration and regulatory proceedings and may be subject to unasserted claims primarily in connection with their activities as securities broker-dealers or as a result of services provided in connection with securities offerings. Such litigation and claims may involve substantial or indeterminate amounts and are in varying stages of legal proceedings. When the Company believes that it is probable that a liability has been incurred and the amount of loss can be reasonably estimated (after giving effect to any expected insurance recovery), the Company accrues such amount. Upon final resolution, amounts payable may differ materially from amounts accrued. The Company had accrued liabilities in the amount of approximately $6,902 at December 31, 2017 and $4,396 at December 31, 2016 for certain pending matters. For other pending matters, the Company was unable to estimate a range of possible loss; however, in the opinion of management, after consultation with counsel, the ultimate resolution of these matters is not expected to have a material adverse effect on the Company's consolidated financial position, results of operations or liquidity. |
Off-Balance-Sheet Risk and Concentration of Credit Risk |
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Off-Balance-Sheet Risk and Concentration of Credit Risk [Abstract] | |
Off-Balance-Sheet Risk and Concentration of Credit Risk | Off-Balance-Sheet Risk and Concentration of Credit Risk Securities America, Triad, Investacorp, KMS, SSN and Ladenburg do not carry accounts for customers or perform custodial functions related to customers’ securities. They introduce all of their customer transactions, which are not reflected in these financial statements, to clearing brokers, which maintain cash and the customers’ accounts and clear such transactions. Also, the clearing brokers provide the clearing and depository operations for proprietary securities transactions. These activities create exposure to off-balance-sheet risk in the event that customers do not fulfill their obligations to the clearing brokers, as each of Securities America, Triad, Investacorp, KMS, SSN and Ladenburg has agreed to indemnify its clearing brokers for any resulting losses. Each of Securities America, Triad, Investacorp, KMS, SSN and Ladenburg continually assesses risk associated with each customer who is on margin credit and records an estimated loss when management believes collection from the customer is unlikely. The clearing operations for the Securities America, Triad, Investacorp, KMS, SSN and Ladenburg securities transactions are provided by three clearing brokers. At December 31, 2017 and December 31, 2016, amounts due from these clearing brokers were $48,543 and $41,492, respectively, which represents a substantial concentration of credit risk should these clearing brokers be unable to fulfill their obligations. In the normal course of business, Securities America, Triad, Investacorp, KMS, SSN and Ladenburg may enter into transactions in financial instruments with off-balance sheet risk. As of December 31, 2017 and December 31, 2016, Securities America, Triad and Ladenburg sold securities that they do not own and will therefore be obligated to purchase such securities at a future date. These obligations have been recorded in the statements of financial condition at the market values of the related securities, and such entities will incur a loss if, at the time of purchase, the market value of the securities has increased since the applicable date of sale. The Company and its subsidiaries maintain cash in bank deposit accounts, which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash. |
Shareholders' Equity |
12 Months Ended |
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Dec. 31, 2017 | |
Equity [Abstract] | |
Shareholders' Equity | Shareholders’ Equity Repurchase Program In March 2007, the Company’s board of directors authorized the repurchase of up to 2,500,000 shares of the Company’s common stock from time to time on the open market or in privately negotiated transactions, depending on market conditions. In each of October 2011, November 2014 and November 2016, the board approved an amendment to the repurchase program to permit the repurchase of an additional 5,000,000 shares, 10,000,000 shares 10,000,000 shares, respectively. Since inception through December 31, 2017, 19,350,215 shares of common stock have been repurchased for $49,411 under the program, including 1,850,215 shares repurchased for $4,721 in 2017 and 5,230,433 shares repurchased for $12,711 in 2016. As of December 31, 2017, 8,149,785 shares remained available for purchase under the program. Warrants As of December 31, 2017, there were no outstanding warrants to acquire the Company’s common stock. In 2017, 2,000,000 warrants were exercised to purchase 2,000,000 shares of the Company's common stock. The intrinsic value on the date of exercise was $1,830. In 2016, 13,236,333 warrants were exercised to purchase 12,389,544 shares of the Company's common stock, net of 846,789 shares tendered in payment of the exercise price. The intrinsic value on the date of exercise was $9,320. In 2015, 646,000 warrants were exercised to purchase 449,482 shares of the Company's common stock, net of 196,518 shares tendered in payment of the exercise price. The intrinsic value on the date of exercise was $966. Capital Stock On May 21, 2013, the Company filed Articles of Amendment with the Department of State of the State of Florida to designate 5,290,000 shares of the Company's authorized preferred stock, par value $0.0001 per share, as shares of Series A Cumulative Redeemable Preferred Stock (the “Series A Preferred Stock”) with the powers, designations, preferences and other rights as set forth therein (the “Articles of Amendment”). In addition, on June 24, 2013, the Company filed a further amendment to designate an additional 3,000,000 preferred shares as Series A Preferred Stock. In 2014, the Company filed articles of amendment to the Company's Articles of Incorporation to designate an additional 6,000,000 shares as Series A Preferred Stock and to increase the authorized number of shares of common stock from 600,000,000 to 800,000,000. In May 2015, the Company filed an amendment to the Company's Articles of Incorporation to designate an additional 3,000,000 shares as Series A cumulative redeemable preferred stock ("Series A Preferred Stock"). On May 18, 2016, the Company's shareholders approved an amendment to the Company's Articles of Incorporation to increase the number of shares of preferred stock authorized from 25,000,000 to 50,000,000 and to increase the number of shares of common stock authorized from 800,000,000 to 1,000,000,000. The Articles of Amendment provide that the Company will pay monthly cumulative dividends on the Series A Preferred Stock, in arrears, on the 28th day of each month (provided that if any dividend payment date is not a business day, then the dividend which would otherwise have been payable on that dividend payment date may be paid on the next succeeding business day without adjustment in the amount of the dividend) from, and including, the date of original issuance of the Series A Preferred Stock at 8.00% of the $25.00 per share liquidation preference per annum (equivalent to $2.00 per annum per share). The Articles of Amendment further provide that dividends will be payable to holders of record as they appear in the stock records of the Company for the Series A Preferred Stock at the close of business on the applicable record date, which shall be the 15th day of each month, whether or not a business day, in which the applicable dividend payment date falls. The Series A Preferred Stock will not be redeemable before May 24, 2018, except upon the occurrence of a Change of Control (as defined in the Articles of Amendment). On or after May 24, 2018, the Company may, at its option, redeem any or all of the shares of the Series A Preferred Stock at $25.00 per share plus any accumulated and unpaid dividends to, but not including, the redemption date. Also, upon the occurrence of a Change of Control, the Company may, at its option, redeem any or all of the shares of Series A Preferred Stock within 120 days after the first date on which such Change of Control occurred at $25.00 per share plus any accumulated and unpaid dividends to, but not including, the redemption date. The Series A Preferred Stock has no stated maturity, is not subject to any sinking fund or mandatory redemption and will remain outstanding indefinitely unless repurchased or redeemed by the Company or converted into the Company's common stock in connection with a Change of Control by the holders of Series A Preferred Stock. Upon the occurrence of a Change of Control, each holder of Series A Preferred Stock will have the right (subject to the Company's election to redeem the Series A Preferred Stock in whole or in part, as described above, prior to the Change of Control Conversion Date (as defined in the Articles of Amendment)) to convert some or all of the Series A Preferred Stock held by such holder on the Change of Control Conversion Date into a number of shares of the Company's common stock per share of Series A Preferred Stock determined by formula, in each case, on the terms and subject to the conditions described in the Articles of Amendment, including provisions for the receipt, under specified circumstances, of alternative consideration as described in the Articles of Amendment. Except under limited circumstances, holders of the Series A Preferred Stock generally do not have any voting rights. On June 24, 2013, June 13, 2014, November 21, 2014, May 22, 2015 and May 22, 2017, the Company entered into Equity Distribution Agreements under which it could sell up to an aggregate of 15,000,000 shares of its Series A Preferred Stock from time to time in “at the market” offerings under Rule 415 under the Securities Act of 1933, as amended (the “Securities Act”). During the years ended December 31, 2017, 2016 and 2015, the Company sold 1,167,159, 1,161,895 and 3,586,790 shares of Series A Preferred Stock, respectively, pursuant to the “at the market” offerings, which provided total gross proceeds to the Company of $29,052, $28,303 and $86,352, respectively, before deducting commissions paid to unaffiliated sales agents and offering expenses aggregating $958, $723 and $1,972, respectively. For the years ended December 31, 2017, 2016 and 2015, the Company paid dividends of $32,482, $30,438 and $28,108, respectively, on its outstanding Series A Preferred Stock based on a monthly dividend of approximately $0.1667 per share. In September 2017, the Company began a quarterly cash dividend on its common stock. For the year ended December 31, 2017, the Company paid dividends of $3,880 on its outstanding common stock base on a quarterly dividend of approximately $0.01 per share. |
Per Share Data |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Per Share Data | Per Share Data Basic net income (loss) per share is computed by dividing net income (loss) attributable to the Company, decreased with respect to net income or increased with respect to net loss by dividends declared on preferred stock by using the weighted-average number of common shares outstanding. The dilutive effect of incremental common shares potentially issuable under outstanding options, warrants and restricted shares is included in diluted earnings per share utilizing the treasury stock method. A reconciliation of basic and diluted common shares use in the computation of per share data is as follows:
