x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
DELAWARE | 30-0168701 | |
(State or Other Jurisdiction of Incorporation or Organization) | (IRS Employer Identification No.) | |
800 Nicollet Mall, Suite 1000 Minneapolis, Minnesota | 55402 | |
(Address of Principal Executive Offices) | (Zip Code) | |
(612) 303-6000 | ||
(Registrant’s Telephone Number, Including Area Code) |
PART I. FINANCIAL INFORMATION | |||
ITEM 1. | |||
ITEM 2. | |||
ITEM 3. | |||
ITEM 4. | |||
PART II. OTHER INFORMATION | |||
ITEM 1. | |||
ITEM 1A. | |||
ITEM 2. | |||
ITEM 6. | |||
September 30, | December 31, | ||||||
2016 | 2015 | ||||||
(Amounts in thousands, except share data) | (Unaudited) | ||||||
Assets | |||||||
Cash and cash equivalents | $ | 51,371 | $ | 189,910 | |||
Cash and cash equivalents segregated for regulatory purposes | 46,022 | 81,022 | |||||
Receivables: | |||||||
Customers | 87,577 | 41,167 | |||||
Brokers, dealers and clearing organizations | 169,427 | 147,949 | |||||
Securities purchased under agreements to resell | 147,475 | 136,983 | |||||
Financial instruments and other inventory positions owned | 488,427 | 283,579 | |||||
Financial instruments and other inventory positions owned and pledged as collateral | 592,060 | 707,355 | |||||
Total financial instruments and other inventory positions owned | 1,080,487 | 990,934 | |||||
Fixed assets (net of accumulated depreciation and amortization of $56,778 and $51,874, respectively) | 23,400 | 18,984 | |||||
Goodwill | 278,699 | 217,976 | |||||
Intangible assets (net of accumulated amortization of $64,203 and $48,803, respectively) | 41,781 | 30,530 | |||||
Investments | 144,542 | 163,861 | |||||
Other assets | 140,542 | 119,202 | |||||
Total assets | $ | 2,211,323 | $ | 2,138,518 | |||
Liabilities and Shareholders’ Equity | |||||||
Short-term financing | $ | 425,785 | $ | 446,190 | |||
Senior notes | 175,000 | 175,000 | |||||
Payables: | |||||||
Customers | 50,730 | 37,364 | |||||
Brokers, dealers and clearing organizations | 201,926 | 48,131 | |||||
Securities sold under agreements to repurchase | 22,009 | 45,319 | |||||
Financial instruments and other inventory positions sold, but not yet purchased | 255,950 | 239,155 | |||||
Accrued compensation | 202,352 | 251,638 | |||||
Other liabilities and accrued expenses | 38,554 | 62,901 | |||||
Total liabilities | 1,372,306 | 1,305,698 | |||||
Shareholders’ equity: | |||||||
Common stock, $0.01 par value: | |||||||
Shares authorized: 100,000,000 at September 30, 2016 and December 31, 2015; | |||||||
Shares issued: 19,534,376 at September 30, 2016 and 19,510,858 at December 31, 2015; | |||||||
Shares outstanding: 12,274,902 at September 30, 2016 and 13,311,016 at December 31, 2015 | 195 | 195 | |||||
Additional paid-in capital | 781,055 | 752,066 | |||||
Retained earnings | 294,173 | 279,140 | |||||
Less common stock held in treasury, at cost: 7,259,474 at September 30, 2016 and 6,199,842 shares at December 31, 2015 | (288,911 | ) | (247,553 | ) | |||
Accumulated other comprehensive loss | (2,032 | ) | (189 | ) | |||
Total common shareholders’ equity | 784,480 | 783,659 | |||||
Noncontrolling interests | 54,537 | 49,161 | |||||
Total shareholders’ equity | 839,017 | 832,820 | |||||
Total liabilities and shareholders’ equity | $ | 2,211,323 | $ | 2,138,518 |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
(Amounts in thousands, except per share data) | 2016 | 2015 | 2016 | 2015 | |||||||||||
Revenues: | |||||||||||||||
Investment banking | $ | 136,682 | $ | 91,640 | $ | 338,034 | $ | 284,786 | |||||||
Institutional brokerage | 42,189 | 34,182 | 122,423 | 106,879 | |||||||||||
Asset management | 15,256 | 18,951 | 43,699 | 58,730 | |||||||||||
Interest | 7,343 | 9,128 | 24,094 | 32,755 | |||||||||||
Investment income | 4,806 | 831 | 14,019 | 10,123 | |||||||||||
Total revenues | 206,276 | 154,732 | 542,269 | 493,273 | |||||||||||
Interest expense | 5,429 | 5,115 | 17,383 | 17,719 | |||||||||||
Net revenues | 200,847 | 149,617 | 524,886 | 475,554 | |||||||||||
Non-interest expenses: | |||||||||||||||
Compensation and benefits | 135,186 | 96,132 | 356,770 | 295,543 | |||||||||||
Outside services | 10,288 | 9,316 | 28,923 | 26,385 | |||||||||||
Occupancy and equipment | 8,743 | 7,025 | 25,311 | 20,791 | |||||||||||
Communications | 7,845 | 6,234 | 22,469 | 17,650 | |||||||||||
Marketing and business development | 7,629 | 6,965 | 23,804 | 21,186 | |||||||||||
Trade execution and clearance | 2,008 | 1,982 | 5,686 | 5,956 | |||||||||||
Restructuring and integration costs | — | 1,496 | 10,206 | 1,496 | |||||||||||
Intangible asset amortization expense | 8,010 | 1,773 | 15,400 | 5,319 | |||||||||||
Other operating expenses | 2,687 | 11,906 | 7,915 | 17,289 | |||||||||||
Total non-interest expenses | 182,396 | 142,829 | 496,484 | 411,615 | |||||||||||
Income before income tax expense | 18,451 | 6,788 | 28,402 | 63,939 | |||||||||||
Income tax expense | 6,515 | 1,573 | 8,767 | 20,605 | |||||||||||
Net income | 11,936 | 5,215 | 19,635 | 43,334 | |||||||||||
Net income applicable to noncontrolling interests | 1,278 | 384 | 4,602 | 4,532 | |||||||||||
Net income applicable to Piper Jaffray Companies | $ | 10,658 | $ | 4,831 | $ | 15,033 | $ | 38,802 | |||||||
Net income applicable to Piper Jaffray Companies’ common shareholders | $ | 8,582 | $ | 4,448 | $ | 12,476 | $ | 35,908 | |||||||
Earnings per common share | |||||||||||||||
Basic | $ | 0.70 | $ | 0.32 | $ | 0.98 | $ | 2.46 | |||||||
Diluted | $ | 0.70 | $ | 0.32 | $ | 0.97 | $ | 2.46 | |||||||
Weighted average number of common shares outstanding | |||||||||||||||
Basic | 12,282 | 13,938 | 12,787 | 14,568 | |||||||||||
Diluted | 12,298 | 13,952 | 12,801 | 14,594 |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
(Amounts in thousands) | 2016 | 2015 | 2016 | 2015 | |||||||||||
Net income | $ | 11,936 | $ | 5,215 | $ | 19,635 | $ | 43,334 | |||||||
Other comprehensive loss, net of tax: | |||||||||||||||
Foreign currency translation adjustment | (587 | ) | (352 | ) | (1,843 | ) | (326 | ) | |||||||
Comprehensive income | 11,349 | 4,863 | 17,792 | 43,008 | |||||||||||
Comprehensive income applicable to noncontrolling interests | 1,278 | 384 | 4,602 | 4,532 | |||||||||||
Comprehensive income applicable to Piper Jaffray Companies | $ | 10,071 | $ | 4,479 | $ | 13,190 | $ | 38,476 |
Nine Months Ended | |||||||
September 30, | |||||||
(Dollars in thousands) | 2016 | 2015 | |||||
Operating Activities: | |||||||
Net income | $ | 19,635 | $ | 43,334 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization of fixed assets | 4,724 | 3,703 | |||||
Deferred income taxes | 715 | (3,967 | ) | ||||
Stock-based and deferred compensation | 43,839 | 30,892 | |||||
Amortization of intangible assets | 15,400 | 5,319 | |||||
Amortization of forgivable loans | 6,894 | 4,499 | |||||
Decrease/(increase) in operating assets: | |||||||
Cash and cash equivalents segregated for regulatory purposes | 35,000 | (2,003 | ) | ||||
Receivables: | |||||||
Customers | (46,398 | ) | (40,093 | ) | |||
Brokers, dealers and clearing organizations | (21,478 | ) | (164,399 | ) | |||
Securities purchased under agreements to resell | (10,492 | ) | 77,114 | ||||
Net financial instruments and other inventory positions owned | (72,758 | ) | 177,254 | ||||
Investments | 11,093 | (32,045 | ) | ||||
Other assets | (24,758 | ) | (8,733 | ) | |||
Increase/(decrease) in operating liabilities: | |||||||
Payables: | |||||||
Customers | 13,366 | 36,021 | |||||
Brokers, dealers and clearing organizations | 153,795 | 69,784 | |||||
Securities sold under agreements to repurchase | (2,018 | ) | 14,186 | ||||
Accrued compensation | (51,569 | ) | (49,824 | ) | |||
Other liabilities and accrued expenses | (32,005 | ) | 129,271 | ||||
Net cash provided by operating activities | 42,985 | 290,313 | |||||
Investing Activities: | |||||||
Business acquisitions, net of cash acquired | (71,019 | ) | (8,737 | ) | |||
Repayment of note receivable | — | 1,500 | |||||
Purchases of fixed assets, net | (7,360 | ) | (4,286 | ) | |||
Net cash used in investing activities | (78,379 | ) | (11,523 | ) | |||
Continued on next page |
Nine Months Ended | |||||||
September 30, | |||||||
(Dollars in thousands) | 2016 | 2015 | |||||
Financing Activities: | |||||||
Increase/(decrease) in short-term financing | $ | (20,405 | ) | $ | 37,980 | ||
Decrease in securities sold under agreements to repurchase | (21,292 | ) | (72,944 | ) | |||
Increase/(decrease) in noncontrolling interests | 10,189 | (116,870 | ) | ||||
Repurchase of common stock | (70,428 | ) | (106,239 | ) | |||
Excess tax benefit from stock-based compensation | 16 | 5,885 | |||||
Proceeds from stock option exercises | 103 | 1,856 | |||||
Net cash used in financing activities | (101,817 | ) | (250,332 | ) | |||
Currency adjustment: | |||||||
Effect of exchange rate changes on cash | (1,328 | ) | (277 | ) | |||
Net increase/(decrease) in cash and cash equivalents | (138,539 | ) | 28,181 | ||||
Cash and cash equivalents at beginning of period | 189,910 | 15,867 | |||||
Cash and cash equivalents at end of period | $ | 51,371 | $ | 44,048 | |||
Supplemental disclosure of cash flow information – | |||||||
Cash paid during the period for: | |||||||
Interest | $ | 17,679 | $ | 18,324 | |||
Income taxes | $ | 22,148 | $ | 24,349 | |||
Non-cash investing activities – | |||||||
Issuance of common stock related to the acquisition of Simmons & Company International: | |||||||
25,525 shares for the nine months ended September 30, 2016 | $ | 1,074 | $ | — | |||
Non-cash financing activities – | |||||||
Issuance of restricted common stock for annual equity award: | |||||||
843,889 shares and 550,650 shares for the nine months ended September 30, 2016 and 2015, respectively | $ | 35,089 | $ | 30,429 |
Note 1 | |||
Note 2 | |||
Note 3 | |||
Note 4 | |||
Note 5 | |||
Note 6 | |||
Note 7 | |||
Note 8 | |||
Note 9 | |||
Note 10 | |||
Note 11 | |||
Note 12 | |||
Note 13 | |||
Note 14 | |||
Note 15 | |||
Note 16 | |||
Note 17 | |||
Note 18 | |||
Note 19 | |||
Note 20 |
(Dollars in thousands) | ||||
Assets: | ||||
Cash and cash equivalents | $ | 47,201 | ||
Fixed assets | 1,868 | |||
Goodwill | 60,737 | |||
Intangible assets | 26,638 | |||
Investments | 980 | |||
Other assets | 5,071 | |||
Total assets acquired | 142,495 | |||
Liabilities: | ||||
Accrued compensation | 15,387 | |||
Other liabilities and accrued expenses | 7,814 | |||
Total liabilities assumed | 23,201 | |||
Net assets acquired | $ | 119,294 |
Three Months Ended | Nine Months Ended | |||||||||||
September 30, | September 30, | |||||||||||
(Dollars in thousands) | 2015 | 2016 | 2015 | |||||||||
Net revenues | $ | 163,090 | $ | 532,683 | $ | 540,571 | ||||||
Net income applicable to Piper Jaffray Companies | 619 | 15,642 | 30,753 |
September 30, | December 31, | ||||||
(Dollars in thousands) | 2016 | 2015 | |||||
Financial instruments and other inventory positions owned: | |||||||
Corporate securities: | |||||||
Equity securities | $ | 4,699 | $ | 9,505 | |||
Convertible securities | 49,191 | 18,460 | |||||
Fixed income securities | 43,368 | 48,654 | |||||
Municipal securities: | |||||||
Taxable securities | 94,420 | 111,591 | |||||
Tax-exempt securities | 603,001 | 416,966 | |||||
Short-term securities | 70,678 | 33,068 | |||||
Mortgage-backed securities | 14,630 | 121,794 | |||||
U.S. government agency securities | 154,980 | 188,140 | |||||
U.S. government securities | 3,432 | 7,729 | |||||
Derivative contracts | 42,088 | 35,027 | |||||
Total financial instruments and other inventory positions owned | 1,080,487 | 990,934 | |||||
Less noncontrolling interests (1) | (64,490 | ) | (43,397 | ) | |||
$ | 1,015,997 | $ | 947,537 | ||||
Financial instruments and other inventory positions sold, but not yet purchased: | |||||||
Corporate securities: | |||||||
Equity securities | $ | 51,012 | $ | 15,740 | |||
Fixed income securities | 25,770 | 39,909 | |||||
U.S. government agency securities | 10,506 | 21,267 | |||||
U.S. government securities | 162,964 | 159,037 | |||||
Derivative contracts | 5,698 | 3,202 | |||||
Total financial instruments and other inventory positions sold, but not yet purchased | 255,950 | 239,155 | |||||
Less noncontrolling interests (2) | (4,937 | ) | (4,586 | ) | |||
$ | 251,013 | $ | 234,569 |
(1) | Noncontrolling interests attributable to third party ownership in a consolidated municipal bond fund consist of $10.9 million and $7.5 million of taxable municipal securities, $51.7 million and $35.1 million of tax-exempt municipal securities, and $1.9 million and $0.8 million of derivative contracts as of September 30, 2016 and December 31, 2015, respectively. |
(2) | Noncontrolling interests attributable to third party ownership in a consolidated municipal bond fund consist of U.S. government securities as of September 30, 2016 and December 31, 2015. |
September 30, 2016 | December 31, 2015 | |||||||||||||||||||||||
(Dollars in thousands) | Derivative | Derivative | Notional | Derivative | Derivative | Notional | ||||||||||||||||||
Derivative Category | Assets (1) | Liabilities (2) | Amount | Assets (1) | Liabilities (2) | Amount | ||||||||||||||||||
Interest rate | ||||||||||||||||||||||||
Customer matched-book | $ | 406,716 | $ | 388,924 | $ | 3,507,518 | $ | 406,888 | $ | 386,284 | $ | 4,392,440 | ||||||||||||
Trading securities | 960 | 8,967 | 401,350 | — | 7,685 | 290,600 | ||||||||||||||||||
Credit default swap index | ||||||||||||||||||||||||
Trading securities | — | 1,083 | 63,000 | 5,411 | 530 | 94,270 | ||||||||||||||||||
Futures and equity options | ||||||||||||||||||||||||
Trading securities | — | — | 271 | 164 | 149 | 2,345,037 | ||||||||||||||||||
$ | 407,676 | $ | 398,974 | $ | 3,972,139 | $ | 412,463 | $ | 394,648 | $ | 7,122,347 |
(1) | Derivative assets are included within financial instruments and other inventory positions owned on the consolidated statements of financial condition. |
(2) | Derivative liabilities are included within financial instruments and other inventory positions sold, but not yet purchased on the consolidated statements of financial condition. |
Three Months Ended | Nine Months Ended | |||||||||||||||||
(Dollars in thousands) | September 30, | September 30, | ||||||||||||||||
Derivative Category | Operations Category | 2016 | 2015 | 2016 | 2015 | |||||||||||||
Interest rate derivative contract | Investment banking | $ | (1,901 | ) | $ | (689 | ) | $ | (3,953 | ) | $ | (1,688 | ) | |||||
Interest rate derivative contract | Institutional brokerage | 8,438 | (10,450 | ) | 819 | 2,106 | ||||||||||||
Credit default swap index contract | Institutional brokerage | 74 | 4,268 | 3,958 | 16,913 | |||||||||||||
Futures and equity option derivative contracts | Institutional brokerage | 107 | 86 | 255 | 139 | |||||||||||||
$ | 6,718 | $ | (6,785 | ) | $ | 1,079 | $ | 17,470 |
Valuation | Weighted | ||||||
Technique | Unobservable Input | Range | Average | ||||
Assets: | |||||||
Financial instruments and other inventory positions owned: | |||||||
Municipal securities: | |||||||
Tax-exempt securities | Discounted cash flow | Expected recovery rate (% of par) (2) | 5 - 60% | 19.4% | |||
Short-term securities | Discounted cash flow | Expected recovery rate (% of par) (2) | 66 - 94% | 91.0% | |||
Mortgage-backed securities: | |||||||
Collateralized by residential mortgages | Discounted cash flow | Credit default rates (3) | 0 - 4% | 0.5% | |||
Prepayment rates (4) | 1 - 35% | 9.7% | |||||
Loss severity (3) | 0 - 100% | 53.6% | |||||
Valuation yields (3) | 2 - 7% | 3.6% | |||||
Derivative contracts: | |||||||
Interest rate locks | Discounted cash flow | Premium over the MMD curve in basis points ("bps") (1) | 3 - 27 bps | 13.9 bps | |||
Investments at fair value: | |||||||
Equity securities in private companies | Market approach | Revenue multiple (2) | 3 - 6 times | 4.4 times | |||
EBITDA multiple (2) | 10 - 12 times | 10.4 times | |||||
Liabilities: | |||||||
Financial instruments and other inventory positions sold, but not yet purchased: | |||||||
Derivative contracts: | |||||||
Interest rate locks | Discounted cash flow | Premium over the MMD curve (1) | 1 - 16 bps | 9.5 bps |
(1) | Significant increase/(decrease) in the unobservable input in isolation would result in a significantly lower/(higher) fair value measurement. |
(2) | Significant increase/(decrease) in the unobservable input in isolation would result in a significantly higher/(lower) fair value measurement. |
(3) | Significant changes in any of these inputs in isolation could result in a significantly different fair value. Generally, a change in the assumption used for credit default rates is accompanied by a directionally similar change in the assumption used for the loss severity and a directionally inverse change in the assumption for valuation yields. |
(4) | The potential impact of changes in prepayment rates on fair value is dependent on other security-specific factors, such as the par value and structure. Changes in the prepayment rates may result in directionally similar or directionally inverse changes in fair value depending on whether the security trades at a premium or discount to the par value. |
Counterparty | |||||||||||||||||||
and Cash | |||||||||||||||||||
Collateral | |||||||||||||||||||
(Dollars in thousands) | Level I | Level II | Level III | Netting (1) | Total | ||||||||||||||
Assets: | |||||||||||||||||||
Financial instruments and other inventory positions owned: | |||||||||||||||||||
Corporate securities: | |||||||||||||||||||
Equity securities | $ | 2,607 | $ | 2,092 | $ | — | $ | — | $ | 4,699 | |||||||||
Convertible securities | — | 49,191 | — | — | 49,191 | ||||||||||||||
Fixed income securities | — | 43,368 | — | — | 43,368 | ||||||||||||||
Municipal securities: | |||||||||||||||||||
Taxable securities | — | 94,420 | — | — | 94,420 | ||||||||||||||
Tax-exempt securities | — | 601,824 | 1,177 | — | 603,001 | ||||||||||||||
Short-term securities | — | 69,930 | 748 | — | 70,678 | ||||||||||||||
Mortgage-backed securities | — | 953 | 13,677 | — | 14,630 | ||||||||||||||
U.S. government agency securities | — | 154,980 | — | — | 154,980 | ||||||||||||||
U.S. government securities | 3,432 | — | — | — | 3,432 | ||||||||||||||
Derivative contracts | — | 406,716 | 960 | (365,588 | ) | 42,088 | |||||||||||||
Total financial instruments and other inventory positions owned | 6,039 | 1,423,474 | 16,562 | (365,588 | ) | 1,080,487 | |||||||||||||
Cash equivalents | 662 | — | — | — | 662 | ||||||||||||||
Investments at fair value | 33,008 | — | 98,718 | (2) | — | 131,726 | |||||||||||||
Total assets | $ | 39,709 | $ | 1,423,474 | $ | 115,280 | $ | (365,588 | ) | $ | 1,212,875 | ||||||||
Liabilities: | |||||||||||||||||||
Financial instruments and other inventory positions sold, but not yet purchased: | |||||||||||||||||||
Corporate securities: | |||||||||||||||||||
Equity securities | $ | 50,930 | $ | 82 | $ | — | $ | — | $ | 51,012 | |||||||||
Fixed income securities | — | 25,770 | — | — | 25,770 | ||||||||||||||
U.S. government agency securities | — | 10,506 | — | — | 10,506 | ||||||||||||||
U.S. government securities | 162,964 | — | — | — | 162,964 | ||||||||||||||
Derivative contracts | — | 391,686 | 7,288 | (393,276 | ) | 5,698 | |||||||||||||
Total financial instruments and other inventory positions sold, but not yet purchased | $ | 213,894 | $ | 428,044 | $ | 7,288 | $ | (393,276 | ) | $ | 255,950 |
(1) | Represents cash collateral and the impact of netting on a counterparty basis. The Company had no securities posted as collateral to its counterparties. |
(2) | Noncontrolling interests of $29.9 million are attributable to third party ownership in a consolidated merchant banking fund. |
Counterparty | |||||||||||||||||||
and Cash | |||||||||||||||||||
Collateral | |||||||||||||||||||
(Dollars in thousands) | Level I | Level II | Level III | Netting (1) | Total | ||||||||||||||
Assets: | |||||||||||||||||||
Financial instruments and other inventory positions owned: | |||||||||||||||||||
Corporate securities: | |||||||||||||||||||
Equity securities | $ | 7,569 | $ | 1,936 | $ | — | $ | — | $ | 9,505 | |||||||||
Convertible securities | — | 18,460 | — | — | 18,460 | ||||||||||||||
Fixed income securities | — | 48,654 | — | — | 48,654 | ||||||||||||||
Municipal securities: | |||||||||||||||||||
Taxable securities | — | 105,775 | 5,816 | — | 111,591 | ||||||||||||||
Tax-exempt securities | — | 415,789 | 1,177 | — | 416,966 | ||||||||||||||
Short-term securities | — | 32,348 | 720 | — | 33,068 | ||||||||||||||
Mortgage-backed securities | — | 670 | 121,124 | — | 121,794 | ||||||||||||||
