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Dec 31, 2020
Oppenheimer Q4 2020 Earnings Report
Reported record revenue and earnings, driven by strong performance in Capital Markets and Asset Management segments.
Key Takeaways
Oppenheimer Holdings Inc. reported a significant increase in net income and revenue for the fourth quarter of 2020, driven by record performances in its Capital Markets and Asset Management segments. Net income for the quarter was $81.9 million, or $6.56 basic earnings per share, compared to $25.4 million, or $1.99 basic earnings per share, for the same period in 2019. Revenue for the fourth quarter of 2020 was $422.9 million, a 42.9% increase from $295.9 million in the fourth quarter of 2019.
Record gross revenue achieved for both the fourth quarter and the full year.
Record pre-tax income and net income attained for the fourth quarter and the full year.
Record basic and diluted earnings per share reported for the fourth quarter and the full year.
Shareholders' Equity reached a record of $685.6 million as of December 31, 2020.
Oppenheimer
Oppenheimer
Oppenheimer Revenue by Segment
Revenue by Segment
Capital Markets Revenue
CapyFin.com Forward Guidance
Company anticipates a return to some level of normalcy by the third quarter of 2021 as the rate of vaccination increases in the U.S. and around the world.
Positive Outlook
- Wealth Management business continued to produce solid operating returns based on increased commission activity and higher fee income from assets under management.
- Wealth Management business got a significant boost from the record performance of the hedge funds that we sponsor which led to an increase in incentive fees from alternative investments in the fourth quarter of 2020 which are measured and earned at the end of each year.
- Investment banking had its best quarter ever as the Firm increased its market share during a robust period for equities issuance in the U.S. capital markets.
- M&A activity also picked up significantly during the fourth quarter with several notable advisory and placement fees.
- The broader equities markets finished the year at record levels and were up 11.7% during the fourth quarter contributing to record assets under management at December 31, 2020, which will drive our advisory fee revenue for the first quarter of 2021.
Challenges Ahead
- Non-compensation expenses remained under close control and we were able to manage our operating environment throughout this year of remote work.
- At year-end we continued to operate with about 90% of our employees working from home amid the increase in the reported infection rate from COVID-19.
- Bank deposit sweep income decreased $18.5 million or 81.2% from a year ago due to lower short-term interest rates partially offset by higher average cash sweep balances
- Interest revenue declined 21.2% from a year ago due to lower short-term interest rates partially offset by higher average margin balances
- Financial advisor headcount declined amid increased retirements to 1,002 at the end of the current quarter compared to 1,032 at the end of fourth quarter of 2019