During 2017, 2016 and 2015, options, warrants and restricted stock to purchase 32,501,007, 41,191,772 and 57,494,385 common shares, respectively, were not included in the computation of diluted (loss) income per share as the effect would be anti-dilutive. |
Stock Compensation Plans |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Compensation Plans | Stock Compensation Plans Employee Stock Purchase Plan Under the Company’s amended and restated Qualified Employee Stock Purchase Plan, a total of 10,000,000 shares of common stock are available for issuance. As currently administered by the Company’s compensation committee, all full-time employees may use a portion of their salary to acquire shares of LTS common stock under this purchase plan at a 5% discount from the market price of LTS’ common stock at the end of each option period. Option periods have been set at three month periods and commence on January 1, April 1, July 1 and October 1 of each year and end on March 31, June 30, September 30 and December 31 of each year. The plan is intended to qualify as an “employee stock purchase plan” under Section 423 of the Internal Revenue Code. During 2017, 167,016 shares of LTS common stock were issued to employees under this plan, at prices ranging from $2.32 to $3.00; during 2016, 210,330 shares of LTS common stock were issued to employees under this plan, at prices ranging from $2.19 to $2.38; and during 2015, 192,978 shares of LTS common stock were issued to employees under this plan, at prices ranging from $2.00 to $3.67. These share issuances resulted in a capital contribution of $420, $481 and $545 for 2017, 2016 and 2015, respectively. Amended and Restated 1999 Performance Equity Plan and 2009 Incentive Compensation Plan In 1999, the Company adopted the 1999 Performance Equity Plan (as amended and restated, the “1999 Plan”) and in 2009 the Company adopted the 2009 Incentive Compensation Plan (the “2009 Plan”), which provide for the grant of stock options and other awards to designated employees, officers and directors and certain other persons performing services for the Company and its subsidiaries, as designated by the board of directors. The 1999 Plan provides for the granting of up to 25,000,000 awards with an annual limit on grants to any individual of 1,500,000. In 2014, the 2009 Plan was amended to provide for the granting of up to 45,000,000 awards with an annual limit on grants to any individual of 1,500,000. Awards under the plans include stock options, stock appreciation rights, restricted stock, deferred stock, stock reload options and/or other stock-based awards. The compensation committee of the Company’s board of directors administers the plans. Stock options granted under the 2009 Plan may be incentive stock options and non-qualified stock options. An incentive stock option may be granted only through August 27, 2019 under the 2009 Plan and may only be exercised within ten years of the date of grant (or five years in the case of an incentive stock option granted to an optionee who at the time of the grant possesses more than 10% of the total combined voting power of all classes of stock of LTS (“10% Shareholder”)). Incentive stock options may no longer be granted under the 1999 Plan. The exercise price of both incentive and non-qualified options may not be less than 100% of the fair market value of LTS’ common stock at the date of grant, provided that the exercise price of an incentive stock option granted to a 10% Shareholder shall not be less than 110% of the fair market value of LTS’ common stock at the date of grant. As of December 31, 2017, 16,317,111 and 4,286,114 shares of common stock were available for issuance under the 2009 Plan and the 1999 Plan, respectively. A summary of the status of the 1999 Plan at December 31, 2017 and changes during the year ended December 31, 2017 are presented below:
A summary of the status of the 2009 Plan at December 31, 2017 and changes during the year ended December 31, 2017 are presented below:
Non-Plan Options The Company has granted stock options to newly-hired employees in conjunction with their employment agreements or in connection with acquisitions, which are outside of the option plans. A summary of the status of these options at December 31, 2017 and changes during the year ended December 31, 2017 are presented below:
The Company did not grant any options to employees or directors in 2017. The weighted-average grant date fair value of employee and director options granted during the years ended December 31, 2016 and 2015 was $1.07 and $2.79, respectively. The fair value of each option award was estimated on the date of grant using the Black-Scholes option pricing model using the following weighted-average assumptions:
The weighted average expected life for the 2016 and 2015 grants to employees and directors reflects the alternative simplified method permitted by authoritative guidance, which defines the expected life as the average of the contractual term of the options and the weighted-average vesting period for all option tranches. The Company estimates the expected term for stock options awarded to independent financial advisors using the contractual term. Expected volatility for the 2016 and 2015 option grants is based on the historical volatility of the common stock of the Company over the same number of years as the expected life, prior to the option grant date. Restricted Stock Awards A summary of the restricted stock awards at December 31, 2017 and changes during the year ended December 31, 2017 is presented below:
Restricted stock awards issued in 2017 vest in four equal annual installments. As of December 31, 2017, there was $7,371 of total unrecognized compensation cost related to non-vested share-based compensation arrangements. This cost is expected to be recognized over the vesting periods of the options and restricted stock, which on a weighted-average basis is approximately 2.09 years. The total intrinsic value of options exercised during the years ended December 31, 2017, 2016 and 2015 amounted to $3,992, $6,556 and $2,595, respectively. The fair value of restricted stock vesting in 2017 and 2016 was $1,944 and $1,197, respectively. Non-cash compensation expense relating to stock options was calculated using the Black-Scholes option pricing model, amortizing the value calculated over the vesting period. The Company has elected to recognize compensation cost for option awards that have graded vesting schedules on a straight line basis over the requisite service period for the entire award. For the years ended December 31, 2017, 2016 and 2015, non-cash compensation expense relating to share-based awards granted to employees, consultants and advisors amounted to $5,539, $5,311 and $8,759, respectively. |
Noncontrolling Interest |
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Noncontrolling Interest [Abstract] | |
Noncontrolling Interest | Noncontrolling Interest During the quarter ended March 31, 2013, Arbor Point Advisors, LLC (“APA”), a newly-formed registered investment advisor, began operations. Investment advisory services of APA are provided through licensed and qualified individuals who are investment advisor representatives of APA. Securities America holds an 80% interest in APA and an unaffiliated entity owns a 20% interest. As Securities America is the controlling managing member of APA, the financial statements of APA are included in the Company's consolidated financial statements and amounts attributable to the 20% unaffiliated investor are recorded as a noncontrolling interest. |
Segment Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | Segment Information The Company has three operating segments. The independent advisory and brokerage services segment includes the investment advisory and brokerage services provided by the Company's independent advisory and brokerage subsidiaries to their independent contractor financial advisors and the wealth management services provided by Premier Trust. The Ladenburg segment includes the investment banking, sales and trading, asset management services and investment activities conducted by Ladenburg and LTAM. The insurance brokerage segment includes the wholesale insurance brokerage activities provided by Highland, which delivers life insurance, fixed and equity indexed annuities and long-term care solutions to investment and insurance providers, and LTAIS, which provides marketing strategies, product expertise, and back-office processing for fixed and equity-indexed annuities. Earnings before interest, taxes, depreciation and amortization, or EBITDA, as adjusted for acquisition-related expense, amortization of retention and forgivable loans, change in fair value of contingent consideration related to acquisitions, loss on extinguishment of debt, non-cash compensation expense, financial advisor recruiting expense and other expense, which includes loss on write-off of receivable from subtenant, excise and franchise tax expense, severance cost and compensation expense that may be paid in stock, is the primary profit measure the Company's management uses in evaluating financial performance for its reportable segments. EBITDA, as adjusted, is considered a non-GAAP financial measure as defined by Regulation G promulgated by the SEC under the Securities Act of 1933, as amended. The Company considers EBITDA, as adjusted, important in evaluating its financial performance on a consistent basis across various periods. Due to the significance of non-cash and non-recurring items, EBITDA, as adjusted, enables the Company's Board of Directors and management to monitor and evaluate the business on a consistent basis. The Company uses EBITDA, as adjusted, as a primary measure, among others, to analyze and evaluate financial and strategic planning decisions regarding future operating investments and potential acquisitions. The Company believes that EBITDA, as adjusted, eliminates items that are not indicative of its core operating performance, such as acquisition-related expense, amortization of retention and forgivable loans and financial advisor recruiting expenses or do not involve a cash outlay, such as stock-related compensation. EBITDA, as adjusted, should be considered in addition to, rather than as a substitute for, income (loss) before income taxes, net income (loss) and cash flows provided by (used in) operating activities. Segment information for the years ended December 31, 2017, 2016 and 2015 is as follows:
(3) Includes loss on severance costs of $525, excise and franchise tax expense of $594 and compensation expense that may be paid in stock of $559. (4) Includes loss on severance costs of $755, excise and franchise tax expense of $508 and compensation expense that may be paid in stock of $586. (5) Includes loss on write-off of receivable from subtenant of $855, compensation expense that may be paid in stock of $532, rent expense due to default by subtenant of $468 and excise and franchise tax expense of $310.