U.S. government agency securities | — | 188,140 | — | — | 188,140 | ||||||||||||||
U.S. government securities | 7,729 | — | — | — | 7,729 | ||||||||||||||
Derivative contracts | 164 | 412,299 | — | (377,436 | ) | 35,027 | |||||||||||||
Total financial instruments and other inventory positions owned | 15,462 | 1,224,071 | 128,837 | (377,436 | ) | 990,934 | |||||||||||||
Cash equivalents | 130,138 | — | — | — | 130,138 | ||||||||||||||
Investments at fair value | 34,874 | — | 107,907 | (2) | — | 142,781 | |||||||||||||
Total assets | $ | 180,474 | $ | 1,224,071 | $ | 236,744 | $ | (377,436 | ) | $ | 1,263,853 | ||||||||
Liabilities: | |||||||||||||||||||
Financial instruments and other inventory positions sold, but not yet purchased: | |||||||||||||||||||
Corporate securities: | |||||||||||||||||||
Equity securities | $ | 13,489 | $ | 2,251 | $ | — | $ | — | $ | 15,740 | |||||||||
Fixed income securities | — | 39,909 | — | — | 39,909 | ||||||||||||||
U.S. government agency securities | — | 21,267 | — | — | 21,267 | ||||||||||||||
U.S. government securities | 159,037 | — | — | — | 159,037 | ||||||||||||||
Derivative contracts | 149 | 387,351 | 7,148 | (391,446 | ) | 3,202 | |||||||||||||
Total financial instruments and other inventory positions sold, but not yet purchased | $ | 172,675 | $ | 450,778 | $ | 7,148 | $ | (391,446 | ) | $ | 239,155 |
(1) | Represents cash collateral and the impact of netting on a counterparty basis. The Company had no securities posted as collateral to its counterparties. |
(2) | Noncontrolling interests of $40.1 million are attributable to third party ownership in a consolidated merchant banking fund and private investment vehicles. |
Unrealized gains/ | |||||||||||||||||||||||||||||||||||
(losses) for assets/ | |||||||||||||||||||||||||||||||||||
Balance at | Realized | Unrealized | Balance at | liabilities held at | |||||||||||||||||||||||||||||||
June 30, | Transfers | Transfers | gains/ | gains/ | September 30, | September 30, | |||||||||||||||||||||||||||||
(Dollars in thousands) | 2016 | Purchases | Sales | in | out | (losses) (1) | (losses) (1) | 2016 | 2016 (1) | ||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||||
Financial instruments and other inventory positions owned: | |||||||||||||||||||||||||||||||||||
Municipal securities: | |||||||||||||||||||||||||||||||||||
Tax-exempt securities | $ | 1,177 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 1,177 | $ | — | |||||||||||||||||||
Short-term securities | 748 | — | — | — | — | — | — | 748 | — | ||||||||||||||||||||||||||
Mortgage-backed securities | 56,053 | — | (44,006 | ) | — | — | 1,440 | 190 | 13,677 | 111 | |||||||||||||||||||||||||
Derivative contracts | 18 | — | — | — | — | — | 942 | 960 | 960 | ||||||||||||||||||||||||||
Total financial instruments and other inventory positions owned | 57,996 | — | (44,006 | ) | — | — | 1,440 | 1,132 | 16,562 | 1,071 | |||||||||||||||||||||||||
Investments at fair value | 116,405 | 944 | (21,309 | ) | — | — | 10,336 | (7,658 | ) | 98,718 | 2,621 | ||||||||||||||||||||||||
Total assets | $ | 174,401 | $ | 944 | $ | (65,315 | ) | $ | — | $ | — | $ | 11,776 | $ | (6,526 | ) | $ | 115,280 | $ | 3,692 | |||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||||
Financial instruments and other inventory positions sold, but not yet purchased: | |||||||||||||||||||||||||||||||||||
Derivative contracts | $ | 14,785 | $ | (5,922 | ) | $ | 171 | $ | — | $ | — | $ | 5,751 | $ | (7,497 | ) | $ | 7,288 | $ | (1,263 | ) | ||||||||||||||
Total financial instruments and other inventory positions sold, but not yet purchased | $ | 14,785 | $ | (5,922 | ) | $ | 171 | $ | — | $ | — | $ | 5,751 | $ | (7,497 | ) | $ | 7,288 | $ | (1,263 | ) |
(1) | Realized and unrealized gains/(losses) related to financial instruments, with the exception of customer matched-book derivatives, are reported in institutional brokerage on the consolidated statements of operations. Realized and unrealized gains/(losses) related to customer matched-book derivatives are reported in investment banking. Realized and unrealized gains/(losses) related to investments are reported in investment banking revenues or investment income on the consolidated statements of operations. |
Unrealized gains/ | |||||||||||||||||||||||||||||||||||
(losses) for assets/ | |||||||||||||||||||||||||||||||||||
Balance at | Realized | Unrealized | Balance at | liabilities held at | |||||||||||||||||||||||||||||||
June 30, | Transfers | Transfers | gains/ | gains/ | September 30, | September 30, | |||||||||||||||||||||||||||||
(Dollars in thousands) | 2015 | Purchases | Sales | in | out | (losses) (1) | (losses) (1) | 2015 | 2015 (1) | ||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||||
Financial instruments and other inventory positions owned: | |||||||||||||||||||||||||||||||||||
Municipal securities: | |||||||||||||||||||||||||||||||||||
Taxable securities | $ | — | $ | 7,624 | $ | (683 | ) | $ | 4,158 | $ | 66 | $ | 341 | $ | 11,506 | $ | 341 | ||||||||||||||||||
Tax-exempt securities | 1,186 | 5,686 | — | — | — | — | (8 | ) | 6,864 | (8 | ) | ||||||||||||||||||||||||
Short-term securities | 720 | — | — | — | — | — | — | 720 | — | ||||||||||||||||||||||||||
Mortgage-backed securities | 129,399 | 24,836 | (32,748 | ) | — | — | (7 | ) | 511 | 121,991 | 451 | ||||||||||||||||||||||||
Derivative contracts | 5,309 | 882 | (2,630 | ) | — | — | 1,748 | (5,309 | ) | — | — | ||||||||||||||||||||||||
Total financial instruments and other inventory positions owned | 136,614 | 39,028 | (36,061 | ) | 4,158 | — | 1,807 | (4,465 | ) | 141,081 | 784 | ||||||||||||||||||||||||
Investments at fair value | 94,196 | — | (7 | ) | — | — | (98 | ) | 2,278 | 96,369 | 2,174 | ||||||||||||||||||||||||
Total assets | $ | 230,810 | $ | 39,028 | $ | (36,068 | ) | $ | 4,158 | $ | — | $ | 1,709 | $ | (2,187 | ) | $ | 237,450 | $ | 2,958 | |||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||||
Financial instruments and other inventory positions sold, but not yet purchased: | |||||||||||||||||||||||||||||||||||
Derivative contracts | $ | 435 | $ | (2,287 | ) | $ | — | $ | — | $ | — | $ | 2,287 | $ | 5,142 | $ | 5,577 | $ | 5,456 | ||||||||||||||||
Total financial instruments and other inventory positions sold, but not yet purchased | $ | 435 | $ | (2,287 | ) | $ | — | $ | — | $ | — | $ | 2,287 | $ | 5,142 | $ | 5,577 | $ | 5,456 |
(1) | Realized and unrealized gains/(losses) related to financial instruments, with the exception of customer matched-book derivatives, are reported in institutional brokerage on the consolidated statements of operations. Realized and unrealized gains/(losses) related to customer matched-book derivatives are reported in investment banking. Realized and unrealized gains/(losses) related to investments are reported in investment banking revenues or investment income on the consolidated statements of operations. |
Unrealized gains/ | |||||||||||||||||||||||||||||||||||
(losses) for assets/ | |||||||||||||||||||||||||||||||||||
Balance at | Realized | Unrealized | Balance at | liabilities held at | |||||||||||||||||||||||||||||||
December 31, | Transfers | Transfers | gains/ | gains/ | September 30, | September 30, | |||||||||||||||||||||||||||||
(Dollars in thousands) | 2015 | Purchases | Sales | in | out | (losses) (1) | (losses) (1) | 2016 | 2016 (1) | ||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||||
Financial instruments and other inventory positions owned: | |||||||||||||||||||||||||||||||||||
Municipal securities: | |||||||||||||||||||||||||||||||||||
Taxable securities | $ | 5,816 | $ | — | $ | (611 | ) | $ | — | $ | (5,216 | ) | $ | 11 | $ | — | $ | — | $ | — | |||||||||||||||
Tax-exempt securities | 1,177 | — | — | — | — | — | — | 1,177 | — | ||||||||||||||||||||||||||
Short-term securities | 720 | — | — | — | — | — | 28 | 748 | 28 | ||||||||||||||||||||||||||
Mortgage-backed securities | 121,124 | 26,519 | (133,913 | ) | — | — | 3,285 | (3,338 | ) | 13,677 | 241 | ||||||||||||||||||||||||
Derivative contracts | — | 246 | — | — | — | (246 | ) | 960 | 960 | 960 | |||||||||||||||||||||||||
Total financial instruments and other inventory positions owned | 128,837 | 26,765 | (134,524 | ) | — | (5,216 | ) | 3,050 | (2,350 | ) | 16,562 | 1,229 | |||||||||||||||||||||||
Investments at fair value | 107,907 | 11,786 | (21,309 | ) | — | (9,088 | ) | 10,336 | (914 | ) | 98,718 | (1,186 | ) | ||||||||||||||||||||||
Total assets | $ | 236,744 | $ | 38,551 | $ | (155,833 | ) | $ | — | $ | (14,304 | ) | $ | 13,386 | $ | (3,264 | ) | $ | 115,280 | $ | 43 | ||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||||
Financial instruments and other inventory positions sold, but not yet purchased: | |||||||||||||||||||||||||||||||||||
Derivative contracts | $ | 7,148 | $ | (23,700 | ) | $ | 171 | $ | — | $ | — | $ | 23,529 | $ | 140 | $ | 7,288 | $ | 7,288 | ||||||||||||||||
Total financial instruments and other inventory positions sold, but not yet purchased | $ | 7,148 | $ | (23,700 | ) | $ | 171 | $ | — | $ | — | $ | 23,529 | $ | 140 | $ | 7,288 | $ | 7,288 |
(1) | Realized and unrealized gains/(losses) related to financial instruments, with the exception of customer matched-book derivatives, are reported in institutional brokerage on the consolidated statements of operations. Realized and unrealized gains/(losses) related to customer matched-book derivatives are reported in investment banking. Realized and unrealized gains/(losses) related to investments are reported in investment banking revenues or investment income on the consolidated statements of operations. |
Unrealized gains/ | |||||||||||||||||||||||||||||||||||
(losses) for assets/ | |||||||||||||||||||||||||||||||||||
Balance at | Realized | Unrealized | Balance at | liabilities held at | |||||||||||||||||||||||||||||||
December 31, | Transfers | Transfers | gains/ | gains/ | September 30, | September 30, | |||||||||||||||||||||||||||||
(Dollars in thousands) | 2014 | Purchases | Sales | in | out | (losses) (1) | (losses) (1) | 2015 | 2015 (1) | ||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||||
Financial instruments and other inventory positions owned: | |||||||||||||||||||||||||||||||||||
Municipal securities: | |||||||||||||||||||||||||||||||||||
Taxable securities | $ | — | $ | 7,624 | $ | (683 | ) | $ | 4,158 | $ | — | $ | 66 | $ | 341 | $ | 11,506 | $ | 341 | ||||||||||||||||
Tax-exempt securities | 1,186 | 5,686 | — | — | — | — | (8 | ) | 6,864 | 8 | |||||||||||||||||||||||||
Short-term securities | 720 | — | — | — | — | — | — | 720 | — | ||||||||||||||||||||||||||
Mortgage-backed securities | 124,749 | 244,606 | (252,050 | ) | — | — | 3,948 | 738 | 121,991 | 1,616 | |||||||||||||||||||||||||
Derivative contracts | 140 | 1,401 | (5,577 | ) | — | — | 4,176 | (140 | ) | — | — | ||||||||||||||||||||||||
Total financial instruments and other inventory positions owned | 126,795 | 259,317 | (258,310 | ) | 4,158 | — | 8,190 | 931 | 141,081 | 1,965 | |||||||||||||||||||||||||
Investments at fair value | 74,165 | 7,900 | (7 | ) | — | — | (98 | ) | 14,409 | 96,369 | 14,304 | ||||||||||||||||||||||||
Total assets | $ | 200,960 | $ | 267,217 | $ | (258,317 | ) | $ | 4,158 | $ | — | $ | 8,092 | $ | 15,340 | $ | 237,450 | $ | 16,269 | ||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||||
Financial instruments and other inventory positions sold, but not yet purchased: | |||||||||||||||||||||||||||||||||||
Derivative contracts | $ | 7,822 | $ | (12,941 | ) | $ | 535 | $ | — | $ | — | $ | 12,406 | $ | (2,245 | ) | $ | 5,577 | $ | 5,577 | |||||||||||||||
Total financial instruments and other inventory positions sold, but not yet purchased | $ | 7,822 | $ | (12,941 | ) | $ | 535 | $ | — | $ | — | $ | 12,406 | $ | (2,245 | ) | $ | 5,577 | $ | 5,577 |
(1) | Realized and unrealized gains/(losses) related to financial instruments, with the exception of customer matched-book derivatives, are reported in institutional brokerage on the consolidated statements of operations. Realized and unrealized gains/(losses) related to customer matched-book derivatives are reported in investment banking. Realized and unrealized gains/(losses) related to investments are reported in investment banking revenues or investment income on the consolidated statements of operations. |
Alternative Asset | ||||
(Dollars in thousands) | Management Funds | |||
Assets: | ||||
Receivables from brokers, dealers and clearing organizations | $ | 54,547 | ||
Financial instruments and other inventory positions owned and pledged as collateral | 379,971 | |||
Investments | 77,340 | |||
Other assets | 22,949 | |||
Total assets | $ | 534,807 | ||
Liabilities: | ||||
Short-term financing | $ | 247,453 | ||
Payables to brokers, dealers and clearing organizations | 106,287 | |||
Financial instruments and other inventory positions sold, but not yet purchased | 29,087 | |||
Other liabilities and accrued expenses | 3,735 | |||
Total liabilities | $ | 386,562 |
September 30, | December 31, | ||||||
(Dollars in thousands) | 2016 | 2015 | |||||
Receivable arising from unsettled securities transactions | $ | 54,547 | $ | 62,105 | |||
Deposits paid for securities borrowed | 35,367 | 47,508 | |||||
Receivable from clearing organizations | 19,903 | 3,155 | |||||
Deposits with clearing organizations | 40,052 | 27,019 | |||||
Securities failed to deliver | 6,100 | 2,100 | |||||
Other | 13,458 | 6,062 | |||||
Total receivables from brokers, dealers and clearing organizations | $ | 169,427 | $ | 147,949 |
September 30, | December 31, | ||||||
(Dollars in thousands) | 2016 | 2015 | |||||
Payable arising from unsettled securities transactions | $ | 181,567 | $ | 34,445 | |||
Payable to clearing organizations | 3,311 | 3,115 | |||||
Securities failed to receive | 10,691 | 4,468 | |||||
Other | 6,357 | 6,103 | |||||
Total payables to brokers, dealers and clearing organizations | $ | 201,926 | $ | 48,131 |
Repurchase | Fair Market | ||||||||
(Dollars in thousands) | Liabilities | Value | Interest Rate | ||||||
Term of 30 to 60 day maturities: | |||||||||
Mortgage-backed securities | $ | 5,977 | $ | 8,120 | 2.57% | ||||
On demand maturities: | |||||||||
U.S. government securities | 16,032 | 15,593 | 0.00 - 0.15% | ||||||
$ | 22,009 | $ | 23,713 |
September 30, | December 31, | ||||||
(Dollars in thousands) | 2016 | 2015 | |||||
Investments at fair value | $ | 131,726 | $ | 142,781 | |||
Investments at cost | 2,489 | 3,299 | |||||
Investments accounted for under the equity method | 10,327 | 17,781 | |||||
Total investments | 144,542 | 163,861 | |||||
Less investments attributable to noncontrolling interests (1) | (29,914 | ) | (40,069 | ) | |||
$ | 114,628 | $ | 123,792 |
(1) | Noncontrolling interests are attributable to third party ownership in a consolidated merchant banking fund. |
September 30, | December 31, | ||||||
(Dollars in thousands) | 2016 | 2015 | |||||
Net deferred income tax assets | $ | 66,095 | $ | 66,810 | |||
Fee receivables | 19,439 | 18,362 | |||||
Senior Living Fund notes receivable | 17,396 | 1,536 | |||||
Accrued interest receivables | 7,022 | 6,145 | |||||
Forgivable loans, net | 10,236 | 10,234 | |||||
Prepaid expenses | 5,806 | 6,161 | |||||
Other | 14,548 | 9,954 | |||||
Total other assets | $ | 140,542 | $ | 119,202 |
Capital | Asset | ||||||||||
(Dollars in thousands) | Markets | Management | Total | ||||||||
Goodwill | |||||||||||
Balance at December 31, 2015 | $ | 21,132 | $ | 196,844 | $ | 217,976 | |||||
Goodwill acquired | 60,723 | — | 60,723 | ||||||||
Balance at September 30, 2016 | $ | 81,855 | $ | 196,844 | $ | 278,699 | |||||
Intangible assets | |||||||||||
Balance at December 31, 2015 | $ | 8,256 | $ | 22,274 | $ | 30,530 | |||||
Intangible assets acquired | 26,651 | — | 26,651 | ||||||||
Amortization of intangible assets | (11,239 | ) | (4,161 | ) | (15,400 | ) | |||||
Balance at September 30, 2016 | $ | 23,668 | $ | 18,113 | $ | 41,781 |
(Dollars in thousands) | |||
Remainder of 2016 | $ | 5,739 | |
2017 | 14,972 | ||
2018 | 9,476 | ||
2019 | 7,463 | ||
2020 | 1,018 | ||
Thereafter | 254 | ||
Total | $ | 38,922 |
Outstanding Balance | Weighted Average Interest Rate | ||||||||||
September 30, | December 31, | September 30, | December 31, | ||||||||
(Dollars in thousands) | 2016 | 2015 | 2016 | 2015 | |||||||
Commercial paper (secured) | $ | 178,332 | $ | 276,894 | 1.91% | 1.74% | |||||
Prime broker arrangements | 247,453 | 169,296 | 1.22% | 1.07% | |||||||
Total short-term financing | $ | 425,785 | $ | 446,190 |
Outstanding Balance | |||||||
September 30, | December 31, | ||||||
(Dollars in thousands) | 2016 | 2015 | |||||
Class A Notes | $ | 50,000 | $ | 50,000 | |||
Class C Notes | 125,000 | 125,000 | |||||
Total senior notes | $ | 175,000 | $ | 175,000 |
(Dollars in thousands) | |||
Remainder of 2016 | $ | 3,961 | |
2017 | 14,060 | ||
2018 | 13,144 | ||
2019 | 11,495 | ||
2020 | 10,996 | ||
Thereafter | 26,707 | ||
$ | 80,363 |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
(Dollars in thousands) | 2016 | 2015 | 2016 | 2015 | |||||||||||
Severance, benefits and outplacement costs | $ | — | $ | 1,017 | $ | 6,608 | $ | 1,017 | |||||||
Vacated redundant leased office space | — | — | 1,320 | — | |||||||||||
Contract termination costs | — | 232 | 1,026 | 232 | |||||||||||
Total pre-tax restructuring charges | $ | — | $ | 1,249 | $ | 8,954 | $ | 1,249 |
Common | Common | Total | ||||||||||||
Shares | Shareholders’ | Noncontrolling | Shareholders’ | |||||||||||
(Amounts in thousands, except share amounts) | Outstanding | Equity | Interests | Equity | ||||||||||
Balance at December 31, 2015 | 13,311,016 | $ | 783,659 | $ | 49,161 | $ | 832,820 | |||||||
Net income | — | 15,033 | 4,602 | 19,635 | ||||||||||
Amortization/issuance of restricted stock (1) | — | 57,015 | — | 57,015 | ||||||||||
Issuance of treasury shares for options exercised | 2,500 | 103 | — | 103 | ||||||||||
Issuance of treasury shares for restricted stock vestings | 729,258 | — | — | — | ||||||||||
Repurchase of common stock through share repurchase program | (1,536,226 | ) | (59,739 | ) | — | (59,739 | ) | |||||||
Repurchase of common stock for employee tax withholding | (255,164 | ) | (10,689 | ) | — | (10,689 | ) | |||||||
Excess tax benefit from stock-based compensation | — | 16 | — | 16 | ||||||||||
Shares reserved/issued for director compensation | 23,518 | 925 | — | 925 | ||||||||||
Other comprehensive loss | — | (1,843 | ) | — | (1,843 | ) | ||||||||
Deconsolidation of investment partnerships (2) | — | — | (9,415 | ) | (9,415 | ) | ||||||||
Fund capital contributions, net | — | — | 10,189 | 10,189 | ||||||||||
Balance at September 30, 2016 | 12,274,902 | $ | 784,480 | $ | 54,537 | $ | 839,017 |
(1) | Includes amortization of restricted stock as part of deal consideration for the acquisition of Simmons. See Note 3 for further discussion. |
(2) | The Company deconsolidated certain investment partnerships upon adoption of ASU 2015-02. See Note 2 for further discussion. |
Incentive Plan | ||
Restricted Stock | ||
Annual grants | 1,320,271 | |
Sign-on grants | 292,809 | |
1,613,080 | ||
Inducement Plan | ||
Restricted Stock | 274,430 | |
Total restricted stock related to compensation | 1,887,510 | |
Simmons Deal Consideration (1) | 1,029,251 | |
Total restricted stock outstanding | 2,916,761 | |
Incentive Plan | ||
Restricted Stock Units | ||
Market condition leadership grants | 374,460 | |
Incentive Plan | ||
Stock Options | 132,288 |
(1) | The Company issued restricted stock with service conditions as part of deal consideration for the acquisition of Simmons. See Note 3 for further discussion. |
Risk-free | Expected Stock | |||
Grant Year | Interest Rate | Price Volatility | ||
2016 | 0.98% | 34.9% | ||
2015 | 0.90% | 29.8% | ||
2014 | 0.82% | 41.3% |
Unvested | Weighted Average | |||||
Restricted Stock | Grant Date | |||||
(in Shares) | Fair Value | |||||
December 31, 2015 | 1,287,915 | $ | 46.20 | |||
Granted | 2,341,453 | 41.68 | ||||
Vested | (602,978 | ) | 44.99 | |||
Canceled | (109,629 | ) | 42.85 | |||
September 30, 2016 | 2,916,761 | $ | 42.95 |
Unvested | Weighted Average | |||||
Restricted | Grant Date | |||||
Stock Units | Fair Value | |||||
December 31, 2015 | 356,242 | $ | 22.18 | |||
Granted | 135,483 | 19.93 | ||||
Vested | (117,265 | ) | 21.32 | |||
Canceled | — | — | ||||
September 30, 2016 | 374,460 | $ | 21.63 |
Weighted Average | ||||||||||||
Weighted | Remaining | |||||||||||
Options | Average | Contractual Term | Aggregate | |||||||||
