Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2016 | Apr. 27, 2016 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | PJC | |
Entity Registrant Name | Piper Jaffray Companies | |
Entity Central Index Key | 1,230,245 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 16,094,194 |
Consolidated Statements of Fina
Consolidated Statements of Financial Condition - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Assets | ||
Cash and cash equivalents | $ 49,140 | $ 189,910 |
Cash and cash equivalents segregated for regulatory purposes | 47,042 | 81,022 |
Receivables: | ||
Customers | 29,697 | 41,167 |
Brokers, dealers and clearing organizations | 185,779 | 147,949 |
Securities purchased under agreements to resell | 117,172 | 136,983 |
Financial instruments and other inventory positions owned | 426,042 | 283,579 |
Financial instruments and other inventory positions owned and pledged as collateral | 675,876 | 707,355 |
Total financial instruments and other inventory positions owned | 1,101,918 | 990,934 |
Fixed assets (net of accumulated depreciation and amortization of $61,284 and $51,874, respectively) | 20,815 | 18,984 |
Goodwill | 289,862 | 217,976 |
Intangible assets (net of accumulated amortization of $52,099 and $48,803, respectively) | 41,845 | 30,530 |
Investments | 163,701 | 163,861 |
Other assets | 131,444 | 119,202 |
Total assets | 2,178,415 | 2,138,518 |
Liabilities and Shareholders’ Equity | ||
Short-term financing | 459,043 | 446,190 |
Senior notes | 175,000 | 175,000 |
Payables: | ||
Customers | 44,641 | 37,364 |
Brokers, dealers and clearing organizations | 170,931 | 48,131 |
Securities sold under agreements to repurchase | 51,632 | 45,319 |
Financial instruments and other inventory positions sold, but not yet purchased | 264,653 | 239,155 |
Accrued compensation | 106,075 | 251,638 |
Other liabilities and accrued expenses | 53,503 | 62,901 |
Total liabilities | 1,325,478 | 1,305,698 |
Shareholders’ equity: | ||
Common stock, $0.01 par value: Shares authorized: 100,000,000 at March 31, 2016 and December 31, 2015; Shares issued: 19,512,638 at March 31, 2016 and 19,510,858 at December 31, 2015; Shares outstanding: 13,267,785 at March 31, 2016 and 13,311,016 at December 31, 2015 | 195 | 195 |
Additional paid-in capital | 773,117 | 752,066 |
Retained earnings | 281,577 | 279,140 |
Less common stock held in treasury, at cost: 6,244,853 at March 31, 2016 and 6,199,842 shares at December 31, 2015 | (249,117) | (247,553) |
Accumulated other comprehensive loss | (592) | (189) |
Total common shareholders’ equity | 805,180 | 783,659 |
Noncontrolling interests | 47,757 | 49,161 |
Total shareholders’ equity | 852,937 | 832,820 |
Total liabilities and shareholders’ equity | $ 2,178,415 | $ 2,138,518 |
Consolidated Statements of Fin3
Consolidated Statements of Financial Condition (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Accumulated depreciation and amortization on fixed assets | $ 61,284 | $ 51,874 |
Accumulated amortization on intangible assets | $ 52,099 | $ 48,803 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 19,512,638 | 19,510,858 |
Common stock, shares outstanding | 13,267,785 | 13,311,016 |
Common stock held in treasury, shares | 6,244,853 | 6,199,842 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Revenues: | ||
Investment banking | $ 103,938 | $ 87,077 |
Institutional brokerage | 32,049 | 36,036 |
Asset management | 13,848 | 20,522 |
Interest | 8,829 | 12,205 |
Investment income | 937 | 12,591 |
Total revenues | 159,601 | 168,431 |
Interest expense | 6,045 | 6,560 |
Net revenues | 153,556 | 161,871 |
Non-interest expenses: | ||
Compensation and benefits | 104,436 | 95,857 |
Outside services | 8,451 | 8,184 |
Occupancy and equipment | 7,718 | 6,783 |
Communications | 7,330 | 6,328 |
Marketing and business development | 7,004 | 6,982 |
Trade execution and clearance | 1,762 | 1,997 |
Restructuring and integration costs | 6,773 | 0 |
Intangible asset amortization expense | 3,296 | 1,773 |
Other operating expenses | 3,344 | 2,675 |
Total non-interest expenses | 150,114 | 130,579 |
Income before income tax expense | 3,442 | 31,292 |
Income tax expense | 256 | 9,490 |
Net income | 3,186 | 21,802 |
Net income applicable to noncontrolling interests | 749 | 4,830 |
Net income applicable to Piper Jaffray Companies | 2,437 | 16,972 |
Net income applicable to Piper Jaffray Companies’ common shareholders | $ 2,124 | $ 15,810 |
Earnings per common share | ||
Basic | $ 0.16 | $ 1.03 |
Diluted | $ 0.16 | $ 1.03 |
Weighted average number of common shares outstanding | ||
Basic | 13,160 | 15,294 |
Diluted | 13,172 | 15,332 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 3,186 | $ 21,802 |
Other comprehensive loss, net of tax: | ||
Foreign currency translation adjustment | (403) | (475) |
Comprehensive income | 2,783 | 21,327 |
Comprehensive income applicable to noncontrolling interests | 749 | 4,830 |
Comprehensive income applicable to Piper Jaffray Companies | $ 2,034 | $ 16,497 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Operating Activities: | ||
Net income | $ 3,186 | $ 21,802 |
Adjustments to reconcile net income to net cash used in operating activities: | ||
Depreciation and amortization of fixed assets | 1,458 | 1,215 |
Deferred income taxes | 6,436 | 10,162 |
Stock-based and deferred compensation | 10,064 | 13,756 |
Amortization of intangible assets | 3,296 | 1,773 |
Amortization of forgivable loans | 2,051 | 1,280 |
Decrease/(increase) in operating assets: | ||
Cash and cash equivalents segregated for regulatory purposes | 33,980 | (2,008) |
Receivables: | ||
Customers | 12,748 | (16,842) |
Brokers, dealers and clearing organizations | (36,899) | (41,203) |
Securities purchased under agreements to resell | 17,899 | (77,542) |
Net financial instruments and other inventory positions owned | (85,486) | (90,662) |
Investments | (8,051) | (18,070) |
Other assets | (17,559) | (25,932) |
Payables: | ||
Customers | 7,277 | 21,594 |
Brokers, dealers and clearing organizations | 122,800 | 150,890 |
Securities sold under agreements to repurchase | 2,809 | 0 |
Accrued compensation | (133,238) | (128,977) |
Other liabilities and accrued expenses | (17,075) | 3,633 |
Net cash used in operating activities | (74,304) | (175,131) |
Investing Activities: | ||
Business acquisitions, net of cash acquired | 70,230 | 0 |
Purchases of fixed assets, net | (1,331) | (1,896) |
Net cash used in investing activities | (71,561) | (1,896) |
Financing Activities: | ||
Increase in short-term financing | 12,853 | 139,755 |
Increase in securities sold under agreements to repurchase | 5,416 | 66,581 |
Increase in noncontrolling interests | 7,262 | 1,805 |
Repurchase of common stock | (19,445) | (42,566) |
Excess/(reduced) tax benefit from stock-based compensation, financing activities | (895) | 3,662 |
Proceeds from stock option exercises | 0 | 1,562 |
Net cash provided by financing activities | 5,191 | 170,799 |
Currency adjustment: | ||
Effect of exchange rate changes on cash | (96) | (257) |
Net decrease in cash and cash equivalents | (140,770) | (6,485) |
Cash and cash equivalents at beginning of period | 189,910 | 15,867 |
Cash and cash equivalents at end of period | 49,140 | 9,382 |
Supplemental disclosure of cash flow information – | ||
Interest | 6,067 | 6,427 |
Income taxes | 19,827 | 15,871 |
Non-cash investing and financing activities – | ||
25,525 shares for the three months ended March 31, 2016 | 1,074 | 0 |
843,889 shares and 550,650 shares for the three months ended March 31, 2016 and 2015, respectively | $ 35,089 | $ 30,429 |
Consolidated Statements of Cas7
Consolidated Statements of Cash Flows (Parenthetical) - shares | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Statement of Cash Flows [Abstract] | ||
Issuance of common stock for the acquisition of Simmons & Company International: | 25,525 | 0 |
Issuance of restricted common stock for annual equity award: | 843,889 | 550,650 |
Organization and Basis of Prese
Organization and Basis of Presentation | 3 Months Ended |
Mar. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Basis of Presentation | Organization and Basis of Presentation Organization Piper Jaffray Companies is the parent company of Piper Jaffray & Co. ("Piper Jaffray"), a securities broker dealer and investment banking firm; Piper Jaffray Ltd., a firm providing securities brokerage and mergers and acquisitions services in Europe headquartered in London, England; Simmons & Company International Limited ("SCIL"), a firm providing mergers and acquisitions services to the energy industry headquartered in Aberdeen, Scotland; Advisory Research, Inc. ("ARI"), which provides asset management services to separately managed accounts, closed-end and open-end funds and partnerships; Piper Jaffray Investment Group Inc., which consists of entities providing alternative asset management services; Piper Jaffray Financial Products Inc., Piper Jaffray Financial Products II Inc. and Piper Jaffray Financial Products III Inc., entities that facilitate derivative transactions; and other immaterial subsidiaries. Piper Jaffray Companies and its subsidiaries (collectively, the "Company") operate in two reporting segments: Capital Markets and Asset Management. A summary of the activities of each of the Company’s business segments is as follows: Capital Markets The Capital Markets segment provides institutional sales, trading and research services and investment banking services. Institutional sales, trading and research services focus on the trading of equity and fixed income products with institutions, government and non-profit entities. Revenues are generated through commissions and sales credits earned on equity and fixed income institutional sales activities, net interest revenues on trading securities held in inventory, and profits and losses from trading these securities. Investment banking services include management of and participation in underwritings, merger and acquisition services and public finance activities. Revenues are generated through the receipt of advisory and financing fees. Also, the Company generates revenue through strategic trading and investing activities, which focus on investments in municipal bonds, mortgage-backed securities, U.S. government agency securities, and merchant banking activities involving equity or debt investments in late stage private companies. The Company has created alternative asset management funds in energy, merchant banking and senior living in order to invest firm capital and to manage capital from outside investors. The Company receives management and performance fees for managing these funds. Asset Management The Asset Management segment provides traditional asset management services with product offerings in equity securities and master limited partnerships to institutions and individuals. Revenues are generated in the form of management and performance fees. Revenues are also generated through investments in the partnerships and funds that the Company manages. Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") for interim financial information and the rules and regulations of the Securities and Exchange Commission ("SEC"). Pursuant to this guidance, certain information and disclosures have been omitted that are included within complete annual financial statements. Except as disclosed herein, there have been no material changes in the information reported in the financial statements and related disclosures in the Company's Annual Report on Form 10-K for the year ended December 31, 2015 . The consolidated financial statements include the accounts of Piper Jaffray Companies, its wholly owned subsidiaries, and all other entities in which the Company has a controlling financial interest. Noncontrolling interests represent equity interests in consolidated entities that are not attributable, either directly or indirectly, to Piper Jaffray Companies. Noncontrolling interests include the minority equity holders’ proportionate share of the equity in the Company's alternative asset management funds. All material intercompany balances have been eliminated. Management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates and assumptions are based on the best information available, actual results could differ from those estimates. |
Accounting Policies and Pronoun
Accounting Policies and Pronouncements | 3 Months Ended |
Mar. 31, 2016 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Accounting Policies and Pronouncements | Accounting Policies and Pronouncements Summary of Significant Accounting Policies Refer to the Company's Annual Report on Form 10-K for the year ended December 31, 2015 for a full description of the Company's significant accounting policies. Changes to the Company's significant accounting policies are described below. Principles of Consolidation The Company consolidates entities in which it has a controlling financial interest. The Company determines whether it has a controlling financial interest in an entity by first evaluating whether the entity is a variable interest entity ("VIE") or a voting interest entity. VIEs are entities in which (i) the total equity investment at risk is not sufficient to enable the entity to finance its activities independently or (ii) the at-risk equity holders do not have the normal characteristics of a controlling financial interest. A controlling financial interest in a VIE is present when an enterprise has one or more variable interests that have both (i) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. The enterprise with a controlling financial interest is the primary beneficiary and consolidates the VIE. Voting interest entities lack one or more of the characteristics of a VIE. The usual condition for a controlling financial interest is ownership of a majority voting interest for a corporation or a majority of kick-out rights for a limited partnership. When the Company does not have a controlling financial interest in an entity but exerts significant influence over the entity’s operating and financial policies (generally defined as owning a voting or economic interest of between 20 percent to 50 percent), the Company's investment is accounted for under the equity method of accounting. If the Company does not have a controlling financial interest in, or exert significant influence over, an entity, the Company accounts for its investment at fair value, if the fair value option was elected, or at cost. Adoption of New Accounting Standards Consolidation In February 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standard Update ("ASU") No. 2015-02, "Consolidation (Topic 810): Amendments to the Consolidation Analysis" ("ASU 2015-02"). ASU 2015-02 makes several modifications to the consolidation guidance for VIEs and general partners' investments in limited partnerships, as well as modifications to the evaluation of whether limited partnerships are VIEs or voting interest entities. It was effective for the Company as of January 1, 2016. The adoption of ASU 2015-02 resulted in the deconsolidation of certain investment partnerships with assets (and the related noncontrolling interests) of approximately $9.4 million . There was no impact to the Company’s retained earnings upon adoption. In addition, certain entities previously consolidated as voting interest entities became consolidated VIEs under the amended guidance. Future Adoption of New Applicable Accounting Standards Revenue Recognition In May 2014, the FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers (Topic 606)," ("ASU 2014-09") which supersedes current revenue recognition guidance, including most industry-specific guidance. ASU 2014-09 requires a company to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods and services, and also requires additional disclosures regarding the nature, amount, timing and uncertainty of revenue that is recognized. The guidance, as stated in ASU 2014-09, is effective for annual and interim periods beginning after December 15, 2016. In August 2015, the FASB issued ASU No. 2015-14, "Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date," which defers the effective date by one year, with early adoption on the original effective date permitted. The FASB has subsequently issued various ASUs which amend specific areas of guidance in ASU 2014-09. The Company is evaluating the impact of the new guidance on its consolidated financial statements. Recognition and Measurement of Financial Assets and Financial Liabilities In January 2016, the FASB issued ASU No. 2016-01, "Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities" ("ASU 2016-01"). The amendments in ASU 2016-01 address certain aspects of the recognition, measurement, presentation and disclosure of financial instruments. ASU 2016-01 is effective for annual and interim periods beginning after December 15, 2017. Except for the early application guidance outlined in ASU 2016-01, early adoption is not permitted. The Company is evaluating the impact of the new guidance on its consolidated financial statements. Leases In February 2016, the FASB issued ASU No. 2016-02, "Leases (Topic 842)" ("ASU 2016-02"). ASU 2016-02 requires lessees to recognize a right-of-use asset and lease liability on the consolidated statements of financial position and disclose key information about leasing arrangements. The recognition, measurement and presentation of expenses and cash flows arising from a lease by a lessee have not significantly changed from current U.S. GAAP. ASU 2016-02 is effective for annual and interim periods beginning after December 15, 2018. The Company is evaluating the impact of the new guidance on its consolidated financial statements. Stock-Based Compensation In March 2016, the FASB issued ASU No. 2016-09, "Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting" ("ASU 2016-09"). ASU 2016-09 makes targeted amendments to the accounting for share-based payments to employees. Under ASU 2016-09, entities will be required to recognize the income tax effects of awards in the income statement when the awards vest or are settled, rather than as additional paid-in-capital. As of March 31, 2016 , the Company had $6.1 million of excess tax benefits recorded as additional paid-in-capital. ASU 2016-09 also amends the guidance regarding the employer’s statutory income tax withholding requirements and allows an entity to make an accounting policy election for forfeitures. ASU 2016-09 is effective for annual and interim periods beginning after December 15, 2016. The Company is evaluating the impact of the new guidance on its consolidated financial statements. |
Acquisitions
Acquisitions | 3 Months Ended |