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Related Party Transactions |
12 Months Ended |
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Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Effective October 2015, Investacorp's lease with Frost Real Estate Holdings, LLC (“FREH”), an entity affiliated with the Company’s chairman of the board and principal shareholder, in an office building in Miami, Florida, was renewed and now expires in September 2020. The lease provides for aggregate payments during the five-year term of approximately $2,420 and minimum annual payments of $484. Rent expense under such lease amounted to $506, $522 and $382 in 2017, 2016 and 2015, respectively. Ladenburg’s principal executive offices are located in the same office building in Miami, Florida, where approximately 14,050 square feet of office space is leased from FREH. Ladenburg’s lease was renewed effective March 2018 and now expires in February 2023 with two optional five-year extensions. The lease provides for aggregate payments during the remaining term of approximately $2,809 and minimum annual payment of $508. Rent expense under such lease amounted to $565, $706, and $734 in 2017, 2016 and 2015, respectively. The Company is a party to an agreement with Vector, where Vector has agreed to make available to the Company the services of Vector’s Executive Vice President to serve as the President and Chief Executive Officer of the Company and to provide certain other financial, tax and accounting services. Various executive officers and directors of Vector serve as members of the board of directors of the Company, and Vector and its subsidiaries own approximately 7.83% of the Company’s common stock at December 31, 2017. In consideration for such services, the Company agreed to pay Vector an annual management fee plus reimbursement of expenses and to indemnify Vector. The agreement is terminable by either party upon 30 days’ prior written notice. The Company paid Vector $850 in 2017, 2016 and 2015 under the agreement and pays Vector at a rate of $850 per year in 2018. In 2015, the Company entered into a Consulting Services Agreement with Nextt Advisors Inc., a corporation owned solely by the son-in-law (the “Consultant”) of the Company’s President and Chief Executive Officer. Pursuant to the agreement, the Company paid the Consultant $200 under the agreement in 2017, $186 in 2016 and $13 in 2015. Effective January 1, 2018, the consulting agreement was terminated and the consultant became an employee of the Company. SSN has an operating lease for office facilities with Cogdill Capital LLC, an entity in which SSN's Chief Executive Officer and Chief Financial Officer are members and own a minority percentage of such entity, which expires in March 2020. Rent expense under such lease amounted to $285 in 2017, $276 in 2016 and $268 in 2015. The Company is a party to an agreement with Castle Brands Inc. ("Castle") under which the Company provides certain administrative, legal and financial services to Castle. The Company's President and Chief Executive Officer, who is also a director of the Company, is also the President and Chief Executive Officer and a director of Castle. Various Company directors serve as directors of Castle, and the Company and Castle have the same principal shareholder. The Company received $260 in 2017, $173 in 2016 and $171 in 2015 under this agreement. In connection with the offering of Notes, as more fully described in Note 12, certain members of management and the Board of Directors of the Company purchased $10,400 of the Notes offered by the Company. See also Note 12 for information regarding other loan transactions involving related parties. |
Quarterly Financial Data (Unaudited) |
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Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Data (Unaudited) | Quarterly Financial Data (Unaudited)
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Summary of Significant Accounting Policies (Policies) |
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Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of the Company and its subsidiaries, all of which are wholly- owned, except for one subsidiary organized in 2013, which is 80% owned, after elimination of all significant intercompany balances and transactions. Certain amounts in the prior period financial statements were reclassified to conform with the current period financial statement presentation. |
Use of Estimates | Use of Estimates The preparation of these consolidated financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Cash Equivalents | Cash Equivalents The Company considers all highly liquid financial instruments with a maturity of three months or less when acquired to be cash equivalents. |
Revenue Recognition | Revenue Recognition Commissions revenue results from transactions in equity securities, mutual funds, variable annuities and other financial products and services. Most of the commission and advisory fee revenue generated by independent contractor financial advisors is paid to the advisors as commissions and fees for initiating the transactions. Commission revenue is generated from front-end sales commissions that occur at the point of sale, as well as trailing commissions. Front-end sales commission revenue and related clearing and other expenses on transactions introduced to its clearing broker are recognized on a trade date basis. Front-end sales commissions and related expenses on transactions initiated directly between the financial advisors and product sponsors are recognized upon receipt of notification from sponsors of the commission earned. Commission revenue also includes 12b-1 fees, and fixed and variable product trailing fees, collectively considered as trailing fees, which are recurring in nature. These trailing fees are earned based on a percentage of the current market value of clients' investment holdings in trail eligible assets. Because trail commission revenues are generally paid in arrears, management estimates commission revenues earned during each period. These estimates are based on a number of factors including investment holdings and the applicable commission rate and the amount of trail commission revenue received in prior periods. Estimates are subsequently adjusted to actual based on notification from the sponsors of trail commissions earned. Commissions are also earned on the sale of insurance policies. Commissions are generally paid each year as long as the client continues to use the product. Commissions paid by insurance companies are based on a percentage of the premium that the insurance company charges to the policyholder. First-year commissions are calculated as a percentage of the first twelve months’ premium on the policy and earned in the year that the policy is originated. In many cases, renewal commissions are received for a period following the first year, if the policy remains in force. Insurance commissions are recognized as revenue when the following criteria are met: (1) the policy application and other carrier delivery requirements are substantially complete, (2) the premium is paid and (3) the insured party is contractually committed to the purchase of the insurance policy. Carrier delivery requirements may include additional supporting documentation, signed amendments and premium payments. Commissions earned on renewal premiums are generally recognized upon receipt from the carrier, since that is typically when notification is first received that such commissions have been earned. Advisory fee revenue represents fees charged by registered investment advisors to their clients based upon the value of advisory assets. Advisory fees are recorded as earned. Since advisory fees are based on assets under management, significant changes in the fair value of these assets will have an impact on the fees earned in future periods. Incentive fees are also earned based upon the performance of investment funds and accounts. Investment banking revenue consists of underwriting revenue, strategic advisory revenue and private placement fees. Underwriting revenues arise from securities offerings in which Ladenburg acts as an underwriter and include management fees, selling concessions and underwriting fees, net of related syndicate expenses. Underwriting revenues are recorded at the time the underwriting is completed and the income is reasonably determined. Strategic advisory revenue primarily consists of success fees on completed mergers and acquisitions transactions, and retainer and periodic fees earned by advising buyers and sellers in transactions. Fees are also earned for related strategic advisory work and other services such as providing fairness opinions and valuation analyses. Strategic advisory revenues are recorded when the transactions or the services (or, if applicable, separate components thereof) to be performed are substantially complete, the fees are determinable and collection is reasonably assured. Private placement fees, net of expenses, are recorded on the closing date of the transaction. Principal transactions revenue includes realized and unrealized net gains and losses resulting from investments in equity securities and equity-linked warrants received from certain investment banking assignments. Interest is recorded on an accrual basis and dividends are recorded on an ex-dividend date basis. Service fees and other income principally includes amounts charged to independent financial advisors for processing of securities trades and for providing administrative and compliance services and also includes marketing allowances earned from product sponsor programs. All such amounts are recorded as earned. As a result of adopting ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” effective January 1, 2018, the Company will amend its accounting policies on the recognition and presentation of certain revenues and related expenses. See “Recent Accounting Pronouncements” for further information. |
Fixed Assets | Fixed Assets Fixed assets are carried at cost net of accumulated depreciation and amortization. Depreciation is provided by the straight-line method over the estimated useful lives of the related assets. Leasehold improvements are amortized on a straight-line basis over the lease term, or their estimated useful lives, whichever is shorter. |
Share-Based Compensation | Share-Based Compensation The Company measures the cost of employee, officer and director services received in exchange for an award of equity instruments, including stock options and restricted stock, based on the grant-date fair value of the award. The cost is recognized as compensation expense over the service period, which would normally be the vesting period of the equity instruments. Compensation expense for share-based awards granted to independent contractors is measured at their vesting date fair value. The compensation expense recognized each period prior to vesting is based on the awards' estimated value at the most recent reporting date. |