Outstanding | Exercise Price | (in Years) | Intrinsic Value | |||||||||
December 31, 2015 | 157,201 | $ | 50.35 | 1.6 | $ | — | ||||||
Granted | — | — | ||||||||||
Exercised | (2,500 | ) | 41.09 | |||||||||
Canceled | — | — | ||||||||||
Expired | (22,413 | ) | 59.83 | |||||||||
September 30, 2016 | 132,288 | $ | 48.91 | 1.1 | $ | 696,825 | ||||||
Options exercisable at September 30, 2016 | 132,288 | $ | 48.91 | 1.1 | $ | 696,825 |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
(Amounts in thousands, except per share data) | 2016 | 2015 | 2016 | 2015 | |||||||||||
Net income applicable to Piper Jaffray Companies | $ | 10,658 | $ | 4,831 | $ | 15,033 | $ | 38,802 | |||||||
Earnings allocated to participating securities (1) | (2,076 | ) | (383 | ) | (2,557 | ) | (2,894 | ) | |||||||
Net income applicable to Piper Jaffray Companies’ common shareholders (2) | $ | 8,582 | $ | 4,448 | $ | 12,476 | $ | 35,908 | |||||||
Shares for basic and diluted calculations: | |||||||||||||||
Average shares used in basic computation | 12,282 | 13,938 | 12,787 | 14,568 | |||||||||||
Stock options | 16 | 14 | 14 | 26 | |||||||||||
Average shares used in diluted computation | 12,298 | 13,952 | 12,801 | 14,594 | |||||||||||
Earnings per common share: | |||||||||||||||
Basic | $ | 0.70 | $ | 0.32 | $ | 0.98 | $ | 2.46 | |||||||
Diluted | $ | 0.70 | $ | 0.32 | $ | 0.97 | $ | 2.46 |
(1) | Represents the allocation of earnings to participating securities. Losses are not allocated to participating securities. Participating securities include all of the Company’s unvested restricted shares. The weighted average participating shares outstanding were 2,974,676 and 1,199,864 for the three months ended September 30, 2016 and 2015, respectively, and 2,623,095 and 1,176,310 for the nine months ended September 30, 2016 and 2015, respectively. |
(2) | Net income/(loss) applicable to Piper Jaffray Companies’ common shareholders for diluted and basic EPS may differ under the two-class method as a result of adding the effect of the assumed exercise of stock options to dilutive shares outstanding, which alters the ratio used to allocate earnings to Piper Jaffray Companies’ common shareholders and participating securities for purposes of calculating diluted and basic EPS. |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
(Dollars in thousands) | 2016 | 2015 | 2016 | 2015 | |||||||||||
Capital Markets | |||||||||||||||
Investment banking | |||||||||||||||
Financing | |||||||||||||||
Equities | $ | 30,479 | $ | 24,290 | $ | 53,831 | $ | 94,621 | |||||||
Debt | 30,898 | 20,446 | 80,195 | 69,082 | |||||||||||
Advisory services | 75,230 | 47,135 | 204,971 | 121,653 | |||||||||||
Total investment banking | 136,607 | 91,871 | 338,997 | 285,356 | |||||||||||
Institutional sales and trading | |||||||||||||||
Equities | 20,492 | 20,026 | 62,773 | 59,338 | |||||||||||
Fixed income | 25,812 | 18,259 | 71,818 | 59,958 | |||||||||||
Total institutional sales and trading | 46,304 | 38,285 | 134,591 | 119,296 | |||||||||||
Management and performance fees | 1,353 | 1,898 | 4,112 | 3,926 | |||||||||||
Investment income | 4,472 | 7,274 | 14,009 | 22,194 | |||||||||||
Long-term financing expenses | (2,253 | ) | (1,668 | ) | (6,838 | ) | (4,781 | ) | |||||||
Net revenues | 186,483 | 137,660 | 484,871 | 425,991 | |||||||||||
Operating expenses (1) | 169,745 | 129,224 | 460,628 | 369,114 | |||||||||||
Segment pre-tax operating income | $ | 16,738 | $ | 8,436 | $ | 24,243 | $ | 56,877 | |||||||
Segment pre-tax operating margin | 9.0 | % | 6.1 | % | 5.0 | % | 13.4 | % | |||||||
Continued on next page |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
(Dollars in thousands) | 2016 | 2015 | 2016 | 2015 | |||||||||||
Asset Management | |||||||||||||||
Management and performance fees | |||||||||||||||
Management fees | $ | 13,903 | $ | 17,053 | $ | 39,587 | $ | 54,596 | |||||||
Performance fees | — | — | — | 208 | |||||||||||
Total management and performance fees | 13,903 | 17,053 | 39,587 | 54,804 | |||||||||||
Investment income/(loss) | 461 | (5,096 | ) | 428 | (5,241 | ) | |||||||||
Net revenues | 14,364 | 11,957 | 40,015 | 49,563 | |||||||||||
Operating expenses (1) | 12,651 | 13,605 | 35,856 | 42,501 | |||||||||||
Segment pre-tax operating income/(loss) | $ | 1,713 | $ | (1,648 | ) | $ | 4,159 | $ | 7,062 | ||||||
Segment pre-tax operating margin | 11.9 | % | (13.8 | )% | 10.4 | % | 14.2 | % | |||||||
Total | |||||||||||||||
Net revenues | $ | 200,847 | $ | 149,617 | $ | 524,886 | $ | 475,554 | |||||||
Operating expenses (1) | 182,396 | 142,829 | 496,484 | 411,615 | |||||||||||
Pre-tax operating income | $ | 18,451 | $ | 6,788 | $ | 28,402 | $ | 63,939 | |||||||
Pre-tax operating margin | 9.2 | % | 4.5 | % | 5.4 | % | 13.4 | % |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
(Dollars in thousands) | 2016 | 2015 | 2016 | 2015 | |||||||||||
Capital Markets | $ | 6,623 | $ | 263 | $ | 11,239 | $ | 789 | |||||||
Asset Management | 1,387 | 1,510 | 4,161 | 4,530 | |||||||||||
Total intangible asset amortization expense | $ | 8,010 | $ | 1,773 | $ | 15,400 | $ | 5,319 |
September 30, | December 31, | ||||||
(Dollars in thousands) | 2016 | 2015 | |||||
Capital Markets | $ | 1,974,983 | $ | 1,870,272 | |||
Asset Management | 236,340 | 268,246 | |||||
$ | 2,211,323 | $ | 2,138,518 |
ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. |
• | As part of our strategy to expand our equity investment banking business into the energy sector and grow our advisory business, on February 26, 2016, we completed the purchase of Simmons & Company International ("Simmons"), an employee-owned investment bank and broker dealer focused on the energy industry. |
• | In the second quarter of 2015, we began expanding our equity investment banking business into the financial institutions sector through significant hiring in our Capital Markets segment. |
• | On September 30, 2015, we built upon our expansion into the financial institutions sector by acquiring the assets of River Branch Holdings LLC ("River Branch"), an equity investment banking boutique focused on the financial institutions sector. The acquisition further strengthened our mergers and acquisitions leadership in the middle markets and added investment banking resources dedicated to banks, thrifts, and depository institutions. |
• | On October 9, 2015, we completed the acquisition of BMO Capital Markets GKST Inc. ("BMO GKST"), a municipal bond sales, trading and origination business of BMO Financial Corp. This acquisition expanded our fixed income institutional sales, trading and underwriting platforms. Additionally, it strengthened our strategic analytic and advisory capabilities. |
• | For more information on our acquisitions, see Note 3 of our accompanying unaudited consolidated financial statements included in this report. |
Three Months Ended | Nine Months Ended | |||||||||||||||||||||
(Amounts in thousands, except per share data) | Sept. 30, | Sept. 30, | Percent | Sept. 30, | Sept. 30, | Percent | ||||||||||||||||
2016 | 2015 | Inc/(Dec) | 2016 | 2015 | Inc/(Dec) | |||||||||||||||||
U.S. GAAP | ||||||||||||||||||||||
Net revenues | $ | 200,847 | $ | 149,617 | 34.2 | % | $ | 524,886 | $ | 475,554 | 10.4 | % | ||||||||||
Compensation and benefits expenses | 135,186 | 96,132 | 40.6 | 356,770 | 295,543 | 20.7 | ||||||||||||||||
Non-compensation expenses | 47,210 | 46,697 | 1.1 | 139,714 | 116,072 | 20.4 | ||||||||||||||||
Net income applicable to Piper Jaffray Companies | 10,658 | 4,831 | 120.6 | 15,033 | 38,802 | (61.3 | ) | |||||||||||||||
Earnings per diluted common share | $ | 0.70 | $ | 0.32 | 118.8 | $ | 0.97 | $ | 2.46 | (60.6 | ) | |||||||||||
Non-GAAP(1) | ||||||||||||||||||||||
Adjusted net revenues | $ | 199,001 | $ | 148,394 | 34.1 | % | $ | 518,396 | $ | 468,012 | 10.8 | % | ||||||||||
Adjusted compensation and benefits expenses | 127,010 | 95,442 | 33.1 | 335,226 | 292,698 | 14.5 | ||||||||||||||||
Adjusted non-compensation expenses | 38,632 | 42,589 | (9.3 | ) | 112,220 | 106,247 | 5.6 | |||||||||||||||
Adjusted net income applicable to Piper Jaffray Companies | 20,976 | 7,250 | 189.3 | 45,523 | 44,703 | 1.8 | ||||||||||||||||
Adjusted earnings per diluted common share | $ | 1.37 | $ | 0.48 | 185.4 | $ | 2.95 | $ | 2.83 | 4.2 |
• | Net revenues increased 34.2 percent from the year-ago period due primarily to higher investment banking revenues. Higher fixed income institutional brokerage revenues also contributed to the increase. |
• | Compensation and benefits expenses increased 40.6 percent compared with the prior-year period due to higher compensation expenses arising from increased revenues, as well as higher acquisition-related compensation costs. |
• | Non-compensation expenses were up slightly compared to the year-ago period. In the third quarter of 2016, non-compensation expenses included intangible amortization expense and other incremental costs related to our recent acquisitions of Simmons, BMO GKST and River Branch. Non-compensation expenses in the prior-year period included a $9.8 million charge related to a legal settlement. |
• | Adjusted earnings per diluted common share was $1.37 for the three months ended September 30, 2016, compared to $0.48 per diluted common share in the year-ago period. On an adjusted basis, the impact of the $9.8 million, pre-tax, legal settlement charge was $0.39 per diluted common share in the third quarter of 2015. |
• | Net revenues increased 10.4 percent from the year-ago period, as higher debt financing, advisory services and fixed income institutional brokerage revenues were partially offset by lower equity financing and asset management revenues. |
• | Compensation and benefits expenses were up 20.7 percent compared to the year-ago period due primarily to higher compensation expenses arising from increased revenues, as well as additional compensation expenses associated with our recent acquisitions. |
• | For the nine months ended September 30, 2016, non-compensation expenses increased 20.4 percent compared with the nine months ended September 30, 2015, as higher acquisition-related expenses and higher costs as a result of business expansion were partially offset by a $9.8 million settlement of a legal matter in the prior-year period. |
• | For the twelve months ended September 30, 2016, our rolling twelve month return on average common shareholders' equity was 3.6 percent, compared with 6.3 percent for the rolling twelve months ended September 30, 2015. On an adjusted basis, we generated a rolling twelve month return on average common shareholders' equity of 8.4 percent(2) for the twelve months ended September 30, 2016, compared with 7.3 percent(2) for rolling twelve months ended September 30, 2015. |
(1) | Reconciliation of U.S. GAAP to adjusted non-GAAP financial information |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
(Amounts in thousands, except per share data) | 2016 | 2015 | 2016 | 2015 | |||||||||||
Net revenues: | |||||||||||||||
Net revenues – U.S. GAAP basis | $ | 200,847 | $ | 149,617 | $ | 524,886 | $ | 475,554 | |||||||
Adjustments: | |||||||||||||||
Revenue related to noncontrolling interests | (1,846 | ) | (1,223 | ) | (6,490 | ) | (7,542 | ) | |||||||
Adjusted net revenues | $ | 199,001 | $ | 148,394 | $ | 518,396 | $ | 468,012 | |||||||
Compensation and benefits: | |||||||||||||||
Compensation and benefits – U.S. GAAP basis | $ | 135,186 | $ | 96,132 | $ | 356,770 | $ | 295,543 | |||||||
Adjustments: | |||||||||||||||
Compensation from acquisition-related agreements | (8,176 | ) | (690 | ) | (21,544 | ) | (2,845 | ) | |||||||
Adjusted compensation and benefits | $ | 127,010 | $ | 95,442 | $ | 335,226 | $ | 292,698 | |||||||
Non-compensation expenses: | |||||||||||||||
Non-compensation expenses – U.S. GAAP basis | $ | 47,210 | $ | 46,697 | $ | 139,714 | $ | 116,072 | |||||||
Adjustments: | |||||||||||||||
Non-compensation expenses related to noncontrolling interests | (568 | ) | (839 | ) | (1,888 | ) | (3,010 | ) | |||||||
Restructuring and integration costs | — | (1,496 | ) | (10,206 | ) | (1,496 | ) | ||||||||
Amortization of intangible assets related to acquisitions | (8,010 | ) | (1,773 | ) | (15,400 | ) | (5,319 | ) | |||||||
Adjusted non-compensation expenses | $ | 38,632 | $ | 42,589 | $ | 112,220 | $ | 106,247 | |||||||
Net income applicable to Piper Jaffray Companies: | |||||||||||||||
Net income applicable to Piper Jaffray Companies – U.S. GAAP basis | $ | 10,658 | $ | 4,831 | $ | 15,033 | $ | 38,802 | |||||||
Adjustments: | |||||||||||||||
Compensation from acquisition-related agreements | 5,424 | 422 | 14,067 | 1,738 | |||||||||||
Restructuring and integration costs | — | 914 | 7,014 | 914 | |||||||||||
Amortization of intangible assets related to acquisitions | 4,894 | 1,083 | 9,409 | 3,249 | |||||||||||
Adjusted net income applicable to Piper Jaffray Companies | $ | 20,976 | $ | 7,250 | $ | 45,523 | $ | 44,703 | |||||||
Earnings per diluted common share: | |||||||||||||||
Earnings per diluted common share – U.S. GAAP basis | $ | 0.70 | $ | 0.32 | $ | 0.97 | $ | 2.46 | |||||||
Adjustments: | |||||||||||||||
Compensation from acquisition-related agreements | 0.36 | 0.03 | 0.91 | 0.11 | |||||||||||
Restructuring and integration costs | — | 0.06 | 0.45 | 0.06 | |||||||||||
Amortization of intangible assets related to acquisitions | 0.32 | 0.07 | 0.61 | 0.21 | |||||||||||
Adjusted earnings per diluted common share | $ | 1.37 | $ | 0.48 | $ | 2.95 | $ | 2.83 |
(2) | Adjusted return on average common shareholders' equity is computed by dividing adjusted net income applicable to Piper Jaffray Companies for the last 12 months by average monthly common shareholders' equity. For a detailed explanation of the components of adjusted net income, see "Reconciliation of U.S. GAAP to adjusted non-GAAP financial information" in footnote (1). |
As a Percentage of | ||||||||||||||||
Net Revenues for the | ||||||||||||||||
Three Months Ended | Three Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2016 | ||||||||||||||||
(Dollars in thousands) | 2016 | 2015 | v2015 | 2016 | 2015 | |||||||||||
Revenues: | ||||||||||||||||
Investment banking | $ | 136,682 | $ | 91,640 | 49.2 | % | 68.1 | % | 61.2 | % | ||||||
Institutional brokerage | 42,189 | 34,182 | 23.4 | 21.0 | 22.8 | |||||||||||
Asset management | 15,256 | 18,951 | (19.5 | ) | 7.6 | 12.7 | ||||||||||
Interest | 7,343 | 9,128 | (19.6 | ) | 3.7 | 6.1 | ||||||||||
Investment income | 4,806 | 831 | 478.3 | 2.4 | 0.6 | |||||||||||
Total revenues | 206,276 | 154,732 | 33.3 | 102.7 | 103.4 | |||||||||||
Interest expense | 5,429 | 5,115 | 6.1 | 2.7 | 3.4 | |||||||||||
Net revenues | 200,847 | 149,617 | 34.2 | 100.0 | 100.0 | |||||||||||
Non-interest expenses: | ||||||||||||||||
Compensation and benefits | 135,186 | 96,132 | 40.6 | 67.3 | 64.3 | |||||||||||
Outside services | 10,288 | 9,316 | 10.4 | 5.1 | 6.2 | |||||||||||
Occupancy and equipment | 8,743 | 7,025 | 24.5 | 4.4 | 4.7 | |||||||||||
Communications | 7,845 | 6,234 | 25.8 | 3.9 | 4.2 | |||||||||||
Marketing and business development | 7,629 | 6,965 | 9.5 | 3.8 | 4.7 | |||||||||||
Trade execution and clearance | 2,008 | 1,982 | 1.3 | 1.0 | 1.3 | |||||||||||
Restructuring and integration costs | — | 1,496 | N/M | — | 1.0 | |||||||||||
Intangible asset amortization expense | 8,010 | 1,773 | 351.8 | 4.0 | 1.2 | |||||||||||
Other operating expenses | 2,687 | 11,906 | (77.4 | ) | 1.3 | 8.0 | ||||||||||
Total non-interest expenses | 182,396 | 142,829 | 27.7 | 90.8 | 95.5 | |||||||||||
Income before income tax expense | 18,451 | 6,788 | 171.8 | 9.2 | 4.5 | |||||||||||
Income tax expense | 6,515 | 1,573 | 314.2 | 3.2 | 1.1 | |||||||||||
Net income | 11,936 | 5,215 | 128.9 | 5.9 | 3.5 | |||||||||||
Net income applicable to noncontrolling interests | 1,278 | 384 | 232.8 | 0.6 | 0.3 | |||||||||||
Net income applicable to Piper Jaffray Companies | $ | 10,658 | $ | 4,831 | 120.6 | % | 5.3 | % | 3.2 | % |
Three Months Ended September 30, | |||||||||||||||||||||||||||||||
2016 | 2015 | ||||||||||||||||||||||||||||||
Adjustments (1) | Adjustments (1) | ||||||||||||||||||||||||||||||
Total | Noncontrolling | Other | U.S. | Total | Noncontrolling | Other | U.S. | ||||||||||||||||||||||||
(Dollars in thousands) | Adjusted | Interests | Adjustments | GAAP | Adjusted | Interests | Adjustments | GAAP | |||||||||||||||||||||||
Investment banking | |||||||||||||||||||||||||||||||
Financing | |||||||||||||||||||||||||||||||
Equities | $ | 30,479 | $ | — | $ | — | $ | 30,479 | $ | 24,290 | $ | — | $ | — | $ | 24,290 | |||||||||||||||
Debt | 30,898 | — | — | 30,898 | 20,446 | — | — | 20,446 | |||||||||||||||||||||||
Advisory services | 75,230 | — | — | 75,230 | 47,135 | — | — | 47,135 | |||||||||||||||||||||||
Total investment banking | 136,607 | — | — | 136,607 | 91,871 | — | — | 91,871 | |||||||||||||||||||||||
Institutional sales and trading | |||||||||||||||||||||||||||||||
Equities | 20,492 | — | — | 20,492 | 20,026 | — | — | 20,026 | |||||||||||||||||||||||
Fixed income | 25,399 | 413 | — | 25,812 | 18,259 | — | — | 18,259 | |||||||||||||||||||||||
Total institutional sales and trading | 45,891 | 413 | — | 46,304 | 38,285 | — | — | 38,285 | |||||||||||||||||||||||
Management and performance fees | 1,353 | — | — | 1,353 | 1,898 | — | — | 1,898 | |||||||||||||||||||||||
Investment income | 3,039 | 1,433 | — | 4,472 | 6,051 | 1,223 | — | 7,274 | |||||||||||||||||||||||
Long-term financing expenses | (2,253 | ) | — | — | (2,253 | ) | (1,668 | ) | — | — | (1,668 | ) | |||||||||||||||||||
Net revenues | 184,637 | 1,846 | — | 186,483 | 136,437 | 1,223 | — | 137,660 | |||||||||||||||||||||||
Operating expenses | 154,378 | 568 | 14,799 | 169,745 | 125,936 | 839 | 2,449 | 129,224 | |||||||||||||||||||||||
Segment pre-tax operating income | $ | 30,259 | $ | 1,278 | $ | (14,799 | ) | $ | 16,738 | $ | 10,501 | $ | 384 | $ | (2,449 | ) | $ | 8,436 | |||||||||||||
Segment pre-tax operating margin | 16.4 | % | 9.0 | % | 7.7 | % | 6.1 | % |
(1) | The following is a summary of the adjustments needed to reconcile our consolidated U.S. GAAP segment pre-tax operating income and segment pre-tax operating margin to the adjusted segment pre-tax operating income and adjusted segment pre-tax operating margin: |
Three Months Ended September 30, | |||||||
(Dollars in thousands) | 2016 | 2015 | |||||
Compensation from acquisition-related agreements | $ | 8,176 | $ | 690 | |||
Restructuring and integration costs | — | 1,496 | |||||
Amortization of intangible assets related to acquisitions | 6,623 | 263 | |||||
$ | 14,799 | $ | 2,449 |
Three Months Ended September 30, | |||||||||||||||||||||||||||||||
2016 | 2015 | ||||||||||||||||||||||||||||||
Adjustments (1) | Adjustments (1) | ||||||||||||||||||||||||||||||
Total | Noncontrolling | Other | U.S. | Total | Noncontrolling | Other | U.S. | ||||||||||||||||||||||||
(Dollars in thousands) | Adjusted | Interests | Adjustments | GAAP | Adjusted | Interests | Adjustments | GAAP | |||||||||||||||||||||||
Management fees | |||||||||||||||||||||||||||||||
Value equity | $ | 6,750 | $ | — | $ | — | $ | 6,750 | $ | 8,997 | $ | — | $ | — | $ | 8,997 | |||||||||||||||
MLP | 7,153 | — | — | 7,153 | 8,056 | — | — | 8,056 | |||||||||||||||||||||||
Total management fees | 13,903 | — | — | 13,903 | 17,053 | — | — | 17,053 | |||||||||||||||||||||||
Performance fees | |||||||||||||||||||||||||||||||
Value equity | — | — | — | — | — | — | — | — | |||||||||||||||||||||||
MLP | — | — | — | — | — | — | — | — | |||||||||||||||||||||||
Total performance fees | — | — | — | — | — | — | — | — | |||||||||||||||||||||||
Total management and performance fees | 13,903 | — | — | 13,903 | 17,053 | — | — | 17,053 | |||||||||||||||||||||||
Investment income/(loss) | 461 | — | — | 461 | (5,096 | ) | — | — | (5,096 | ) | |||||||||||||||||||||
Total net revenues | 14,364 | — | — | 14,364 | 11,957 | — | — | 11,957 | |||||||||||||||||||||||
Operating expenses | 11,264 | — | 1,387 | 12,651 | 12,095 | — | 1,510 | 13,605 | |||||||||||||||||||||||
Segment pre-tax operating income/(loss) | $ | 3,100 | $ | — | $ | (1,387 | ) | $ | 1,713 | $ | (138 | ) | $ | — | $ | (1,510 | ) | $ | (1,648 | ) | |||||||||||
Segment pre-tax operating margin | 21.6 | % | 11.9 | % | (1.2 | )% | (13.8 | )% | |||||||||||||||||||||||
Adjusted segment pre-tax operating margin excluding investment income/(loss) (2) | 19.0 | % | 29.1 | % |
(1) | Other Adjustments – Amortization of intangible assets related to acquisitions of $1.4 million and $1.5 million for the three months ended September 30, 2016 and 2015, respectively, is not included in adjusted segment pre-tax operating income and adjusted segment pre-tax operating margin for the periods presented. |
