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Segment Information
 9 Months Ended
Sep. 30, 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 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 commission and a proportionate amount of 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 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, 2013 and 2012. 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,		  
     2013     2012     2013     2012  

Revenue

         

Private client division *

    $ 144,316      $ 133,798      $ 430,963      $ 406,530   

Asset management *

      21,488        19,812        64,450        58,848   

Capital markets

      68,460        68,587        201,495        209,477   

Commercial mortgage banking

      9,314        8,738        26,857        27,726   

Corporate/Other

      (202 )      903        2,587        616   
  

 

 

    

 

 

    

 

 

    

 

 

  

Total

    $ 243,376      $ 231,838      $ 726,352      $ 703,197   
  

 

 

    

 

 

    

 

 

    

 

 

  

Income (loss) before income taxes

         

Private client division *

    $ 15,088      $ 11,825      $ 48,113      $ 39,557   

Asset management *

      6,387        4,129        20,332        13,225   

Capital markets

      4,301        3,474        8,806        4,479   

Commercial mortgage banking

      2,823        3,155        7,977        11,985   

Corporate/Other

      (20,436 )      (17,325 )      (64,678 )      (62,638 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Total

    $ 8,163      $ 5,258      $ 20,550      $ 6,608   
  

 

 

    

 

 

    

 

 

    

 

 

  

 

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

Revenue, classified by the major geographic areas in which it was earned for the three and nine months ended September 30, 2013 and 2012, was as follows:

(Expressed in thousands)

 

     Three Months Ended
September 30,		      Nine Months Ended
September 30,		  
     2013      2012      2013      2012  

United States

    $ 231,777       $ 222,226       $ 693,251       $ 670,339   

Europe/Middle East

      9,210         7,475         26,930         26,155   

Asia

      1,309         332         2,843         633   

South America

      1,080         1,805         3,328         6,070   
  

 

 

     

 

 

     

 

 

     

 

 

  

Total

    $ 243,376       $ 231,838       $ 726,352       $ 703,197