Intangible Assets | Intangible Assets Intangible assets are amortized over their estimated useful lives, generally on a straight-line basis. Intangible assets subject to amortization are tested for recoverability whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. The Company assesses the recoverability of its intangible assets by determining whether the unamortized balance can be recovered over the assets’ remaining life through undiscounted forecasted cash flows. If undiscounted forecasted cash flows indicate that the unamortized amounts will not be recovered, an adjustment will be made to reduce such amounts to fair value determined based on forecasted future cash flows discounted at a rate commensurate with the risk associated with achieving such cash flows. Future cash flows are based on trends of historical performance and the Company’s estimate of future performance, giving consideration to existing and anticipated competitive and economic conditions. |
Goodwill | Goodwill Goodwill, which was recorded in connection with acquisitions of subsidiaries (see Notes 3 and 8), is not subject to amortization and is tested for impairment annually, or more frequently if events or changes in circumstances indicate that the asset may be impaired. The impairment test consists of a comparison of the fair value of the reporting unit with its carrying amount. Fair value is typically based upon forecasted future cash flows discounted at a rate commensurate with the risk involved or market based comparables. If the carrying amount of the reporting unit exceeds its fair value then an analysis will be performed to compare the implied fair value of goodwill with the carrying amount of goodwill. An impairment loss will be recognized in an amount equal to the excess of the carrying amount over the implied fair value. After an impairment loss is recognized, the adjusted carrying amount of goodwill is its new accounting basis. Accounting guidance on the testing of goodwill for impairment allows entities the option of performing a qualitative assessment to determine the likelihood of goodwill impairment and whether it is necessary to perform such two-step quantitative impairment test. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers (the “Standard”), which completes the joint effort by the FASB and the International Accounting Standards Board to improve financial reporting by creating common revenue recognition guidance for GAAP and the International Financial Reporting Standards. The FASB has subsequently issued several amendments, including deferral of the effective date until January 1, 2018, clarification of principal versus agent considerations, narrow scope improvements and other technical corrections. The Standard also requires new qualitative and quantitative disclosures, including disaggregation of revenues and descriptions of performance obligations. The Standard, including clarifying amendments, became effective for fiscal years and interim periods within those years, beginning after December 15, 2017, with early adoption permitted. Amongst other things, the guidance provides for (i) determining whether revenue should be recognized at a point in time or over time, which replaces the previous distinction between goods and services, (ii) identifies distinct performance obligations, accounting for contract modifications and accounting for the time value of money and (iii) new, increased requirements for disclosure of revenue in the financial statements. Furthermore, the standard specifies how to account for the incremental costs of obtaining a contract and the costs directly associated with fulfilling a contract. Provided these costs are expected to be recovered, such costs will be capitalized, subsequently amortized over the useful life of customers and tested for impairment. The Company will adopt the provisions of this guidance on January 1, 2018, using the modified retrospective approach, with a cumulative-effect adjustment of approximately $29,344 increase to opening retained earnings. The impact of adoption is primarily related to the following areas: Gross vs. Net Reporting of Revenues - The presentation of revenues in the statement of operations on a gross basis or net of commissions earned by third party advisors and brokers, as follows: (a) presentation of a portion of advisory services revenue on a net basis which have historically been reported on a gross basis; and (b) presentation of a portion of insurance commissions revenue on a gross basis which have historically been reported on a net basis. While the Company’s total revenue is expected to be reduced by these changes prospectively, there will be offsetting impact to reduce operating expenses and no impact to operating profit. Renewal Commissions - The timing of revenue recognized for commissions on future renewals of insurance policies sold will be accelerated, as these future commissions represent variable consideration under the Standard and are required to be estimated and included in the transaction price, subject to the constraint. This change of accounting resulted in the recognition of a renewal commission receivable asset of approximately $58,788 and a corresponding renewal commission payable liability for the payments owed to the Company’s brokers of approximately $29,395, a removal of the previous net intangible of approximately $23,645 and an increase to opening retained earnings of approximately $5,748. Contract Origination Costs - The Company will capitalize certain incremental costs to obtain a customer contract or portfolio of customer contracts which have historically been recorded as a period expense. Recruitment fees consist primarily of fees paid to third party recruiters and compensation paid to employees for successful recruiting of financial advisors to join the Company’s independent advisory and brokerage services firms. Notes receivable from financial advisors consist of loans provided to newly recruited financial advisors to assist in the transition process, which are forgiven over a multi-year period subject to certain restrictions. Each of these costs is deferred and amortized over the estimated customer relationship period, which ranges from 6 to 10 years. This change of accounting resulted in the recognition of a contract asset and an increase to opening retained earnings of approximately $23,516. Contract Fulfillment Costs - The Company’s investment banking business includes underwriting services under contingent fee arrangements. Revenue and direct costs, except for a portion of employee compensation, associated with the underwriting service contract are deferred until the transaction is completed. If an underwritten securities transaction is not completed, the deferred costs are expensed. Effective January 1, 2018, the Company will include direct costs of the dedicated underwriting personnel in the determination of contract fulfillment costs required to be deferred under the Standard and recognized along with the associated revenue upon satisfaction of the performance obligation, subject to a recoverability assessment. Since the Company’s underwriting contracts are generally very short-term in duration, the recoverability assessment does not require a significant degree of estimation. This change of accounting resulted in the recognition of a contract asset and an increase to opening retained earnings of approximately $80. The adoption of the Standard is not expected to have other material impacts on the Company’s consolidated results of operations and financial condition. In January 2016, the FASB issued ASU 2016-01, Financial Instruments--Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities, which amends the guidance in U.S. GAAP on the classification and measurement of financial instruments. Changes to the current guidance primarily affect the accounting for equity investments, financial liabilities under the fair value option, and the presentation and disclosure requirements for financial instruments. In addition, the ASU clarifies guidance related to the valuation allowance assessment when recognizing deferred tax assets resulting from unrealized losses on available-for-sale debt securities. The new standard is effective for fiscal years and interim periods beginning after December 15, 2017, and upon adoption, an entity should apply the amendments by means of a cumulative-effect adjustment to the balance sheet at the beginning of the first reporting period in which the guidance is effective. Early adoption is not permitted except for the provision to record fair value changes for financial liabilities under the fair value option resulting from instrument-specific credit risk in other comprehensive income. The Company does not expect a material effect on its consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which supersedes the existing guidance for lease accounting, Leases (Topic 840). ASU 2016-02 requires lessees to recognize leases on their balance sheets, and leaves lessor accounting largely unchanged. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years. Early application is permitted for all entities. ASU 2016-02 requires a modified retrospective approach for all leases existing at, or entered into after, the date of initial application, with an option to elect to use certain transition relief. The Company's current lease arrangements expire through 2030 and the Company is currently assessing the impact that the adoption of ASU 2016-02 will have on its consolidated financial statements. In March 2016, the FASB amended the existing accounting standards for stock-based compensation, ASU 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The amendments impact several aspects of accounting for share-based payment transactions, including the income tax consequences, forfeitures, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The Company adopted the amendments in the first quarter of 2017. Prior to adoption of ASU 2016-009, tax attributes related to stock option windfall deductions were not recorded until they resulted in a reduction of cash tax payable. As of December 31, 2016, the tax benefit related to the excluded windfall deductions for federal and state purposes was approximately $4,458. Upon adoption of ASU 2016-09, the Company recognized the tax benefit related to the excluded windfall deductions as a deferred tax asset with a corresponding offset of $4,446 to valuation allowance. In regards to the forfeiture policy election, the Company is not continuing to estimate the number of awards expected to be forfeited, rather the Company will elect to account for forfeitures as they occur. As of December 31, 2016, additional compensation cost related to the elimination of estimated forfeitures was $63, net of estimated tax benefit of $12, which is reflected in the statement of changes in shareholders' equity. No other terms of the adopted guidance resulted in an impact on the Company's consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments, ASU 2016-15 is intended to reduce diversity in practice on how certain cash receipts and payments are presented and classified in the statement of cash flows. The standard provides guidance in a number of situations including, among others, settlement of zero-coupon bonds, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, and distributions received from equity method investees. ASU 2016-15 also provides guidance for classifying cash receipts and payments that have aspects of more than one class of cash flows. ASU 2016-15 is effective for the Company's fiscal year beginning January 1, 2018. Early adoption is permitted. The standard requires application using a retrospective transition method. The adoption of this guidance is not expected to have a material impact on the Company's consolidated financial statements. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230). ASU 2016-18 provides guidance on the classification of restricted cash to be included with cash and cash equivalents when reconciling the beginning of period and end of period total amounts on the statement of cash flows. This pronouncement is effective for reporting periods beginning after December 15, 2017 using a retrospective adoption method and early adoption is permitted. The adoption of this guidance is not expected to have a material impact on the Company's consolidated financial statements. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. ASU 2017-01 provides that when substantially all the fair value of the assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets, the set is not a business. ASU 2017-01 became effective for transactions beginning in the first quarter of 2017 and is being applied prospectively. The adoption of ASU 2017-01 did not have any impact on the Company’s consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, an amendment to simplify the subsequent quantitative measurement of goodwill by eliminating step two from the goodwill impairment test. As amended, an entity will recognize an impairment charge for the amount by which the carrying amount of a reporting unit exceeds its fair value, not to exceed the total amount of goodwill allocated to the reporting unit. An entity still has the option to perform the qualitative test for a reporting unit to determine if the quantitative impairment test is necessary. This amendment is effective for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2019 and applies prospectively. Early adoption is permitted, including in an interim period, for impairment tests performed after January 1, 2017. The Company has not elected to early adopt ASU 2017-04. The adoption of this guidance is not expected to have a material impact on the Company's consolidated financial statements. |
Acquisitions (Tables) |
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Business Combinations [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Business Acquisition | The Company conducted a valuation study to determine the acquisition-date fair value of assets acquired and liabilities assumed and related allocation of purchase price of SSN. The following table summarizes the fair value of assets acquired and liabilities assumed at the acquisition date:
(1) Increased by $484 from amounts originally reported. (2) Increased by $9,100 from amounts originally reported. |
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Schedule of Indefinite-lived Intangible Assets Acquired | Identifiable intangible assets as of the acquisition date consist of:
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Fair Value of Assets and Liabilities (Tables) |
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value of Assets and Liabilities Measured on a Nonrecurring Basis | The following tables presents the carrying values and estimated fair values at December 31, 2017 and December 31, 2016 of financial assets and liabilities, excluding financial instruments that are carried at fair value on a recurring basis, and information is provided on their classification within the fair value hierarchy. Such instruments are carried at amounts that approximate fair value due to their short-term nature and generally negligible credit risk.
(1) Carrying value approximates fair value, which is determined based on a valuation technique to convert future cash payments or forgiveness transactions to a single discounted preset value amount. (2) Excludes contingent consideration liabilities of $2,104. (3) Estimated fair value based on then current rates at which similar amounts of debt could be borrowed.
(1) Carrying value approximates fair value, which is determined based on a valuation technique to convert future cash payments or forgiveness transactions to a single discounted preset value amount. (2) Excludes contingent consideration liabilities of $7,144. (3) Estimated fair value based on then current rates at which similar amounts of debt could be borrowed. |
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Schedule of Fair Value of Assets and Liabilities Measured on a Recurring Basis | The following tables presents the financial assets and liabilities measured at fair value on a recurring basis at December 31, 2017 and December 31, 2016:
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Schedule of Changes in Carrying Value of Contingent Consideration | Set forth below are changes in the carrying value of contingent consideration related to acquisitions, which is included in accounts payable and accrued liabilities:
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Fixed Assets (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fixed Assets | Components of fixed assets, net included in the consolidated statements of financial condition were as follows:
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Intangible Assets (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Intangible Assets | At December 31, 2017 and 2016, intangible assets subject to amortization consisted of the following:
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Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Estimated amortization expense for each of the five succeeding years and thereafter is as follows:
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Goodwill (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Asset Impairment [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill | Changes to the carrying amount of goodwill during the years ended December 31, 2017 and 2016 are as follows:
(1) During 2016, the Company corrected the allocation of purchase price related to the Securities America acquisition, which resulted in a decrease of $2,870 in goodwill and related decrease in deferred tax liability. (2) During 2017, Securities America corrected the allocation of purchase price related to the Foothill acquisition, which resulted in an increase in goodwill and related increase in contingent deferred liability. |
Income Taxes (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Income Tax Expense (Benefit) | The provision for income taxes for 2017, 2016 and 2015 consisted of the following:
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Schedule of Effective Income Tax Rate Reconciliation | The difference between the income taxes expected at the U.S. federal statutory income tax rate of 35% and the reported income tax expense (benefit) is summarized as follows:
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Schedule of Deferred Tax Assets and Liabilities | Significant components of the Company's deferred tax assets and liabilities as of December 31, 2017 and December 31, 2016 are as follows:
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Schedule of Unrecognized Tax Benefits |
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Notes Payable (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Notes Payable | Notes payable consisted of the following:
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Commitments and Contingencies (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Lease Payment and Sublease Rental | As of December 31, 2017, minimum lease payments (net of lease abatement and exclusive of escalation charges) and sublease rentals are as follows:
(1) Includes $2,727 for the Miami office space which was renewed in March 2018. (2) In connection with a new office lease entered into in March 2016, Securities America has exercised an option to lease additional office space, which has not yet been constructed, for 12 years and would require the payment of an estimated average annual rent of $2,000, subject to certain adjustments. The Company currently expects that this lease would commence in 2020 upon the completion of the construction. Such estimated rent amounts are included in the lease commitment table above. |
Per Share Data (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted | A reconciliation of basic and diluted common shares use in the computation of per share data is as follows:
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Stock Compensation Plans (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Share-based Compensation, Stock Options, Activity | A summary of the status of these options at December 31, 2017 and changes during the year ended December 31, 2017 are presented below:
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Schedule of Share-based Compensation, Restricted Stock Activity | A summary of the restricted stock awards at December 31, 2017 and changes during the year ended December 31, 2017 is presented below:
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Employee and Director Option | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The fair value of each option award was estimated on the date of grant using the Black-Scholes option pricing model using the following weighted-average assumptions:
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Plan 1999 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Share-based Compensation, Stock Options, Activity | A summary of the status of the 1999 Plan at December 31, 2017 and changes during the year ended December 31, 2017 are presented below:
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Plan 2009 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Share-based Compensation, Stock Options, Activity | A summary of the status of the 2009 Plan at December 31, 2017 and changes during the year ended December 31, 2017 are presented below:
|
Segment Information (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment information | Segment information for the years ended December 31, 2017, 2016 and 2015 is as follows:
(3) Includes loss on severance costs of $525, excise and franchise tax expense of $594 and compensation expense that may be paid in stock of $559. (4) Includes loss on severance costs of $755, excise and franchise tax expense of $508 and compensation expense that may be paid in stock of $586. (5) Includes loss on write-off of receivable from subtenant of $855, compensation expense that may be paid in stock of $532, rent expense due to default by subtenant of $468 and excise and franchise tax expense of $310.