(2) | Management believes that presenting adjusted segment pre-tax operating margin excluding investment income/(loss) provides the most meaningful basis for comparison of Asset Management operating results across periods. |
Twelve | |||||||||||
Three Months Ended | Months Ended | ||||||||||
September 30, | September 30, | ||||||||||
(Dollars in millions) | 2016 | 2015 | 2016 | ||||||||
Value Equity | |||||||||||
Beginning of period | $ | 3,681 | $ | 5,757 | $ | 5,054 | |||||
Net outflows | (103 | ) | (208 | ) | (1,585 | ) | |||||
Net market appreciation/(depreciation) | 300 | (495 | ) | 409 | |||||||
End of period | $ | 3,878 | $ | 5,054 | $ | 3,878 | |||||
MLP | |||||||||||
Beginning of period | $ | 4,410 | $ | 5,626 | $ | 4,309 | |||||
Net inflows/(outflows) | (122 | ) | 154 | (148 | ) | ||||||
Net market appreciation/(depreciation) | 263 | (1,471 | ) | 390 | |||||||
End of period | $ | 4,551 | $ | 4,309 | $ | 4,551 | |||||
Total | |||||||||||
Beginning of period | $ | 8,091 | $ | 11,383 | $ | 9,363 | |||||
Net outflows | (225 | ) | (54 | ) | (1,733 | ) | |||||
Net market appreciation/(depreciation) | 563 | (1,966 | ) | 799 | |||||||
End of period | $ | 8,429 | $ | 9,363 | $ | 8,429 |
As a Percentage of | ||||||||||||||||
Net Revenues for the | ||||||||||||||||
Nine Months Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2016 | ||||||||||||||||
(Dollars in thousands) | 2016 | 2015 | v2015 | 2016 | 2015 | |||||||||||
Revenues: | ||||||||||||||||
Investment banking | $ | 338,034 | $ | 284,786 | 18.7 | % | 64.4 | % | 59.9 | % | ||||||
Institutional brokerage | 122,423 | 106,879 | 14.5 | 23.3 | 22.5 | |||||||||||
Asset management | 43,699 | 58,730 | (25.6 | ) | 8.3 | 12.3 | ||||||||||
Interest | 24,094 | 32,755 | (26.4 | ) | 4.6 | 6.9 | ||||||||||
Investment income | 14,019 | 10,123 | 38.5 | 2.7 | 2.1 | |||||||||||
Total revenues | 542,269 | 493,273 | 9.9 | 103.3 | 103.7 | |||||||||||
Interest expense | 17,383 | 17,719 | (1.9 | ) | 3.3 | 3.7 | ||||||||||
Net revenues | 524,886 | 475,554 | 10.4 | 100.0 | 100.0 | |||||||||||
Non-interest expenses: | ||||||||||||||||
Compensation and benefits | 356,770 | 295,543 | 20.7 | 68.0 | 62.1 | |||||||||||
Outside services | 28,923 | 26,385 | 9.6 | 5.5 | 5.5 | |||||||||||
Occupancy and equipment | 25,311 | 20,791 | 21.7 | 4.8 | 4.4 | |||||||||||
Communications | 22,469 | 17,650 | 27.3 | 4.3 | 3.7 | |||||||||||
Marketing and business development | 23,804 | 21,186 | 12.4 | 4.5 | 4.5 | |||||||||||
Trade execution and clearance | 5,686 | 5,956 | (4.5 | ) | 1.1 | 1.3 | ||||||||||
Restructuring and integration costs | 10,206 | 1,496 | 582.2 | 1.9 | 0.3 | |||||||||||
Intangible asset amortization expense | 15,400 | 5,319 | 189.5 | 2.9 | 1.1 | |||||||||||
Other operating expenses | 7,915 | 17,289 | (54.2 | ) | 1.5 | 3.6 | ||||||||||
Total non-interest expenses | 496,484 | 411,615 | 20.6 | 94.6 | 86.6 | |||||||||||
Income before income tax expense | 28,402 | 63,939 | (55.6 | ) | 5.4 | 13.4 | ||||||||||
Income tax expense | 8,767 | 20,605 | (57.5 | ) | 1.7 | 4.3 | ||||||||||
Net income | 19,635 | 43,334 | (54.7 | ) | 3.7 | 9.1 | ||||||||||
Net income applicable to noncontrolling interests | 4,602 | 4,532 | 1.5 | 0.9 | 1.0 | |||||||||||
Net income applicable to Piper Jaffray Companies | $ | 15,033 | $ | 38,802 | (61.3 | )% | 2.9 | % | 8.2 | % |
Nine Months Ended September 30, | |||||||||||||||||||||||||||||||
2016 | 2015 | ||||||||||||||||||||||||||||||
Adjustments (1) | Adjustments (1) | ||||||||||||||||||||||||||||||
Total | Noncontrolling | Other | U.S. | Total | Noncontrolling | Other | U.S. | ||||||||||||||||||||||||
(Dollars in thousands) | Adjusted | Interests | Adjustments | GAAP | Adjusted | Interests | Adjustments | GAAP | |||||||||||||||||||||||
Investment banking | |||||||||||||||||||||||||||||||
Financing | |||||||||||||||||||||||||||||||
Equities | $ | 53,831 | $ | — | $ | — | $ | 53,831 | $ | 94,621 | $ | — | $ | — | $ | 94,621 | |||||||||||||||
Debt | 80,195 | — | — | 80,195 | 69,082 | — | — | 69,082 | |||||||||||||||||||||||
Advisory services | 204,971 | — | — | 204,971 | 121,653 | — | — | 121,653 | |||||||||||||||||||||||
Total investment banking | 338,997 | — | — | 338,997 | 285,356 | — | — | 285,356 | |||||||||||||||||||||||
Institutional sales and trading | |||||||||||||||||||||||||||||||
Equities | 62,773 | — | — | 62,773 | 59,338 | — | — | 59,338 | |||||||||||||||||||||||
Fixed income | 70,665 | 1,153 | — | 71,818 | 59,958 | — | — | 59,958 | |||||||||||||||||||||||
Total institutional sales and trading | 133,438 | 1,153 | — | 134,591 | 119,296 | — | — | 119,296 | |||||||||||||||||||||||
Management and performance fees | 4,112 | — | — | 4,112 | 3,926 | — | — | 3,926 | |||||||||||||||||||||||
Investment income | 8,672 | 5,337 | — | 14,009 | 14,652 | 7,542 | — | 22,194 | |||||||||||||||||||||||
Long-term financing expenses | (6,838 | ) | — | — | (6,838 | ) | (4,781 | ) | — | — | (4,781 | ) | |||||||||||||||||||
Net revenues | 478,381 | 6,490 | — | 484,871 | 418,449 | 7,542 | — | 425,991 | |||||||||||||||||||||||
Operating expenses | 415,760 | 1,888 | 42,980 | 460,628 | 361,188 | 3,010 | 4,916 | 369,114 | |||||||||||||||||||||||
Segment pre-tax operating income | $ | 62,621 | $ | 4,602 | $ | (42,980 | ) | $ | 24,243 | $ | 57,261 | $ | 4,532 | $ | (4,916 | ) | $ | 56,877 | |||||||||||||
Segment pre-tax operating margin | 13.1 | % | 5.0 | % | 13.7 | % | 13.4 | % |
(1) | The following is a summary of the adjustments needed to reconcile our consolidated U.S. GAAP pre-tax operating income and pre-tax operating margin to the adjusted segment pre-tax operating income and adjusted segment pre-tax operating margin: |
Nine Months Ended September 30, | |||||||
(Dollars in thousands) | 2016 | 2015 | |||||
Compensation from acquisition-related agreements | $ | 21,544 | $ | 2,631 | |||
Restructuring and integration costs | 10,197 | 1,496 | |||||
Amortization of intangible assets related to acquisitions | 11,239 | 789 | |||||
$ | 42,980 | $ | 4,916 |
Nine Months Ended September 30, | |||||||||||||||||||||||||||||||
2016 | 2015 | ||||||||||||||||||||||||||||||
Adjustments (1) | Adjustments (1) | ||||||||||||||||||||||||||||||
Total | Noncontrolling | Other | U.S. | Total | Noncontrolling | Other | U.S. | ||||||||||||||||||||||||
(Dollars in thousands) | Adjusted | Interests | Adjustments | GAAP | Adjusted | Interests | Adjustments | GAAP | |||||||||||||||||||||||
Management fees | |||||||||||||||||||||||||||||||
Value equity | $ | 21,051 | $ | — | $ | — | $ | 21,051 | $ | 29,404 | $ | — | $ | — | $ | 29,404 | |||||||||||||||
MLP | 18,536 | — | — | 18,536 | 25,192 | — | — | 25,192 | |||||||||||||||||||||||
Total management fees | 39,587 | — | — | 39,587 | 54,596 | — | — | 54,596 | |||||||||||||||||||||||
Performance fees | |||||||||||||||||||||||||||||||
Value equity | — | — | — | — | 208 | — | — | 208 | |||||||||||||||||||||||
MLP | — | — | — | — | — | — | — | — | |||||||||||||||||||||||
Total performance fees | — | — | — | — | 208 | — | — | 208 | |||||||||||||||||||||||
Total management and performance fees | 39,587 | — | — | 39,587 | 54,804 | — | — | 54,804 | |||||||||||||||||||||||
Investment income/(loss) | 428 | — | — | 428 | (5,241 | ) | — | — | (5,241 | ) | |||||||||||||||||||||
Total net revenues | 40,015 | — | — | 40,015 | 49,563 | — | — | 49,563 | |||||||||||||||||||||||
Operating expenses | 31,686 | — | 4,170 | 35,856 | 37,757 | — | 4,744 | 42,501 | |||||||||||||||||||||||
Segment pre-tax operating income | $ | 8,329 | $ | — | $ | (4,170 | ) | $ | 4,159 | $ | 11,806 | $ | — | $ | (4,744 | ) | $ | 7,062 | |||||||||||||
Segment pre-tax operating margin | 20.8 | % | 10.4 | % | 23.8 | % | 14.2 | % | |||||||||||||||||||||||
Adjusted segment pre-tax operating margin excluding investment income/(loss) (2) | 20.0 | % | 31.1 | % |
(1) | Other Adjustments – The following table sets forth the items not included in adjusted segment pre-tax operating income and adjusted segment pre-tax operating margin for the periods presented: |
Nine Months Ended September 30, | |||||||
(Dollars in thousands) | 2016 | 2015 | |||||
Compensation from acquisition-related agreements | $ | — | $ | 214 | |||
Restructuring and integration costs | 9 | — | |||||
Amortization of intangible assets related to acquisitions | 4,161 | 4,530 | |||||
$ | 4,170 | $ | 4,744 |
(2) | Management believes that presenting adjusted segment pre-tax operating margin excluding investment income/(loss) provides the most meaningful basis for comparison of Asset Management operating results across periods. |
Twelve | |||||||||||
Nine Months Ended | Months Ended | ||||||||||
September 30, | September 30, | ||||||||||
(Dollars in millions) | 2016 | 2015 | 2016 | ||||||||
Value Equity | |||||||||||
Beginning of period | $ | 4,954 | $ | 5,758 | $ | 5,054 | |||||
Net outflows | (1,379 | ) | (366 | ) | (1,585 | ) | |||||
Net market appreciation/(depreciation) | 303 | (338 | ) | 409 | |||||||
End of period | $ | 3,878 | $ | 5,054 | $ | 3,878 | |||||
MLP | |||||||||||
Beginning of period | $ | 3,924 | $ | 5,711 | $ | 4,309 | |||||
Net inflows/(outflows) | (193 | ) | 389 | (148 | ) | ||||||
Net market appreciation/(depreciation) | 820 | (1,791 | ) | 390 | |||||||
End of period | $ | 4,551 | $ | 4,309 | $ | 4,551 | |||||
Total | |||||||||||
Beginning of period | $ | 8,878 | $ | 11,469 | $ | 9,363 | |||||
Net inflows/(outflows) | (1,572 | ) | 23 | (1,733 | ) | ||||||
Net market appreciation/(depreciation) | 1,123 | (2,129 | ) | 799 | |||||||
End of period | $ | 8,429 | $ | 9,363 | $ | 8,429 |
• | Valuation of Financial Instruments |
• | Goodwill and Intangible Assets |
• | Compensation Plans |
• | Income Taxes |
September 30, | December 31, | ||||||
(Dollars in thousands) | 2016 | 2015 | |||||
Total assets | $ | 2,211,323 | $ | 2,138,518 | |||
Deduct: Goodwill and intangible assets | (320,480 | ) | (248,506 | ) | |||
Deduct: Assets from noncontrolling interests | (120,887 | ) | (88,590 | ) | |||
Adjusted assets | $ | 1,769,956 | $ | 1,801,422 | |||
Total shareholders' equity | $ | 839,017 | $ | 832,820 | |||
Deduct: Goodwill and intangible assets | (320,480 | ) | (248,506 | ) | |||
Deduct: Noncontrolling interests | (54,537 | ) | (49,161 | ) | |||
Tangible common shareholders' equity | $ | 464,000 | $ | 535,153 | |||
Leverage ratio (1) | 2.6 | 2.6 | |||||
Adjusted leverage ratio (2) | 3.8 | 3.4 |
(1) | Leverage ratio equals total assets divided by total shareholders’ equity. |
(2) | Adjusted leverage ratio equals adjusted assets divided by tangible common shareholders’ equity. |
(Dollars in millions) | CP Series A | CP Series II A | CP Series III A | |||||||||
Maximum amount that may be issued | $ | 300.0 | $ | 150.0 | $ | 125.0 | ||||||
Amount outstanding | 105.4 | 20.0 | 52.9 | |||||||||
Weighted average maturity, in days | 67 | 8 | 17 | |||||||||
Weighted average maturity at issuance, in days | 150 | 96 | 42 |
Average Balance for the Three Months Ended | |||||||||||
(Dollars in millions) | Sept. 30, 2016 | June 30, 2016 | Mar. 31, 2016 | ||||||||
Funding source: | |||||||||||
Repurchase agreements | $ | 14.8 | $ | 28.9 | $ | 30.5 | |||||
Commercial paper | 235.8 | 279.7 | 279.2 | ||||||||
Prime broker arrangements | 200.6 | 169.2 | 159.0 | ||||||||
Short-term bank loans | — | 6.4 | 0.8 | ||||||||
Total | $ | 451.2 | $ | 484.2 | $ | 469.5 |
Average Balance for the Three Months Ended | |||||||||||||||
(Dollars in millions) | Dec. 31, 2015 | Sept. 30, 2015 | June 30, 2015 | Mar. 31, 2015 | |||||||||||
Funding source: | |||||||||||||||
Repurchase agreements | $ | 25.5 | $ | 32.1 | $ | 76.9 | $ | 66.4 | |||||||
Commercial paper | 277.5 | 276.8 | 256.3 | 245.1 | |||||||||||
Prime broker arrangements | 109.4 | 139.8 | 242.8 | 167.1 | |||||||||||
Short-term bank loans | 0.3 | 0.2 | 11.9 | 28.4 | |||||||||||
Total | $ | 412.7 | $ | 448.9 | $ | 587.9 | $ | 507.0 |
(Dollars in millions) | 2016 | 2015 | ||||||
First Quarter | $ | 576.4 | $ | 949.8 | ||||
Second Quarter | $ | 669.7 | $ | 876.0 | ||||
Third Quarter | $ | 525.6 | $ | 666.1 | ||||
Fourth Quarter | $ | 531.7 |
Outstanding Balance | |||||||
September 30, | December 31, | ||||||
(Dollars in thousands) | 2016 | 2015 | |||||
Class A Notes | $ | 50,000 | $ | 50,000 | |||
Class C Notes | 125,000 | 125,000 | |||||
Total senior notes | $ | 175,000 | $ | 175,000 |
Remainder of | 2017 | 2019 | 2021 and | ||||||||||||||||
(Dollars in millions) | 2016 | - 2018 | - 2020 | thereafter | Total | ||||||||||||||
Operating lease obligations | $ | 4.0 | $ | 27.2 | $ | 22.5 | $ | 26.7 | $ | 80.4 |
Expiration Per Period at December 31, | Total Contractual Amount | ||||||||||||||||||||||||||||||
2019 | 2021 | September 30, | December 31, | ||||||||||||||||||||||||||||
(Dollars in thousands) | 2016 | 2017 | 2018 | - 2020 | - 2022 | Later | 2016 | 2015 | |||||||||||||||||||||||
Customer matched-book derivative contracts (1) (2) | $ | 22,008 | $ | 40,950 | $ | — | $ | 69,226 | $ | 67,690 | $ | 3,307,644 | $ | 3,507,518 | $ | 4,392,440 | |||||||||||||||
Trading securities derivative contracts (2) | 271,600 | 100,000 | — | — | — | 29,750 | 401,350 | 290,600 | |||||||||||||||||||||||
Credit default swap index contracts (2) | — | — | — | 5,000 | 58,000 | — | 63,000 | 94,270 | |||||||||||||||||||||||
Futures and equity option derivative contracts (2) | 271 | — | — | — | — | — | 271 | 2,345,037 | |||||||||||||||||||||||
Investment commitments (3) | — | — | — | — | — | — | 24,587 | 32,819 |
(1) | Consists of interest rate swaps. We have minimal market risk related to these matched-book derivative contracts; however, we do have counterparty risk with one major financial institution, which is mitigated by collateral deposits. In addition, we have a limited number of counterparties (contractual amount of $184.9 million at September 30, 2016) who are not required to post collateral. The uncollateralized amounts, representing the fair value of the derivative contracts, expose us to the credit risk of these counterparties. At September 30, 2016, we had $29.1 million of credit exposure with these counterparties, including $21.9 million of credit exposure with one counterparty. |
(2) | We believe the fair value of these derivative contracts is a more relevant measure of the obligations because we believe the notional or contract amount overstates the expected payout. At September 30, 2016 and December 31, 2015, the net fair value of these derivative contracts approximated $36.4 million and $31.8 million, respectively. |
(3) | The investment commitments have no specified call dates. The timing of capital calls is based on market conditions and investment opportunities. |
September 30, | December 31, | ||||||
(Dollars in thousands) | 2016 | 2015 | |||||
Interest Rate Risk | $ | 423 | $ | 608 | |||
Equity Price Risk | 170 | 119 | |||||
Diversification Effect (1) | (82 | ) | (66 | ) | |||
Total Value-at-Risk | $ | 511 | $ | 661 |
(1) | Equals the difference between total VaR and the sum of the VaRs for the two risk categories. This effect arises because the two market risk categories are not perfectly correlated. |
(Dollars in thousands) | High | Low | Average | ||||||||
For the Nine Months Ended September 30, 2016 | |||||||||||
Interest Rate Risk | $ | 722 | $ | 251 | $ | 479 | |||||
Equity Price Risk | 412 | 6 | 151 | ||||||||
Diversification Effect (1) | (69 | ) | |||||||||
Total Value-at-Risk | $ | 790 | $ | 362 | $ | 561 |
(Dollars in thousands) | High | Low | Average | ||||||||
For the Year Ended December 31, 2015 | |||||||||||
Interest Rate Risk | $ | 853 | $ | 415 | $ | 582 | |||||
Equity Price Risk | 618 | 31 | 314 | ||||||||
Diversification Effect (1) | (133 | ) | |||||||||
Total Value-at-Risk | $ | 1,128 | $ | 487 | $ | 763 |
(1) | Equals the difference between total VaR and the sum of the VaRs for the two risk categories. This effect arises because the two market risk categories are not perfectly correlated. Because high and low VaR numbers for these risk categories may have occurred on different days, high and low numbers for diversification benefit would not be meaningful. |
Total Number of Shares | Approximate Dollar | ||||||||||||||
Purchased as Part of | Value of Shares Yet to be | ||||||||||||||
Total Number of | Average Price | Publicly Announced | Purchased Under the | ||||||||||||
Period | Shares Purchased | Paid per Share | Plans or Programs | Plans or Programs (1) | |||||||||||
Month #1 | |||||||||||||||
(July 1, 2016 to July 31, 2016) | 198,809 | (2) | $ | 39.91 | 185,211 | $ | 72 | million | |||||||
Month #2 | |||||||||||||||
(August 1, 2016 to August 31, 2016) | 8,135 | $ | 43.17 | — | $ | 72 | million | ||||||||
Month #3 | |||||||||||||||
(September 1, 2016 to September 30, 2016) | — | $ | — | — | $ | 72 | million | ||||||||
Total | 206,944 | $ | 40.03 | 185,211 | $ | 72 | million |
(1) | Effective August 14, 2015, the our board of directors authorized the repurchase of up to $150.0 million in common shares through September 30, 2017. |
(2) | Consists of 185,211 shares of common stock repurchased on the open market pursuant to a 10b5-1 plan established with an independent agent at an average price of $39.78 per share, and 13,598 shares of common stock withheld from recipients of restricted stock to pay taxes upon the vesting of the restricted stock at an average price per share of $41.57. |
Exhibit | Method | |||
Number | Description | of Filing | ||
3.1 | Amended and Restated Bylaws (as of August 5, 2016). | (1) | ||
31.1 | Rule 13a-14(a)/15d-14(a) Certification of Chairman and Chief Executive Officer. | Filed herewith | ||
31.2 | Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer. | Filed herewith | ||
32.1 | Section 1350 Certifications. | Filed herewith | ||
101 | Interactive data files pursuant to Rule 405 Registration S-T: (i) the Consolidated Statements of Financial Condition as of September 30, 2016 and December 31, 2015, (ii) the Consolidated Statements of Operations for the three and nine months ended September 30, 2016 and 2015, (iii) the Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2016 and 2015, (iv) the Consolidated Statements of Cash Flows for the nine months ended September 30, 2016 and 2015 and (v) the notes to the Consolidated Financial Statements. | Filed herewith |
(1) | Filed as Exhibit 3.1 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on August 5, 2016, and incorporated by reference herein. |
PIPER JAFFRAY COMPANIES | ||
By | /s/ Andrew S. Duff | |
Its | Chairman and Chief Executive Officer | |
By | /s/ Debbra L. Schoneman | |
Its | Chief Financial Officer |
Exhibit | Method | |||
Number | Description | of Filing | ||
3.1 | Amended and Restated Bylaws (as of August 5, 2016). | (1) | ||
31.1 | Rule 13a-14(a)/15d-14(a) Certification of Chairman and Chief Executive Officer. | Filed herewith | ||
31.2 | Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer. | Filed herewith | ||
32.1 | Section 1350 Certifications. | Filed herewith | ||
101 | Interactive data files pursuant to Rule 405 Registration S-T: (i) the Consolidated Statements of Financial Condition as of September 30, 2016 and December 31, 2015, (ii) the Consolidated Statements of Operations for the three and nine months ended September 30, 2016 and 2015, (iii) the Consolidated Statements of Comprehensive Income for the three and nine months ended September 30, 2016 and 2015, (iv) the Consolidated Statements of Cash Flows for the nine months ended September 30, 2016 and 2015 and (v) the notes to the Consolidated Financial Statements. | Filed herewith |
(1) | Filed as Exhibit 3.1 to the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on August 5, 2016, and incorporated by reference herein. |
1. | I have reviewed this quarterly report on Form 10-Q of Piper Jaffray Companies; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/ Andrew S. Duff | |
Andrew S. Duff | |
Chairman and Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of Piper Jaffray Companies; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/ Debbra L. Schoneman | |
Debbra L. Schoneman | |
Chief Financial Officer |
/s/ Andrew S. Duff | |
Andrew S. Duff | |
Chairman and Chief Executive Officer | |
/s/ Debbra L. Schoneman | |
Debbra L. Schoneman | |
Chief Financial Officer |
Document and Entity Information - shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2016 |
Oct. 19, 2016 |
|
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2016 | |
Document Fiscal Year Focus | 2016 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | PJC | |