Mar. 31, 2016 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions The following acquisitions were accounted for pursuant to FASB Accounting Standards Codification Topic 805, "Business Combinations." Accordingly, the purchase price of each acquisition was allocated to the acquired assets and liabilities assumed based on their estimated fair values as of the respective acquisition dates. The excess of the purchase price over the net assets acquired was allocated between goodwill and intangible assets within the Capital Markets segment. Simmons & Company International On February 26, 2016 , the Company completed the purchase of Simmons & Company International ("Simmons"), an employee-owned investment bank and broker dealer focused on the energy industry. The economic value of the acquisition was approximately $140.0 million and was completed pursuant to the Securities Purchase Agreement dated November 16, 2015 , as amended. The acquisition of Simmons supports the Company's strategy to expand its investment banking business into the energy sector and also grow its advisory business. The Company acquired net assets with a fair value of $118.5 million as described below. As part of the purchase price, the Company issued 1,149,340 restricted shares valued at $48.2 million as equity consideration on the acquisition date. These restricted shares cliff vest after three years , and the employees must fulfill service requirements in exchange for the rights to the shares. Compensation expense will be amortized on a straight-line basis over the requisite service period of one or three years (a weighted average service period of 2.7 years ). The fair value of the restricted stock was determined using the market price of the Company's common stock on the date of the acquisition. The Company also entered into acquisition-related compensation arrangements with certain employees of $20.6 million which consisted of cash ( $9.0 million ) and restricted stock ( $11.6 million ) for retention purposes. Compensation expense related to these arrangements will be amortized on a straight-line basis over the requisite service period of three years . Additional cash compensation may be available to certain investment banking employees subject to exceeding an investment banking revenue threshold during the three year post-acquisition period to the extent they are employed by the Company at the time of payment. Amounts estimated to be payable, if any, related to this performance award plan will be recorded as compensation expense on the consolidated statements of operations over the requisite performance period of three years . The Company recorded $71.9 million of goodwill on the consolidated statements of financial condition, of which $61.7 million is expected to be deductible for income tax purposes. The final goodwill recorded on the Company's consolidated statements of financial condition may differ from that reflected herein as a result of measurement period adjustments. In management's opinion, the goodwill represents the reputation and operating expertise of Simmons. Identifiable intangible assets purchased by the Company consisted of customer relationships and the Simmons trade name with acquisition-date fair values currently estimated to be $13.8 million and $0.8 million , respectively. The Company anticipates finalizing the fair value of Simmons intangible assets in the second quarter of 2016. Transaction costs of $0.5 million were incurred for the three months ended March 31, 2016 , and are included in restructuring and integration costs on the consolidated statements of operations. The following table summarizes the estimated fair values of assets acquired and liabilities assumed at the date of the acquisition: (Dollars in thousands) Assets: Cash and cash equivalents $ 47,201 Receivables: Customers 1,278 Brokers, dealers and clearing organizations 931 Fixed assets 1,981 Goodwill 71,900 Intangible assets 14,597 Investments 995 Other assets 3,599 Total assets acquired 142,482 Liabilities: Accrued compensation 16,284 Other liabilities and accrued expenses 7,693 Total liabilities assumed 23,977 Net assets acquired $ 118,505 Simmons’ results of operations have been included in the Company's consolidated financial statements prospectively beginning on the date of acquisition. The acquisition has been fully integrated with the Company's existing operations. Accordingly, post-acquisition revenues and net income are not discernible. The following unaudited pro forma financial data assumes the acquisition had occurred at the beginning of the comparable prior period presented. Pro forma results have been prepared by adjusting the Company's historical results to include Simmons' results of operations adjusted for the following changes: amortization expense was adjusted to account for the acquisition-date fair value of intangible assets; compensation and benefits expenses were adjusted to reflect such expenses based on the Company’s compensation arrangements and the restricted stock issued as equity consideration; and the income tax effect of applying the Company's statutory tax rates to Simmons’ results of operations. The consolidated Company's unaudited pro forma information presented does not necessarily reflect the results of operations that would have resulted had the acquisition been completed at the beginning of the applicable periods presented, does not contemplate anticipated operational efficiencies of the combined entities, nor does it indicate the results of operations in future periods. Three Months Ended March 31, (Dollars in thousands) 2016 2015 Net revenues $ 161,353 $ 187,982 Net income/(loss) applicable to Piper Jaffray Companies (222 ) 15,490 River Branch Holdings LLC and BMO Capital Markets GKST Inc. On September 30, 2015 , the Company acquired the assets of River Branch Holdings LLC ("River Branch"), an equity investment banking boutique focused on the financial institutions sector. The purchase was completed pursuant to the Asset Purchase Agreement dated July 11, 2015 . On October 9, 2015 , the Company completed the purchase of BMO Capital Markets GKST Inc. ("BMO GKST"), a municipal bond sales, trading and origination business of BMO Financial Corp. The purchase was completed pursuant to the Stock Purchase Agreement dated July 19, 2015 . The Company recorded $6.1 million of goodwill on the consolidated statements of financial condition related to these acquisitions and $7.5 million of identifiable intangible assets consisting of customer relationships. In management's opinion, the goodwill represents the reputation and operating expertise of River Branch and BMO GKST. The results of operations of River Branch and BMO GKST have been included in the Company's consolidated financial statements prospectively from the respective dates of acquisition. The terms of these transactions were not disclosed as the acquisitions did not have a material impact on the Company's consolidated financial statements. |
Financial Instruments and Other
Financial Instruments and Other Inventory Positions Owned and Financial Instruments and Other Inventory Positions Sold, but Not Yet Purchased | 3 Months Ended |
Mar. 31, 2016 | |
Financial Instruments Owned and Sold, Not yet Purchased [Abstract] | |
Financial Instruments and Other Inventory Positions Owned and Financial Instruments and Other Inventory Positions Sold, Not Yet Purchased | Financial Instruments and Other Inventory Positions Owned and Financial Instruments and Other Inventory Positions Sold, but Not Yet Purchased March 31, December 31, (Dollars in thousands) 2016 2015 Financial instruments and other inventory positions owned: Corporate securities: Equity securities $ 4,791 $ 9,505 Convertible securities 17,039 18,460 Fixed income securities 59,735 48,654 Municipal securities: Taxable securities 125,692 111,591 Tax-exempt securities 509,219 416,966 Short-term securities 72,164 33,068 Mortgage-backed securities 117,891 121,794 U.S. government agency securities 155,894 188,140 U.S. government securities — 7,729 Derivative contracts 39,493 35,027 Total financial instruments and other inventory positions owned 1,101,918 990,934 Less noncontrolling interests (1) (54,047 ) (43,397 ) $ 1,047,871 $ 947,537 Financial instruments and other inventory positions sold, but not yet purchased: Corporate securities: Equity securities $ 21,949 $ 15,740 Fixed income securities 43,553 39,909 U.S. government agency securities 13,584 21,267 U.S. government securities 180,462 159,037 Derivative contracts 5,105 3,202 Total financial instruments and other inventory positions sold, but not yet purchased 264,653 239,155 Less noncontrolling interests (2) (11,457 ) (4,586 ) $ 253,196 $ 234,569 (1) Noncontrolling interests attributable to third party ownership in a consolidated municipal bond fund consist of $12.5 million and $7.5 million of taxable municipal securities, $40.6 million and $35.1 million of tax-exempt municipal securities, and $0.9 million and $0.8 million of derivative contracts as of March 31, 2016 and December 31, 2015 , respectively. (2) Noncontrolling interests attributable to third party ownership in a consolidated municipal bond fund consist of U.S. government securities as of March 31, 2016 and December 31, 2015 . At March 31, 2016 and December 31, 2015 , financial instruments and other inventory positions owned in the amount of $675.9 million and $707.4 million , respectively, had been pledged as collateral for short-term financings and repurchase agreements. Financial instruments and other inventory positions sold, but not yet purchased represent obligations of the Company to deliver the specified security at the contracted price, thereby creating a liability to purchase the security in the market at prevailing prices. The Company is obligated to acquire the securities sold short at prevailing market prices, which may exceed the amount reflected on the consolidated statements of financial condition. The Company economically hedges changes in the market value of its financial instruments and other inventory positions owned using inventory positions sold, but not yet purchased, interest rate derivatives, credit default swap index contracts, U.S. treasury bond and Eurodollar futures and exchange traded options. Derivative Contract Financial Instruments The Company uses interest rate swaps, interest rate locks, credit default swap index contracts, U.S. treasury bond and Eurodollar futures and equity option contracts as a means to manage risk in certain inventory positions. The Company also enters into interest rate swaps to facilitate customer transactions. The following describes the Company’s derivatives by the type of transaction or security the instruments are economically hedging. Customer matched-book derivatives: The Company enters into interest rate derivative contracts in a principal capacity as a dealer to satisfy the financial needs of its customers. The Company simultaneously enters into an interest rate derivative contract with a third party for the same notional amount to hedge the interest rate and credit risk of the initial client interest rate derivative contract. In certain limited instances, the Company has only hedged interest rate risk with a third party, and retains uncollateralized credit risk as described below. The instruments use interest rates based upon either the London Interbank Offer Rate (“LIBOR”) index or the Securities Industry and Financial Markets Association (“SIFMA”) index. Trading securities derivatives: The Company enters into interest rate derivative contracts and uses U.S. treasury bond and Eurodollar futures to hedge interest rate and market value risks associated with its fixed income securities. These instruments use interest rates based upon either the Municipal Market Data (“MMD”) index, LIBOR or the SIFMA index. The Company also enters into credit default swap index contracts to hedge credit risk associated with its taxable fixed income securities and option contracts to hedge market value risk associated with its convertible securities. Derivatives are reported on a net basis by counterparty (i.e., the net payable or receivable for derivative assets and liabilities for a given counterparty) when a legal right of offset exists and on a net basis by cross product when applicable provisions are stated in master netting agreements. Cash collateral received or paid is netted on a counterparty basis, provided a legal right of offset exists. The total absolute notional contract amount, representing the absolute value of the sum of gross long and short derivative contracts, provides an indication of the volume of the Company's derivative activity and does not represent gains and losses. The following table presents the gross fair market value and the total absolute notional contract amount of the Company's outstanding derivative instruments, prior to counterparty netting, by asset or liability position: March 31, 2016 December 31, 2015 (Dollars in thousands) Derivative Derivative Notional Derivative Derivative Notional Derivative Category Assets (1) Liabilities (2) Amount Assets (1) Liabilities (2) Amount Interest rate Customer matched-book $ 445,897 $ 425,503 $ 3,989,068 $ 406,888 $ 386,284 $ 4,392,440 Trading securities 5 6,907 301,800 — 7,685 290,600 Credit default swap index Trading securities 4,905 1,341 116,902 5,411 530 94,270 Futures and equity options Trading securities 502 — 12,925,612 164 149 2,345,037 $ 451,309 $ 433,751 $ 17,333,382 $ 412,463 $ 394,648 $ 7,122,347 (1) Derivative assets are included within financial instruments and other inventory positions owned on the consolidated statements of financial condition. (2) Derivative liabilities are included within financial instruments and other inventory positions sold, but not yet purchased on the consolidated statements of financial condition. The Company’s derivative contracts do not qualify for hedge accounting, therefore, unrealized gains and losses are recorded on the consolidated statements of operations. The gains and losses on the related economically hedged inventory positions are not disclosed below as they are not in qualifying hedging relationships. The following table presents the Company’s unrealized gains/(losses) on derivative instruments: Three Months Ended (Dollars in thousands) March 31, Derivative Category Operations Category 2016 2015 Interest rate derivative contract Investment banking $ (1,172 ) $ (520 ) Interest rate derivative contract Institutional brokerage 1,744 679 Credit default swap index contract Institutional brokerage 389 4,607 Futures and equity option derivative contracts Institutional brokerage 29 35 $ 990 $ 4,801 Credit risk associated with the Company’s derivatives is the risk that a derivative counterparty will not perform in accordance with the terms of the applicable derivative contract. Credit exposure associated with the Company’s derivatives is driven by uncollateralized market movements in the fair value of the contracts with counterparties and is monitored regularly by the Company’s financial risk committee. The Company considers counterparty credit risk in determining derivative contract fair value. The majority of the Company’s derivative contracts are substantially collateralized by its counterparties, who are major financial institutions. The Company has a limited number of counterparties who are not required to post collateral. Based on market movements, the uncollateralized amounts representing the fair value of the derivative contract can become material, exposing the Company to the credit risk of these counterparties. As of March 31, 2016 , the Company had $28.2 million of uncollateralized credit exposure with these counterparties (notional contract amount of $186.1 million ), including $20.0 million of uncollateralized credit exposure with one counterparty. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Based on the nature of the Company’s business and its role as a “dealer” in the securities industry or as a manager of alternative asset management funds, the fair values of its financial instruments are determined internally. The Company’s processes are designed to ensure that the fair values used for financial reporting are based on observable inputs wherever possible. In the event that observable inputs are not available, unobservable inputs are developed based on an evaluation of all relevant empirical market data, including prices evidenced by market transactions, interest rates, credit spreads, volatilities and correlations and other security-specific information. Valuation adjustments related to illiquidity or counterparty credit risk are also considered. In estimating fair value, the Company may utilize information provided by third party pricing vendors to corroborate internally-developed fair value estimates. The Company employs specific control processes to determine the reasonableness of the fair value of its financial instruments. The Company’s processes are designed to ensure that the internally-estimated fair values are accurately recorded and that the data inputs and the valuation techniques used are appropriate, consistently applied, and that the assumptions are reasonable and consistent with the objective of determining fair value. Individuals outside of the trading departments perform independent pricing verification reviews as of each reporting date. The Company has established parameters which set forth when the fair value of securities are independently verified. The selection parameters are generally based upon the type of security, the level of estimation risk of a security, the materiality of the security to the Company’s financial statements, changes in fair value from period to period, and other specific facts and circumstances of the Company’s securities portfolio. In evaluating the initial internally-estimated fair values made by the Company’s traders, the nature and complexity of securities involved (e.g., term, coupon, collateral, and other key drivers of value), level of market activity for securities, and availability of market data are considered. The independent price verification procedures include, but are not limited to, analysis of trade data (both internal and external where available), corroboration to the valuation of positions with similar characteristics, risks and components, or comparison to an alternative pricing source, such as a discounted cash flow model. The Company’s valuation committee, comprised of members of senior management and risk management, provides oversight and overall responsibility for the internal control processes and procedures related to fair value measurements. The following is a description of the valuation techniques used to measure fair value. Cash Equivalents Cash equivalents include highly liquid investments with original maturities of 90 days or less. Actively traded money market funds are measured at their net asset value and classified as Level I. Financial Instruments and Other Inventory Positions Owned The Company records financial instruments and other inventory positions owned and financial instruments and other inventory positions sold, but not yet purchased at fair value on the consolidated statements of financial condition with unrealized gains and losses reflected on the consolidated statements of operations. Equity securities – Exchange traded equity securities are valued based on quoted prices from the exchange for identical assets or liabilities as of the period-end date. To the extent these securities are actively traded and valuation adjustments are not applied, they are categorized as Level I. Non-exchange traded equity securities (principally hybrid preferred securities) are measured primarily using broker quotations, prices observed for recently executed market transactions and internally-developed fair value estimates based on observable inputs and are categorized within Level II of the fair value hierarchy. Convertible securities – Convertible securities are valued based on observable trades, when available. Accordingly, these convertible securities are categorized as Level II. Corporate fixed income securities – Fixed income securities include corporate bonds which are valued based on recently executed market transactions of comparable size, internally-developed fair value estimates based on observable inputs, or broker quotations. Accordingly, these corporate bonds are categorized as Level II. Taxable municipal securities – Taxable municipal securities are valued using recently executed observable trades or market price quotations and therefore are generally categorized as Level II. Certain illiquid taxable municipal securities are valued using market data for comparable securities (maturity and sector) and management judgment to infer an appropriate current yield or other model-based valuation techniques deemed appropriate by management based on the specific nature of the individual security and are therefore categorized as Level III. Tax-exempt municipal securities – Tax-exempt municipal securities are valued using recently executed observable trades