|
Quarterly Financial Data (Unaudited) (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Quarterly Financial Information |
|
Acquisitions (Purchase Price Allocation) (Details) - USD ($) $ in Thousands |
Jan. 02, 2015 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|---|---|
Business Acquisition [Line Items] | ||||
Goodwill | $ 124,210 | $ 124,031 | $ 125,572 | |
SSN | ||||
Business Acquisition [Line Items] | ||||
Cash | $ 8,081 | |||
Securities owned, at fair value | 158 | |||
Receivables from clearing broker | 630 | |||
Other receivables, net | 11,711 | |||
Fixed assets, net | 57 | |||
Restricted assets | 225 | |||
Identifiable intangible assets | 30,901 | |||
Goodwill | 9,282 | |||
Other assets | 714 | |||
Total assets acquired | 61,759 | |||
Commissions and fees payable | (12,562) | |||
Deferred income | (44) | |||
Accounts payable and accrued liabilities | (1,866) | |||
Total liabilities assumed | (14,472) | |||
Total estimated purchase price | 47,287 | |||
SSN | Other Receivables, Net and Commissions and Fees Payable | ||||
Business Acquisition [Line Items] | ||||
Increase in original amount | 484 | |||
SSN | Goodwill and Accounts Payable and Accrued Liabilities | ||||
Business Acquisition [Line Items] | ||||
Increase in original amount | $ 9,100 |
Fair Value of Assets and Liabilities (Narrative) (Details) - USD ($) $ in Thousands |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Securities owned deposited with the Company's subsidiaries clearing broker | $ 3,265 | $ 3,161 |
Securities owned, at fair value | 3,881 | 3,543 |
Common Stock and Warrants | Warrants to purchase common stock | Level 2 | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Securities owned, at fair value | $ 475 | $ 252 |
Fair Value of Assets and Liabilities (Schedule of Changes in Carrying Value of Contingent Consideration) (Details) - Contingent Consideration - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |||
Beginning balance of contingent consideration | $ 7,144 | $ 2,813 | $ 3,212 |
Payments | (5,021) | (827) | (1,945) |
Change in fair value of contingent consideration | (19) | 216 | (55) |
Fair value of contingent consideration in connection with acquisitions | 4,942 | 1,601 | |
Ending balance of contingent consideration | $ 2,104 | $ 7,144 | $ 2,813 |
Fixed Assets (Details) - USD ($) $ in Thousands |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Property, Plant and Equipment [Line Items] | ||
Fixed assets, gross | $ 56,650 | $ 48,253 |
Less: accumulated depreciation and amortization | (33,029) | (27,000) |
Total | 23,621 | 21,253 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Fixed assets, gross | 4,112 | 4,829 |
Computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Fixed assets, gross | 18,604 | 16,782 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Fixed assets, gross | 3,816 | 3,418 |
Software | ||
Property, Plant and Equipment [Line Items] | ||
Fixed assets, gross | 25,115 | 19,161 |
Other | ||
Property, Plant and Equipment [Line Items] | ||
Fixed assets, gross | $ 5,003 | $ 4,063 |
Intangible Assets (Narrative) (Detail) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization of intangible assets | $ 21,327 | $ 20,703 | $ 20,650 |
Estimated useful life | 8 years 9 months 27 days |
Intangible Assets (Estimated Amortization Expense) (Detail) $ in Thousands |
Dec. 31, 2017
USD ($)
|
---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | |
2018 | $ 20,462 |
2019 | 16,987 |
2020 | 15,400 |
2021 | 10,687 |
2022 | 7,798 |
Thereafter | 32,277 |
Estimated amortization expense | $ 103,611 |
Goodwill (Changes To The Carrying Amount) (Detail) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Goodwill [Roll Forward] | ||
Beginning balance | $ 124,031 | $ 125,572 |
Correction related to acquisition purchase price allocation | 179 | (2,870) |
Business acquisitions | 1,329 | |
Ending balance | 124,210 | 124,031 |
Ladenburg | ||
Goodwill [Roll Forward] | ||
Beginning balance | 301 | 301 |
Correction related to acquisition purchase price allocation | 0 | 0 |
Business acquisitions | 0 | |
Ending balance | 301 | 301 |
Independent Advisory and Brokerage Services | ||
Goodwill [Roll Forward] | ||
Beginning balance | 111,031 | 112,572 |
Correction related to acquisition purchase price allocation | 179 | (2,870) |
Business acquisitions | 1,329 | |
Ending balance | 111,210 | 111,031 |
Insurance Brokerage | ||
Goodwill [Roll Forward] | ||
Beginning balance | 12,699 | 12,699 |
Correction related to acquisition purchase price allocation | 0 | 0 |
Business acquisitions | 0 | |
Ending balance | $ 12,699 | $ 12,699 |
Notes Receivable from Financial Advisors (Detail) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Allowance for doubtful accounts | $ 416 | $ 371 |
Minimum | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Loan amortized over forgiveness period | 3 years | |
Maximum | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Percentage bearing variable interest rate | 10.00% | |
Loan amortized over forgiveness period | 5 years |
Deferred Compensation Plan (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Deferred Compensation Plans Disclosure [Abstract] | ||
Minimum period of participation before distributions are made | 5 years | |
Cash surrender value due policyholders, amount | $ 12,711 | $ 10,210 |
Deferred compensation liability | $ 18,161 | $ 17,247 |
Income Taxes (Income Taxes Components) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Current Total | $ 1,171 | $ 929 | $ (160) |
Deferred Total | (7,673) | 9,096 | (400) |
Benefit applied to reduce goodwill | 78 | ||
Income tax expense (benefit) | (6,502) | 10,025 | (482) |
Federal | |||
Current Federal | 364 | 0 | (1,491) |
Deferred Federal | (7,695) | 8,992 | (1,623) |
Benefit applied to reduce goodwill | 0 | ||
Income tax expense (benefit) | (7,331) | 8,992 | (3,114) |
State and Local | |||
Current State and Local | 807 | 929 | 1,331 |
Deferred State and Local | 22 | 104 | 1,223 |
Benefit applied to reduce goodwill | 78 | ||
Income tax expense (benefit) | $ 829 | $ 1,033 | $ 2,632 |
Income Taxes (Provision for Income Taxes) (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2016 |
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Income Tax Disclosure [Abstract] | |||||||||||
Income (loss) before income taxes | $ (146) | $ 4,657 | $ 1,187 | $ (4,518) | $ 2,586 | $ (6,911) | $ (1,576) | $ (6,385) | $ 1,180 | $ (12,286) | $ (11,695) |
Expense (benefit) under statutory U.S. tax rates | 413 | (4,300) | (4,093) | ||||||||
Increase (decrease) in taxes resulting from: | |||||||||||
(Decrease) increase in valuation allowance | (11,261) | 12,540 | 79 | ||||||||
Nondeductible items | 4,475 | 1,323 | 1,701 | ||||||||
State taxes, net of federal benefit | 431 | 671 | 1,600 | ||||||||
Impact of tax reform | (660) | 0 | 0 | ||||||||
Other, net | 100 | (209) | 231 | ||||||||
Income tax expense (benefit) | $ (6,502) | $ 10,025 | $ (482) |
Income Taxes (Deferred Tax Assets and Liabilities) (Details) - USD ($) $ in Thousands |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Deferred tax assets (liabilities): | ||
Net operating loss carryforwards | $ 8,642 | $ 14,132 |
AMT credit carryforward | 440 | 76 |
Accrued expenses | 4,105 | 5,084 |
Compensation and benefits | 10,877 | 18,333 |
Deferred compensation liability | 4,492 | 6,496 |
Securities owned | 514 | 900 |
Total deferred tax assets | 29,070 | 45,021 |
Valuation allowance | (5,520) | (13,766) |
Net deferred tax assets | 23,550 | 31,255 |
Fixed assets | (4,707) | (6,025) |
Intangibles | (13,589) | (25,097) |
Goodwill | (8,222) | (10,775) |
Total deferred liabilities | (26,518) | (41,897) |
Net deferred tax liability | $ (2,968) | $ (10,642) |