Entity Registrant Name | Piper Jaffray Companies | |
Entity Central Index Key | 0001230245 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 15,129,897 |
Consolidated Statements of Financial Condition (Parenthetical) - USD ($) $ in Thousands |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Accumulated depreciation and amortization on fixed assets | $ 56,778 | $ 51,874 |
Accumulated amortization on intangible assets | $ 64,203 | $ 48,803 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 19,534,376 | 19,510,858 |
Common stock, shares outstanding | 12,274,902 | 13,311,016 |
Common stock held in treasury, shares | 7,259,474 | 6,199,842 |
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Revenues: | ||||
Investment banking | $ 136,682 | $ 91,640 | $ 338,034 | $ 284,786 |
Institutional brokerage | 42,189 | 34,182 | 122,423 | 106,879 |
Asset management | 15,256 | 18,951 | 43,699 | 58,730 |
Interest | 7,343 | 9,128 | 24,094 | 32,755 |
Investment income | 4,806 | 831 | 14,019 | 10,123 |
Total revenues | 206,276 | 154,732 | 542,269 | 493,273 |
Interest expense | 5,429 | 5,115 | 17,383 | 17,719 |
Net revenues | 200,847 | 149,617 | 524,886 | 475,554 |
Non-interest expenses: | ||||
Compensation and benefits | 135,186 | 96,132 | 356,770 | 295,543 |
Outside services | 10,288 | 9,316 | 28,923 | 26,385 |
Occupancy and equipment | 8,743 | 7,025 | 25,311 | 20,791 |
Communications | 7,845 | 6,234 | 22,469 | 17,650 |
Marketing and business development | 7,629 | 6,965 | 23,804 | 21,186 |
Trade execution and clearance | 2,008 | 1,982 | 5,686 | 5,956 |
Restructuring and integration costs | 0 | 1,496 | 10,206 | 1,496 |
Intangible asset amortization expense | 8,010 | 1,773 | 15,400 | 5,319 |
Other operating expenses | 2,687 | 11,906 | 7,915 | 17,289 |
Total non-interest expenses | 182,396 | 142,829 | 496,484 | 411,615 |
Income before income tax expense | 18,451 | 6,788 | 28,402 | 63,939 |
Income tax expense | 6,515 | 1,573 | 8,767 | 20,605 |
Net income | 11,936 | 5,215 | 19,635 | 43,334 |
Net income applicable to noncontrolling interests | 1,278 | 384 | 4,602 | 4,532 |
Net income applicable to Piper Jaffray Companies | 10,658 | 4,831 | 15,033 | 38,802 |
Net income applicable to Piper Jaffray Companies’ common shareholders | $ 8,582 | $ 4,448 | $ 12,476 | $ 35,908 |
Earnings per common share | ||||
Basic | $ 0.70 | $ 0.32 | $ 0.98 | $ 2.46 |
Diluted | $ 0.70 | $ 0.32 | $ 0.97 | $ 2.46 |
Weighted average number of common shares outstanding | ||||
Basic | 12,282 | 13,938 | 12,787 | 14,568 |
Diluted | 12,298 | 13,952 | 12,801 | 14,594 |
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 11,936 | $ 5,215 | $ 19,635 | $ 43,334 |
Other comprehensive loss, net of tax: | ||||
Foreign currency translation adjustment | (587) | (352) | (1,843) | (326) |
Comprehensive income | 11,349 | 4,863 | 17,792 | 43,008 |
Comprehensive income applicable to noncontrolling interests | 1,278 | 384 | 4,602 | 4,532 |
Comprehensive income applicable to Piper Jaffray Companies | $ 10,071 | $ 4,479 | $ 13,190 | $ 38,476 |
Consolidated Statements of Cash Flows (Parenthetical) - shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Statement of Cash Flows [Abstract] | ||
Issuance of common stock for the acquisition of Simmons & Company International: | 25,525 | 0 |
Issuance of restricted common stock for annual equity award: | 843,889 | 550,650 |
Organization and Basis of Presentation |
9 Months Ended |
---|---|
Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Basis of Presentation | Organization and Basis of Presentation Organization Piper Jaffray Companies is the parent company of Piper Jaffray & Co. ("Piper Jaffray"), a securities broker dealer and investment banking firm; Piper Jaffray Ltd., a firm providing securities brokerage and mergers and acquisitions services in Europe headquartered in London, England; Simmons & Company International Limited ("SCIL"), a firm providing mergers and acquisitions services to the energy industry headquartered in Aberdeen, Scotland; Advisory Research, Inc. ("ARI"), which provides asset management services to separately managed accounts, closed-end and open-end funds and partnerships; Piper Jaffray Investment Group Inc., which consists of entities providing alternative asset management services; Piper Jaffray Financial Products Inc., Piper Jaffray Financial Products II Inc. and Piper Jaffray Financial Products III Inc., entities that facilitate derivative transactions; and other immaterial subsidiaries. Piper Jaffray Companies and its subsidiaries (collectively, the "Company") operate in two reporting segments: Capital Markets and Asset Management. A summary of the activities of each of the Company’s business segments is as follows: Capital Markets The Capital Markets segment provides institutional sales, trading and research services and investment banking services. Institutional sales, trading and research services focus on the trading of equity and fixed income products with institutions, government and non-profit entities. Revenues are generated through commissions and sales credits earned on equity and fixed income institutional sales activities, net interest revenues on trading securities held in inventory, and profits and losses from trading these securities. Investment banking services include management of and participation in underwritings, financial advisory services and public finance activities. Revenues are generated through the receipt of advisory and financing fees. Also, the Company generates revenue through strategic trading and investing activities, which focus on investments in municipal bonds, mortgage-backed securities, U.S. government agency securities, and merchant banking activities involving equity or debt investments in late stage private companies. The Company has created alternative asset management funds in energy, merchant banking and senior living in order to invest firm capital and to manage capital from outside investors. The Company receives management and performance fees for managing these funds. Asset Management The Asset Management segment provides traditional asset management services with product offerings in equity securities and master limited partnerships to institutions and individuals. Revenues are generated in the form of management and performance fees. Revenues are also generated through investments in the partnerships and funds that the Company manages. Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") for interim financial information and the rules and regulations of the Securities and Exchange Commission ("SEC"). Pursuant to this guidance, certain information and disclosures have been omitted that are included within complete annual financial statements. Except as disclosed herein, there have been no material changes in the information reported in the financial statements and related disclosures in the Company's Annual Report on Form 10-K for the year ended December 31, 2015. The consolidated financial statements include the accounts of Piper Jaffray Companies, its wholly owned subsidiaries, and all other entities in which the Company has a controlling financial interest. Noncontrolling interests represent equity interests in consolidated entities that are not attributable, either directly or indirectly, to Piper Jaffray Companies. Noncontrolling interests include the minority equity holders’ proportionate share of the equity in the Company's alternative asset management funds. All material intercompany balances have been eliminated. Management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates and assumptions are based on the best information available, actual results could differ from those estimates. |
Accounting Policies and Pronouncements |
9 Months Ended |
---|---|
Sep. 30, 2016 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Accounting Policies and Pronouncements | Accounting Policies and Pronouncements Summary of Significant Accounting Policies Refer to the Company's Annual Report on Form 10-K for the year ended December 31, 2015 for a full description of the Company's significant accounting policies. Changes to the Company's significant accounting policies are described below. Principles of Consolidation The Company consolidates entities in which it has a controlling financial interest. The Company determines whether it has a controlling financial interest in an entity by first evaluating whether the entity is a variable interest entity ("VIE") or a voting interest entity. VIEs are entities in which (i) the total equity investment at risk is not sufficient to enable the entity to finance its activities independently or (ii) the at-risk equity holders do not have the normal characteristics of a controlling financial interest. A controlling financial interest in a VIE is present when an enterprise has one or more variable interests that have both (i) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. The enterprise with a controlling financial interest is the primary beneficiary and consolidates the VIE. Voting interest entities lack one or more of the characteristics of a VIE. The usual condition for a controlling financial interest is ownership of a majority voting interest for a corporation or a majority of kick-out rights for a limited partnership. When the Company does not have a controlling financial interest in an entity but exerts significant influence over the entity’s operating and financial policies (generally defined as owning a voting or economic interest of between 20 percent to 50 percent), the Company's investment is accounted for under the equity method of accounting. If the Company does not have a controlling financial interest in, or exert significant influence over, an entity, the Company accounts for its investment at fair value, if the fair value option was elected, or at cost. Adoption of New Accounting Standards Consolidation In February 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") No. 2015-02, "Consolidation (Topic 810): Amendments to the Consolidation Analysis" ("ASU 2015-02"). ASU 2015-02 makes several modifications to the consolidation guidance for VIEs and general partners' investments in limited partnerships, as well as modifications to the evaluation of whether limited partnerships are VIEs or voting interest entities. It was effective for the Company as of January 1, 2016. The adoption of ASU 2015-02 resulted in the deconsolidation of certain investment partnerships with assets (and the related noncontrolling interests) of approximately $9.4 million. There was no impact to the Company’s retained earnings upon adoption. In addition, certain entities previously consolidated as voting interest entities became consolidated VIEs under the amended guidance. Future Adoption of New Applicable Accounting Standards Revenue Recognition In May 2014, the FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers (Topic 606)," ("ASU 2014-09") which supersedes current revenue recognition guidance, including most industry-specific guidance. ASU 2014-09 requires a company to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods and services, and also requires additional disclosures regarding the nature, amount, timing and uncertainty of revenue that is recognized. The guidance, as stated in ASU 2014-09, is effective for annual and interim periods beginning after December 15, 2016. In August 2015, the FASB issued ASU No. 2015-14, "Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date," which defers the effective date by one year, with early adoption on the original effective date permitted. The FASB has subsequently issued various ASUs which amend specific areas of guidance in ASU 2014-09. The Company is evaluating the impact of the new guidance on its consolidated financial statements. Recognition and Measurement of Financial Assets and Financial Liabilities In January 2016, the FASB issued ASU No. 2016-01, "Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities" ("ASU 2016-01"). The amendments in ASU 2016-01 address certain aspects of the recognition, measurement, presentation and disclosure of financial instruments. ASU 2016-01 is effective for annual and interim periods beginning after December 15, 2017. Except for the early application guidance outlined in ASU 2016-01, early adoption is not permitted. The Company is evaluating the impact of the new guidance on its consolidated financial statements. Leases In February 2016, the FASB issued ASU No. 2016-02, "Leases (Topic 842)" ("ASU 2016-02"). ASU 2016-02 requires lessees to recognize a right-of-use asset and lease liability on the consolidated statements of financial position and disclose key information about leasing arrangements. The recognition, measurement and presentation of expenses and cash flows arising from a lease by a lessee have not significantly changed from current U.S. GAAP. ASU 2016-02 is effective for annual and interim periods beginning after December 15, 2018. The Company is evaluating the impact of the new guidance on its consolidated financial statements. Stock-Based Compensation In March 2016, the FASB issued ASU No. 2016-09, "Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting" ("ASU 2016-09"). ASU 2016-09 makes targeted amendments to the accounting for share-based payments to employees. Under ASU 2016-09, entities will be required to recognize the income tax effects of awards in the income statement when the awards vest or are settled, rather than as additional paid-in capital. ASU 2016-09 also amends the guidance regarding the employer’s statutory income tax withholding requirements and allows an entity to make an accounting policy election for forfeitures. The guidance is effective on a prospective basis for annual and interim periods beginning after December 15, 2016. As of September 30, 2016, the Company had $7.0 million of excess tax benefits recorded as additional paid-in capital, which will remain in additional paid-in capital upon adoption. The adoption of ASU 2016-09 will impact the Company's 2017 results of operations as all income tax effects of awards that vest or are settled will be recognized in the income statement as opposed to additional paid-in capital. Financial Instruments – Credit Losses In June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" ("ASU 2016-13"). The new guidance requires an entity to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts as opposed to delaying recognition until the loss was probable of occurring. ASU 2016-13 is effective for annual and interim periods beginning after December 15, 2019. Early adoption is permitted for annual and interim periods beginning after December 15, 2018. The Company is evaluating the impact of the new guidance on its consolidated financial statements. Statement of Cash Flows In August 2016, the FASB issued ASU No. 2016-15, "Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments" ("ASU 2016-15"). ASU 2016-15 clarifies how entities should classify certain cash receipts and cash payments on the statement of cash flows. The amendments in ASU 2016-15 are effective for annual and interim periods beginning after December 31, 2017 and should be applied retrospectively. Early adoption is permitted. The Company is evaluating the impact of the amendments on its consolidated statements of cash flows. |
Acquisitions |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions | Acquisitions The following acquisitions were accounted for pursuant to FASB Accounting Standards Codification Topic 805, "Business Combinations." Accordingly, the purchase price of each acquisition was allocated to the acquired assets and liabilities assumed based on their estimated fair values as of the respective acquisition dates. The excess of the purchase price over the net assets acquired was allocated between goodwill and intangible assets within the Capital Markets segment. Simmons & Company International On February 26, 2016, the Company completed the purchase of Simmons & Company International ("Simmons"), an employee-owned investment bank and broker dealer focused on the energy industry. The economic value of the acquisition was approximately $140.0 million and was completed pursuant to the Securities Purchase Agreement dated November 16, 2015, as amended. The acquisition of Simmons expands the Company's equity investment banking business into the energy sector and grows its advisory business. The Company acquired net assets with a fair value of $119.3 million as described below. As part of the purchase price, the Company issued 1,149,340 restricted shares valued at $48.2 million as equity consideration on the acquisition date. These restricted shares cliff vest after three years, and the employees must fulfill service requirements in exchange for the rights to the shares. Compensation expense will be amortized on a straight-line basis over the requisite service period of one or three years (a weighted average service period of 2.7 years). The fair value of the restricted stock was determined using the market price of the Company's common stock on the date of the acquisition. The Company also entered into acquisition-related compensation arrangements with certain employees of $20.6 million which consisted of cash ($9.0 million) and restricted stock ($11.6 million) for retention purposes. Compensation expense related to these arrangements will be amortized on a straight-line basis over the requisite service period of three years. Additional cash compensation may be available to certain investment banking employees subject to exceeding an investment banking revenue threshold during the three year post-acquisition period to the extent they are employed by the Company at the time of payment. Amounts estimated to be payable, if any, related to this performance award plan will be recorded as compensation expense on the consolidated statements of operations over the requisite performance period of three years. The Company recorded $60.7 million of goodwill on the consolidated statements of financial condition, of which $59.4 million is expected to be deductible for income tax purposes. In management's opinion, the goodwill represents the reputation and operating expertise of Simmons. Identifiable intangible assets purchased by the Company consisted of customer relationships and the Simmons trade name with acquisition-date fair values of $17.5 million and $9.1 million, respectively. Transaction costs of $0.9 million were incurred for the nine months ended September 30, 2016, and are included in restructuring and integration costs on the consolidated statements of operations. In the third quarter of 2016, the Company recorded a $12.0 million measurement period adjustment to reflect the final fair value of Simmons intangible assets, which resulted in a corresponding decrease to goodwill. Based on the final fair value of Simmons intangible assets, the Company would have recorded additional amortization expense of $2.3 million from the acquisition date through June 30, 2016. The following table summarizes the estimated fair value of assets acquired and liabilities assumed at the date of the acquisition:
Simmons’ results of operations have been included in the Company's consolidated financial statements prospectively beginning on the date of acquisition. The acquisition has been fully integrated with the Company's existing operations. Accordingly, post-acquisition revenues and net income are not discernible. The following unaudited pro forma financial data assumes the acquisition had occurred at the beginning of the comparable prior period presented. Pro forma results have been prepared by adjusting the Company's historical results to include Simmons' results of operations adjusted for the following changes: amortization expense was adjusted to account for the acquisition-date fair value of intangible assets; compensation and benefits expenses were adjusted to reflect such expenses based on the Company’s compensation arrangements and the restricted stock issued as equity consideration; and the income tax effect of applying the Company's statutory tax rates to Simmons’ results of operations. The consolidated Company's unaudited pro forma information presented does not necessarily reflect the results of operations that would have resulted had the acquisition been completed at the beginning of the applicable periods presented, does not contemplate anticipated operational efficiencies of the combined entities, nor does it indicate the results of operations in future periods.