or market price quotations and therefore are generally categorized as Level II. Certain illiquid tax-exempt municipal securities are valued using market data for comparable securities (maturity and sector) and management judgment to infer an appropriate current yield or other model-based valuation techniques deemed appropriate by management based on the specific nature of the individual security and are therefore categorized as Level III. Short-term municipal securities – Short-term municipal securities include auction rate securities, variable rate demand notes, and other short-term municipal securities. Variable rate demand notes and other short-term municipal securities are valued using recently executed observable trades or market price quotations and therefore are generally categorized as Level II. Auction rate securities with limited liquidity are categorized as Level III and are valued using discounted cash flow models with unobservable inputs such as the Company’s expected recovery rate on the securities. Mortgage-backed securities – Mortgage-backed securities are valued using observable trades, when available. Certain mortgage-backed securities are valued using models where inputs to the model are directly observable in the market, or can be derived principally from or corroborated by observable market data. These mortgage-backed securities are categorized as Level II. Other mortgage-backed securities, which are principally collateralized by residential mortgages, have experienced low volumes of executed transactions resulting in less observable transaction data. Certain mortgage-backed securities collateralized by residential mortgages are valued using cash flow models that utilize unobservable inputs including credit default rates, prepayment rates, loss severity and valuation yields. As judgment is used to determine the range of these inputs, these mortgage-backed securities are categorized as Level III. U.S. government agency securities – U.S. government agency securities include agency debt bonds and mortgage bonds. Agency debt bonds are valued by using either direct price quotes or price quotes for comparable bond securities and are categorized as Level II. Mortgage bonds include bonds secured by mortgages, mortgage pass-through securities, agency collateralized mortgage-obligation (“CMO”) securities and agency interest-only securities. Mortgage pass-through securities, CMO securities and interest-only securities are valued using recently executed observable trades or other observable inputs, such as prepayment speeds and therefore are generally categorized as Level II. Mortgage bonds are valued using observable market inputs, such as market yields ranging from 180 - 300 basis points (“bps”) on spreads over U.S. treasury securities, or models based upon prepayment expectations ranging from 8% - 20% conditional prepayment rate (“CPR”). These securities are categorized as Level II. U.S. government securities – U.S. government securities include highly liquid U.S. treasury securities which are generally valued using quoted market prices and therefore categorized as Level I. The Company does not transact in securities of countries other than the U.S. government. Derivatives – Derivative contracts include interest rate swaps, interest rate locks, credit default swap index contracts, U.S. treasury bond and Eurodollar futures and equity option contracts. These instruments derive their value from underlying assets, reference rates, indices or a combination of these factors. The Company's equity option derivative contracts are valued based on quoted prices from the exchange for identical assets or liabilities as of the period-end date. To the extent these contracts are actively traded and valuation adjustments are not applied, they are categorized as Level I. The Company’s credit default swap index contracts are valued using market price quotations and are classified as Level II. The majority of the Company’s interest rate derivative contracts, including both interest rate swaps and interest rate locks, are valued using market standard pricing models based on the net present value of estimated future cash flows. The valuation models used do not involve material subjectivity as the methodologies do not entail significant judgment and the pricing inputs are market observable, including contractual terms, yield curves and measures of volatility. These instruments are classified as Level II within the fair value hierarchy. Certain interest rate locks transact in less active markets and were valued using valuation models that included the previously mentioned observable inputs and certain unobservable inputs that required significant judgment, such as the premium over the MMD curve. These instruments are classified as Level III. Investments The Company’s investments valued at fair value include equity investments in private companies and partnerships, investments in registered mutual funds, warrants of public and private companies and private company debt. Investments in registered mutual funds are valued based on quoted prices on active markets and classified as Level I. Company-owned warrants, which have a cashless exercise option, are valued based upon the Black-Scholes option-pricing model and certain unobservable inputs. The Company applies a liquidity discount to the value of its warrants in public and private companies. For warrants in private companies, valuation adjustments, based upon management’s judgment, are made to account for differences between the measured security and the stock volatility factors of comparable companies. Company-owned warrants are reported as Level III assets. Investments in private companies are valued based on an assessment of each underlying security, considering rounds of financing, third party transactions and market-based information, including comparable company transactions, trading multiples (e.g., multiples of revenue and earnings before interest, taxes, depreciation and amortization ("EBITDA")) and changes in market outlook, among other factors. These securities are generally categorized as Level III. Fair Value Option – The fair value option permits the irrevocable fair value option election on an instrument-by-instrument basis at initial recognition of an asset or liability or upon an event that gives rise to a new basis of accounting for that instrument. The fair value option was elected for certain merchant banking and other investments at inception to reflect economic events in earnings on a timely basis. Merchant banking and other equity investments of $18.2 million and $19.7 million , included within investments on the consolidated statements of financial condition, are accounted for at fair value and are classified as Level III assets at March 31, 2016 and December 31, 2015 , respectively. The realized and unrealized gains from fair value changes included in earnings as a result of electing to apply the fair value option to certain financial assets were $0.3 million and $0.8 million for the three months ended March 31, 2016 and 2015 , respectively. The following table summarizes quantitative information about the significant unobservable inputs used in the fair value measurement of the Company’s Level III financial instruments as of March 31, 2016 : Valuation Weighted Technique Unobservable Input Range Average Assets: Financial instruments and other inventory positions owned: Municipal securities: Tax-exempt securities Discounted cash flow Debt service coverage ratio (2) 5 - 60% 19.4% Short-term securities Discounted cash flow Expected recovery rate (% of par) (2) 66 - 94% 91.0% Mortgage-backed securities: Collateralized by residential mortgages Discounted cash flow Credit default rates (3) 2 - 8% 4.2% Prepayment rates (4) 3 - 25% 7.9% Loss severity (3) 20 - 95% 65.8% Valuation yields (3) 2 - 7% 5.0% Derivative contracts: Interest rate locks Discounted cash flow Premium over the MMD curve (1) 6.5 bps 6.5 bps Investments at fair value: Equity securities in private companies Market approach Revenue multiple (2) 2 - 5 times 4.0 times EBITDA multiple (2) 10 - 12 times 10.4 times Liabilities: Financial instruments and other inventory positions sold, but not yet purchased: Derivative contracts: Interest rate locks Discounted cash flow Premium over the MMD curve (1) 3 - 51 bps 15.3 bps Sensitivity of the fair value to changes in unobservable inputs: (1) Significant increase/(decrease) in the unobservable input in isolation would result in a significantly lower/(higher) fair value measurement. (2) Significant increase/(decrease) in the unobservable input in isolation would result in a significantly higher/(lower) fair value measurement. (3) Significant changes in any of these inputs in isolation could result in a significantly different fair value. Generally, a change in the assumption used for credit default rates is accompanied by a directionally similar change in the assumption used for the loss severity and a directionally inverse change in the assumption for valuation yields. (4) The potential impact of changes in prepayment rates on fair value is dependent on other security-specific factors, such as the par value and structure. Changes in the prepayment rates may result in directionally similar or directionally inverse changes in fair value depending on whether the security trades at a premium or discount to the par value. The following table summarizes the valuation of the Company’s financial instruments by pricing observability levels defined in FASB Accounting Standards Codification Topic 820, "Fair Value Measurement" ("ASC 820") as of March 31, 2016 : Counterparty and Cash Collateral (Dollars in thousands) Level I Level II Level III Netting (1) Total Assets: Financial instruments and other inventory positions owned: Corporate securities: Equity securities $ 4,031 $ 760 $ — $ — $ 4,791 Convertible securities — 17,039 — — 17,039 Fixed income securities — 59,735 — — 59,735 Municipal securities: Taxable securities — 125,692 — — 125,692 Tax-exempt securities — 508,042 1,177 — 509,219 Short-term securities — 71,416 748 — 72,164 Mortgage-backed securities — — 117,891 — 117,891 U.S. government agency securities — 155,894 — — 155,894 Derivative contracts 87 451,217 5 (411,816 ) 39,493 Total financial instruments and other inventory positions owned 4,118 1,389,795 119,821 (411,816 ) 1,101,918 Cash equivalents 766 — — — 766 Investments at fair value 36,922 — 110,477 — 147,399 Total assets $ 41,806 $ 1,389,795 $ 230,298 $ (411,816 ) $ 1,250,083 Liabilities: Financial instruments and other inventory positions sold, but not yet purchased: Corporate securities: Equity securities $ 17,837 $ 4,112 $ — $ — $ 21,949 Fixed income securities — 43,553 — — 43,553 U.S. government agency securities — 13,584 — — 13,584 U.S. government securities 180,462 — — — 180,462 Derivative contracts — 428,343 5,408 (428,646 ) 5,105 Total financial instruments and other inventory positions sold, but not yet purchased $ 198,299 $ 489,592 $ 5,408 $ (428,646 ) $ 264,653 (1) Represents cash collateral and the impact of netting on a counterparty basis. The Company had no securities posted as collateral to its counterparties. The following table summarizes the valuation of the Company’s financial instruments by pricing observability levels defined in ASC 820 as of December 31, 2015 : Counterparty and Cash Collateral (Dollars in thousands) Level I Level II Level III Netting (1) Total Assets: Financial instruments and other inventory positions owned: Corporate securities: Equity securities $ 7,569 $ 1,936 $ — $ — $ 9,505 Convertible securities — 18,460 — — 18,460 Fixed income securities — 48,654 — — 48,654 Municipal securities: Taxable securities — 105,775 5,816 — 111,591 Tax-exempt securities — 415,789 1,177 — 416,966 Short-term securities — 32,348 720 — 33,068 Mortgage-backed securities — 670 121,124 — 121,794 U.S. government agency securities — 188,140 — — 188,140 U.S. government securities 7,729 — — — 7,729 Derivative contracts 164 412,299 — (377,436 ) 35,027 Total financial instruments and other inventory positions owned 15,462 1,224,071 128,837 (377,436 ) 990,934 Cash equivalents 130,138 — — — 130,138 Investments at fair value 34,874 — 107,907 — 142,781 Total assets $ 180,474 $ 1,224,071 $ 236,744 $ (377,436 ) $ 1,263,853 Liabilities: Financial instruments and other inventory positions sold, but not yet purchased: Corporate securities: Equity securities $ 13,489 $ 2,251 $ — $ — $ 15,740 Fixed income securities — 39,909 — — 39,909 U.S. government agency securities — 21,267 — — 21,267 U.S. government securities 159,037 — — — 159,037 Derivative contracts 149 387,351 7,148 (391,446 ) 3,202 Total financial instruments and other inventory positions sold, but not yet purchased $ 172,675 $ 450,778 $ 7,148 $ (391,446 ) $ 239,155 (1) Represents cash collateral and the impact of netting on a counterparty basis. The Company had no securities posted as collateral to its counterparties. The Company’s Level III assets were $230.3 million and $236.7 million , or 18.4 percent and 18.7 percent of financial instruments measured at fair value at March 31, 2016 and December 31, 2015 , respectively. The value of transfers between levels are recognized at the beginning of the reporting period. There were $14.3 million of transfers of financial assets out of Level III for the three months ended March 31, 2016 , of which $9.1 million primarily related to the deconsolidation of certain investment partnerships as discussed in Note 2, and $5.2 million related to taxable municipal securities for which valuation inputs became observable. There were no other significant transfers between Level I, Level II or Level III for the three months ended March 31, 2016. The following tables summarize the changes in fair value associated with Level III financial instruments held at the beginning or end of the periods presented: Unrealized gains/ (losses) for assets/ Balance at Realized Unrealized Balance at liabilities held at December 31, Transfers Transfers gains/ gains/ March 31, March 31, (Dollars in thousands) 2015 Purchases Sales in out (losses) (1) (losses) (1) 2016 2016 (1) Assets: Financial instruments and other inventory positions owned: Municipal securities: Taxable securities $ 5,816 $ — $ (611 ) $ — $ (5,216 ) $ 11 $ — $ — $ — Tax-exempt securities 1,177 — — — — — — 1,177 — Short-term securities 720 — — — — — 28 748 28 Mortgage-backed securities 121,124 26,519 (27,213 ) — — 1,067 (3,606 ) 117,891 (730 ) Derivative contracts — — — — — — 5 5 5 Total financial instruments and other inventory positions owned 128,837 26,519 (27,824 ) — (5,216 ) 1,078 (3,573 ) 119,821 (697 ) Investments at fair value 107,907 9,301 — — (9,088 ) — 2,357 110,477 2,357 Total assets $ 236,744 $ 35,820 $ (27,824 ) $ — $ (14,304 ) $ 1,078 $ (1,216 ) $ 230,298 $ 1,660 Liabilities: Financial instruments and other inventory positions sold, but not yet purchased: Derivative contracts $ 7,148 $ — $ (9,882 ) $ — $ — $ 9,882 $ (1,740 ) $ 5,408 $ 4,534 Total financial instruments and other inventory positions sold, but not yet purchased $ 7,148 $ — $ (9,882 ) $ — $ — $ 9,882 $ (1,740 ) $ 5,408 $ 4,534 (1) Realized and unrealized gains/(losses) related to financial instruments, with the exception of customer matched-book derivatives, are reported in institutional brokerage on the consolidated statements of operations. Realized and unrealized gains/(losses) related to customer matched-book derivatives are reported in investment banking. Realized and unrealized gains/(losses) related to investments are reported in investment banking revenues or investment income on the consolidated statements of operations. Unrealized gains/ (losses) for assets/ Balance at Realized Unrealized Balance at liabilities held at December 31, Transfers Transfers gains/ gains/ March 31, March 31, (Dollars in thousands) 2014 Purchases Sales in out (losses) (1) (losses) (1) 2015 2015 (1) Assets: Financial instruments and other inventory positions owned: Municipal securities: Tax-exempt securities $ 1,186 $ — $ — $ — $ — $ — $ (10 ) $ 1,176 $ (10 ) Short-term securities 720 — — — — — — 720 — Mortgage-backed securities 124,749 119,826 (98,947 ) — — 2,490 (241 ) 147,877 517 Derivative contracts 140 520 — — — (520 ) 1,082 1,222 1,222 Total financial instruments and other inventory positions owned 126,795 120,346 (98,947 ) — — 1,970 831 150,995 1,729 Investments at fair value 74,165 — (182 ) — — 182 13,303 87,468 13,303 Total assets $ 200,960 $ 120,346 $ (99,129 ) $ — $ — $ 2,152 $ 14,134 $ 238,463 $ 15,032 Liabilities: Financial instruments and other inventory positions sold, but not yet purchased: Derivative contracts $ 7,822 $ (5,814 ) $ — $ — $ — $ 5,814 $ 404 $ 8,226 $ 4,318 Total financial instruments and other inventory positions sold, but not yet purchased $ 7,822 $ (5,814 ) $ — $ — $ — $ 5,814 $ 404 $ 8,226 $ 4,318 (1) Realized and unrealized gains/(losses) related to financial instruments, with the exception of customer matched-book derivatives, are reported in institutional brokerage on the consolidated statements of operations. Realized and unrealized gains/(losses) related to customer matched-book derivatives are reported in investment banking. Realized and unrealized gains/(losses) related to investments are reported in investment banking revenues or investment income on the consolidated statements of operations. The carrying values of the Company’s cash, securities either purchased or sold under agreements to resell, receivables and payables either from or to customers and brokers, dealers and clearing organizations and short-term financings approximate fair value due to their liquid or short-term nature. |
Variable Interest Entities
Variable Interest Entities | 3 Months Ended |
Mar. 31, 2016 | |
Variable Interest Entity, Reporting Entity Involvement, Maximum Loss Exposure, Determination Methodology and Factors [Abstract] | |