Income Taxes (Unrecognized Tax Benefit) (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
|
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Balance at January 1, | $ 503 | $ 423 |
Increases in tax positions for prior years | (33) | |
Increases in tax positions for prior years | 9 | |
Increases in tax positions for current years | 56 | 71 |
Balance at December 31, | $ 526 | $ 503 |
Notes Payable (Revolving Credit Agreement) (Details) - Revolving Credit Facility - USD ($) |
1 Months Ended | 12 Months Ended | ||||
---|---|---|---|---|---|---|
Oct. 19, 2007 |
Nov. 30, 2016 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2007 |
|
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | $ 40,000,000 | $ 40,000,000 | ||||
Interest rate during period | 11.00% | |||||
Amount outstanding | $ 0 | $ 0 | ||||
Additional borrowings | $ 25,000,000 | |||||
Repayment on credit facility | $ 25,000,000 | |||||
Interest expense | 0 | $ 113,000 | $ 0 | |||
Number of securities called by warrants (in shares) | 2,000,000 | |||||
Exercise price (in USD per share) | $ 1.91 | |||||
Debt issuance cost | $ 3,200,000 |
Notes Payable (NFS Forgivable Loans) (Details) |
12 Months Ended | ||||
---|---|---|---|---|---|
Nov. 04, 2015
USD ($)
|
Nov. 04, 2011
USD ($)
installment
|
Dec. 31, 2017
USD ($)
|
Dec. 31, 2016
USD ($)
|
Dec. 31, 2015
USD ($)
|
|
Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Amount outstanding | $ 0 | $ 0 | |||
NFS Forgivable Loans | |||||
Debt Instrument [Line Items] | |||||
Term | 7 years | ||||
Loans payable | $ 15,000,000 | ||||
Number of installments | installment | 7 | ||||
Annual installment | $ 2,143,000 | ||||
Forgiveness, principal | 2,143,000 | 2,143,000 | $ 2,143,000 | ||
Forgiveness, interest | 295,000 | $ 408,000 | $ 525,000 | ||
Secured loan securities value | 91,975,000 | ||||
NFS Forgivable Loans | Minimum | |||||
Debt Instrument [Line Items] | |||||
Effective percentage | 6.00% | ||||
NFS Forgivable Loans | Maximum | |||||
Debt Instrument [Line Items] | |||||
Effective percentage | 11.00% | ||||
NFS Forgivable Loans, Amended | |||||
Debt Instrument [Line Items] | |||||
Forgiveness, principal | $ 1,786,000 | ||||
Forgiveness, interest | $ 94,000 | ||||
Frost Gamma Investment Trust | Revolving Credit Facility | |||||
Debt Instrument [Line Items] | |||||
Amount outstanding | $ 40,000,000 |
Notes Payable (Securities America Notes) (Details) - USD ($) |
12 Months Ended | ||||
---|---|---|---|---|---|
Oct. 26, 2016 |
Nov. 04, 2011 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Debt Instrument [Line Items] | |||||
Aggregate shares of common stock for warrants exercised | 10,699,999 | ||||
Loss on extinguishment of debt | $ 0 | $ 0 | $ 252,000 | ||
Frost Nevada | |||||
Debt Instrument [Line Items] | |||||
Interest paid | 1,779,000 | 2,034,000 | |||
Vector Group | |||||
Debt Instrument [Line Items] | |||||
Interest paid | $ 198,000 | 226,000 | |||
November 2011 Loan | |||||
Debt Instrument [Line Items] | |||||
Current borrowing capacity | $ 160,700,000 | ||||
Stated percentage | 11.00% | ||||
Funding fees | $ 804,000 | ||||
Extinguishment of debt | 11,852,000 | ||||
Loss on extinguishment of debt | $ 252,000 | ||||
Securities America Notes | |||||
Debt Instrument [Line Items] | |||||
Warrants outstanding (in shares) | 10,713,332 | ||||
Warrants issued to lenders | $ 9,428,000 | ||||
Notes Payable to Banks | November 2011 Loan | |||||
Debt Instrument [Line Items] | |||||
Extinguishment of debt | $ 17,976,000 | ||||
Indebtedness | $ 0 |
Notes Payable Notes Payable (Bank Loan) (Details) - USD ($) |
Apr. 21, 2017 |
Nov. 06, 2013 |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|---|---|
Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Amount outstanding | $ 0 | $ 0 | ||
Securities America | Secured debt | Bank Loan | Line of Credit | ||||
Debt Instrument [Line Items] | ||||
Current borrowing capacity | $ 1,709,000 | |||
Stated percentage | 5.50% | |||
Amount outstanding | 153,000 | |||
Securities America | Secured debt | Bank Loan | Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Amount outstanding | 216,000 | $ 620,000 | ||
Term | 5 years | |||
Securities America | Secured debt | Amended and restated loan agreement | ||||
Debt Instrument [Line Items] | ||||
Stated percentage | 5.75% | |||
Amount outstanding | $ 6,563,000 | |||
Debt instrument, face amount | $ 8,000,000 | |||
Securities America | Line of Credit | Amended and restated loan agreement | Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 2.25% |
Commitments and Contingencies (Minimum Lease Payments And Sublease Rentals) (Detail) - USD ($) $ in Thousands |
Mar. 28, 2016 |
Mar. 14, 2018 |
Dec. 31, 2017 |
---|---|---|---|
Lease Commitments | |||
2018 | $ 7,632 | ||
2019 | 7,795 | ||
2020 | 8,516 | ||
2021 | 6,808 | ||
2022 | 6,297 | ||
Thereafter | 36,569 | ||
Total | 73,617 | ||
Sublease Rentals | |||
2018 | 40 | ||
2019 | 41 | ||
2020 | 28 | ||
2021 | 0 | ||
2022 | 0 | ||
Thereafter | 0 | ||
Total | 109 | ||
Net | |||
2018 | 7,592 | ||
2019 | 7,754 | ||
2020 | 8,488 | ||
2021 | 6,808 | ||
2022 | 6,297 | ||
Thereafter | 36,569 | ||
Total | 73,508 | ||
Estimated annual rent expense | 36,569 | ||
Miami, Florida | |||
Lease Commitments | |||
2018 | 508 | ||
2019 | 493 | ||
2020 | 493 | ||
2021 | 493 | ||
2022 | 493 | ||
Total | $ 2,809 | ||
Securities America | |||
Lease Commitments | |||
Thereafter | $ 2,000 | ||
Net | |||
Estimated annual rent expense | $ 2,000 | ||
Lease term | 12 years | ||
Subsequent event | Miami, Florida | |||
Lease Commitments | |||
Total | $ 2,727 |
Off-Balance-Sheet Risk and Concentration of Credit Risk (Detail) - USD ($) $ in Thousands |
Dec. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Off-Balance-Sheet Risk and Concentration of Credit Risk [Abstract] | ||
Receivables from clearing broker | $ 48,543 | $ 41,492 |
Per Share Data (Computations of Basic and Diluted Per Share) (Details) - shares |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2016 |
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Earnings Per Share [Abstract] | |||||||||||
Basic weighted-average common shares outstanding - basic (in shares) | 194,749,001 | 192,912,643 | 192,304,828 | 192,270,615 | 188,837,490 | 181,032,730 | 180,674,937 | 181,363,446 | 193,064,550 | 182,987,850 | 183,660,993 |
Effect of dilutive securities: | |||||||||||
Options to purchase common stock (in shares) | 0 | 0 | 0 | ||||||||
Warrants to purchase common stock (in shares) | 0 | 0 | 0 | ||||||||
Restricted shares (in shares) | 0 | 0 | 0 | ||||||||
Dilutive potential common shares (in shares) | 0 | 0 | 0 | ||||||||
Weighted average common shares outstanding and dilutive potential common shares (in shares) | 194,749,001 | 192,912,643 | 192,304,828 | 192,270,615 | 188,837,490 | 181,032,730 | 180,674,937 | 181,363,446 | 193,064,550 | 182,987,850 | 183,660,993 |
Per Share Data (Narrative) (Details) - shares |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Earnings Per Share [Abstract] | |||
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | 32,501,007 | 41,191,772 | 57,494,385 |
Stock Compensation Plans (Summary Of The Status Of These Options) (Detail) $ / shares in Units, $ in Thousands |
12 Months Ended |
---|---|
Dec. 31, 2017
USD ($)
$ / shares
shares
| |
Shares | |
Options outstanding, beginning balance (in shares) | shares | 3,000,000 |
Forfeited (in shares) | shares | (3,000,000) |
Options outstanding, ending balance (in shares) | shares | 0 |
Weighted- Average Exercise Price | |
Options outstanding, beginning balance (in USD per share) | $ / shares | $ 1.91 |
Forfeited (in USD per share) | $ / shares | 1.91 |
Options outstanding, ending balance (in USD per share) | $ / shares | $ 0.00 |
Aggregate Intrinsic Value | |