River Branch Holdings LLC and BMO Capital Markets GKST Inc. On September 30, 2015, the Company acquired the assets of River Branch Holdings LLC ("River Branch"), an equity investment banking boutique focused on the financial institutions sector. On October 9, 2015, the Company completed the purchase of BMO Capital Markets GKST Inc. ("BMO GKST"), a municipal bond sales, trading and origination business of BMO Financial Corp. The Company recorded $6.1 million of goodwill on the consolidated statements of financial condition related to these acquisitions and $7.5 million of identifiable intangible assets consisting of customer relationships. In management's opinion, the goodwill represents the reputation and operating expertise of River Branch and BMO GKST. The results of operations of River Branch and BMO GKST have been included in the Company's consolidated financial statements prospectively from the respective dates of acquisition. The terms of these transactions were not disclosed as the acquisitions did not have a material impact on the Company's consolidated financial statements. |
Financial Instruments and Other Inventory Positions Owned and Financial Instruments and Other Inventory Positions Sold, but Not Yet Purchased |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Instruments Owned and Sold, Not yet Purchased [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Instruments and Other Inventory Positions Owned and Financial Instruments and Other Inventory Positions Sold, Not Yet Purchased | Financial Instruments and Other Inventory Positions Owned and Financial Instruments and Other Inventory Positions Sold, but Not Yet Purchased
At September 30, 2016 and December 31, 2015, financial instruments and other inventory positions owned in the amount of $592.1 million and $707.4 million, respectively, had been pledged as collateral for short-term financings and repurchase agreements. Financial instruments and other inventory positions sold, but not yet purchased represent obligations of the Company to deliver the specified security at the contracted price, thereby creating a liability to purchase the security in the market at prevailing prices. The Company is obligated to acquire the securities sold short at prevailing market prices, which may exceed the amount reflected on the consolidated statements of financial condition. The Company economically hedges changes in the market value of its financial instruments and other inventory positions owned using inventory positions sold, but not yet purchased, interest rate derivatives, credit default swap index contracts, U.S. treasury bond and Eurodollar futures and exchange traded options. Derivative Contract Financial Instruments The Company uses interest rate swaps, interest rate locks, credit default swap index contracts, U.S. treasury bond and Eurodollar futures and equity option contracts as a means to manage risk in certain inventory positions. The Company also enters into interest rate swaps to facilitate customer transactions. The following describes the Company’s derivatives by the type of transaction or security the instruments are economically hedging. Customer matched-book derivatives: The Company enters into interest rate derivative contracts in a principal capacity as a dealer to satisfy the financial needs of its customers. The Company simultaneously enters into an interest rate derivative contract with a third party for the same notional amount to hedge the interest rate and credit risk of the initial client interest rate derivative contract. In certain limited instances, the Company has only hedged interest rate risk with a third party, and retains uncollateralized credit risk as described below. The instruments use interest rates based upon either the London Interbank Offer Rate (“LIBOR”) index or the Securities Industry and Financial Markets Association (“SIFMA”) index. Trading securities derivatives: The Company enters into interest rate derivative contracts and uses U.S. treasury bond and Eurodollar futures to hedge interest rate and market value risks associated with its fixed income securities. These instruments use interest rates based upon either the Municipal Market Data (“MMD”) index, LIBOR or the SIFMA index. The Company also enters into credit default swap index contracts to hedge credit risk associated with its taxable fixed income securities and option contracts to hedge market value risk associated with its convertible securities. Derivatives are reported on a net basis by counterparty (i.e., the net payable or receivable for derivative assets and liabilities for a given counterparty) when a legal right of offset exists and on a net basis by cross product when applicable provisions are stated in master netting agreements. Cash collateral received or paid is netted on a counterparty basis, provided a legal right of offset exists. The total absolute notional contract amount, representing the absolute value of the sum of gross long and short derivative contracts, provides an indication of the volume of the Company's derivative activity and does not represent gains and losses. The following table presents the gross fair market value and the total absolute notional contract amount of the Company's outstanding derivative instruments, prior to counterparty netting, by asset or liability position:
The Company’s derivative contracts do not qualify for hedge accounting, therefore, unrealized gains and losses are recorded on the consolidated statements of operations. The gains and losses on the related economically hedged inventory positions are not disclosed below as they are not in qualifying hedging relationships. The following table presents the Company’s unrealized gains/(losses) on derivative instruments:
Credit risk associated with the Company’s derivatives is the risk that a derivative counterparty will not perform in accordance with the terms of the applicable derivative contract. Credit exposure associated with the Company’s derivatives is driven by uncollateralized market movements in the fair value of the contracts with counterparties and is monitored regularly by the Company’s financial risk committee. The Company considers counterparty credit risk in determining derivative contract fair value. The majority of the Company’s derivative contracts are substantially collateralized by its counterparties, who are major financial institutions. The Company has a limited number of counterparties who are not required to post collateral. Based on market movements, the uncollateralized amounts representing the fair value of the derivative contract can become material, exposing the Company to the credit risk of these counterparties. As of September 30, 2016, the Company had $29.1 million of uncollateralized credit exposure with these counterparties (notional contract amount of $184.9 million), including $21.9 million of uncollateralized credit exposure with one counterparty. |
Fair Value of Financial Instruments |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Financial Instruments | Fair Value of Financial Instruments Based on the nature of the Company’s business and its role as a “dealer” in the securities industry or as a manager of alternative asset management funds, the fair values of its financial instruments are determined internally. The Company’s processes are designed to ensure that the fair values used for financial reporting are based on observable inputs wherever possible. In the event that observable inputs are not available, unobservable inputs are developed based on an evaluation of all relevant empirical market data, including prices evidenced by market transactions, interest rates, credit spreads, volatilities and correlations and other security-specific information. Valuation adjustments related to illiquidity or counterparty credit risk are also considered. In estimating fair value, the Company may utilize information provided by third party pricing vendors to corroborate internally-developed fair value estimates. The Company employs specific control processes to determine the reasonableness of the fair value of its financial instruments. The Company’s processes are designed to ensure that the internally-estimated fair values are accurately recorded and that the data inputs and the valuation techniques used are appropriate, consistently applied, and that the assumptions are reasonable and consistent with the objective of determining fair value. Individuals outside of the trading departments perform independent pricing verification reviews as of each reporting date. The Company has established parameters which set forth when the fair value of securities are independently verified. The selection parameters are generally based upon the type of security, the level of estimation risk of a security, the materiality of the security to the Company’s financial statements, changes in fair value from period to period, and other specific facts and circumstances of the Company’s securities portfolio. In evaluating the initial internally-estimated fair values made by the Company’s traders, the nature and complexity of securities involved (e.g., term, coupon, collateral, and other key drivers of value), level of market activity for securities, and availability of market data are considered. The independent price verification procedures include, but are not limited to, analysis of trade data (both internal and external where available), corroboration to the valuation of positions with similar characteristics, risks and components, or comparison to an alternative pricing source, such as a discounted cash flow model. The Company’s valuation committee, comprised of members of senior management and risk management, provides oversight and overall responsibility for the internal control processes and procedures related to fair value measurements. The following is a description of the valuation techniques used to measure fair value. Cash Equivalents Cash equivalents include highly liquid investments with original maturities of 90 days or less. Actively traded money market funds are measured at their net asset value and classified as Level I. Financial Instruments and Other Inventory Positions Owned The Company records financial instruments and other inventory positions owned and financial instruments and other inventory positions sold, but not yet purchased at fair value on the consolidated statements of financial condition with unrealized gains and losses reflected on the consolidated statements of operations. Equity securities – Exchange traded equity securities are valued based on quoted prices from the exchange for identical assets or liabilities as of the period-end date. To the extent these securities are actively traded and valuation adjustments are not applied, they are categorized as Level I. Non-exchange traded equity securities (principally hybrid preferred securities) are measured primarily using broker quotations, prices observed for recently executed market transactions and internally-developed fair value estimates based on observable inputs and are categorized within Level II of the fair value hierarchy. Convertible securities – Convertible securities are valued based on observable trades, when available. Accordingly, these convertible securities are categorized as Level II. Corporate fixed income securities – Fixed income securities include corporate bonds which are valued based on recently executed market transactions of comparable size, internally-developed fair value estimates based on observable inputs, or broker quotations. Accordingly, these corporate bonds are categorized as Level II. Taxable municipal securities – Taxable municipal securities are valued using recently executed observable trades or market price quotations and therefore are generally categorized as Level II. Certain illiquid taxable municipal securities are valued using market data for comparable securities (maturity and sector) and management judgment to infer an appropriate current yield or other model-based valuation techniques deemed appropriate by management based on the specific nature of the individual security and are therefore categorized as Level III. Tax-exempt municipal securities – Tax-exempt municipal securities are valued using recently executed observable trades or market price quotations and therefore are generally categorized as Level II. Certain illiquid tax-exempt municipal securities are valued using market data for comparable securities (maturity and sector) and management judgment to infer an appropriate current yield or other model-based valuation techniques deemed appropriate by management based on the specific nature of the individual security and are therefore categorized as Level III. Short-term municipal securities – Short-term municipal securities include auction rate securities, variable rate demand notes, and other short-term municipal securities. Variable rate demand notes and other short-term municipal securities are valued using recently executed observable trades or market price quotations and therefore are generally categorized as Level II. Auction rate securities with limited liquidity are categorized as Level III and are valued using discounted cash flow models with unobservable inputs such as the Company’s expected recovery rate on the securities. Mortgage-backed securities – Mortgage-backed securities are valued using observable trades, when available. Certain mortgage-backed securities are valued using models where inputs to the model are directly observable in the market, or can be derived principally from or corroborated by observable market data. These mortgage-backed securities are categorized as Level II. Other mortgage-backed securities, which are principally collateralized by residential mortgages, have experienced low volumes of executed transactions resulting in less observable transaction data. Certain mortgage-backed securities collateralized by residential mortgages are valued using cash flow models that utilize unobservable inputs including credit default rates, prepayment rates, loss severity and valuation yields. As judgment is used to determine the range of these inputs, these mortgage-backed securities are categorized as Level III. U.S. government agency securities – U.S. government agency securities include agency debt bonds and mortgage bonds. Agency debt bonds are valued by using either direct price quotes or price quotes for comparable bond securities and are categorized as Level II. Mortgage bonds include bonds secured by mortgages, mortgage pass-through securities, agency collateralized mortgage-obligation (“CMO”) securities and agency interest-only securities. Mortgage pass-through securities, CMO securities and interest-only securities are valued using recently executed observable trades or other observable inputs, such as prepayment speeds and therefore are generally categorized as Level II. Mortgage bonds are valued using observable market inputs, such as market yields ranging from 170-510 basis points on spreads over U.S. treasury securities, or models based upon prepayment expectations ranging from 6%-20% conditional prepayment rate ("CPR"). These securities are categorized as Level II. U.S. government securities – U.S. government securities include highly liquid U.S. treasury securities which are generally valued using quoted market prices and therefore categorized as Level I. The Company does not transact in securities of countries other than the U.S. government. Derivatives – Derivative contracts include interest rate swaps, interest rate locks, credit default swap index contracts, U.S. treasury bond and Eurodollar futures and equity option contracts. These instruments derive their value from underlying assets, reference rates, indices or a combination of these factors. The Company's equity option derivative contracts are valued based on quoted prices from the exchange for identical assets or liabilities as of the period-end date. To the extent these contracts are actively traded and valuation adjustments are not applied, they are categorized as Level I. The Company’s credit default swap index contracts are valued using market price quotations and are classified as Level II. The majority of the Company’s interest rate derivative contracts, including both interest rate swaps and interest rate locks, are valued using market standard pricing models based on the net present value of estimated future cash flows. The valuation models used do not involve material subjectivity as the methodologies do not entail significant judgment and the pricing inputs are market observable, including contractual terms, yield curves and measures of volatility. These instruments are classified as Level II within the fair value hierarchy. Certain interest rate locks transact in less active markets and were valued using valuation models that included the previously mentioned observable inputs and certain unobservable inputs that required significant judgment, such as the premium over the MMD curve. These instruments are classified as Level III. Investments The Company’s investments valued at fair value include equity investments in private companies and partnerships, investments in registered mutual funds, warrants of public and private companies and private company debt. Investments in registered mutual funds are valued based on quoted prices on active markets and classified as Level I. Company-owned warrants, which have a cashless exercise option, are valued based upon the Black-Scholes option-pricing model and certain unobservable inputs. The Company applies a liquidity discount to the value of its warrants in public and private companies. For warrants in private companies, valuation adjustments, based upon management’s judgment, are made to account for differences between the measured security and the stock volatility factors of comparable companies. Company-owned warrants are reported as Level III assets. Investments in private companies are valued based on an assessment of each underlying security, considering rounds of financing, third party transactions and market-based information, including comparable company transactions, trading multiples (e.g., multiples of revenue and earnings before interest, taxes, depreciation and amortization ("EBITDA")) and changes in market outlook, among other factors. These securities are generally categorized as Level III. Fair Value Option – The fair value option permits the irrevocable fair value option election on an instrument-by-instrument basis at initial recognition of an asset or liability or upon an event that gives rise to a new basis of accounting for that instrument. The fair value option was elected for certain merchant banking and other investments at inception to reflect economic events in earnings on a timely basis. Merchant banking and other equity investments of $18.9 million and $19.7 million, included within investments on the consolidated statements of financial condition, are accounted for at fair value and are classified as Level III assets at September 30, 2016 and December 31, 2015, respectively. The realized and unrealized net gains from fair value changes included in earnings as a result of electing to apply the fair value option to certain financial assets were $1.0 million and $0.7 million for the nine months ended September 30, 2016 and 2015, respectively. The following table summarizes quantitative information about the significant unobservable inputs used in the fair value measurement of the Company’s Level III financial instruments as of September 30, 2016:
Sensitivity of the fair value to changes in unobservable inputs:
The following table summarizes the valuation of the Company’s financial instruments by pricing observability levels defined in FASB Accounting Standards Codification Topic 820, "Fair Value Measurement" ("ASC 820") as of September 30, 2016:
The following table summarizes the valuation of the Company’s financial instruments by pricing observability levels defined in ASC 820 as of December 31, 2015:
The Company’s Level III assets were $115.3 million and $236.7 million, or 9.5 percent and 18.7 percent of financial instruments measured at fair value at September 30, 2016 and December 31, 2015, respectively. The value of transfers between levels are recognized at the beginning of the reporting period. There were $14.3 million of transfers of financial assets out of Level III for the nine months ended September 30, 2016, of which $9.1 million primarily related to the deconsolidation of certain investment partnerships as discussed in Note 2, and $5.2 million related to taxable municipal securities for which valuation inputs became observable. There were no other significant transfers between Level I, Level II or Level III for the three and nine months ended September 30, 2016. The following tables summarize the changes in fair value associated with Level III financial instruments held at the beginning or end of the periods presented:
The carrying values of the Company’s cash, securities either purchased or sold under agreements to resell, receivables and payables either from or to customers and brokers, dealers and clearing organizations and short-term financings approximate fair value due to their liquid or short-term nature. |
Variable Interest Entities |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Variable Interest Entity, Reporting Entity Involvement, Maximum Loss Exposure, Determination Methodology and Factors [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Variable Interest Entities | Variable Interest Entities The Company has investments in and/or acts as the managing partner of various partnerships, limited liability companies, or registered mutual funds. These entities were established for the purpose of investing in securities of public or private companies, or municipal debt obligations, or providing financing to senior living facilities, and were initially financed through the capital commitments or seed investments of the members. VIEs are entities in which equity investors lack the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities. The determination as to whether an entity is a VIE is based on the structure and nature of each entity. The Company also considers other characteristics such as the power through voting rights or similar rights to direct the activities of an entity that most significantly impact the entity’s economic performance and how the entity is financed. The Company is required to consolidate all VIEs for which it is considered to be the primary beneficiary. The determination as to whether the Company is considered to be the primary beneficiary is based on whether the Company has both the power to direct the activities of the VIE that most significantly impact the entity’s economic performance and the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. Effective January 1, 2016, the Company adopted ASU 2015-02. Prior to the adoption of ASU 2015-02, the primary beneficiary analysis differed for entities which qualified for the deferral under previous consolidation guidance (i.e., asset managers and investment companies). For these entities, the Company was considered to be the primary beneficiary if it absorbed a majority of the VIE’s expected losses, received a majority of the VIE’s expected residual returns, or both. Consolidated VIEs The Company’s consolidated VIEs at September 30, 2016 include certain alternative asset management funds in which the Company has an investment and as the managing partner, is deemed to have both the power to direct the most significant activities of the funds and the right to receive benefits (or the obligation to absorb losses) that could potentially be significant to these funds. Prior to the adoption of ASU 2015-02, these entities lacked the characteristics of a VIE and were consolidated as voting interest entities. The following table presents information about the carrying value of the assets and liabilities of the VIEs which are consolidated by the Company and included on the consolidated statements of financial condition at September 30, 2016. The assets can only be used to settle the liabilities of the respective VIE, and the creditors of the VIEs do not have recourse to the general credit of the Company. The assets and liabilities are presented prior to consolidation and thus a portion of these assets and liabilities are eliminated in consolidation.
The Company has investments in a grantor trust which was established as part of a nonqualified deferred compensation plan. The Company is the primary beneficiary of the grantor trust. Accordingly, the assets and liabilities of the grantor trust are consolidated by the Company on the consolidated statements of financial condition. See Note 17 for additional information on the nonqualified deferred compensation plan. Nonconsolidated VIEs The Company determined it is not the primary beneficiary of certain VIEs and accordingly does not consolidate them. These VIEs had net assets approximating $0.8 billion and $0.4 billion at September 30, 2016 and December 31, 2015, respectively. The Company’s exposure to loss from these VIEs is $9.3 million, which is the carrying value of its capital contributions recorded in investments on the consolidated statements of financial condition at September 30, 2016. The Company had no liabilities related to these VIEs at September 30, 2016 and December 31, 2015, respectively. Furthermore, the Company has not provided financial or other support to these VIEs that it was not previously contractually required to provide as of September 30, 2016. |
Receivables from and Payables to Brokers, Dealers and Clearing Organizations |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Brokers and Dealers [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables from and Payables to Brokers, Dealers and Clearing Organizations | Receivables from and Payables to Brokers, Dealers and Clearing Organizations
Deposits paid for securities borrowed approximate the market value of the securities. Securities failed to deliver and receive represent the contract value of securities that have not been delivered or received by the Company on settlement date. |
Collateralized Securities Transactions |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Repurchase Agreements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Collateralized Securities Transactions | Collateralized Securities Transactions The Company’s financing and customer securities activities involve the Company using securities as collateral. In the event that the counterparty does not meet its contractual obligation to return securities used as collateral (e.g., pursuant to the terms of a repurchase agreement), or customers do not deposit additional securities or cash for margin when required, the Company may be exposed to the risk of reacquiring the securities or selling the securities at unfavorable market prices in order to satisfy its obligations to its customers or counterparties. The Company seeks to control this risk by monitoring the market value of securities pledged or used as collateral on a daily basis and requiring adjustments in the event of excess market exposure. The Company also uses unaffiliated third party custodians to administer the underlying collateral for the majority of its short-term financing to mitigate risk. In a reverse repurchase agreement the Company purchases financial instruments from a seller, typically in exchange for cash, and agrees to resell the same or substantially the same financial instruments to the seller at a stated price plus accrued interest in the future. In a repurchase agreement, the Company sells financial instruments to a buyer, typically for cash, and agrees to repurchase the same or substantially the same financial instruments from the buyer at a stated price plus accrued interest at a future date. Even though repurchase and reverse repurchase agreements involve the legal transfer of ownership of financial instruments, they are accounted for as financing arrangements because they require the financial instruments to be repurchased or resold at maturity of the agreement. In a securities borrowed transaction, the Company borrows securities from a counterparty in exchange for cash. When the Company returns the securities, the counterparty returns the cash. Interest is generally paid periodically over the life of the transaction. In the normal course of business, the Company obtains securities purchased under agreements to resell, securities borrowed and margin agreements on terms that permit it to repledge or resell the securities to others, typically pursuant to repurchase agreements. The Company obtained securities with a fair value of approximately $186.5 million and $185.8 million at September 30, 2016 and December 31, 2015, respectively, of which $175.3 million and $175.8 million, respectively, had been pledged or otherwise transferred to satisfy its commitments under financial instruments and other inventory positions sold, but not yet purchased. The following is a summary of the Company’s securities sold under agreements to repurchase ("Repurchase Liabilities"), the fair market value of collateral pledged and the interest rate charged by the Company’s counterparty, which is based on LIBOR plus an applicable margin, as of September 30, 2016:
Reverse repurchase agreements, repurchase agreements and securities borrowed and loaned are reported on a net basis by counterparty when a legal right of offset exists. There were no gross amounts offset on the consolidated statements of financial condition for reverse repurchase agreements, securities borrowed or repurchase agreements at September 30, 2016 and December 31, 2015, respectively, as a legal right of offset did not exist. The Company had no outstanding securities lending arrangements as of September 30, 2016 or December 31, 2015. See Note 4 for information related to the Company's offsetting of derivative contracts. |
Investments |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments, All Other Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments | Investments The Company’s investments include investments in private companies and partnerships, registered mutual funds, warrants of public and private companies and private company debt.
At September 30, 2016, investments carried on a cost basis had an estimated fair market value of $4.4 million. Because valuation estimates were based upon management’s judgment, investments carried at cost would be categorized as Level III assets in the fair value hierarchy, if they were carried at fair value. Investments accounted for under the equity method include general and limited partnership interests. The carrying value of these investments is based on the investment vehicle’s net asset value. The net assets of investment partnerships consist of investments in both marketable and non-marketable securities. The underlying investments held by such partnerships are valued based on the estimated fair value determined by management in our capacity as general partner or investor and, in the case of investments in unaffiliated investment partnerships, are based on financial statements prepared by the unaffiliated general partners. |
Other Assets |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Assets | Other Assets
|
Goodwill and Intangible Assets |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets | Goodwill and Intangible Assets
The addition of goodwill and intangible assets during the nine months ended September 30, 2016 related to the acquisition of Simmons, as discussed in Note 3. Management identified $26.6 million of intangible assets, consisting of customer relationships ($17.5 million) and the Simmons trade name ($9.1 million), which will be amortized over a weighted average life of 1.6 years and 4.0 years, respectively. In the third quarter of 2016, the Company recorded a measurement period adjustment to reflect the final fair value of Simmons intangible assets, as discussed in Note 3. The following table summarizes the future aggregate amortization expense of the Company's intangible assets with determinable lives for the years ended:
|
Short-Term Financing |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Short-Term Financing | Short-Term Financing
The Company issues secured commercial paper to fund a portion of its securities inventory. The commercial paper notes (“CP Notes”) can be issued with maturities of 27 days to 270 days from the date of issuance. The CP Notes are issued under three separate programs, CP Series A, CP Series II A and CP Series III A, and are secured by different inventory classes. As of September 30, 2016, the weighted average maturity of CP Series A, CP Series II A and CP Series III A was 67 days, 8 days and 17 days, respectively. The CP Notes are interest bearing or sold at a discount to par with an interest rate based on LIBOR plus an applicable margin. CP Series III A includes a covenant that requires the Company’s U.S. broker dealer subsidiary to maintain excess net capital of $120 million. The Company has established arrangements to obtain financing with prime brokers related to its municipal bond fund and convertible securities. Financing under these arrangements is primarily secured by municipal securities, and collateral limitations could reduce the amount of funding available under the arrangements. Prime broker financing activities are recorded net of receivables from trading activity. The funding is at the discretion of the prime brokers subject to a notice period. The Company has committed short-term bank line financing available on a secured basis and uncommitted short-term bank line financing available on both a secured and unsecured basis. The Company uses these credit facilities in the ordinary course of business to fund a portion of its daily operations and the amount borrowed under these credit facilities varies daily based on the Company’s funding needs. The Company’s committed short-term bank line financing at September 30, 2016 consisted of a one-year $250 million committed revolving credit facility with U.S. Bank, N.A., which was renewed in December 2015. Advances under this facility are secured by certain marketable securities. The facility includes a covenant that requires the Company’s U.S. broker dealer subsidiary to maintain minimum net capital of $120 million, and the unpaid principal amount of all advances under this facility will be due on December 17, 2016. The Company pays a nonrefundable commitment fee on the unused portion of the facility on a quarterly basis. At September 30, 2016, the Company had no advances against this line of credit. The Company’s uncommitted secured lines at September 30, 2016 totaled $185 million with two banks and are dependent on having appropriate collateral, as determined by the bank agreement, to secure an advance under the line. The availability of the Company’s uncommitted lines are subject to approval by the individual banks each time an advance is requested and may be denied. At September 30, 2016, the Company had no advances against these lines of credit. |
Senior Notes |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Senior Notes | Senior Notes The Company has entered into variable and fixed rate senior notes with certain entities advised by Pacific Investment Management Company ("PIMCO"). The following table presents the outstanding balance by note class at September 30, 2016 and December 31, 2015, respectively.