Variable Interest Entities | Variable Interest Entities The Company has investments in and/or acts as the managing partner of various partnerships, limited liability companies, or registered mutual funds. These entities were established for the purpose of investing in securities of public or private companies, or municipal debt obligations, or providing financing to senior living facilities, and were initially financed through the capital commitments or seed investments of the members. VIEs are entities in which equity investors lack the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities. The determination as to whether an entity is a VIE is based on the structure and nature of each entity. The Company also considers other characteristics such as the power through voting rights or similar rights to direct the activities of an entity that most significantly impact the entity’s economic performance and how the entity is financed. The Company is required to consolidate all VIEs for which it is considered to be the primary beneficiary. The determination as to whether the Company is considered to be the primary beneficiary is based on whether the Company has both the power to direct the activities of the VIE that most significantly impact the entity’s economic performance and the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. Effective January 1, 2016, the Company adopted ASU 2015-02. Prior to the adoption of ASU 2015-02, the primary beneficiary analysis differed for entities which qualified for the deferral under previous consolidation guidance (i.e., asset managers and investment companies). For these entities, the Company was considered to be the primary beneficiary if it absorbed a majority of the VIE’s expected losses, received a majority of the VIE’s expected residual returns, or both. Consolidated VIEs The Company’s consolidated VIEs at March 31, 2016 include certain alternative asset management funds in which the Company has an investment and as the managing partner, is deemed to have both the power to direct the most significant activities of the funds and the right to receive benefits (or the obligation to absorb losses) that could potentially be significant to these funds. Prior to the adoption of ASU 2015-02, these entities lacked the characteristics of a VIE and were consolidated as voting interest entities. The following table presents information about the carrying value of the assets and liabilities of the VIEs which are consolidated by the Company and included on the consolidated statements of financial condition at March 31, 2016 . The assets can only be used to settle the liabilities of the respective VIE, and the creditors of the VIEs do not have recourse to the general credit of the Company. The assets and liabilities are presented prior to consolidation and thus a portion of these assets and liabilities are eliminated in consolidation. Alternative Asset (Dollars in thousands) Management Funds Assets: Receivables from brokers, dealers and clearing organizations $ 46,753 Financial instruments and other inventory positions owned and pledged as collateral 349,618 Investments 89,068 Other assets 9,819 Total assets $ 495,258 Liabilities: Short-term financing $ 179,236 Payables to brokers, dealers and clearing organizations 89,245 Financial instruments and other inventory positions sold, but not yet purchased 74,112 Other liabilities and accrued expenses 9,526 Total liabilities $ 352,119 The Company has investments in a grantor trust which was established as part of a nonqualified deferred compensation plan. The Company is the primary beneficiary of the grantor trust. Accordingly, the assets and liabilities of the grantor trust are consolidated by the Company on the consolidated statements of financial condition. See Note 17 for additional information on the nonqualified deferred compensation plan. Nonconsolidated VIEs The Company determined it is not the primary beneficiary of certain VIEs and accordingly does not consolidate them. These VIEs had net assets approximating $0.9 billion and $0.4 billion at March 31, 2016 and December 31, 2015 , respectively. The Company’s exposure to loss from these VIEs is $12.4 million , which is the carrying value of its capital contributions recorded in investments on the consolidated statements of financial condition at March 31, 2016 . The Company had no liabilities related to these VIEs at March 31, 2016 and December 31, 2015 , respectively. Furthermore, the Company has not provided financial or other support to these VIEs that it was not previously contractually required to provide as of March 31, 2016 . |
Receivables from and Payables t
Receivables from and Payables to Brokers, Dealers and Clearing Organizations | 3 Months Ended |
Mar. 31, 2016 | |
Brokers and Dealers [Abstract] | |
Receivables from and Payables to Brokers, Dealers and Clearing Organizations | Receivables from and Payables to Brokers, Dealers and Clearing Organizations March 31, December 31, (Dollars in thousands) 2016 2015 Receivable arising from unsettled securities transactions $ 46,753 $ 62,105 Deposits paid for securities borrowed 63,819 47,508 Receivable from clearing organizations 5,068 3,155 Deposits with clearing organizations 60,877 27,019 Securities failed to deliver 6,341 2,100 Other 2,921 6,062 Total receivables from brokers, dealers and clearing organizations $ 185,779 $ 147,949 March 31, December 31, (Dollars in thousands) 2016 2015 Payable arising from unsettled securities transactions $ 161,648 $ 34,445 Payable to clearing organizations 65 3,115 Securities failed to receive 3,196 4,468 Other 6,022 6,103 Total payable to brokers, dealers and clearing organizations $ 170,931 $ 48,131 Deposits paid for securities borrowed approximate the market value of the securities. Securities failed to deliver and receive represent the contract value of securities that have not been delivered or received by the Company on settlement date. |
Collateralized Securities Trans
Collateralized Securities Transactions | 3 Months Ended |
Mar. 31, 2016 | |
Disclosure of Repurchase Agreements [Abstract] | |
Collateralized Securities Transactions | Collateralized Securities Transactions The Company’s financing and customer securities activities involve the Company using securities as collateral. In the event that the counterparty does not meet its contractual obligation to return securities used as collateral (e.g., pursuant to the terms of a repurchase agreement), or customers do not deposit additional securities or cash for margin when required, the Company may be exposed to the risk of reacquiring the securities or selling the securities at unfavorable market prices in order to satisfy its obligations to its customers or counterparties. The Company seeks to control this risk by monitoring the market value of securities pledged or used as collateral on a daily basis and requiring adjustments in the event of excess market exposure. The Company also uses unaffiliated third party custodians to administer the underlying collateral for the majority of its short-term financing to mitigate risk. In a reverse repurchase agreement the Company purchases financial instruments from a seller, typically in exchange for cash, and agrees to resell the same or substantially the same financial instruments to the seller at a stated price plus accrued interest in the future. In a repurchase agreement, the Company sells financial instruments to a buyer, typically for cash, and agrees to repurchase the same or substantially the same financial instruments from the buyer at a stated price plus accrued interest at a future date. Even though repurchase and reverse repurchase agreements involve the legal transfer of ownership of financial instruments, they are accounted for as financing arrangements because they require the financial instruments to be repurchased or resold at maturity of the agreement. In a securities borrowed transaction, the Company borrows securities from a counterparty in exchange for cash. When the Company returns the securities, the counterparty returns the cash. Interest is generally paid periodically over the life of the transaction. In the normal course of business, the Company obtains securities purchased under agreements to resell, securities borrowed and margin agreements on terms that permit it to repledge or resell the securities to others, typically pursuant to repurchase agreements. The Company obtained securities with a fair value of approximately $184.7 million and $185.8 million at March 31, 2016 and December 31, 2015 , respectively, of which $174.6 million and $175.8 million , respectively, had been pledged or otherwise transferred to satisfy its commitments under financial instruments and other inventory positions sold, but not yet purchased. The following is a summary of the Company’s securities sold under agreements to repurchase ("Repurchase Liabilities"), the fair market value of collateral pledged and the interest rate charged by the Company’s counterparty, which is based on LIBOR plus an applicable margin, as of March 31, 2016 : Repurchase Fair Market (Dollars in thousands) Liabilities Value Interest Rate Term up to 30 day maturities: Mortgage-backed securities $ 32,685 $ 47,153 2.18 - 2.37% On demand maturities: U.S. government agency securities 1,912 2,020 0.65% U.S. government securities 18,947 18,732 0.10% $ 53,544 $ 67,905 Reverse repurchase agreements, repurchase agreements and securities borrowed and loaned are reported on a net basis by counterparty when a legal right of offset exists. The following table provides information about the offsetting of these instruments and related collateral amounts at March 31, 2016 : Gross Amount Net Amounts Gross Amounts Not Offset Offset on the Presented on the on the Consolidated Statements Gross Consolidated Consolidated of Financial Condition (Dollars in thousands) Recognized Statements of Statements of Financial Collateral Net Description Assets Financial Condition Financial Condition Instruments Received (1) Amount Reverse repurchase agreements $ 119,084 $ (1,912 ) $ 117,172 $ — $ (117,172 ) $ — Securities borrowed (3) 63,819 — 63,819 — (63,819 ) — Gross Amount Net Amount Gross Amount Not Offset Offset on the Presented on the on the Consolidated Statements Gross Consolidated Consolidated of Financial Condition (Dollars in thousands) Recognized Statements of Statements of Financial Collateral Net Description Liabilities Financial Condition Financial Condition Instruments Pledged (2) Amount Repurchase agreements $ 53,544 $ (1,912 ) $ 51,632 $ — $ (51,632 ) $ — (1) Includes securities received by the Company from the counterparty. These securities are not included on the consolidated statements of financial condition unless there is an event of default. (2) Includes the fair value of securities pledged by the Company to the counterparty. These securities are included on the consolidated statements of financial condition unless the Company defaults. (3) Deposits paid for securities borrowed are included in receivables from brokers, dealers and clearing organizations on the consolidated statements of financial condition. See Note 7 for additional information on receivables from brokers, dealers and clearing organizations. There were no gross amounts offset on the consolidated statements of financial condition for reverse repurchase agreements, securities borrowed or repurchase agreements at December 31, 2015 , as a legal right of offset did not exist. The Company had no outstanding securities lending arrangements as of March 31, 2016 or December 31, 2015 . See Note 4 for information related to the Company's offsetting of derivative contracts. |
Investments
Investments | 3 Months Ended |
Mar. 31, 2016 | |
Investments, All Other Investments [Abstract] | |
Investments | Investments The Company’s investments include investments in private companies and partnerships, registered mutual funds, warrants of public and private companies and private company debt. March 31, December 31, (Dollars in thousands) 2016 2015 Investments at fair value $ 147,399 $ 142,781 Investments at cost 2,892 3,299 Investments accounted for under the equity method 13,410 17,781 Total investments 163,701 163,861 Less investments attributable to noncontrolling interests (1) (33,562 ) (40,069 ) $ 130,139 $ 123,792 (1) Noncontrolling interests are attributable to third party ownership in a consolidated merchant banking fund. At March 31, 2016 , investments carried on a cost basis had an estimated fair market value of $4.8 million . Because valuation estimates were based upon management’s judgment, investments carried at cost would be categorized as Level III assets in the fair value hierarchy, if they were carried at fair value. Investments accounted for under the equity method include general and limited partnership interests. The carrying value of these investments is based on the investment vehicle’s net asset value. The net assets of investment partnerships consist of investments in both marketable and non-marketable securities. The underlying investments held by such partnerships are valued based on the estimated fair value determined by management in our capacity as general partner or investor and, in the case of investments in unaffiliated investment partnerships, are based on financial statements prepared by the unaffiliated general partners. |
Other Assets
Other Assets | 3 Months Ended |
Mar. 31, 2016 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Assets | Other Assets March 31, December 31, (Dollars in thousands) 2016 2015 Net deferred income tax assets $ 60,018 $ 66,810 Fee receivables 16,858 18,362 Accrued interest receivables 7,236 6,145 Forgivable loans, net 10,682 10,234 Income tax receivables 10,946 — Prepaid expenses 7,590 6,161 Other 18,114 11,490 Total other assets $ 131,444 $ 119,202 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Mar. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Capital Asset (Dollars in thousands) Markets Management Total Goodwill Balance at December 31, 2015 $ 21,132 $ 196,844 $ 217,976 Goodwill acquired 71,900 — 71,900 Measurement period adjustment (14 ) — (14 ) Balance at March 31, 2016 $ 93,018 $ 196,844 $ 289,862 Intangible assets Balance at December 31, 2015 $ 8,256 $ 22,274 $ 30,530 Intangible assets acquired 14,597 — 14,597 Measurement period adjustment 14 — 14 Amortization of intangible assets (1,909 ) (1,387 ) (3,296 ) Balance at March 31, 2016 $ 20,958 $ 20,887 $ 41,845 The addition of goodwill and intangible assets during the three months ended March 31, 2016 related to the acquisition of Simmons, as discussed in Note 3 . Management identified $14.6 million of intangible assets, consisting of customer relationships ( $13.8 million ) and the Simmons trade name ( $0.8 million ), which will be amortized over a weighted average life of 2.0 years and 5.0 years , respectively. The following table summarizes the future aggregate amortization expense of the Company's intangible assets with determinable lives for the years ended: (Dollars in thousands) Remainder of 2016 $ 12,180 2017 12,183 2018 6,516 2019 6,009 2020 1,427 Thereafter 670 Total $ 38,985 |
Short-Term Financing
Short-Term Financing | 3 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
Short-Term Financing | Short-Term Financing Outstanding Balance Weighted Average Interest Rate March 31, December 31, March 31, December 31, (Dollars in thousands) 2016 2015 2016 2015 Commercial paper (secured) $ 279,807 $ 276,894 1.88% 1.74% Prime broker arrangement 179,236 169,296 1.18% 1.07% Total short-term financing $ 459,043 $ 446,190 The Company issues secured commercial paper to fund a portion of its securities inventory. The commercial paper notes (“CP Notes”) can be issued with maturities of 27 days to 270 days from the date of issuance. The CP Notes are issued under three separate programs, CP Series A, CP Series II A and CP Series III A, and are secured by different inventory classes. As of March 31, 2016 , the weighted average maturity of CP Series A, CP Series II A and CP Series III A was 67 days , 6 days and 26 days , respectively. The CP Notes are interest bearing or sold at a discount to par with an interest rate based on LIBOR plus an applicable margin. CP Series III A includes a covenant that requires the Company’s U.S. broker dealer subsidiary to maintain excess net capital of $120 million . The Company has established an arrangement to obtain financing with a prime broker related to its municipal bond funds. Financing under this arrangement is secured by certain securities, primarily municipal securities, and collateral limitations could reduce the amount of funding available under this arrangement. The prime broker financing activities are recorded net of receivables from trading activity. The funding is at the discretion of the prime broker subject to a notice period. The Company has committed short-term bank line financing available on a secured basis and uncommitted short-term bank line financing available on both a secured and unsecured basis. The Company uses these credit facilities in the ordinary course of business to fund a portion of its daily operations and the amount borrowed under these credit facilities varies daily based on the Company’s funding needs. The Company’s committed short-term bank line financing at March 31, 2016 consisted of a one -year $250 million committed revolving credit facility with U.S. Bank, N.A., which was renewed in December 2015. Advances under this facility are secured by certain marketable securities. The facility includes a covenant that requires the Company’s U.S. broker dealer subsidiary to maintain minimum net capital of $120 million , and the unpaid principal amount of all advances under this facility will be due on December 17, 2016 . The Company pays a nonrefundable commitment fee on the unused portion of the facility on a quarterly basis. At March 31, 2016 , the Company had no advances against this line of credit. The Company’s uncommitted secured lines at March 31, 2016 totaled $185 million with two banks and are dependent on having appropriate collateral, as determined by the bank agreement, to secure an advance under the line. The availability of the Company’s uncommitted lines are subject to approval by the individual banks each time an advance is requested and may be denied. At March 31, 2016 , the Company had no advances against these lines of credit. |
Senior Notes
Senior Notes | 3 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
Long-term Debt [Text Block] | Senior Notes The Company has entered into variable and fixed rate senior notes with certain entities advised by Pacific Investment Management Company ("PIMCO"). The following table presents the outstanding balance by note class at March 31, 2016 and December 31, 2015 , respectively. Outstanding Balance March 31, December 31, (Dollars in thousands) 2016 2015 Class A Notes $ 50,000 $ 50,000 Class C Notes 125,000 125,000 Total senior notes $ 175,000 $ 175,000 On October 8, 2015 , the Company entered into a second amended and restated note purchase agreement ("Second Amended and Restated Note Purchase Agreement") under which the Company issued $125 million of fixed rate Class C Notes. The Class C Notes bear interest at an annual fixed rate of 5.06 percent , payable semi-annually and mature on October 9, 2018 . The variable rate Class A Notes bear interest at a rate equal to three -month LIBOR plus 3.00 percent , adjusted and payable quarterly and mature on May 31, 2017 . The unpaid principal amounts are due in full on the respective maturity dates and may not be prepaid by the Company. The Second Amended and Restated Note Purchase Agreement includes customary events of default and covenants that, among other things, require the Company to maintain a minimum consolidated tangible net worth and regulatory net capital, limit the Company's leverage ratio and require the Company to maintain a minimum ratio of operating cash flow to fixed charges. With respect to the net capital covenant, the Company's U.S. broker dealer subsidiary is required to maintain minimum net capital of $120 million . At March 31, 2016 , the Company was in compliance with all covenants. The senior notes are recorded at amortized cost. As of March 31, 2016 , the carrying value of the variable rate Class A Notes approximated fair value. As of March 31, 2016 , the fair value of the fixed rate Class C Notes was approximately $128.4 million . |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Contingencies and Commitments Legal Contingencies The Company has been named as a defendant in various legal actions, including complaints and litigation and arbitration claims, arising from its business activities. Such actions include claims related to securities brokerage and investment banking activities, and certain class actions that primarily allege violations of securities laws and seek unspecified damages, which could be substantial. Also, the Company is involved from time to time in investigations and proceedings by governmental agencies and self-regulatory organizations (“SROs”) which could result in adverse judgments, settlement, penalties, fines or other relief. The Company has established reserves for potential losses that are probable and reasonably estimable that may result from pending and potential legal actions, investigations and regulatory proceedings. In many cases, however, it is inherently difficult to determine whether any loss is probable or even possible or to estimate the amount or range of any potential loss, particularly where proceedings may be in relatively early stages or where plaintiffs are seeking substantial or indeterminate damages. Matters frequently need to be more developed before a loss or range of loss can reasonably be estimated. Given uncertainties regarding the timing, scope, volume