Options outstanding | $ | $ 0 |
Stock Compensation Plans (Black-Scholes Option Pricing Weighted-Average Assumptions) (Detail) - Employee and Director Option |
12 Months Ended | |
---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Dividend yield | 0.00% | 0.00% |
Expected volatility | 50.38% | 61.10% |
Risk-free interest rate | 1.67% | 1.63% |
Expected life (in years) | 6 years 1 month 10 days | 6 years 1 month 24 days |
Stock Compensation Plans (Restricted Stock Activity) (Details) - Restricted Stock |
12 Months Ended |
---|---|
Dec. 31, 2017
$ / shares
shares
| |
Stock | |
Nonvested at beginning of period (in shares) | shares | 2,233,219 |
Issued (in shares) | shares | 1,791,000 |
Vested (in shares) | shares | (639,073) |
Forfeited (in shares) | shares | (5,000) |
Nonvested at end of period (in shares) | shares | 3,380,146 |
Weighted Average Grant Date Fair Value | |
Nonvested at beginning of period (in dollars per share) | $ / shares | $ 2.92 |
Issued (in dollars per share) | $ / shares | 2.35 |
Vested (in dollars per share) | $ / shares | 3.04 |
Forfeited (in dollars per share) | $ / shares | 2.24 |
Nonvested at end of period (in dollars per share) | $ / shares | $ 2.60 |
Noncontrolling Interest (Details) - Arbor Point Advisors, LLC |
Dec. 31, 2017 |
---|---|
Noncontrolling Interest [Line Items] | |
Ownership percentage by parent | 80.00% |
Ownership percentage by noncontrolling owners | 20.00% |
Segment Information (Narrative) (Details) |
12 Months Ended |
---|---|
Dec. 31, 2017
Segment
| |
Segment Reporting [Abstract] | |
Number of operating segments | 3 |
Segment Information For Current And Prior Years (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2016 |
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Segment Reporting Information [Line Items] | |||||||||||
Revenues | $ 344,016 | $ 322,309 | $ 311,536 | $ 290,291 | $ 297,059 | $ 274,323 | $ 269,775 | $ 265,796 | $ 1,268,152 | $ 1,106,953 | $ 1,152,118 |
Income (loss) before income taxes | (146) | $ 4,657 | $ 1,187 | $ (4,518) | 2,586 | $ (6,911) | $ (1,576) | $ (6,385) | 1,180 | (12,286) | (11,695) |
EBITDA, as adjusted | 56,001 | 35,771 | 44,045 | ||||||||
Identifiable assets | 632,025 | 546,003 | 632,025 | 546,003 | 574,105 | ||||||
Depreciation and amortization | 28,835 | 28,334 | 27,077 | ||||||||
Interest | 2,710 | 4,262 | 5,169 | ||||||||
Capital expenditures | 9,896 | 7,132 | 8,298 | ||||||||
Non-cash compensation | 5,539 | 5,311 | 8,759 | ||||||||
Corporate | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues | 3,960 | 3,763 | 5,339 | ||||||||
Income (loss) before income taxes | (19,686) | (17,609) | (15,824) | ||||||||
EBITDA, as adjusted | (14,568) | (12,785) | (9,639) | ||||||||
Identifiable assets | 98,041 | 29,884 | 98,041 | 29,884 | 50,999 | ||||||
Depreciation and amortization | 34 | 64 | 52 | ||||||||
Interest | 870 | 748 | 947 | ||||||||
Capital expenditures | 4 | 0 | 87 | ||||||||
Non-cash compensation | 3,692 | 3,519 | 4,046 | ||||||||
Independent Advisory and Brokerage Services | Operating Segments | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues | 1,140,380 | 1,003,282 | 1,035,365 | ||||||||
Income (loss) before income taxes | 19,858 | 15,071 | 7,735 | ||||||||
EBITDA, as adjusted | 59,756 | 47,977 | 46,462 | ||||||||
Identifiable assets | 443,670 | 423,288 | 443,670 | 423,288 | 417,367 | ||||||
Depreciation and amortization | 21,455 | 20,406 | 19,373 | ||||||||
Interest | 1,157 | 2,828 | 3,532 | ||||||||
Capital expenditures | 8,923 | 6,784 | 7,341 | ||||||||
Non-cash compensation | 1,035 | 1,010 | 3,836 | ||||||||
Ladenburg | Operating Segments | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues | 66,680 | 49,425 | 61,841 | ||||||||
Income (loss) before income taxes | 6,346 | (3,674) | 3,095 | ||||||||
EBITDA, as adjusted | 8,115 | (1,676) | 6,052 | ||||||||
Identifiable assets | 43,148 | 38,665 | 43,148 | 38,665 | 44,050 | ||||||
Depreciation and amortization | 505 | 703 | 703 | ||||||||
Interest | 0 | 4 | 7 | ||||||||
Capital expenditures | 753 | 139 | 87 | ||||||||
Non-cash compensation | 629 | 537 | 638 | ||||||||
Insurance Brokerage | Operating Segments | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenues | 57,132 | 50,483 | 49,573 | ||||||||
Income (loss) before income taxes | (5,338) | (6,074) | (6,701) | ||||||||
EBITDA, as adjusted | 2,698 | 2,255 | 1,170 | ||||||||
Identifiable assets | $ 47,166 | $ 54,166 | 47,166 | 54,166 | 61,689 | ||||||
Depreciation and amortization | 6,841 | 7,161 | 6,949 | ||||||||
Interest | 683 | 682 | 683 | ||||||||
Capital expenditures | 216 | 209 | 783 | ||||||||
Non-cash compensation | $ 183 | $ 245 | $ 239 |
Quarterly Financial Data (Unaudited) (Statement of Financial Condition) (Detail) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2016 |
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenues | $ 344,016 | $ 322,309 | $ 311,536 | $ 290,291 | $ 297,059 | $ 274,323 | $ 269,775 | $ 265,796 | $ 1,268,152 | $ 1,106,953 | $ 1,152,118 |
Expenses | 344,095 | 317,649 | 310,286 | 294,961 | 294,435 | 281,162 | 271,302 | 272,124 | 1,266,991 | 1,119,023 | 1,163,868 |
Income (loss) before item shown below | (79) | 4,660 | 1,250 | (4,670) | 2,624 | (6,839) | (1,527) | (6,328) | 1,161 | (12,070) | (11,750) |
Change in fair value of contingent consideration | (67) | (3) | (63) | 152 | (38) | (72) | (49) | (57) | 19 | (216) | 55 |
Income (loss) before income taxes | (146) | 4,657 | 1,187 | (4,518) | 2,586 | (6,911) | (1,576) | (6,385) | 1,180 | (12,286) | (11,695) |
Net income (loss) | 6,634 | 3,402 | 1,325 | (3,679) | 621 | (7,515) | (17,801) | 2,384 | 7,682 | (22,311) | (11,213) |
Loss attributable to noncontrolling interest | 10 | (3) | 3 | 5 | 9 | 1 | 14 | 18 | 15 | 42 | 62 |
Net income (loss) attributable to the Company | 6,644 | 3,399 | 1,328 | (3,674) | 630 | (7,514) | (17,787) | 2,402 | 7,697 | (22,269) | (11,151) |
Dividends declared on preferred stock | (8,456) | (8,149) | (7,953) | (7,924) | (7,924) | (7,780) | (7,389) | (7,345) | (32,482) | (30,438) | (28,108) |
Net loss available to common shareholders | $ (1,812) | $ (4,750) | $ (6,625) | $ (11,598) | $ (7,294) | $ (15,294) | $ (25,176) | $ (4,943) | $ (24,785) | $ (52,707) | $ (39,259) |
Basic loss per common share (in USD per share) | $ (0.01) | $ (0.02) | $ (0.03) | $ (0.06) | $ (0.04) | $ (0.08) | $ (0.14) | $ (0.03) | $ (0.13) | $ (0.29) | $ (0.21) |
Diluted loss per common share (in USD per share) | $ (0.01) | $ (0.02) | $ (0.03) | $ (0.06) | $ (0.04) | $ (0.08) | $ (0.14) | $ (0.03) | $ (0.13) | $ (0.29) | $ (0.21) |
Basic weighted average common shares (in shares) | 194,749,001 | 192,912,643 | 192,304,828 | 192,270,615 | 188,837,490 | 181,032,730 | 180,674,937 | 181,363,446 | 193,064,550 | 182,987,850 | 183,660,993 |
Diluted weighted average common shares (in shares) | 194,749,001 | 192,912,643 | 192,304,828 | 192,270,615 | 188,837,490 | 181,032,730 | 180,674,937 | 181,363,446 | 193,064,550 | 182,987,850 | 183,660,993 |
Quarterly Financial Data (Unaudited) (Narrative) (Detail) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2017 |
Sep. 30, 2017 |
Jun. 30, 2017 |
Mar. 31, 2017 |
Dec. 31, 2016 |
Sep. 30, 2016 |
Jun. 30, 2016 |
Mar. 31, 2016 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Schedule of Quarterly Financial Information [Line Items] | |||||||||||
Expenses | $ 344,095 | $ 317,649 | $ 310,286 | $ 294,961 | $ 294,435 | $ 281,162 | $ 271,302 | $ 272,124 | $ 1,266,991 | $ 1,119,023 | $ 1,163,868 |
Non Cash Compensation | |||||||||||
Schedule of Quarterly Financial Information [Line Items] | |||||||||||
Expenses | $ 1,391 | $ 1,341 | $ 1,378 | $ 1,429 | $ 1,315 | $ 1,300 | $ 1,341 | $ 1,355 |
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