On October 8, 2015, the Company entered into a second amended and restated note purchase agreement ("Second Amended and Restated Note Purchase Agreement") under which the Company issued $125 million of fixed rate Class C Notes. The Class C Notes bear interest at an annual fixed rate of 5.06 percent, payable semi-annually and mature on October 9, 2018. The variable rate Class A Notes bear interest at a rate equal to three-month LIBOR plus 3.00 percent, adjusted and payable quarterly and mature on May 31, 2017. The unpaid principal amounts are due in full on the respective maturity dates and may not be prepaid by the Company. The Second Amended and Restated Note Purchase Agreement includes customary events of default and covenants that, among other things, require the Company to maintain a minimum consolidated tangible net worth and regulatory net capital, limit the Company's leverage ratio and require the Company to maintain a minimum ratio of operating cash flow to fixed charges. At September 30, 2016, the Company was in compliance with all covenants. The senior notes are recorded at amortized cost. As of September 30, 2016, the carrying value of the variable rate Class A Notes approximated fair value. As of September 30, 2016, the fair value of the fixed rate Class C Notes was approximately $127.5 million. |
Commitments and Contingencies |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | Contingencies and Commitments Legal Contingencies The Company has been named as a defendant in various legal actions, including complaints and litigation and arbitration claims, arising from its business activities. Such actions include claims related to securities brokerage and investment banking activities, and certain class actions that primarily allege violations of securities laws and seek unspecified damages, which could be substantial. Also, the Company is involved from time to time in investigations and proceedings by governmental agencies and self-regulatory organizations (“SROs”) which could result in adverse judgments, settlement, penalties, fines or other relief. The Company has established reserves for potential losses that are probable and reasonably estimable that may result from pending and potential legal actions, investigations and regulatory proceedings. In many cases, however, it is inherently difficult to determine whether any loss is probable or even possible or to estimate the amount or range of any potential loss, particularly where proceedings may be in relatively early stages or where plaintiffs are seeking substantial or indeterminate damages. Matters frequently need to be more developed before a loss or range of loss can reasonably be estimated. Given uncertainties regarding the timing, scope, volume and outcome of pending and potential legal actions, investigations and regulatory proceedings and other factors, the amounts of reserves and ranges of reasonably possible losses are difficult to determine and of necessity subject to future revision. Subject to the foregoing, management of the Company believes, based on currently available information, after consultation with outside legal counsel and taking into account its established reserves, that pending legal actions, investigations and regulatory proceedings will be resolved with no material adverse effect on the consolidated statements of financial condition, results of operations or cash flows of the Company. However, if during any period a potential adverse contingency should become probable or resolved for an amount in excess of the established reserves, the results of operations and cash flows in that period and the financial condition as of the end of that period could be materially adversely affected. In addition, there can be no assurance that material losses will not be incurred from claims that have not yet been brought to the Company’s attention or are not yet determined to be reasonably possible. Operating Lease Commitments The Company leases office space throughout the United States and in a limited number of foreign countries where the Company’s international operations reside. Aggregate minimum lease commitments under operating leases as of September 30, 2016 are as follows:
|
Restructuring |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring | Restructuring The Company incurred the following pre-tax restructuring charges within the Capital Markets segment primarily in conjunction with the Simmons acquisition discussed in Note 3.
|
Shareholders' Equity |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shareholders' Equity | Shareholders’ Equity Share Repurchases Effective August 14, 2015, the Company's board of directors authorized the repurchase of up to $150.0 million in common shares through September 30, 2017. During the nine months ended September 30, 2016, the Company repurchased 1,536,226 shares at an average price of $38.89 per share for an aggregate purchase price of $59.7 million related to this authorization. The Company has $71.8 million remaining under this authorization. The Company also purchases shares of common stock from restricted stock award recipients upon the award vesting as recipients sell shares to meet their employment tax obligations. The Company purchased 255,164 shares and 270,922 shares, or $10.7 million and $14.1 million of the Company’s common stock for this purpose during the nine months ended September 30, 2016 and 2015, respectively. Issuance of Shares The Company issues common shares out of treasury stock as a result of employee restricted share vesting and exercise transactions as discussed in Note 17. During the nine months ended September 30, 2016 and 2015, the Company issued 731,758 shares and 485,251 shares, respectively, related to these obligations. Noncontrolling Interests The consolidated financial statements include the accounts of Piper Jaffray Companies, its wholly owned subsidiaries and other entities in which the Company has a controlling financial interest. Noncontrolling interests represent equity interests in consolidated entities that are not attributable, either directly or indirectly, to Piper Jaffray Companies. Noncontrolling interests include the minority equity holders’ proportionate share of the equity in a merchant banking fund of $31.8 million, a municipal bond fund with employee investors of $9.1 million and a senior living fund aggregating $13.6 million as of September 30, 2016. As of December 31, 2015, noncontrolling interests included the minority equity holders’ proportionate share of the equity in a merchant banking fund of $31.8 million, a municipal bond fund with employee investors of $7.0 million and private investment vehicles aggregating $10.4 million. Ownership interests in entities held by parties other than the Company’s common shareholders are presented as noncontrolling interests within shareholders’ equity, separate from the Company’s own equity. Revenues, expenses and net income or loss are reported on the consolidated statements of operations on a consolidated basis, which includes amounts attributable to both the Company’s common shareholders and noncontrolling interests. Net income or loss is then allocated between the Company and noncontrolling interests based upon their relative ownership interests. Net income applicable to noncontrolling interests is deducted from consolidated net income to determine net income applicable to the Company. There was no other comprehensive income or loss attributed to noncontrolling interests for the nine months ended September 30, 2016 and 2015, respectively. The following table presents the changes in shareholders' equity for the nine months ended September 30, 2016:
|
Compensation Plans |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Compensation Plans | Compensation Plans Stock-Based Compensation Plans The Company maintains two stock-based compensation plans, the Piper Jaffray Companies Amended and Restated 2003 Annual and Long-Term Incentive Plan (the "Incentive Plan") and the 2016 Employment Inducement Award Plan (the "Inducement Plan"). The Company’s equity awards are recognized on the consolidated statements of operations at grant date fair value over the service period of the award, net of estimated forfeitures. The following table provides a summary of the Company’s outstanding equity awards (in shares or units) as of September 30, 2016:
Incentive Plan The Incentive Plan permits the grant of equity awards, including restricted stock, restricted stock units and non-qualified stock options, to the Company’s employees and directors for up to 8.2 million shares of common stock (0.9 million shares remained available for future issuance under the Incentive Plan as of September 30, 2016). The Company believes that such awards help align the interests of employees and directors with those of shareholders and serve as an employee retention tool. The Incentive Plan provides for accelerated vesting of awards if there is a severance event, a change in control of the Company (as defined in the Incentive Plan), in the event of a participant’s death, and at the discretion of the compensation committee of the Company’s board of directors. Restricted Stock Awards Restricted stock grants are valued at the market price of the Company’s common stock on the date of grant and are amortized over the requisite service period. The Company grants shares of restricted stock to employees as part of year-end compensation (“Annual Grants”) and upon initial hiring or as a retention award (“Sign-on Grants”). The Company’s Annual Grants are made each year in February. Annual Grants vest ratably over three years in equal installments. The Annual Grants provide for continued vesting after termination of employment, so long as the employee does not violate certain post-termination restrictions set forth in the award agreement or any agreements entered into upon termination. The Company determined the service inception date precedes the grant date for the Annual Grants, and that the post-termination restrictions do not meet the criteria for an in-substance service condition, as defined by FASB Accounting Standards Codification Topic 718, "Compensation – Stock Compensation" ("ASC 718"). Accordingly, restricted stock granted as part of the Annual Grants is expensed in the one-year period in which those awards are deemed to be earned, which is generally the calendar year preceding the February grant date. For example, the Company recognized compensation expense during fiscal 2015 for its February 2016 Annual Grant. If an equity award related to the Annual Grants is forfeited as a result of violating the post-termination restrictions, the lower of the fair value of the award at grant date or the fair value of the award at the date of forfeiture is recorded within the consolidated statements of operations as a reversal of compensation expense. Sign-on Grants are used as a recruiting tool for new employees and are issued to current employees as a retention tool. These awards have both cliff and ratable vesting terms, and the employees must fulfill service requirements in exchange for rights to the awards. Compensation expense is amortized on a straight-line basis from the grant date over the requisite service period, generally one to five years. Employees forfeit unvested shares upon termination of employment and a reversal of compensation expense is recorded. Annually, the Company grants stock to its non-employee directors. The stock-based compensation paid to non-employee directors is fully expensed on the grant date and included within outside services expense on the consolidated statements of operations. Restricted Stock Units The Company grants restricted stock units to its leadership team (“Leadership Grants”). The units will vest and convert to shares of common stock at the end of each 36-month performance period only if the Company's stock performance satisfies predetermined market conditions over the performance period. Under the terms of the grants, the number of units that will vest and convert to shares will be based on the Company's stock performance achieving specified targets during each performance period as described below. Compensation expense is amortized on a straight-line basis over the three-year requisite service period based on the fair value of the award on the grant date. The market condition must be met for the awards to vest and compensation cost will be recognized regardless if the market condition is satisfied. Employees forfeit unvested share units upon termination of employment with a corresponding reversal of compensation expense. Up to 50 percent of the award can be earned based on the Company’s total shareholder return relative to members of a predetermined peer group and up to 50 percent of the award can be earned based on the Company’s total shareholder return. The fair value of the awards on the grant date was determined using a Monte Carlo simulation with the following assumptions:
Because a portion of the award vesting depends on the Company’s total shareholder return relative to a peer group, the valuation modeled the performance of the peer group as well as the correlation between the Company and the peer group. The expected stock price volatility assumptions were determined using historical volatility as correlation coefficients can only be developed through historical volatility. The risk-free interest rates were determined based on three-year U.S. Treasury bond yields. Stock Options The Company previously granted options to purchase Piper Jaffray Companies common stock to employees and non-employee directors in fiscal years 2004 through 2008. Employee and director options were expensed by the Company on a straight-line basis over the required service period, based on the estimated fair value of the award on the date of grant using a Black-Scholes option-pricing model. As described above pertaining to the Company’s Annual Grants of restricted shares, stock options granted to employees were expensed in the calendar year preceding the annual February grant date. For example, the Company recognized compensation expense during fiscal 2007 for its February 2008 option grant. The maximum term of the stock options granted to employees and directors is ten years. The Company has not granted stock options since 2008. Inducement Plan The Company established the Inducement Plan in conjunction with the acquisition of Simmons. The Company granted $11.6 million (286,776 shares) in restricted stock under the Inducement Plan on May 15, 2016. These shares cliff vest in three years. Inducement Plan awards are amortized as compensation expense on a straight-line basis over the vesting period. Employees forfeit unvested Inducement Plan shares upon termination of employment and a reversal of compensation expense is recorded. Stock-Based Compensation Activity The Company recorded compensation expense of $17.9 million and $8.2 million for the three months ended September 30, 2016 and 2015, respectively, and $41.6 million and $30.4 million for the nine months ended September 30, 2016 and 2015, respectively, related to employee restricted stock and restricted stock unit awards. Forfeitures were $0.5 million for the three months ended September 30, 2016, and $0.6 million and $0.3 million for the nine months ended September 30, 2016 and 2015, respectively. Forfeitures were immaterial for the three months ended September 30, 2015. The tax benefit related to stock-based compensation costs totaled $6.6 million and $3.2 million for the three months ended September 30, 2016 and 2015, respectively, and $15.5 million and $11.8 million for the nine months ended September 30, 2016 and 2015, respectively. The following table summarizes the changes in the Company’s unvested restricted stock:
The following table summarizes the changes in the Company’s unvested restricted stock units:
As of September 30, 2016, there was $54.1 million of total unrecognized compensation cost related to restricted stock and restricted stock units expected to be recognized over a weighted average period of 2.3 years. The following table summarizes the changes in the Company’s outstanding stock options:
As of September 30, 2016, there was no unrecognized compensation cost related to stock options expected to be recognized over future years. The intrinsic value of options exercised and resulting tax benefit realized were immaterial for the nine months ended September 30, 2016. The intrinsic value of options exercised was $0.9 million, and the resulting tax benefit realized was $0.3 million for the nine months ended September 30, 2015. Deferred Compensation Plans The Company maintains various deferred compensation arrangements for employees. The nonqualified deferred compensation plan is an unfunded plan which allows certain highly compensated employees, at their election, to defer a percentage of their base salary, commissions and/or cash bonuses. The deferrals vest immediately and are non-forfeitable. The amounts deferred under this plan are held in a grantor trust. The Company invests, as a principal, in investments to economically hedge its obligation under the nonqualified deferred compensation plan. Investments in the grantor trust, consisting of mutual funds, totaled $24.0 million and $14.6 million as of September 30, 2016 and December 31, 2015, respectively, and are included in investments on the consolidated statements of financial condition. The compensation deferred by the employees is expensed in the period earned. The deferred compensation liability was $24.1 million and $14.5 million as of September 30, 2016 and December 31, 2015, respectively. Changes in the fair value of the investments made by the Company are reported in investment income and changes in the corresponding deferred compensation liability are reflected as compensation and benefits expense on the consolidated statements of operations. The Piper Jaffray Companies Mutual Fund Restricted Share Investment Plan is a fully funded deferred compensation plan which allows eligible employees to elect to receive a portion of the incentive compensation they would otherwise receive in the form of restricted stock, instead in restricted mutual fund shares ("MFRS Awards") of investment funds. MFRS Awards are awarded to qualifying employees in February of each year, and represent a portion of their compensation for performance in the preceding year similar to the Company's Annual Grants. MFRS Awards vest ratably over three years in equal installments and provide for continued vesting after termination of employment so long as the employee does not violate certain post-termination restrictions set forth in the award agreement or any agreement entered into upon termination. Forfeitures are recorded as a reduction of compensation and benefits expense within the consolidated statements of operations. MFRS Awards are owned by employee recipients and as such are not included on the consolidated statements of financial condition. The Company has also granted MFRS Awards to new employees as a recruiting tool. Employees must fulfill service requirements in exchange for rights to the awards. Compensation expense from these awards will be amortized on a straight-line basis over the requisite service period of two to five years. The Company recorded compensation expense of $6.6 million and $4.9 million for the three months ended September 30, 2016 and 2015, respectively, and $13.8 million and $18.8 million for the nine months ended September 30, 2016 and 2015, respectively, related to employee MFRS Awards. Total compensation cost includes year-end compensation for MFRS Awards and the amortization of sign-on MFRS Awards, less forfeitures. Forfeitures were immaterial for the three and nine months ended September 30, 2016 and 2015, respectively. |
Earnings Per Share |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | Earnings Per Share The Company calculates earnings per share using the two-class method. Basic earnings per common share is computed by dividing net income/(loss) applicable to Piper Jaffray Companies’ common shareholders by the weighted average number of common shares outstanding for the period. Net income/(loss) applicable to Piper Jaffray Companies’ common shareholders represents net income/(loss) applicable to Piper Jaffray Companies reduced by the allocation of earnings to participating securities. Losses are not allocated to participating securities. All of the Company’s unvested restricted shares are deemed to be participating securities as they are eligible to share in the profits (e.g., receive dividends) of the Company. The Company’s unvested restricted stock units are not participating securities as they are not eligible to share in the profits of the Company. Diluted earnings per common share is calculated by adjusting the weighted average outstanding shares to assume conversion of all potentially dilutive stock options. The computation of earnings per share is as follows:
The anti-dilutive effects from stock options were immaterial for the nine months ended September 30, 2016 and 2015, respectively. |
Segment Reporting |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting | Segment Reporting Basis for Presentation The Company structures its segments primarily based upon the nature of the financial products and services provided to customers and the Company’s management organization. The Company evaluates performance and allocates resources based on segment pre-tax operating income or loss and segment pre-tax operating margin. Revenues and expenses directly associated with each respective segment are included in determining their operating results. Other revenues and expenses that are not directly attributable to a particular segment are allocated based upon the Company’s allocation methodologies, including each segment’s respective net revenues, use of shared resources, headcount or other relevant measures. Segment assets are based on those directly associated with each segment, and include an allocation of certain assets based on the most relevant measures applicable, including headcount and other factors. The substantial majority of the Company's net revenues and long-lived assets are located in the U.S. Reportable segment financial results are as follows:
(1)Operating expenses include intangible asset amortization expense as set forth in the table below:
Reportable segment assets are as follows:
|
Net Capital Requirements and Other Regulatory Matters |
9 Months Ended |
---|---|
Sep. 30, 2016 | |
Regulatory Capital Requirements [Abstract] | |
Net Capital Requirements and Other Regulatory Matters | Net Capital Requirements and Other Regulatory Matters Piper Jaffray is registered as a securities broker dealer with the SEC and is a member of various SROs and securities exchanges. The Financial Industry Regulatory Authority (“FINRA”) serves as Piper Jaffray’s primary SRO. Piper Jaffray is subject to the uniform net capital rule of the SEC and the net capital rule of FINRA. Piper Jaffray has elected to use the alternative method permitted by the SEC rule, which requires that it maintain minimum net capital of the greater of $1.0 million or 2 percent of aggregate debit balances arising from customer transactions, as such term is defined in the SEC rule. Under its rules, FINRA may prohibit a member firm from expanding its business or paying dividends if resulting net capital would be less than 5 percent of aggregate debit balances. Advances to affiliates, repayment of subordinated debt, dividend payments and other equity withdrawals by Piper Jaffray are subject to certain notification and other provisions of SEC and FINRA rules. At September 30, 2016, net capital calculated under the SEC rule was $184.8 million, and exceeded the minimum net capital required under the SEC rule by $183.0 million. The Company’s committed short-term credit facility and its senior notes include covenants requiring Piper Jaffray to maintain minimum net capital of $120 million. CP Notes issued under CP Series III A include a covenant that requires Piper Jaffray to maintain excess net capital of $120 million. Piper Jaffray Ltd. and SCIL, broker dealer subsidiaries registered in the United Kingdom, are subject to the capital requirements of the Prudential Regulation Authority and the Financial Conduct Authority. As of September 30, 2016, Piper Jaffray Ltd. and SCIL were in compliance with the capital requirements of the Prudential Regulation Authority and the Financial Conduct Authority. Piper Jaffray Hong Kong Limited is licensed by the Hong Kong Securities and Futures Commission, which is subject to the liquid capital requirements of the Securities and Futures (Financial Resources) Rule promulgated under the Securities and Futures Ordinance. At September 30, 2016, Piper Jaffray Hong Kong Limited was in compliance with the liquid capital requirements of the Hong Kong Securities and Futures Commission. |
Accounting Policies and Pronouncements Accounting Policies and Pronouncements (Policies) |
9 Months Ended |
---|---|
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The Company consolidates entities in which it has a controlling financial interest. The Company determines whether it has a controlling financial interest in an entity by first evaluating whether the entity is a variable interest entity ("VIE") or a voting interest entity. VIEs are entities in which (i) the total equity investment at risk is not sufficient to enable the entity to finance its activities independently or (ii) the at-risk equity holders do not have the normal characteristics of a controlling financial interest. A controlling financial interest in a VIE is present when an enterprise has one or more variable interests that have both (i) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. The enterprise with a controlling financial interest is the primary beneficiary and consolidates the VIE. Voting interest entities lack one or more of the characteristics of a VIE. The usual condition for a controlling financial interest is ownership of a majority voting interest for a corporation or a majority of kick-out rights for a limited partnership. When the Company does not have a controlling financial interest in an entity but exerts significant influence over the entity’s operating and financial policies (generally defined as owning a voting or economic interest of between 20 percent to 50 percent), the Company's investment is accounted for under the equity method of accounting. If the Company does not have a controlling financial interest in, or exert significant influence over, an entity, the Company accounts for its investment at fair value, if the fair value option was elected, or at cost. |
Acquisitions (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Estimated fair values of assets acquired and liabilities assumed | The following table summarizes the estimated fair value of assets acquired and liabilities assumed at the date of the acquisition:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unaudited pro forma information | The consolidated Company's unaudited pro forma information presented does not necessarily reflect the results of operations that would have resulted had the acquisition been completed at the beginning of the applicable periods presented, does not contemplate anticipated operational efficiencies of the combined entities, nor does it indicate the results of operations in future periods.
|
Financial Instruments and Other Inventory Positions Owned and Financial Instruments and Other Inventory Positions Sold, but Not Yet Purchased (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Instruments Owned and Sold, Not yet Purchased [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Instruments and Other Inventory Positions Owned and Financial Instruments and Other Inventory Positions Sold, but not yet Purchased |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total Absolute Notional Contract Amount | The following table presents the gross fair market value and the total absolute notional contract amount of the Company's outstanding derivative instruments, prior to counterparty netting, by asset or liability position:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unrealized Gains/(Losses) on Derivative Instruments | The following table presents the Company’s unrealized gains/(losses) on derivative instruments:
|
Fair Value of Financial Instruments (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Information about Significant Unobservable Inputs used in Fair Value Measurement | The following table summarizes quantitative information about the significant unobservable inputs used in the fair value measurement of the Company’s Level III financial instruments as of September 30, 2016:
Sensitivity of the fair value to changes in unobservable inputs:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Valuation of Financial Instruments by Pricing Observability Levels | The following table summarizes the valuation of the Company’s financial instruments by pricing observability levels defined in FASB Accounting Standards Codification Topic 820, "Fair Value Measurement" ("ASC 820") as of September 30, 2016:
The following table summarizes the valuation of the Company’s financial instruments by pricing observability levels defined in ASC 820 as of December 31, 2015:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in Fair Value Associated with Level III Financial Instruments | The following tables summarize the changes in fair value associated with Level III financial instruments held at the beginning or end of the periods presented:
|
Variable Interest Entities Variable Interest Entities (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Variable Interest Entity, Consolidated, Carrying Amount, Assets and Liabilities, Net [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Variable Interest Entities | The following table presents information about the carrying value of the assets and liabilities of the VIEs which are consolidated by the Company and included on the consolidated statements of financial condition at September 30, 2016. The assets can only be used to settle the liabilities of the respective VIE, and the creditors of the VIEs do not have recourse to the general credit of the Company. The assets and liabilities are presented prior to consolidation and thus a portion of these assets and liabilities are eliminated in consolidation.
