Segment Information

9 Months Ended

Sep. 30, 2014

Segment Reporting [Abstract]

Segment Information

Segment information

The Company has determined its reportable segments based on the Company’s method of internal reporting, which disaggregates its retail business by branch and its proprietary and investment banking businesses by product. The Company evaluates the performance of its reportable segments and allocates resources to them based upon profitability.

Due to the growth in the Company’s commercial loan origination and servicing business operated out of OMHHF, the Company has presented separately the results of this business in a reportable segment titled “Commercial Mortgage Banking.” This reportable segment engages in business activities in which it earns revenues and incurs expenses that are distinct from the Company’s other reportable segments, its operating results are reviewed by the Company’s Chief Executive Officer who makes decisions about resources to be allocated to this business, and separate financial information is available for the legal entity from which it operates. The Commercial Mortgage Banking reportable segment not only meets these qualitative criteria but, as a result of its recent growth, also meets one of the quantitative thresholds for segment reporting. Previously reported segment information has been revised to reflect this new reportable segment.

The Company’s reportable segments are:

Private Client—includes commissions and a proportionate amount of fee income earned on assets under management ("AUM"), net interest earnings on client margin loans and cash balances, fees from money market funds, net contributions from stock loan activities and financing activities, and direct expenses associated with this segment;

Asset Management—includes a proportionate amount of fee income earned on AUM from investment management services of Oppenheimer Asset Management Inc. Oppenheimer’s asset management divisions employ various programs to professionally manage client assets either in individual accounts or in funds, and includes direct expenses associated with this segment;

Capital Markets—includes investment banking, institutional equities sales, trading, and research, taxable fixed income sales, trading, and research, public finance and municipal trading, as well as the Company’s operations in the United Kingdom, Hong Kong and Israel, and direct expenses associated with this segment; and

Commercial Mortgage Banking—includes loan origination and servicing fees from the Company’s subsidiary, OMHHF. The Company has added this business segment due to the significant growth and profitability of this line of business over the last several quarters. In prior periods, this business had been part of the Capital Markets business segment.

The Company does not allocate costs associated with certain infrastructure support groups that are centrally managed for its reportable segments. These areas include, but are not limited to, legal, compliance, operations, accounting, and internal audit. Costs associated with these groups are separately reported in a Corporate/Other category and include, for example, compensation and benefits, rent expense, information technology, legal and professional.

The table below presents information about the reported revenue and net income before taxes of the Company for the three and nine months ended September 30, 2014 and 2013. Asset information by reportable segment is not reported, since the Company does not produce such information for internal use by the chief operating decision maker.

(Expressed in thousands)
	Three Months Ended September 30,						Nine Months Ended September 30,
	2014			2013			2014			2013
Revenue
Private client *	$	142,606		$	144,316		$	435,770		$	430,963
Asset management *	24,801			21,488			74,443			64,450
Capital markets	71,226			68,460			221,324			201,495
Commercial mortgage banking	6,349			9,314			18,179			26,857
Corporate/Other	(303		)	(202		)	(180		)	2,587
Total	$	244,679		$	243,376		$	749,536		$	726,352
Income (loss) before income taxes
Private client *	$	18,898		$	15,088		$	36,766		$	48,113
Asset management *	8,264			6,387			24,300			20,332
Capital markets	5,699			4,301			23,965			8,806
Commercial mortgage banking	1,815			2,823			7,269			7,977
Corporate/Other	(23,780		)	(20,436		)	(76,159		)	(64,678		)
Total	$	10,896		$	8,163		$	16,141		$	20,550

*    Asset management fees are allocated 22.5% to the Asset Management and 77.5% to the Private Client segments.

Revenue, classified by the major geographic areas in which it was earned for the three and nine months ended September 30, 2014 and 2013, was as follows:

(Expressed in thousands)
	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
United States	$	233,846	$	231,777	$	710,198	$	693,251
Europe/Middle East	9,106		9,210		32,983		26,930
Asia	1,256		1,309		5,024		2,843
South America	471		1,080		1,331		3,328
Total	$	244,679	$	243,376	$	749,536	$	726,352