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Segment Information
 3 Months Ended
Mar. 31, 2014
Segment Reporting [Abstract]  
Segment Information
14. 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 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 months ended March 31, 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)             
     For the Three Months Ended March 31,  
     2014     2013  

Revenue

     

Private client division *

    $ 147,820      $ 143,369   

Asset management *

      24,610        20,956   

Capital markets

      77,881        65,131   

Commercial mortgage banking

      4,872        8,066   

Corporate/Other

      (15 )      1,624   
  

 

 

    

 

 

  

Total

    $ 255,168      $ 239,146   
  

 

 

    

 

 

  

Income (loss) before income taxes

     

Private client division *

    $ 10,308      $ 17,327   

Asset management *

      7,683        6,543   

Capital markets

      11,184        3,533   

Commercial mortgage banking

      1,849        2,878   

Corporate/Other

      (25,915 )      (23,568 ) 
  

 

 

    

 

 

  

Total

    $ 5,109      $ 6,713   
  

 

 

    

 

 

  

 

* 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 months ended March 31, 2014 and 2013, was as follows:

 

(Expressed in thousands)              
     For the Three Months Ended March 31,  
     2014      2013  

United States

    $ 239,912       $ 228,693   

Europe/Middle East

      13,837         8,403   

Asia

      1,003         825   

South America

      416         1,225   
  

 

 

     

 

 

  

Total

    $ 255,168       $ 239,146