and outcome of pending and potential legal actions, investigations and regulatory proceedings and other factors, the amounts of reserves and ranges of reasonably possible losses are difficult to determine and of necessity subject to future revision. Subject to the foregoing, management of the Company believes, based on currently available information, after consultation with outside legal counsel and taking into account its established reserves, that pending legal actions, investigations and regulatory proceedings will be resolved with no material adverse effect on the consolidated statements of financial condition, results of operations or cash flows of the Company. However, if during any period a potential adverse contingency should become probable or resolved for an amount in excess of the established reserves, the results of operations and cash flows in that period and the financial condition as of the end of that period could be materially adversely affected. In addition, there can be no assurance that material losses will not be incurred from claims that have not yet been brought to the Company’s attention or are not yet determined to be reasonably possible. Several class action complaints were brought on behalf of a purported class of state, local and municipal government entities in connection with the bidding or sale of municipal investment contracts and municipal derivative products directly from one of the defendants or through a broker, from January 1, 1992, to the present. The complaints, which have been consolidated into a single nationwide class action entitled In re Municipal Derivatives Antitrust Litigation , MDL No. 1950 (Master Docket No. 08-2516), allege antitrust violations and are pending in the U.S. District Court for the Southern District of New York under the multi-district litigation rules. The consolidated complaint seeks unspecified treble damages under Section 1 of the Sherman Act. Several California municipalities also brought separate class action complaints in California federal court, and approximately eighteen California municipalities and two New York municipalities filed individual lawsuits that are not as part of class actions, all of which have since been transferred to the Southern District of New York and consolidated for pretrial purposes. All three sets of complaints assert similar claims under federal (and for the California and New York plaintiffs, state) antitrust claims. With respect to In re Municipal Derivatives Antitrust Litigation, Piper Jaffray entered into a settlement agreement with class representatives in the amount of $9.8 million to settle the MDL class action. This expense was incurred in the third quarter of 2015, and the settlement is subject to final court approval after notice to the class. Litigation in the separate California and New York individual cases is ongoing. Operating Lease Commitments The Company leases office space throughout the United States and in a limited number of foreign countries where the Company’s international operations reside. Aggregate minimum lease commitments under operating leases as of March 31, 2016 are as follows: (Dollars in thousands) Remainder of 2016 $ 11,837 2017 14,025 2018 12,935 2019 11,285 2020 10,779 Thereafter 26,078 $ 86,939 |
Restructuring
Restructuring | 3 Months Ended |
Mar. 31, 2016 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | Restructuring The Company incurred pre-tax restructuring charges of $6.0 million for the three months ended March 31, 2016 within the Capital Markets segment. The charges included severance, benefits and outplacement costs of $5.4 million and contract termination costs of $0.6 million primarily in conjunction with the Simmons acquisition discussed in Note 3 . |
Shareholders' Equity
Shareholders' Equity | 3 Months Ended |
Mar. 31, 2016 | |
Equity [Abstract] | |
Shareholders' Equity | Shareholders’ Equity Share Repurchases Effective August 14, 2015, the Company's board of directors authorized the repurchase of up to $150.0 million in common shares through September 30, 2017 . During the three months ended March 31, 2016 , the Company repurchased 351,791 shares at an average price of $35.14 per share for an aggregate purchase price of $12.4 million related to this authorization. The Company has $119.2 million remaining under this authorization. The Company also purchases shares of common stock from restricted stock award recipients upon the award vesting as recipients sell shares to meet their employment tax obligations. The Company purchased 169,282 shares and 178,928 shares, or $7.1 million and $9.9 million of the Company’s common stock for this purpose during the three months ended March 31, 2016 and 2015 , respectively. Issuance of Shares The Company issues common shares out of treasury stock as a result of employee restricted share vesting and exercise transactions as discussed in Note 17 . During the three months ended March 31, 2016 and 2015 , the Company issued 476,062 shares and 518,106 shares, respectively, related to these obligations. Noncontrolling Interests The consolidated financial statements include the accounts of Piper Jaffray Companies, its wholly owned subsidiaries and other entities in which the Company has a controlling financial interest. Noncontrolling interests represent equity interests in consolidated entities that are not attributable, either directly or indirectly, to Piper Jaffray Companies. Noncontrolling interests include the minority equity holders’ proportionate share of the equity in a merchant banking fund of $34.9 million , a municipal bond fund with limited employee investors of $7.9 million and a senior living fund aggregating $5.0 million as of March 31, 2016 . As of December 31, 2015 , noncontrolling interests included the minority equity holders’ proportionate share of the equity in a merchant banking fund of $31.8 million , a municipal bond fund with limited employee investors of $7.0 million and private investment vehicles aggregating $10.4 million . Ownership interests in entities held by parties other than the Company’s common shareholders are presented as noncontrolling interests within shareholders’ equity, separate from the Company’s own equity. Revenues, expenses and net income or loss are reported on the consolidated statements of operations on a consolidated basis, which includes amounts attributable to both the Company’s common shareholders and noncontrolling interests. Net income or loss is then allocated between the Company and noncontrolling interests based upon their relative ownership interests. Net income applicable to noncontrolling interests is deducted from consolidated net income to determine net income applicable to the Company. There was no other comprehensive income or loss attributed to noncontrolling interests for the three months ended March 31, 2016 and 2015 , respectively. The following table presents the changes in shareholders' equity for the three months ended March 31, 2016 : Common Common Total Shares Shareholders’ Noncontrolling Shareholders’ (Amounts in thousands, except share amounts) Outstanding Equity Interests Equity Balance at December 31, 2015 13,311,016 $ 783,659 $ 49,161 $ 832,820 Net income — 2,437 749 3,186 Amortization/issuance of restricted stock — 37,120 — 37,120 Issuance of common stock as deal consideration for Simmons 25,525 2,647 — 2,647 Issuance of treasury shares for restricted stock vestings 450,537 — — — Repurchase of common stock through share repurchase program (351,791 ) (12,364 ) — (12,364 ) Repurchase of common stock for employee tax withholding (169,282 ) (7,081 ) — (7,081 ) Reduced tax benefit from stock-based compensation — (895 ) — (895 ) Shares reserved/issued for director compensation 1,780 60 — 60 Other comprehensive loss — (403 ) — (403 ) Deconsolidation of investment partnerships (1) — — (9,415 ) (9,415 ) Fund capital contributions, net — — 7,262 7,262 Balance at March 31, 2016 13,267,785 $ 805,180 $ 47,757 $ 852,937 (1) The Company deconsolidated certain investment partnerships upon adoption of ASU 2015-02. Se e Note 2 fo r further discussion. |
Compensation Plans
Compensation Plans | 3 Months Ended |
Mar. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Compensation Plans | Compensation Plans Stock-Based Compensation Plans The Company maintains one stock-based compensation plan, the Piper Jaffray Companies Amended and Restated 2003 Annual and Long-Term Incentive Plan (the “Incentive Plan”). The Company’s equity awards are recognized on the consolidated statements of operations at grant date fair value over the service period of the award, net of estimated forfeitures. The following table provides a summary of the Company’s outstanding Incentive Plan equity awards (in shares or units) as of March 31, 2016 : Restricted Stock Annual grants 1,332,725 Sign-on grants 370,899 Simmons deal consideration (1) 1,146,596 2,850,220 Restricted Stock Units Market condition leadership grants 356,242 Stock Options 146,560 (1) The Company issued restricted stock as part of deal consideration for Simmons. Se e Note 3 fo r further discussion. Incentive Plan The Incentive Plan permits the grant of equity awards, including restricted stock, restricted stock units and non-qualified stock options, to the Company’s employees and directors for up to 8.2 million shares of common stock ( 0.9 million shares remained available for future issuance under the Incentive Plan as of March 31, 2016 ). The Company believes that such awards help align the interests of employees and directors with those of shareholders and serve as an employee retention tool. The Incentive Plan provides for accelerated vesting of awards if there is a severance event, a change in control of the Company (as defined in the Incentive Plan), in the event of a participant’s death, and at the discretion of the compensation committee of the Company’s board of directors. Restricted Stock Awards Restricted stock grants are valued at the market price of the Company’s common stock on the date of grant and are amortized over the related requisite service period. The Company grants shares of restricted stock to current employees as part of year-end compensation (“Annual Grants”) and as a retention tool. Employees may also receive restricted stock upon initial hiring or as a retention award (“Sign-on Grants”). The Company’s Annual Grants are made each year in February. Annual Grants vest ratably over three years in equal installments. The Annual Grants provide for continued vesting after termination of employment, so long as the employee does not violate certain post-termination restrictions set forth in the award agreement or any agreements entered into upon termination. The Company determined the service inception date precedes the grant date for the Annual Grants, and that the post-termination restrictions do not meet the criteria for an in-substance service condition, as defined by FASB Accounting Standards Codification Topic 718, "Compensation – Stock Compensation" ("ASC 718"). Accordingly, restricted stock granted as part of the Annual Grants is expensed in the one -year period in which those awards are deemed to be earned, which is generally the calendar year preceding the February grant date. For example, the Company recognized compensation expense during fiscal 2015 for its February 2016 Annual Grant. If an equity award related to the Annual Grants is forfeited as a result of violating the post-termination restrictions, the lower of the fair value of the award at grant date or the fair value of the award at the date of forfeiture is recorded within the consolidated statements of operations as a reversal of compensation expense. Sign-on Grants are used as a recruiting tool for new employees and are issued to current employees as a retention tool. These awards have both cliff and ratable vesting terms, and the employees must fulfill service requirements in exchange for rights to the awards. Compensation expense is amortized on a straight-line basis from the grant date over the requisite service period, generally one to five years. Employees forfeit unvested shares upon termination of employment and a reversal of compensation expense is recorded. Annually, the Company grants stock to its non-employee directors. The stock-based compensation paid to non-employee directors is fully expensed on the grant date and included within outside services expense on the consolidated statements of operations. Restricted Stock Units The Company grants restricted stock units to its leadership team (“Leadership Grants”). The units will vest and convert to shares of common stock at the end of each 36 -month performance period only if the Company's stock performance satisfies predetermined market conditions over the performance period. Under the terms of the grants, the number of units that will vest and convert to shares will be based on the Company's stock performance achieving specified market conditions during each performance period as described below. Compensation expense is amortized on a straight-line basis over the three -year requisite service period based on the fair value of the award on the grant date. The market condition must be met for the awards to vest and compensation cost will be recognized regardless if the market condition is satisfied. Employees forfeit unvested share units upon termination of employment with a corresponding reversal of compensation expense. Up to 50 percent of the award can be earned based on the Company’s total shareholder return relative to members of a predetermined peer group and up to 50 percent of the award can be earned based on the Company’s total shareholder return. The fair value of the awards on the grant date was determined using a Monte Carlo simulation with the following assumptions: Risk-free Expected Stock Grant Year Interest Rate Price Volatility 2015 0.90% 29.8% 2014 0.82% 41.3% 2013 0.40% 44.0% Because a portion of the award vesting depends on the Company’s total shareholder return relative to a peer group, the valuation modeled the performance of the peer group as well as the correlation between the Company and the peer group. The expected stock price volatility assumptions were determined using historical volatility as correlation coefficients can only be developed through historical volatility. The risk-free interest rates were determined based on three -year U.S. Treasury bond yields. Stock Options The Company previously granted options to purchase Piper Jaffray Companies common stock to employees and non-employee directors in fiscal years 2004 through 2008. Employee and director options were expensed by the Company on a straight-line basis over the required service period, based on the estimated fair value of the award on the date of grant using a Black-Scholes option-pricing model. As described above pertaining to the Company’s Annual Grants of restricted shares, stock options granted to employees were expensed in the calendar year preceding the annual February grant date. For example, the Company recognized compensation expense during fiscal 2007 for its February 2008 option grant. The maximum term of the stock options granted to employees and directors is ten years. The Company has not granted stock options since 2008. Inducement Plan The Company established the 2016 Employment Inducement Award Plan (the "Inducement Plan") in conjunction with the acquisition of Simmons. The Company will grant $11.6 million (up to 400,000 shares) in restricted stock under the Inducement Plan on May 15, 2016 . Stock-Based Compensation Activity The Company recorded total compensation expense of $10.0 million and $13.8 million for the three months ended March 31, 2016 and 2015 , respectively, related to employee restricted stock and restricted stock unit awards. Total compensation cost includes year-end compensation for Annual Grants and the amortization of Sign-on and Leadership Grants, less forfeitures. Forfeitures were immaterial for the three months ended March 31, 2016 and 2015 , respectively. The tax benefit related to stock-based compensation costs totaled $3.9 million and $5.4 million for the three months ended March 31, 2016 and 2015 , respectively. The following table summarizes the changes in the Company’s unvested restricted stock (including the restricted stock issued as part of the deal consideration for Simmons) under the Incentive Plan: Unvested Weighted Average Restricted Stock Grant Date (in Shares) Fair Value December 31, 2015 1,287,915 $ 46.20 Granted 2,042,264 41.84 Vested (476,062 ) 46.32 Canceled (3,897 ) 46.09 March 31, 2016 2,850,220 $ 43.06 The following table summarizes the changes in the Company’s unvested restricted stock units under the Incentive Plan: Unvested Weighted Average Restricted Grant Date Stock Units Fair Value December 31, 2015 356,242 $ 22.18 Granted — — Vested — — Canceled — — March 31, 2016 356,242 $ 22.18 As of March 31, 2016 , there was $59.3 million of total unrecognized compensation cost related to restricted stock and restricted stock units expected to be recognized over a weighted average period of 2.7 years . The following table summarizes the changes in the Company’s outstanding stock options: Weighted Average Weighted Remaining Options Average Contractual Term Aggregate Outstanding Exercise Price (in Years) Intrinsic Value December 31, 2015 157,201 $ 50.35 1.6 $ — Granted — — Exercised — — Canceled — — Expired (10,641 ) 47.85 March 31, 2016 146,560 $ 50.53 1.7 $ 542,334 Options exercisable at March 31, 2016 146,560 $ 50.53 1.7 $ 542,334 As of March 31, 2016 , there was no unrecognized compensation cost related to stock options expected to be recognized over future years. The intrinsic value of options exercised was $0.7 million and the resulting tax benefit realized was $0.3 million for the three months ended March 31, 2015 . There were no options exercised during the three months ended March 31, 2016 . Deferred Compensation Plans The Company maintains various deferred compensation arrangements for employees. The nonqualified deferred compensation plan is an unfunded plan which allows certain highly compensated employees, at their election, to defer a percentage of their base salary, commissions and/or cash bonuses. The deferrals vest immediately and are non-forfeitable. The amounts deferred under this plan are held in a grantor trust. The Company invests, as a principal, in investments to economically hedge its obligation under the nonqualified deferred compensation plan. Investments in the grantor trust, consisting of mutual funds, totaled $20.7 million and $14.6 million as of March 31, 2016 and December 31, 2015 , respectively, and are included in investments on the consolidated statements of financial condition. The compensation deferred by the employees is expensed in the period earned. The deferred compensation liability was $20.6 million and $14.5 million as of March 31, 2016 and December 31, 2015 , respectively. Changes in the fair value of the investments made by the Company are reported in investment income and changes in the corresponding deferred compensation liability are reflected as compensation and benefits expense on the consolidated statements of operations. The Piper Jaffray Companies Mutual Fund Restricted Share Investment Plan is a fully funded deferred compensation plan which allows eligible employees to elect to receive a portion of the incentive compensation they would otherwise receive in the form of restricted stock, instead in restricted mutual fund shares ("MFRS Awards") of investment funds. MFRS Awards are awarded to qualifying employees in February of each year, and represent a portion of their compensation for performance in the preceding year similar to the Company's Annual Grants. MFRS Awards vest ratably over three years in equal installments and provide for continued vesting after termination of employment so long as the employee does not violate certain post-termination restrictions set forth in the award agreement or any agreement entered into upon termination. Forfeitures are recorded as a reduction of compensation and benefits expense within the consolidated statements of operations. The Company has also granted MFRS Awards to new employees as a recruiting tool. Employees must fulfill service requirements in exchange for rights to the awards. Compensation expense from these awards will be amortized on a straight-line basis over the requisite service period of two to five years . The Company recorded total compensation expense of $3.4 million and $8.2 million for the three months ended March 31, 2016 and 2015 , respectively, related to employee MFRS Awards. Total compensation cost includes year-end compensation for MFRS Awards and the amortization of sign-on MFRS Awards, less forfeitures. Forfeitures were immaterial for the three months ended March 31, 2016 and 2015 , respectively. MFRS Awards are owned by employee recipients and as such are not included on the consolidated statements of financial condition. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2016 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share The Company calculates earnings per share using the two-class method. Basic earnings per common share is computed by dividing net income/(loss) applicable to Piper Jaffray Companies’ common shareholders by the weighted average number of common shares outstanding for the period. Net income/(loss) applicable to Piper Jaffray Companies’ common shareholders represents net income/(loss) applicable to Piper Jaffray Companies reduced by the allocation of earnings to participating securities. Losses are not allocated to participating securities. All of the Company’s unvested restricted shares are deemed to be participating securities as they are eligible to share in the profits (e.g., receive dividends) of the Company. The Company’s unvested restricted stock units are not participating securities as they are not eligible to share in the profits of the Company. Diluted earnings per common share is calculated by adjusting the weighted average outstanding shares to assume conversion of all potentially dilutive stock options. The computation of earnings per share is as follows: Three Months Ended March 31, (Amounts in thousands, except per share data) 2016 2015 Net income applicable to Piper Jaffray Companies $ 2,437 $ 16,972 Earnings allocated to participating securities (1) (313 ) (1,162 ) Net income applicable to Piper Jaffray Companies’ common shareholders (2) $ 2,124 $ 15,810 Shares for basic and diluted calculations: Average shares used in basic computation 13,160 15,294 Stock options 12 38 Average shares used in diluted computation 13,172 15,332 Earnings per common share: Basic $ 0.16 $ 1.03 Diluted $ 0.16 $ 1.03 (1) Represents the allocation of earnings to participating securities. Losses are not allocated to participating securities. Participating securities include all of the Company’s unvested restricted shares. The weighted average participating shares outstanding were 1,938,759 and 1,126,906 for the three months ended March 31, 2016 and 2015 , respectively. (2) Net income/(loss) applicable to Piper Jaffray Companies’ common shareholders for diluted and basic EPS may differ under the two-class method as a result of adding the effect of the assumed exercise of stock options to dilutive shares outstanding, which alters the ratio used to allocate earnings to Piper Jaffray Companies’ common shareholders and participating securities for purposes of calculating diluted and basic EPS. The anti-dilutive effects from stock options were immaterial for the three months ended March 31, 2016 and 2015 , respectively. |
Segment Reporting
Segment Reporting | 3 Months Ended |
Mar. 31, 2016 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting Basis for Presentation The Company structures its segments primarily based upon the nature of the financial products and services provided to customers and the Company’s management organization. The Company evaluates performance and allocates resources based on segment pre-tax operating income or loss and segment pre-tax operating margin. Revenues and expenses directly associated with each respective segment are included in determining their operating results. Other revenues and expenses that are not directly attributable to a particular segment are allocated based upon the Company’s allocation methodologies, including each segment’s respective net revenues, use of shared resources, headcount or other relevant measures. Segment assets are based on those directly associated with each segment, and include an allocation of certain assets based on the most relevant measures applicable, including headcount and other factors. The substantial majority of the Company's net revenues and long-lived assets are located in the U.S. Reportable segment financial results are as follows: Three Months Ended March 31, (Dollars in thousands) 2016 2015 Capital Markets Investment banking Financing Equities $ 6,566 $ 36,007 Debt 15,972 20,988 Advisory services 81,629 30,498 Total investment banking 104,167 87,493 Institutional sales and trading Equities 19,669 18,905 Fixed income 17,054 21,217 Total institutional sales and trading 36,723 40,122 Management and performance fees 965 1,407 Investment income 2,086 14,705 Long-term financing expenses (2,292 ) (1,560 ) Net revenues 141,649 142,167 Operating expenses (1) 138,855 116,203 Segment pre-tax operating income $ 2,794 $ 25,964 Segment pre-tax operating margin 2.0 % 18.3 % Continued on next page Three Months Ended March 31, (Dollars in thousands) 2016 2015 Asset Management Management and performance fees Management fees $ 12,883 $ 19,107 Performance fees — 8 Total management and performance fees 12,883 19,115 Investment income/(loss) (976 ) 589 Net revenues 11,907 19,704 Operating expenses (1) 11,259 14,376 Segment pre-tax operating income $ 648 $ 5,328 Segment pre-tax operating margin 5.4 % 27.0 % Total Net revenues $ 153,556 $ 161,871 Operating expenses (1) 150,114 130,579 Pre-tax operating income $ 3,442 $ 31,292 Pre-tax operating margin 2.2 % 19.3 % (1) Operating expenses include intangible asset amortization expense as set forth in the table below: Three Months Ended March 31, (Dollars in thousands) 2016 2015 Capital Markets $ 1,909 $ 263 Asset Management 1,387 1,510 Total intangible asset amortization expense $ 3,296 $ 1,773 Reportable segment assets are as follows: March 31, December 31, (Dollars in thousands) 2016 2015 Capital Markets $ 1,925,541 $ 1,870,272 Asset Management 252,874 268,246 $ 2,178,415 $ 2,138,518 |
Net Capital Requirements and Ot
Net Capital Requirements and Other Regulatory Matters | 3 Months Ended |
Mar. 31, 2016 | |
Regulatory Capital Requirements [Abstract] | |
Net Capital Requirements and Other Regulatory Matters | Net Capital Requirements and Other Regulatory Matters Piper Jaffray is registered as a securities broker dealer with the SEC and is a member of various SROs and securities exchanges. The Financial Industry Regulatory Authority (“FINRA”) serves as Piper Jaffray’s primary SRO. Piper Jaffray is subject to the uniform net capital rule of the SEC and the net capital rule of FINRA. Piper Jaffray has elected to use the alternative method permitted by the SEC rule, which requires that it maintain minimum net capital of the greater of $1.0 million or 2 percent of aggregate debit balances arising from customer transactions, as such term is defined in the SEC rule. Under its rules, FINRA may prohibit a member firm from expanding its business or paying dividends if resulting net capital would be less than 5 percent of aggregate debit balances. Advances to affiliates, repayment of subordinated debt, dividend payments and other equity withdrawals by Piper Jaffray are subject to certain notification and other provisions of SEC and FINRA rules. At March 31, 2016 , net capital calculated under the SEC rule was $215.0 million , and exceeded the minimum net capital required under the SEC rule by $214.0 million . The Company’s committed short-term credit facility and its senior notes include covenants requiring Piper Jaffray to maintain minimum net capital of $120 million . CP Notes issued under CP Series III A include a covenant that requires Piper Jaffray to maintain excess net capital of $120 million . Piper Jaffray Ltd. and SCIL, broker dealer subsidiaries registered in the United Kingdom, are subject to the capital requirements of the Prudential Regulation Authority and the Financial Conduct Authority. As of March 31, 2016 , Piper Jaffray Ltd. and SCIL were in compliance with the capital requirements of the Prudential Regulation Authority and the Financial Conduct Authority. Piper Jaffray Hong Kong Limited is licensed by the Hong Kong Securities and Futures Commission, which is subject to the liquid capital requirements of the Securities and Futures (Financial Resources) Rule promulgated under the Securities and Futures Ordinance. At March 31, 2016 , Piper Jaffray Hong Kong Limited was in compliance with the liquid capital requirements of the Hong Kong Securities and Futures Commission. |
Income Taxes (Notes)
Income Taxes (Notes) | 3 Months Ended |
Mar. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company's effective income tax rate, excluding noncontrolling interests, for the three months ended March 31, 2016 was 9.5 percent , compared to 35.9 percent for the three months ended March 31, 2015 . The effective income tax rate for the three months ended March 31, 2016 was unusually low due to the impact of tax-exempt municipal interest income representing a larger proportion of pre-tax income. |
Accounting Policies and Prono29
Accounting Policies and Pronouncements Accounting Policies and Pronouncements (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The Company consolidates entities in which it has a controlling financial interest. The Company determines whether it has a controlling financial interest in an entity by first evaluating whether the entity is a variable interest entity ("VIE") or a voting interest entity. VIEs are entities in which (i) the total equity investment at risk is not sufficient to enable the entity to finance its activities independently or (ii) the at-risk equity holders do not have the normal characteristics of a controlling financial interest. A controlling financial interest in a VIE is present when an enterprise has one or more variable interests that have both (i) the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. The enterprise with a controlling financial interest is the primary beneficiary and consolidates the VIE. Voting interest entities lack one or more of the characteristics of a VIE. The usual condition for a controlling financial interest is ownership of a majority voting interest for a corporation or a majority of kick-out rights for a limited partnership. When the Company does not have a controlling financial interest in an entity but exerts significant influence over the entity’s operating and financial policies (generally defined as owning a voting or economic interest of between 20 percent to 50 percent), the Company's investment is accounted for under the equity method of accounting. If the Company does not have a controlling financial interest in, or exert significant influence over, an entity, the Company accounts for its investment at fair value, if the fair value option was elected, or at cost. |
Acquisitions (Tables)
Acquisitions (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Business Combinations [Abstract] | |
Estimated fair values of assets acquired and liabilities assumed | The following table summarizes the estimated fair values of assets acquired and liabilities assumed at the date of the acquisition: (Dollars in thousands) Assets: Cash and cash equivalents $ 47,201 Receivables: Customers 1,278 Brokers, dealers and clearing organizations 931 Fixed assets 1,981 Goodwill 71,900 Intangible assets 14,597 Investments 995 Other assets 3,599 Total assets acquired 142,482 Liabilities: Accrued compensation 16,284 Other liabilities and accrued expenses 7,693 Total liabilities assumed 23,977 Net assets acquired $ 118,505 |
Unaudited pro forma information | The consolidated Company's unaudited pro forma information presented does not necessarily reflect the results of operations that would have resulted had the acquisition been completed at the beginning of the applicable periods presented, does not contemplate anticipated operational efficiencies of the combined entities, nor does it indicate the results of operations in future periods. Three Months Ended March 31, (Dollars in thousands) 2016 2015 Net revenues $ 161,353 $ 187,982 Net income/(loss) applicable to Piper Jaffray Companies (222 ) 15,490 |
Financial Instruments and Oth31
Financial Instruments and Other Inventory Positions Owned and Financial Instruments and Other Inventory Positions Sold, but Not Yet Purchased (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Financial Instruments Owned and Sold, Not yet Purchased [Abstract] | |
Financial Instruments and Other Inventory Positions Owned and Financial Instruments and Other Inventory Positions Sold, but not yet Purchased | March 31, December 31, (Dollars in thousands) 2016 2015 Financial instruments and other inventory positions owned: Corporate securities: Equity securities $ 4,791 $ 9,505 Convertible securities 17,039 18,460 Fixed income securities 59,735 48,654 Municipal securities: Taxable securities 125,692 111,591 Tax-exempt securities 509,219 416,966 Short-term securities 72,164 33,068 Mortgage-backed securities 117,891 121,794 U.S. government agency securities 155,894 188,140 U.S. government securities — 7,729 Derivative contracts 39,493 35,027 Total financial instruments and other inventory positions owned 1,101,918 990,934 Less noncontrolling interests (1) (54,047 ) (43,397 ) $ 1,047,871 $ 947,537 Financial instruments and other inventory positions sold, but not yet purchased: Corporate securities: Equity securities $ 21,949 $ 15,740 Fixed income securities 43,553 39,909 U.S. government agency securities 13,584 21,267 U.S. government securities 180,462 159,037 Derivative contracts 5,105 3,202 Total financial instruments and other inventory positions sold, but not yet purchased 264,653 239,155 Less noncontrolling interests (2) (11,457 ) (4,586 ) $ 253,196 $ 234,569 (1) Noncontrolling interests attributable to third party ownership in a consolidated municipal bond fund consist of $12.5 million and $7.5 million of taxable municipal securities, $40.6 million and $35.1 million of tax-exempt municipal securities, and $0.9 million and $0.8 million of derivative contracts as of March 31, 2016 and December 31, 2015 , respectively. (2) Noncontrolling interests attributable to third party ownership in a consolidated municipal bond fund consist of U.S. government securities as of March 31, 2016 and December 31, 2015 |
Total Absolute Notional Contract Amount | The following table presents the gross fair market value and the total absolute notional contract amount of the Company's outstanding derivative instruments, prior to counterparty netting, by asset or liability position: March 31, 2016 December 31, 2015 (Dollars in thousands) Derivative Derivative Notional Derivative Derivative Notional Derivative Category Assets (1) Liabilities (2) Amount Assets (1) Liabilities (2) Amount Interest rate Customer matched-book $ 445,897 $ 425,503 $ 3,989,068 $ 406,888 $ 386,284 $ 4,392,440 Trading securities 5 6,907 301,800 — 7,685 290,600 Credit default swap index Trading securities 4,905 1,341 116,902 5,411 530 94,270 Futures and equity options Trading securities 502 — 12,925,612 164 149 2,345,037 $ 451,309 $ 433,751 $ 17,333,382 $ 412,463 $ 394,648 $ 7,122,347 |
Unrealized Gains/(Losses) on Derivative Instruments | The following table presents the Company’s unrealized gains/(losses) on derivative instruments: Three Months Ended (Dollars in thousands) March 31, Derivative Category Operations Category 2016 2015 Interest rate derivative contract Investment banking $ (1,172 ) $ (520 ) Interest rate derivative contract Institutional brokerage 1,744 679 Credit default swap index contract Institutional brokerage 389 4,607 Futures and equity option derivative contracts Institutional brokerage 29 35 $ 990 $ 4,801 |
Fair Value of Financial Instr32
Fair Value of Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Information about Significant Unobservable Inputs used in Fair Value Measurement | The following table summarizes quantitative information about the significant unobservable inputs used in the fair value measurement of the Company’s Level III financial instruments as of March 31, 2016 : Valuation Weighted Technique Unobservable Input Range Average Assets: Financial instruments and other inventory positions owned: Municipal securities: Tax-exempt securities Discounted cash flow Debt service coverage ratio (2) 5 - 60% 19.4% Short-term securities Discounted cash flow Expected recovery rate (% of par) (2) 66 - 94% 91.0% Mortgage-backed securities: Collateralized by residential mortgages Discounted cash flow Credit default rates (3) 2 - 8% 4.2% Prepayment rates (4) 3 - 25% 7.9% Loss severity (3) 20 - 95% 65.8% Valuation yields (3) 2 - 7% 5.0% Derivative contracts: Interest rate locks Discounted cash flow Premium over the MMD curve (1) 6.5 bps 6.5 bps Investments at fair value: Equity securities in private companies Market approach Revenue multiple (2) 2 - 5 times 4.0 times EBITDA multiple (2) 10 - 12 times 10.4 times Liabilities: Financial instruments and other inventory positions sold, but not yet purchased: Derivative contracts: Interest rate locks Discounted cash flow Premium over the MMD curve (1) 3 - 51 bps 15.3 bps Sensitivity of the fair value to changes in unobservable inputs: (1) Significant increase/(decrease) in the unobservable input in isolation would result in a significantly lower/(higher) fair value measurement. (2) Significant increase/(decrease) in the unobservable input in isolation would result in a significantly higher/(lower) fair value measurement. (3) Significant changes in any of these inputs in isolation could result in a significantly different fair value. Generally, a change in the assumption used for credit default rates is accompanied by a directionally similar change in the assumption used for the loss severity and a directionally inverse change in the assumption for valuation yields. (4) The potential impact of changes in prepayment rates on fair value is dependent on other security-specific factors, such as the par value and structure. Changes in the prepayment rates may result in directionally similar or directionally inverse changes in fair value depending on whether the security trades at a premium or discount to the par value. |