|
Receivables from and Payables to Brokers, Dealers and Clearing Organizations (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Brokers and Dealers [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Brokers, Dealers and Clearing Organizations |
|
Collateralized Securities Transactions (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Repurchase Agreements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Repurchase Liabilities, Fair Market Value of Related Collateral Pledged and Interest Rate Charged | The following is a summary of the Company’s securities sold under agreements to repurchase ("Repurchase Liabilities"), the fair market value of collateral pledged and the interest rate charged by the Company’s counterparty, which is based on LIBOR plus an applicable margin, as of September 30, 2016:
|
Investments (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments, All Other Investments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Investments | The Company’s investments include investments in private companies and partnerships, registered mutual funds, warrants of public and private companies and private company debt.
|
Other Assets (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Assets |
|
Goodwill and Intangible Assets (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in Carrying Value of Goodwill and Intangible Assets |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Aggregate Future Intangible Asset Amortization Expense | The following table summarizes the future aggregate amortization expense of the Company's intangible assets with determinable lives for the years ended:
|
Short-Term Financing (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Short-Term Financing and Weighted Average Interest Rate on Borrowings |
|
Senior Notes Senior Notes (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Senior Notes [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of senior notes | The Company has entered into variable and fixed rate senior notes with certain entities advised by Pacific Investment Management Company ("PIMCO"). The following table presents the outstanding balance by note class at September 30, 2016 and December 31, 2015, respectively.
|
Commitments and Contingencies Commitments and Contingencies (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Schedule of Future Minimum Rental Payments for Operating Leases | The Company leases office space throughout the United States and in a limited number of foreign countries where the Company’s international operations reside. Aggregate minimum lease commitments under operating leases as of September 30, 2016 are as follows:
|
Restructuring Restructuring (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Pre-tax restructuring charges | The Company incurred the following pre-tax restructuring charges within the Capital Markets segment primarily in conjunction with the Simmons acquisition discussed in Note 3.
|
Shareholders' Equity (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Table Text Block] | Ownership interests in entities held by parties other than the Company’s common shareholders are presented as noncontrolling interests within shareholders’ equity, separate from the Company’s own equity. Revenues, expenses and net income or loss are reported on the consolidated statements of operations on a consolidated basis, which includes amounts attributable to both the Company’s common shareholders and noncontrolling interests. Net income or loss is then allocated between the Company and noncontrolling interests based upon their relative ownership interests. Net income applicable to noncontrolling interests is deducted from consolidated net income to determine net income applicable to the Company. There was no other comprehensive income or loss attributed to noncontrolling interests for the nine months ended September 30, 2016 and 2015, respectively. The following table presents the changes in shareholders' equity for the nine months ended September 30, 2016:
|
Compensation Plans (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Outstanding Equity Awards | The following table provides a summary of the Company’s outstanding equity awards (in shares or units) as of September 30, 2016:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Valuation Assumptions | The fair value of the awards on the grant date was determined using a Monte Carlo simulation with the following assumptions:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in Unvested Restricted Stock | The following table summarizes the changes in the Company’s unvested restricted stock:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in Unvested Restricted Stock Units | The following table summarizes the changes in the Company’s unvested restricted stock units:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Changes in Outstanding Stock Options | The following table summarizes the changes in the Company’s outstanding stock options:
|
Earnings Per Share (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computation of Earnings per Share | The computation of earnings per share is as follows:
|
Segment Reporting (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reportable segment financial results | Reportable segment financial results are as follows:
(1)Operating expenses include intangible asset amortization expense as set forth in the table below:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of intangible asset amortization expense | Operating expenses include intangible asset amortization expense as set forth in the table below:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reportable segment assets | Reportable segment assets are as follows:
|
Organization and Basis of Presentation - Additional Information (Detail) |
9 Months Ended |
---|---|
Sep. 30, 2016
segment
| |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of reportable segments | 2 |
Accounting Policies and Pronouncements Accounting Policies and Pronouncments (Details) $ in Millions |
9 Months Ended |
---|---|
Sep. 30, 2016
USD ($)
| |
Accounting Standards Update 2015-02 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Deconsolidated assets of certain investment partnerships | $ 0.0 |
Effective as of January 1, 2016 | Accounting Standards Update 2015-02 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Deconsolidated assets of certain investment partnerships | 9.4 |
Actual impact as of period end | Accounting Standards Update 2016-09 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Excess tax benefits recorded as additional paid-in-capital | $ 7.0 |
Acquisitions - Estimated Fair Values of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands |
Sep. 30, 2016 |
Feb. 26, 2016 |
Dec. 31, 2015 |
---|---|---|---|
Assets | |||
Goodwill | $ 278,699 | $ 217,976 | |
Simmons & Company International | |||
Assets | |||
Cash and cash equivalents | $ 47,201 | ||
Fixed assets | 1,868 | ||
Goodwill | 60,737 | ||
Intangible assets | 26,638 | ||
Investments | 980 | ||
Other assets | 5,071 | ||
Total assets acquired | 142,495 | ||
Liabilities | |||
Accrued compensation | 15,387 | ||
Other liabilities and accrued expenses | 7,814 | ||
Total liabilities assumed | 23,201 | ||
Net assets acquired | $ 119,294 |
Acquisitions - Unaudited Pro Forma Information (Details) - Simmons & Company International - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |
---|---|---|---|
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | |||
Net revenues | $ 163,090 | $ 532,683 | $ 540,571 |
Net income applicable to Piper Jaffray Companies | $ 619 | $ 15,642 | $ 30,753 |
Financial Instruments and Other Inventory Positions Owned and Financial Instruments and Other Inventory Positions Sold, but Not Yet Purchased - Additional Information (Details) - Maximum risk of loss $ in Millions |
Sep. 30, 2016
USD ($)
|
---|---|
Counterparties not required to post collateral | |
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | |
Uncollateralized credit exposure | $ 29.1 |
Notional contract amount | 184.9 |
One unnamed financial institutional not required to post collateral | |
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | |
Uncollateralized credit exposure | $ 21.9 |
Fair Value of Financial Instruments Fair Value of Financial Instruments - Fair Value Option (Details) - Merchant Banking Investments - Level III - USD ($) $ in Millions |
9 Months Ended | ||
---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Dec. 31, 2015 |
|
Fair Value, Option, Quantitative Disclosures [Line Items] | |||
Investments at fair value | $ 18.9 | $ 19.7 | |
Gains from changes in fair value | $ 1.0 | $ 0.7 |
Variable Interest Entities - Additional Information (Details) - Variable Interest Entity, Not Primary Beneficiary, Aggregated Disclosure [Member] - USD ($) |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Variable Interest Entity [Line Items] | ||
Nonconsolidated assets related to VIEs | $ 800,000,000 | $ 400,000,000 |
Maximum exposure to loss for nonconsolidated VIEs | 9,300,000 | |
Nonconsolidated liabilities related to VIEs | $ 0 | $ 0 |
Receivables from and Payables to Brokers, Dealers and Clearing Organizations - Amounts Receivable from Brokers, Dealers and Clearing Organizations (Details) - USD ($) $ in Thousands |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Brokers and Dealers [Abstract] | ||
Receivable arising from unsettled securities transactions | $ 54,547 | $ 62,105 |
Deposits paid for securities borrowed | 35,367 | 47,508 |
Receivable from clearing organizations | 19,903 | 3,155 |
Deposits with clearing organizations | 40,052 | 27,019 |
Securities failed to deliver | 6,100 | 2,100 |
Other | 13,458 | 6,062 |
Total brokers, dealers and clearing organizations | $ 169,427 | $ 147,949 |
Receivables from and Payables to Brokers, Dealers and Clearing Organizations - Amounts Payable to Brokers, Dealers and Clearing Organizations (Details) - USD ($) $ in Thousands |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Brokers and Dealers [Abstract] | ||
Payable arising from unsettled securities transactions | $ 181,567 | $ 34,445 |
Payable to clearing organizations | 3,311 | 3,115 |
Securities failed to receive | 10,691 | 4,468 |
Other | 6,357 | 6,103 |
Total brokers, dealers and clearing organizations | $ 201,926 | $ 48,131 |
Collateralized Securities Transactions - Summary of Repurchase Liabilities, Fair Market Value of Related Collateral Pledged and Interest Rate Charged (Details) $ in Thousands |
Sep. 30, 2016
USD ($)
|
---|---|
Assets Sold under Agreements to Repurchase [Line Items] | |
Repurchase Liabilities | $ 22,009 |
Fair Market Value | 23,713 |
Term of 30 to 60 day maturities: | Mortgage-backed securities | |
Assets Sold under Agreements to Repurchase [Line Items] | |
Repurchase Liabilities | 5,977 |
Fair Market Value | $ 8,120 |
Interest Rate | 2.571% |
On demand maturities: | U.S. government securities | |
Assets Sold under Agreements to Repurchase [Line Items] | |
Repurchase Liabilities | $ 16,032 |
Fair Market Value | $ 15,593 |
On demand maturities: | U.S. government securities | Minimum | |
Assets Sold under Agreements to Repurchase [Line Items] | |
Interest Rate | 0.00% |
On demand maturities: | U.S. government securities | Maximum | |
Assets Sold under Agreements to Repurchase [Line Items] | |
Interest Rate | 0.15% |
Collateralized Securities Transactions - Additional Information (Detail) - USD ($) |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Disclosure of Repurchase Agreements [Abstract] | ||
Securities purchased under agreements to resell, securities borrowed and margin agreements on terms that permit to repledge or resell the securities to others | $ 186,500,000 | $ 185,800,000 |
Securities either pledged or otherwise transferred to others in connection with financing activities or to satisfy commitments under financial instruments and other inventory positions sold, but not yet purchased | 175,300,000 | 175,800,000 |
Reverse repurchase agreements, offset value | 0 | 0 |
Securities loaned | $ 0 | $ 0 |
Investments (Details) - USD ($) $ in Thousands |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Schedule of Investments [Line Items] | ||
Investments at fair value | $ 131,726 | $ 142,781 |
Investments at cost | 2,489 | 3,299 |
Investments accounted for under the equity method | 10,327 | 17,781 |
Total investments | 144,542 | 163,861 |
Less investments attributable to noncontrolling interests (1) | ||
Schedule of Investments [Line Items] | ||
Investments at fair value | 29,914 | 40,069 |
Parent Company | ||
Schedule of Investments [Line Items] | ||
Total investments | $ 114,628 | $ 123,792 |
Investments - Additional Information (Details) $ in Millions |
Sep. 30, 2016
USD ($)
|
---|---|
Investments, All Other Investments [Abstract] | |
Estimated fair market value of investments carried at cost | $ 4.4 |
Other Assets (Details) - USD ($) $ in Thousands |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Net deferred income tax assets | $ 66,095 | $ 66,810 |
Fee receivables | 19,439 | 18,362 |
Senior Living Fund notes receivable | 17,396 | 1,536 |
Accrued interest receivables | 7,022 | 6,145 |
Forgivable loans, net | 10,236 | 10,234 |
Prepaid expenses | 5,806 | 6,161 |
Other | 14,548 | 9,954 |
Total other assets | $ 140,542 | $ 119,202 |
Goodwill and Intangible Assets Goodwill and Intangible Assets - Aggregate Future Intangible Asset Amortization Expense (Details) $ in Thousands |
Sep. 30, 2016
USD ($)
|
---|---|
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |
Remainder of 2016 | $ 5,739 |
2017 | 14,972 |
2018 | 9,476 |
2019 | 7,463 |
2020 | 1,018 |
Thereafter | 254 |
Total | $ 38,922 |
Short-Term Financing - Summary of Short Term Financing and Weighted Average Interest Rate on Borrowings (Details) - USD ($) $ in Thousands |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Short-term Debt [Line Items] | ||
Oustanding Balance | $ 425,785 | $ 446,190 |
Commercial paper (secured) | ||
Short-term Debt [Line Items] | ||
Oustanding Balance | $ 178,332 | $ 276,894 |
Weighted Average Interest Rate | 1.91% | 1.7376% |
Prime broker arrangement | ||
Short-term Debt [Line Items] | ||
Oustanding Balance | $ 247,453 | $ 169,296 |
Weighted Average Interest Rate | 1.22% | 1.0745% |
Senior Notes Senior Notes (Details) - USD ($) $ in Thousands |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Debt Instrument [Line Items] | ||
Senior Notes | $ 175,000 | $ 175,000 |
Senior Notes | Class A Variable Rate Senior Notes Due May 2017 | ||
Debt Instrument [Line Items] | ||
Senior Notes | 50,000 | 50,000 |
Senior Notes | Class C Fixed Rate Senior Notes Due October 2018 | ||
Debt Instrument [Line Items] | ||
Senior Notes | $ 125,000 | $ 125,000 |
Senior Notes - Additional Information (Details) - Senior Notes - USD ($) $ in Millions |
9 Months Ended | |
---|---|---|
Sep. 30, 2016 |
Oct. 08, 2015 |
|
Class A Variable Rate Senior Notes Due May 2017 | LIBOR | ||
Debt Instrument [Line Items] | ||
Reference rate | P3M | |
Basis spread on variable rate | 3.00% | |
Class C Fixed Rate Senior Notes Due October 2018 | ||
Debt Instrument [Line Items] | ||
Face amount | $ 125.0 | |
Annual fixed rate | 5.06% | |
Fair value disclosure | $ 127.5 |
Commitments and Contingencies Aggregate Minimum Lease Commitments Under Operating Leases (Details) $ in Thousands |
Sep. 30, 2016
USD ($)
|
---|---|
Commitments and Contingencies Disclosure [Abstract] | |
Remainder of 2016 | $ 3,961 |
2017 | 14,060 |
2018 | 13,144 |
2019 | 11,495 |
2020 | 10,996 |
Thereafter | 26,707 |
Total | $ 80,363 |
Restructuring and Integration Costs (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Sep. 30, 2016 |
Sep. 30, 2015 |
|
Restructuring Cost and Reserve [Line Items] | ||||
Pre-tax restructuring charges | $ 0 | $ 1,249 | $ 8,954 | $ 1,249 |
Severance, benefits and outplacement costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Pre-tax restructuring charges | 0 | 1,017 | 6,608 | 1,017 |
Vacated redundant leased office space | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Pre-tax restructuring charges | 0 | 0 | 1,320 | 0 |
Contract termination costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Pre-tax restructuring charges | $ 0 | $ 232 | $ 1,026 | $ 232 |
Compensation Plans - RSU Valuation Assumptions (Details) - Restricted Stock Units |
9 Months Ended |
---|---|
Sep. 30, 2016 | |
2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk-free Interest Rate | 0.98% |
Expected Stock Price Volatility | 34.90% |
2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk-free Interest Rate | 0.90% |
Expected Stock Price Volatility | 29.80% |
2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk-free Interest Rate | 0.82% |
Expected Stock Price Volatility | 41.30% |
Compensation Plans - Unvested Restricted Stock (Details) - Restricted Stock |
9 Months Ended |
---|---|
Sep. 30, 2016
$ / shares
shares
| |
Unvested Restricted Stock or Stock Units | |
Beginning Balance | shares | 1,287,915 |
Granted | shares | 2,341,453 |
Vested | shares | (602,978) |
Cancelled | shares | (109,629) |
Ending Balance | shares | 2,916,761.000 |
Weighted Average Grant Date Fair Value (in dollars per share) | |
Beginning Balance | $ / shares | $ 46.20 |
Granted | $ / shares | 41.68 |
Vested | $ / shares | 44.99 |
Cancelled | $ / shares | 42.85 |
Ending Balance | $ / shares | $ 42.95 |
Compensation Plans - Unvested Restricted Stock Units (Details) - Restricted Stock Units |
9 Months Ended |
---|---|
Sep. 30, 2016
$ / shares
shares
| |
Unvested Restricted Stock or Stock Units | |
Beginning Balance | shares | 356,242 |
Granted | shares | 135,483 |
Vested | shares | (117,265) |
Cancelled | shares | 0 |
Ending Balance | shares | 374,460 |
Weighted Average Grant Date Fair Value (in dollars per share) | |
Beginning Balance | $ / shares | $ 22.18 |
Granted | $ / shares | 19.93 |
Vested | $ / shares | 21.32 |
Cancelled | $ / shares | 0.00 |
Ending Balance | $ / shares | $ 21.63 |
Compensation Plans - Stock Options (Details) - USD ($) |
9 Months Ended | ||
---|---|---|---|
Sep. 30, 2016 |
Sep. 30, 2015 |
Dec. 31, 2015 |
|
Options Outstanding | |||
Beginning Balance | 157,201 | ||
Granted | 0 | ||
Exercised | (2,500) | ||
Cancelled | 0 | ||
Expired | (22,413) | ||
Ending Balance | 132,288 | ||
Options exercisable at period end | 132,288 | ||
Weighted Average Exercise Price (in dollars per share) | |||
Beginning Balance | $ 50.35 | ||
Granted | 0.00 | ||
Exercised | 41.09 | ||
Cancelled | 0.00 | ||
Expired | 59.83 | ||
Ending Balance | 48.91 | ||
Options exercisable at period end | $ 48.91 | ||
Weighted Average Remaining Contractual Term (in Years) | |||
Weighted Average Remaining Contractual Term (in Years) | 1 year 1 month | 1 year 7 months 6 days | |
Options exercisable at period end | 1 year 1 month | ||
Aggregate Intrinsic Value | |||
Aggregate Intrinsic Value | $ 696,825 | $ 0 | |
Options exercisable at end of period | $ 696,825 |
Segment Reporting Segment Reporting - Reportable Segment Assets (Details) - USD ($) $ in Thousands |
Sep. 30, 2016 |
Dec. 31, 2015 |
---|---|---|
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Reportable segment assets | $ 2,211,323 | $ 2,138,518 |
Capital Markets | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Reportable segment assets | 1,974,983 | 1,870,272 |
Asset Management | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Reportable segment assets | $ 236,340 | $ 268,246 |
Net Capital Requirements and Other Regulatory Matters - Additional Information (Detail) |
Sep. 30, 2016
USD ($)
|
---|---|
Schedule Of Compliance With Regulatory Capital Requirements For Broker Dealer [Line Items] | |
Minimum net capital requirement | $ 1,000,000.0 |
Net capital requirement, percentage of aggregate debit balances arising from customer transactions | 2.00% |
Net capital requirement, percent of aggregate debit balances under restriction on business expansion or dividend payment | 5.00% |
Net capital | $ 184,800,000 |
Minimum net capital required | 183,000,000 |
Commercial Paper | CP Series III A | |
Schedule Of Compliance With Regulatory Capital Requirements For Broker Dealer [Line Items] | |
Excess net capital required | 120,000,000.0 |
Committed Credit Facility | Senior Notes | |
Schedule Of Compliance With Regulatory Capital Requirements For Broker Dealer [Line Items] | |
Minimum net capital required | $ 120,000,000 |
A0*K2K;P&J% 6X&:&&CW]&&U.Q0!$0&_!$SV(B;!^Q'Q-20_FCW-@@60
M4+N@P/UR@D>0,@CYQF^SYD?+0+R,S^K?XK3>_9%;>$3Y6S2N]V8S2AIH^2C=
M"T[?81[A/@C6*&W\DGJT#M690HGB[VD5.JY3^E-L9MIM0CX3\H6PR:+QU"C:
M?.*.5Z7!B=B!A[-;[3S.FB8.7I6G:K79ENP4A*XPB7B8,0N"
M>?6;+7)ZBYY'>OXY?7U-7R>'Z]1]FWTN4%P+%$F@^-^("7.8,=M_AV07>ZK
M=/'J6%+CJ%W:TJ6ZW,Z'/)[)![PJ!][!3VXZH2TYHO,G&P^@173@VV=W]Y3T
M_OTLB836A?"KCTVZ4BEQ.)P?R/)*J[]02P,$% @ F6)<2>JHU*JC 0
ML0, !D !X;"]W;W)K L4)KP)=5H+*J%0HGBGW$5?5BG^"=;:-<)Z4Q(5\+O)!B/
MC8+-!VYY66B&PO=V]R:W-H965TX!RF#D#?^.VN^6P;B>;RH_XS3^NZ/W,(]RC^B<;UO-J.D@9:/TKW@] OF
M$6Z#8(W2QB^I1^M0+11*%']+J]!QG=*?']E,NT[(9T+^@<"246SS@3M>E08G
M8@<>SFZS\W 31+PR\;U9/W;4-''PJCQ5>9&5[!2$+C")>$B8S8I@7OVJ14ZO
MT?-D\3F]N*07J<-B[O +_MM+@6T2V,X"^;41$^:P8(H/)NQL3Q68+EX=2VH<
MM4M;NE;7VWF7QS-YAU?EP#MXXJ83VI(C.G^R\0!:1 ?>/KNYI:3W[V=-)+0N
MA-]];-*52HG#87D@ZRNM_@-02P,$% @ F6)<2:FB8[NB 0 L0, !D
M !X;"]W;W)K
&PO=V]R:W-H965T@7NEB/<@Y1>R#5^GS6_6GKB:;RH/X9IG?L#-W"/\I^H
M;>?,)I34T/!1VA>
&ULE9;; [->J6M7%K7\W@3MM:KRYM^-
M+-7M,81P'/A1G,Y=/Q"M5]$4=R@J6;>%JH-&'A_#K[#M,V
MMN=4/GA=7>I\75;DXHCN:@)P'VJR33K5$,L_*Y+=BQ1!)(LBF\<$^3U!'@CR
M0% FCPF*60=%)$CO8XK0BB3D+&+.Q1-!E[,RRRB3SI2K051AX4&N '!&)"F#@RX_^ &_P'N
M/X"IE[PUH 7=I6'BD@GW%1@WN,PM,+Q<=D.Y^"<-7+YI%G07 7%P+N">@>&K
M%CM0Q'B]\0WU)KB*Q*7>!*GWOU6PM# '>P-N++">B1SJH2':$AJZMX025 4=
M3#.UR[(@2%."?HGM%V?@4J>=KRX./NV4:][N])&C\];BV$BSBQU'QV/- _0[
M[2_CCV2^-(>3#YH\.Q0[_K-H=V73>2]"JGV\WFYOA9!<*0OO(]_;JP/9^%#Q
MK>QO8W7?FB.*>9#B,)RXQF-?_@]02P,$% @ F6)<24N_R:MN!P *C
M !D !X;"]W;W)K
0+?XS,
MGY)!>#H_TN]CM][]AENX1?DF&M=YLQDE#;1\+]T+#@\PMK (P"U*&[]DN[<.
MU5%"B>*?:10ZCD/:NQ[N+E_Z=!,@
MGDR\-^O;CDP3&Z^K0[THKBIV"*"SG"1
J;(?/8']M.U6-(6%0Y;_-
ML:B'X\W\DL4VC Y &X!3P%2'#F V@+T&),Z Q 8DOA52&Y!^J!"9WH>9>\J[
M?+UJU"UH+WG_?X*EEC=]$ITYT-/5ZI48