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Segment information
 3 Months Ended
Mar. 31, 2013
Segment Reporting [Abstract]  
Segment information

12. 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 segments and allocates resources to them based upon profitability.

Due to the recent growth in the Company’s commercial loan origination and servicing business operated out of OMHHF, the Company has broken out the results of this business in a reportable segment titled “Commercial Mortgage Banking.” This operating 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 CEO 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 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 operating segment.

 

The Company’s segments are:

Private Client—includes commission and fee income earned on client transactions, 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 fees from investment management services of Oppenheimer Asset Management Inc. and Oppenheimer’s asset management divisions employing various programs to professionally manage client assets either in individual accounts or in funds, and 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 to its operating 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 months ended March 31, 2013 and 2012. Asset information by reportable segment is not reported, since the Company does not produce such information for internal use.

 

     Three months ended March 31,  
(expressed in thousands of dollars)    2013     2012  

Revenue

     

Private client division

    $ 143,369      $ 144,263   

Asset management

      20,956        19,044   

Capital markets

      65,131        69,329   

Commercial mortgage banking

      8,066        8,054   

Corporate/Other

      1,624        (2,476 ) 
  

 

 

    

 

 

  

Total

    $ 239,146      $ 238,214   
  

 

 

    

 

 

  

Income (loss) before income taxes

     

Private client division

    $ 17,327      $ 14,962   

Asset management

      6,543        4,990   

Capital markets

      3,533        (1,655 ) 

Commercial mortgage banking

      2,878        3,830   

Corporate/Other

      (23,568 )      (28,616 ) 
  

 

 

    

 

 

  

Total

    $ 6,713      $ (6,489 ) 
  

 

 

    

 

 

  

Revenue, classified by the major geographic areas in which it was earned for the three months ended March 31, 2013 and 2012, was as follows:

 

     Three months ended March 31,  
(expressed in thousands of dollars)    2013      2012  

United States

    $ 228,693       $ 225,635   

Europe/Middle East

      8,403         9,913   

Asia

      825         190   

South America

      1,225         2,476   
  

 

 

     

 

 

  

Total

    $ 239,146       $ 238,214