Valuation of Financial Instruments by Pricing Observability Levels | The following table summarizes the valuation of the Company’s financial instruments by pricing observability levels defined in FASB Accounting Standards Codification Topic 820, "Fair Value Measurement" ("ASC 820") as of March 31, 2016 : Counterparty and Cash Collateral (Dollars in thousands) Level I Level II Level III Netting (1) Total Assets: Financial instruments and other inventory positions owned: Corporate securities: Equity securities $ 4,031 $ 760 $ — $ — $ 4,791 Convertible securities — 17,039 — — 17,039 Fixed income securities — 59,735 — — 59,735 Municipal securities: Taxable securities — 125,692 — — 125,692 Tax-exempt securities — 508,042 1,177 — 509,219 Short-term securities — 71,416 748 — 72,164 Mortgage-backed securities — — 117,891 — 117,891 U.S. government agency securities — 155,894 — — 155,894 Derivative contracts 87 451,217 5 (411,816 ) 39,493 Total financial instruments and other inventory positions owned 4,118 1,389,795 119,821 (411,816 ) 1,101,918 Cash equivalents 766 — — — 766 Investments at fair value 36,922 — 110,477 — 147,399 Total assets $ 41,806 $ 1,389,795 $ 230,298 $ (411,816 ) $ 1,250,083 Liabilities: Financial instruments and other inventory positions sold, but not yet purchased: Corporate securities: Equity securities $ 17,837 $ 4,112 $ — $ — $ 21,949 Fixed income securities — 43,553 — — 43,553 U.S. government agency securities — 13,584 — — 13,584 U.S. government securities 180,462 — — — 180,462 Derivative contracts — 428,343 5,408 (428,646 ) 5,105 Total financial instruments and other inventory positions sold, but not yet purchased $ 198,299 $ 489,592 $ 5,408 $ (428,646 ) $ 264,653 (1) Represents cash collateral and the impact of netting on a counterparty basis. The Company had no securities posted as collateral to its counterparties. The following table summarizes the valuation of the Company’s financial instruments by pricing observability levels defined in ASC 820 as of December 31, 2015 : Counterparty and Cash Collateral (Dollars in thousands) Level I Level II Level III Netting (1) Total Assets: Financial instruments and other inventory positions owned: Corporate securities: Equity securities $ 7,569 $ 1,936 $ — $ — $ 9,505 Convertible securities — 18,460 — — 18,460 Fixed income securities — 48,654 — — 48,654 Municipal securities: Taxable securities — 105,775 5,816 — 111,591 Tax-exempt securities — 415,789 1,177 — 416,966 Short-term securities — 32,348 720 — 33,068 Mortgage-backed securities — 670 121,124 — 121,794 U.S. government agency securities — 188,140 — — 188,140 U.S. government securities 7,729 — — — 7,729 Derivative contracts 164 412,299 — (377,436 ) 35,027 Total financial instruments and other inventory positions owned 15,462 1,224,071 128,837 (377,436 ) 990,934 Cash equivalents 130,138 — — — 130,138 Investments at fair value 34,874 — 107,907 — 142,781 Total assets $ 180,474 $ 1,224,071 $ 236,744 $ (377,436 ) $ 1,263,853 Liabilities: Financial instruments and other inventory positions sold, but not yet purchased: Corporate securities: Equity securities $ 13,489 $ 2,251 $ — $ — $ 15,740 Fixed income securities — 39,909 — — 39,909 U.S. government agency securities — 21,267 — — 21,267 U.S. government securities 159,037 — — — 159,037 Derivative contracts 149 387,351 7,148 (391,446 ) 3,202 Total financial instruments and other inventory positions sold, but not yet purchased $ 172,675 $ 450,778 $ 7,148 $ (391,446 ) $ 239,155 (1) Represents cash collateral and the impact of netting on a counterparty basis. The Company had no securities posted as collateral to its counterparties. |
Changes in Fair Value Associated with Level III Financial Instruments | The following tables summarize the changes in fair value associated with Level III financial instruments held at the beginning or end of the periods presented: Unrealized gains/ (losses) for assets/ Balance at Realized Unrealized Balance at liabilities held at December 31, Transfers Transfers gains/ gains/ March 31, March 31, (Dollars in thousands) 2015 Purchases Sales in out (losses) (1) (losses) (1) 2016 2016 (1) Assets: Financial instruments and other inventory positions owned: Municipal securities: Taxable securities $ 5,816 $ — $ (611 ) $ — $ (5,216 ) $ 11 $ — $ — $ — Tax-exempt securities 1,177 — — — — — — 1,177 — Short-term securities 720 — — — — — 28 748 28 Mortgage-backed securities 121,124 26,519 (27,213 ) — — 1,067 (3,606 ) 117,891 (730 ) Derivative contracts — — — — — — 5 5 5 Total financial instruments and other inventory positions owned 128,837 26,519 (27,824 ) — (5,216 ) 1,078 (3,573 ) 119,821 (697 ) Investments at fair value 107,907 9,301 — — (9,088 ) — 2,357 110,477 2,357 Total assets $ 236,744 $ 35,820 $ (27,824 ) $ — $ (14,304 ) $ 1,078 $ (1,216 ) $ 230,298 $ 1,660 Liabilities: Financial instruments and other inventory positions sold, but not yet purchased: Derivative contracts $ 7,148 $ — $ (9,882 ) $ — $ — $ 9,882 $ (1,740 ) $ 5,408 $ 4,534 Total financial instruments and other inventory positions sold, but not yet purchased $ 7,148 $ — $ (9,882 ) $ — $ — $ 9,882 $ (1,740 ) $ 5,408 $ 4,534 (1) Realized and unrealized gains/(losses) related to financial instruments, with the exception of customer matched-book derivatives, are reported in institutional brokerage on the consolidated statements of operations. Realized and unrealized gains/(losses) related to customer matched-book derivatives are reported in investment banking. Realized and unrealized gains/(losses) related to investments are reported in investment banking revenues or investment income on the consolidated statements of operations. Unrealized gains/ (losses) for assets/ Balance at Realized Unrealized Balance at liabilities held at December 31, Transfers Transfers gains/ gains/ March 31, March 31, (Dollars in thousands) 2014 Purchases Sales in out (losses) (1) (losses) (1) 2015 2015 (1) Assets: Financial instruments and other inventory positions owned: Municipal securities: Tax-exempt securities $ 1,186 $ — $ — $ — $ — $ — $ (10 ) $ 1,176 $ (10 ) Short-term securities 720 — — — — — — 720 — Mortgage-backed securities 124,749 119,826 (98,947 ) — — 2,490 (241 ) 147,877 517 Derivative contracts 140 520 — — — (520 ) 1,082 1,222 1,222 Total financial instruments and other inventory positions owned 126,795 120,346 (98,947 ) — — 1,970 831 150,995 1,729 Investments at fair value 74,165 — (182 ) — — 182 13,303 87,468 13,303 Total assets $ 200,960 $ 120,346 $ (99,129 ) $ — $ — $ 2,152 $ 14,134 $ 238,463 $ 15,032 Liabilities: Financial instruments and other inventory positions sold, but not yet purchased: Derivative contracts $ 7,822 $ (5,814 ) $ — $ — $ — $ 5,814 $ 404 $ 8,226 $ 4,318 Total financial instruments and other inventory positions sold, but not yet purchased $ 7,822 $ (5,814 ) $ — $ — $ — $ 5,814 $ 404 $ 8,226 $ 4,318 (1) Realized and unrealized gains/(losses) related to financial instruments, with the exception of customer matched-book derivatives, are reported in institutional brokerage on the consolidated statements of operations. Realized and unrealized gains/(losses) related to customer matched-book derivatives are reported in investment banking. Realized and unrealized gains/(losses) related to investments are reported in investment banking revenues or investment income on the consolidated statements of operations. |
Variable Interest Entities Vari
Variable Interest Entities Variable Interest Entities (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Variable Interest Entity, Consolidated, Carrying Amount, Assets and Liabilities, Net [Abstract] | |
Schedule of Variable Interest Entities | The following table presents information about the carrying value of the assets and liabilities of the VIEs which are consolidated by the Company and included on the consolidated statements of financial condition at March 31, 2016 . The assets can only be used to settle the liabilities of the respective VIE, and the creditors of the VIEs do not have recourse to the general credit of the Company. The assets and liabilities are presented prior to consolidation and thus a portion of these assets and liabilities are eliminated in consolidation. Alternative Asset (Dollars in thousands) Management Funds Assets: Receivables from brokers, dealers and clearing organizations $ 46,753 Financial instruments and other inventory positions owned and pledged as collateral 349,618 Investments 89,068 Other assets 9,819 Total assets $ 495,258 Liabilities: Short-term financing $ 179,236 Payables to brokers, dealers and clearing organizations 89,245 Financial instruments and other inventory positions sold, but not yet purchased 74,112 Other liabilities and accrued expenses 9,526 Total liabilities $ 352,119 |
Receivables from and Payables34
Receivables from and Payables to Brokers, Dealers and Clearing Organizations (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Brokers and Dealers [Abstract] | |
Brokers, Dealers and Clearing Organizations | March 31, December 31, (Dollars in thousands) 2016 2015 Receivable arising from unsettled securities transactions $ 46,753 $ 62,105 Deposits paid for securities borrowed 63,819 47,508 Receivable from clearing organizations 5,068 3,155 Deposits with clearing organizations 60,877 27,019 Securities failed to deliver 6,341 2,100 Other 2,921 6,062 Total receivables from brokers, dealers and clearing organizations $ 185,779 $ 147,949 March 31, December 31, (Dollars in thousands) 2016 2015 Payable arising from unsettled securities transactions $ 161,648 $ 34,445 Payable to clearing organizations 65 3,115 Securities failed to receive 3,196 4,468 Other 6,022 6,103 Total payable to brokers, dealers and clearing organizations $ 170,931 $ 48,131 |
Collateralized Securities Tra35
Collateralized Securities Transactions (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Disclosure of Repurchase Agreements [Abstract] | |
Summary of Repurchase Liabilities, Fair Market Value of Related Collateral Pledged and Interest Rate Charged | The following is a summary of the Company’s securities sold under agreements to repurchase ("Repurchase Liabilities"), the fair market value of collateral pledged and the interest rate charged by the Company’s counterparty, which is based on LIBOR plus an applicable margin, as of March 31, 2016 : Repurchase Fair Market (Dollars in thousands) Liabilities Value Interest Rate Term up to 30 day maturities: Mortgage-backed securities $ 32,685 $ 47,153 2.18 - 2.37% On demand maturities: U.S. government agency securities 1,912 2,020 0.65% U.S. government securities 18,947 18,732 0.10% $ 53,544 $ 67,905 |
Offsetting Assets and Liabilities | The following table provides information about the offsetting of these instruments and related collateral amounts at March 31, 2016 : Gross Amount Net Amounts Gross Amounts Not Offset Offset on the Presented on the on the Consolidated Statements Gross Consolidated Consolidated of Financial Condition (Dollars in thousands) Recognized Statements of Statements of Financial Collateral Net Description Assets Financial Condition Financial Condition Instruments Received (1) Amount Reverse repurchase agreements $ 119,084 $ (1,912 ) $ 117,172 $ — $ (117,172 ) $ — Securities borrowed (3) 63,819 — 63,819 — (63,819 ) — Gross Amount Net Amount Gross Amount Not Offset Offset on the Presented on the on the Consolidated Statements Gross Consolidated Consolidated of Financial Condition (Dollars in thousands) Recognized Statements of Statements of Financial Collateral Net Description Liabilities Financial Condition Financial Condition Instruments Pledged (2) Amount Repurchase agreements $ 53,544 $ (1,912 ) $ 51,632 $ — $ (51,632 ) $ — (1) Includes securities received by the Company from the counterparty. These securities are not included on the consolidated statements of financial condition unless there is an event of default. (2) Includes the fair value of securities pledged by the Company to the counterparty. These securities are included on the consolidated statements of financial condition unless the Company defaults. (3) Deposits paid for securities borrowed are included in receivables from brokers, dealers and clearing organizations on the consolidated statements of financial condition. See Note 7 for additional information on receivables from brokers, dealers and clearing organizations. |
Investments (Tables)
Investments (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Investments, All Other Investments [Abstract] | |
Schedule of Investments | The Company’s investments include investments in private companies and partnerships, registered mutual funds, warrants of public and private companies and private company debt. March 31, December 31, (Dollars in thousands) 2016 2015 Investments at fair value $ 147,399 $ 142,781 Investments at cost 2,892 3,299 Investments accounted for under the equity method 13,410 17,781 Total investments 163,701 163,861 Less investments attributable to noncontrolling interests (1) (33,562 ) (40,069 ) $ 130,139 $ 123,792 (1) Noncontrolling interests are attributable to third party ownership in a consolidated merchant banking fund. |
Other Assets (Tables)
Other Assets (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Assets | March 31, December 31, (Dollars in thousands) 2016 2015 Net deferred income tax assets $ 60,018 $ 66,810 Fee receivables 16,858 18,362 Accrued interest receivables 7,236 6,145 Forgivable loans, net 10,682 10,234 Income tax receivables 10,946 — Prepaid expenses 7,590 6,161 Other 18,114 11,490 Total other assets $ 131,444 $ 119,202 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes in Carrying Value of Goodwill and Intangible Assets | Capital Asset (Dollars in thousands) Markets Management Total Goodwill Balance at December 31, 2015 $ 21,132 $ 196,844 $ 217,976 Goodwill acquired 71,900 — 71,900 Measurement period adjustment (14 ) — (14 ) Balance at March 31, 2016 $ 93,018 $ 196,844 $ 289,862 Intangible assets Balance at December 31, 2015 $ 8,256 $ 22,274 $ 30,530 Intangible assets acquired 14,597 — 14,597 Measurement period adjustment 14 — 14 Amortization of intangible assets (1,909 ) (1,387 ) (3,296 ) Balance at March 31, 2016 $ 20,958 $ 20,887 $ 41,845 |
Aggregate Future Intangible Asset Amortization Expense | The following table summarizes the future aggregate amortization expense of the Company's intangible assets with determinable lives for the years ended: (Dollars in thousands) Remainder of 2016 $ 12,180 2017 12,183 2018 6,516 2019 6,009 2020 1,427 Thereafter 670 Total $ 38,985 |
Short-Term Financing (Tables)
Short-Term Financing (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
Summary of Short-Term Financing and Weighted Average Interest Rate on Borrowings | Outstanding Balance Weighted Average Interest Rate March 31, December 31, March 31, December 31, (Dollars in thousands) 2016 2015 2016 2015 Commercial paper (secured) $ 279,807 $ 276,894 1.88% 1.74% Prime broker arrangement 179,236 169,296 1.18% 1.07% Total short-term financing $ 459,043 $ 446,190 |
Senior Notes Senior Notes (Tabl
Senior Notes Senior Notes (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Senior Notes [Abstract] | |
Schedule of senior notes | The Company has entered into variable and fixed rate senior notes with certain entities advised by Pacific Investment Management Company ("PIMCO"). The following table presents the outstanding balance by note class at March 31, 2016 and December 31, 2015 , respectively. Outstanding Balance March 31, December 31, (Dollars in thousands) 2016 2015 Class A Notes $ 50,000 $ 50,000 Class C Notes 125,000 125,000 Total senior notes $ 175,000 $ 175,000 |
Commitments and Contingencies C
Commitments and Contingencies Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Rental Payments for Operating Leases | The Company leases office space throughout the United States and in a limited number of foreign countries where the Company’s international operations reside. Aggregate minimum lease commitments under operating leases as of March 31, 2016 are as follows: (Dollars in thousands) Remainder of 2016 $ 11,837 2017 14,025 2018 12,935 2019 11,285 2020 10,779 Thereafter 26,078 $ 86,939 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Equity [Abstract] | |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Table Text Block] | Ownership interests in entities held by parties other than the Company’s common shareholders are presented as noncontrolling interests within shareholders’ equity, separate from the Company’s own equity. Revenues, expenses and net income or loss are reported on the consolidated statements of operations on a consolidated basis, which includes amounts attributable to both the Company’s common shareholders and noncontrolling interests. Net income or loss is then allocated between the Company and noncontrolling interests based upon their relative ownership interests. Net income applicable to noncontrolling interests is deducted from consolidated net income to determine net income applicable to the Company. There was no other comprehensive income or loss attributed to noncontrolling interests for the three months ended March 31, 2016 and 2015 , respectively. The following table presents the changes in shareholders' equity for the three months ended March 31, 2016 : Common Common Total Shares Shareholders’ Noncontrolling Shareholders’ (Amounts in thousands, except share amounts) Outstanding Equity Interests Equity Balance at December 31, 2015 13,311,016 $ 783,659 $ 49,161 $ 832,820 Net income — 2,437 749 3,186 Amortization/issuance of restricted stock — 37,120 — 37,120 Issuance of common stock as deal consideration for Simmons 25,525 2,647 — 2,647 Issuance of treasury shares for restricted stock vestings 450,537 — — — Repurchase of common stock through share repurchase program (351,791 ) (12,364 ) — (12,364 ) Repurchase of common stock for employee tax withholding (169,282 ) (7,081 ) — (7,081 ) Reduced tax benefit from stock-based compensation — (895 ) — (895 ) Shares reserved/issued for director compensation 1,780 60 — 60 Other comprehensive loss — (403 ) — (403 ) Deconsolidation of investment partnerships (1) — — (9,415 ) (9,415 ) Fund capital contributions, net — — 7,262 7,262 Balance at March 31, 2016 13,267,785 $ 805,180 $ 47,757 $ 852,937 (1) The Company deconsolidated certain investment partnerships upon adoption of ASU 2015-02. Se e Note 2 fo r further discussion. |
Compensation Plans (Tables)
Compensation Plans (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of Outstanding Equity Awards | The following table provides a summary of the Company’s outstanding Incentive Plan equity awards (in shares or units) as of March 31, 2016 : Restricted Stock Annual grants 1,332,725 Sign-on grants 370,899 Simmons deal consideration (1) 1,146,596 2,850,220 Restricted Stock Units Market condition leadership grants 356,242 Stock Options 146,560 |
Schedule of Valuation Assumptions | The fair value of the awards on the grant date was determined using a Monte Carlo simulation with the following assumptions: Risk-free Expected Stock Grant Year Interest Rate Price Volatility 2015 0.90% 29.8% 2014 0.82% 41.3% 2013 0.40% 44.0% |
Changes in Unvested Restricted Stock | The following table summarizes the changes in the Company’s unvested restricted stock (including the restricted stock issued as part of the deal consideration for Simmons) under the Incentive Plan: Unvested Weighted Average Restricted Stock Grant Date (in Shares) Fair Value December 31, 2015 1,287,915 $ 46.20 Granted 2,042,264 41.84 Vested (476,062 ) 46.32 Canceled (3,897 ) 46.09 March 31, 2016 2,850,220 $ 43.06 |
Changes in Unvested Restricted Stock Units | The following table summarizes the changes in the Company’s unvested restricted stock units under the Incentive Plan: Unvested Weighted Average Restricted Grant Date Stock Units Fair Value December 31, 2015 356,242 $ 22.18 Granted — — Vested — — Canceled — — March 31, 2016 356,242 $ 22.18 |
Changes in Outstanding Stock Options | The following table summarizes the changes in the Company’s outstanding stock options: Weighted Average Weighted Remaining Options Average Contractual Term Aggregate Outstanding Exercise Price (in Years) Intrinsic Value December 31, 2015 157,201 $ 50.35 1.6 $ — Granted — — Exercised — — Canceled — — Expired (10,641 ) 47.85 March 31, 2016 146,560 $ 50.53 1.7 $ 542,334 Options exercisable at March 31, 2016 146,560 $ 50.53 1.7 $ 542,334 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Earnings Per Share [Abstract] | |
Computation of Earnings per Share | The computation of earnings per share is as follows: Three Months Ended March 31, (Amounts in thousands, except per share data) 2016 2015 Net income applicable to Piper Jaffray Companies $ 2,437 $ 16,972 Earnings allocated to participating securities (1) (313 ) (1,162 ) Net income applicable to Piper Jaffray Companies’ common shareholders (2) $ 2,124 $ 15,810 Shares for basic and diluted calculations: Average shares used in basic computation 13,160 15,294 Stock options 12 38 Average shares used in diluted computation 13,172 15,332 Earnings per common share: Basic $ 0.16 $ 1.03 Diluted $ 0.16 $ 1.03 (1) Represents the allocation of earnings to participating securities. Losses are not allocated to participating securities. Participating securities include all of the Company’s unvested restricted shares. The weighted average participating shares outstanding were 1,938,759 and 1,126,906 for the three months ended March 31, 2016 and 2015 , respectively. (2) Net income/(loss) applicable to Piper Jaffray Companies’ common shareholders for diluted and basic EPS may differ under the two-class method as a result of adding the effect of the assumed exercise of stock options to dilutive shares outstanding, which alters the ratio used to allocate earnings to Piper Jaffray Companies’ common shareholders and participating securities for purposes of calculating diluted and basic EPS. |
Segment Reporting (Tables)
Segment Reporting (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Segment Reporting [Abstract] | |
Reportable segment financial results | Reportable segment financial results are as follows: Three Months Ended March 31, (Dollars in thousands) 2016 2015 Capital Markets Investment banking Financing Equities $ 6,566 $ 36,007 Debt 15,972 20,988 Advisory services 81,629 30,498 Total investment banking 104,167 87,493 Institutional sales and trading Equities 19,669 18,905 Fixed income 17,054 21,217 Total institutional sales and trading 36,723 40,122 Management and performance fees 965 1,407 Investment income 2,086 14,705 Long-term financing expenses (2,292 ) (1,560 ) Net revenues 141,649 142,167 Operating expenses (1) 138,855 116,203 Segment pre-tax operating income $ 2,794 $ 25,964 Segment pre-tax operating margin 2.0 % 18.3 % Continued on next page Three Months Ended March 31, (Dollars in thousands) 2016 2015 Asset Management Management and performance fees Management fees $ 12,883 $ 19,107 Performance fees — 8 Total management and performance fees 12,883 19,115 Investment income/(loss) (976 ) 589 Net revenues 11,907 19,704 Operating expenses (1) 11,259 14,376 Segment pre-tax operating income $ 648 $ 5,328 Segment pre-tax operating margin 5.4 % 27.0 % Total Net revenues $ 153,556 $ 161,871 Operating expenses (1) 150,114 130,579 Pre-tax operating income $ 3,442 $ 31,292 Pre-tax operating margin 2.2 % 19.3 % (1) Operating expenses include intangible asset amortization expense as set forth in the table below: Three Months Ended March 31, (Dollars in thousands) 2016 2015 Capital Markets $ 1,909 $ 263 Asset Management 1,387 1,510 Total intangible asset amortization expense $ 3,296 $ 1,773 |
Schedule of intangible asset amortization expense | Operating expenses include intangible asset amortization expense as set forth in the table below: Three Months Ended March 31, (Dollars in thousands) 2016 2015 Capital Markets $ 1,909 $ 263 Asset Management 1,387 1,510 Total intangible asset amortization expense $ 3,296 $ 1,773 |
Reportable segment assets | Reportable segment assets are as follows: March 31, December 31, (Dollars in thousands) 2016 2015 Capital Markets $ 1,925,541 $ 1,870,272 Asset Management 252,874 268,246 $ 2,178,415 $ 2,138,518 |
Organization and Basis of Pre46
Organization and Basis of Presentation - Additional Information (Detail) | 3 Months Ended |
Mar. 31, 2016segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of reportable segments | 2 |
Accounting Policies and Prono47
Accounting Policies and Pronouncements Accounting Policies and Pronouncments (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2016USD ($) | |
Accounting Standards Update 2015-02 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Deconsolidated assets of certain investment partnerships | $ 0 |
Effective as of January 1, 2016 | Accounting Standards Update 2015-02 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Deconsolidated assets of certain investment partnerships | 9.4 |
Actual impact as of period end | Accounting Standards Update 2016-09 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Excess tax benefits recorded as additional paid-in-capital | $ 6.1 |
Acquisitions - Additional Infor
Acquisitions - Additional Information(Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2016 | Feb. 26, 2016 | Dec. 31, 2015 | |
Business Acquisition [Line Items] | |||
Goodwill acquired | $ 71,900 | ||
Goodwill | 289,862 | $ 217,976 | |
Simmons & Company International | |||
Business Acquisition [Line Items] | |||
Economic value | $ 140,000 | ||
Fair value of net assets acquired | 118,500 | ||
Acquisition related compensation arrangements | 20,600 | ||
Goodwill acquired | 71,900 | ||
Goodwill amount expected to be deducted for income tax purposes | 61,700 | ||
Transaction costs | $ 500 | ||
Goodwill | 71,900 | ||
Simmons & Company International | Customer relationships | |||
Business Acquisition [Line Items] | |||
Identifiable intangible assets acquired | 13,800 | ||
Simmons & Company International | Simmons trade name | |||
Business Acquisition [Line Items] | |||
Identifiable intangible assets acquired | 800 | ||
Simmons & Company International | Restricted Stock | |||
Business Acquisition [Line Items] | |||
Number of restricted common shares issued as part of the purchase price | 1,149,340 | ||
Value of equity consideration on the acquisition date | 48,200 | ||
Award vesting period in years | 3 years | ||
Acquisition related compensation arrangements | 11,600 | ||
Simmons & Company International | Restricted Stock | Minimum | |||
Business Acquisition [Line Items] | |||
Acquisition related compensation arrangement requisite service period | 1 year | ||
Simmons & Company International | Restricted Stock | Maximum | |||
Business Acquisition [Line Items] | |||
Acquisition related compensation arrangement requisite service period | 3 years | ||
Simmons & Company International | Restricted Stock | Weighted Average | |||
Business Acquisition [Line Items] | |||
Acquisition related compensation arrangement requisite service period | 2 years 8 months 19 days | ||
River Branch and BMO GKST | |||
Business Acquisition [Line Items] | |||
Goodwill | $ 6,098 | ||
River Branch and BMO GKST | Customer relationships | |||
Business Acquisition [Line Items] | |||
Identifiable intangible assets acquired | $ 7,534 | ||
Cash | Simmons & Company International | |||
Business Acquisition [Line Items] | |||
Acquisition related compensation arrangements | $ 9,000 | ||
Requisite service period for performance award plan | 3 years | ||
Cash | Simmons & Company International | Restricted Stock | |||
Business Acquisition [Line Items] | |||
Requisite service period for acquisition related compensation arrangements | 3 years |
Acquisitions - Estimated Fair V
Acquisitions - Estimated Fair Values of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Feb. 26, 2016 | Dec. 31, 2015 |
Receivables | |||
Goodwill | $ 289,862 | $ 217,976 | |
Simmons & Company International | |||
Assets | |||
Cash and cash equivalents | $ 47,201 | ||
Receivables | |||
Customer | 1,278 | ||
Brokers, dealers and clearing organizations | 931 | ||
Fixed assets | 1,981 | ||
Goodwill | 71,900 | ||
Intangible assets | 14,597 | ||
Investments | 995 | ||
Other assets | 3,599 | ||
Total assets acquired | 142,482 | ||
Liabilities | |||
Accrued compensation | 16,284 | ||
Other liabilities and accrued expenses | 7,693 | ||
Total liabilities assumed | 23,977 | ||
Net assets acquired | $ 118,505 |
Acquisitions - Unaudited Pro Fo
Acquisitions - Unaudited Pro Forma Information (Details) - Simmons & Company International - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||
Net revenues | $ 161,353 | $ 187,982 |
Net income/(loss) applicable to Piper Jaffray Companies | $ (222) | $ 15,490 |
Financial Instruments and Oth51
Financial Instruments and Other Inventory Positions Owned and Financial Instruments and Other Inventory Positions Sold, but Not Yet Purchased (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Security Owned and Sold, Not yet Purchased, at Fair Value [Line Items] | ||
Equity securities | $ 4,791 | $ 9,505 |
Convertible securities | 17,039 | 18,460 |
Fixed income securities | 59,735 | 48,654 |
Taxable securities | 125,692 | 111,591 |
Tax-exempt securities | 509,219 | 416,966 |
Short-term securities | 72,164 | 33,068 |
Mortgage-backed securities | 117,891 | 121,794 |
U.S. government agency securities | 155,894 | 188,140 |
U.S. government securities | 0 | 7,729 |
Derivative contracts | 39,493 | 35,027 |
Total financial instruments and other inventory positions owned | 1,101,918 | 990,934 |
Equity securities | 21,949 | 15,740 |
Fixed income securities | 43,553 | 39,909 |
U.S. government agency securities | 13,584 | 21,267 |
U.S. government securities | 180,462 | 159,037 |
Derivative contracts | 5,105 | 3,202 |
Total financial instruments and other inventory positions sold, but not yet purchased | 264,653 | 239,155 |
Financial instruments and other inventory positions owned and pledged as collateral | 675,876 | 707,355 |
Municipal Bond Fund | ||
Security Owned and Sold, Not yet Purchased, at Fair Value [Line Items] | ||
Taxable securities | 12,500 | 7,500 |
Tax-exempt securities | 40,600 | 35,100 |
Derivative contracts | 900 | 800 |
Total financial instruments and other inventory positions owned | 54,047 | 43,397 |
Total financial instruments and other inventory positions sold, but not yet purchased | 11,457 | 4,586 |
Parent Company | ||
Security Owned and Sold, Not yet Purchased, at Fair Value [Line Items] | ||
Total financial instruments and other inventory positions owned | 1,047,871 | 947,537 |
Total financial instruments and other inventory positions sold, but not yet purchased | $ 253,196 | $ 234,569 |
Financial Instruments and Oth52
Financial Instruments and Other Inventory Positions Owned and Financial Instruments and Other Inventory Positions Sold, but Not Yet Purchased - Total Absolute Notional Contract Amount (Details) - Not Designated as Hedging Instrument - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Derivative [Line Items] | ||
Derivative Assets (1) | $ 451,309 | $ 412,463 |
Derivative Liabilities (2) | 433,751 | 394,648 |
Notional Amount | 17,333,382 | 7,122,347 |
Interest rate | Customer matched-book | ||
Derivative [Line Items] | ||
Notional Amount | 3,989,068 | 4,392,440 |
Interest rate | Customer matched-book | Financial instruments and other inventory positions owned | ||
Derivative [Line Items] | ||
Derivative Assets (1) | 445,897 | 406,888 |
Interest rate | Customer matched-book | Financial instruments and other inventory positions sold, but not yet purchased | ||
Derivative [Line Items] | ||
Derivative Liabilities (2) | 425,503 | 386,284 |
Interest rate | Trading securities | ||
Derivative [Line Items] | ||
Notional Amount | 301,800 | 290,600 |
Interest rate | Trading securities | Financial instruments and other inventory positions owned | ||
Derivative [Line Items] | ||
Derivative Assets (1) | 5 | 0 |
Interest rate | Trading securities | Financial instruments and other inventory positions sold, but not yet purchased | ||
Derivative [Line Items] | ||
Derivative Liabilities (2) | 6,907 | 7,685 |
Credit default swap index | Trading securities | ||
Derivative [Line Items] | ||
Notional Amount | 116,902 | 94,270 |
Credit default swap index | Trading securities | Financial instruments and other inventory positions owned | ||
Derivative [Line Items] | ||
Derivative Assets (1) | 4,905 | 5,411 |
Credit default swap index | Trading securities | Financial instruments and other inventory positions sold, but not yet purchased | ||
Derivative [Line Items] | ||
Derivative Liabilities (2) | 1,341 | 530 |
Futures and equity options | Trading securities | ||
Derivative [Line Items] | ||
Notional Amount | 12,925,612 | 2,345,037 |
Futures and equity options | Trading securities | Financial instruments and other inventory positions owned | ||
Derivative [Line Items] | ||
Derivative Assets (1) | 502 | 164 |
Futures and equity options | Trading securities | Financial instruments and other inventory positions sold, but not yet purchased | ||
Derivative [Line Items] | ||
Derivative Liabilities (2) | $ 0 | $ 149 |
Financial Instruments and Oth53
Financial Instruments and Other Inventory Positions Owned and Financial Instruments and Other Inventory Positions Sold, but Not Yet Purchased - Unrealized Gains/(Losses) on Derivative Instruments (Details) - Not Designated as Hedging Instrument - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Unrealized Gain (Loss) on Derivatives Instruments | $ 990 | $ 4,801 |
Interest rate derivative contract | Investment banking | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Unrealized Gain (Loss) on Derivatives Instruments | (1,172) | (520) |
Interest rate derivative contract | Institutional brokerage | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Unrealized Gain (Loss) on Derivatives Instruments | 1,744 | 679 |
Credit default swap index contract | Institutional brokerage | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Unrealized Gain (Loss) on Derivatives Instruments | 389 | 4,607 |
Futures and equity option derivative contracts | Institutional brokerage | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Unrealized Gain (Loss) on Derivatives Instruments | $ 29 | $ 35 |
Financial Instruments and Oth54
Financial Instruments and Other Inventory Positions Owned and Financial Instruments and Other Inventory Positions Sold, but Not Yet Purchased - Additional Information (Details) - Maximum risk of loss $ in Millions | Mar. 31, 2016USD ($) |
Counterparties not required to post collateral | |
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | |
Uncollateralized credit exposure | $ 28.2 |
Notional contract amount | 186.1 |
One unnamed financial institutional not required to post collateral | |
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | |
Uncollateralized credit exposure | $ 20 |
Fair Value of Financial Instr55
Fair Value of Financial Instruments Fair Value of Financial Instruments - Fair Value Option (Details) - Merchant Banking Investments - Level III - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Fair Value, Option, Quantitative Disclosures [Line Items] | |||
Investments at fair value | $ 18.2 | $ 19.7 | |
Gains from changes in fair value | $ 0.3 | $ 0.8 |
Fair Value of Financial Instr56
Fair Value of Financial Instruments - Information about Significant Unobservable Inputs used in Fair Value Measurement (Details) - Level III | 3 Months Ended |
Mar. 31, 2016 | |
Tax-exempt securities | Financial instruments and other inventory positions owned | Minimum | Discounted cash flow | |
Fair Value Inputs Assets and Liabilities Quantitative Information [Line Items] | |
Debt service coverage ratio | 5.00% |
Tax-exempt securities | Financial instruments and other inventory positions owned | Maximum | Discounted cash flow | |
Fair Value Inputs Assets and Liabilities Quantitative Information [Line Items] | |
Debt service coverage ratio | 60.00% |
Tax-exempt securities | Financial instruments and other inventory positions owned | Weighted Average | Discounted cash flow | |
Fair Value Inputs Assets and Liabilities Quantitative Information [Line Items] | |
Debt service coverage ratio | 19.40% |
Short-term securities | Financial instruments and other inventory positions owned | Minimum | Discounted cash flow | |
Fair Value Inputs Assets and Liabilities Quantitative Information [Line Items] | |
Expected recovery rate (% of par) | 66.00% |
Short-term securities | Financial instruments and other inventory positions owned | Maximum | Discounted cash flow | |
Fair Value Inputs Assets and Liabilities Quantitative Information [Line Items] | |
Expected recovery rate (% of par) | 94.00% |
Short-term securities | Financial instruments and other inventory positions owned | Weighted Average | Discounted cash flow | |
Fair Value Inputs Assets and Liabilities Quantitative Information [Line Items] | |
Expected recovery rate (% of par) | 91.00% |
Collateralized by residential mortgages | Financial instruments and other inventory positions owned | Minimum | Discounted cash flow | |
Fair Value Inputs Assets and Liabilities Quantitative Information [Line Items] | |
Credit default rate | 2.00% |
Prepayment rates | 3.00% |
Loss severity | 20.00% |
Valuation yields | 1.80% |
Collateralized by residential mortgages | Financial instruments and other inventory positions owned | Maximum | Discounted cash flow | |
Fair Value Inputs Assets and Liabilities Quantitative Information [Line Items] | |
Credit default rate | 8.00% |
Prepayment rates | 25.00% |
Loss severity | 95.00% |
Valuation yields | 7.00% |
Collateralized by residential mortgages | Financial instruments and other inventory positions owned | Weighted Average | Discounted cash flow | |
Fair Value Inputs Assets and Liabilities Quantitative Information [Line Items] | |
Credit default rate | 4.20% |
Prepayment rates | 7.86% |
Loss severity | 65.75% |
Valuation yields | 4.98% |
Interest rate locks | Financial instruments and other inventory positions owned | Discounted cash flow | |
Fair Value Inputs Assets and Liabilities Quantitative Information [Line Items] | |
Unamortized premium over the MMD curve | 0.065% |
Interest rate locks | Financial instruments and other inventory positions owned | Weighted Average | Discounted cash flow | |
Fair Value Inputs Assets and Liabilities Quantitative Information [Line Items] | |
Unamortized premium over the MMD curve | 0.065% |
Equity investment in private company | Investments | Minimum | Market approach | |
Fair Value Inputs Assets and Liabilities Quantitative Information [Line Items] | |
Revenue multiple | 2.3 |
EBITDA multiple | 9.9 |
Equity investment in private company | Investments | Maximum | Market approach | |
Fair Value Inputs Assets and Liabilities Quantitative Information [Line Items] | |
Revenue multiple | 4.5 |
EBITDA multiple | 12 |
Equity investment in private company | Investments | Weighted Average | Market approach | |
Fair Value Inputs Assets and Liabilities Quantitative Information [Line Items] | |
Revenue multiple | 4 |
EBITDA multiple | 10.4 |
Interest rate locks | Financial instruments and other inventory positions sold, but not yet purchased | Minimum | Discounted cash flow | |
Fair Value Inputs Assets and Liabilities Quantitative Information [Line Items] | |
Unamortized premium over the MMD curve | 0.0253% |
Interest rate locks | Financial instruments and other inventory positions sold, but not yet purchased | Maximum | Discounted cash flow | |
Fair Value Inputs Assets and Liabilities Quantitative Information [Line Items] | |
Unamortized premium over the MMD curve | 0.5103% |
Interest rate locks | Financial instruments and other inventory positions sold, but not yet purchased | Weighted Average | Discounted cash flow | |
Fair Value Inputs Assets and Liabilities Quantitative Information [Line Items] | |
Unamortized premium over the MMD curve | 0.1533% |
Fair Value of Financial Instr57
Fair Value of Financial Instruments - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Dec. 31, 2015 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Transfers out of Level 3 | $ (14,304) | |
Transfers between fair value levels | 0 | |
Level II | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total assets | 1,389,795 | $ 1,224,071 |
Level III | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total assets | $ 230,298 | $ 236,744 |
Percentage of Level III assets to financial instruments measured at fair value | 18.40% | 18.70% |
U.S. government agency securities | Minimum | Level II | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Conditional prepayment rate | 8.00% | |
Market yields basis points spreads to treasury securities (as a percent) | 1.80% | |
U.S. government agency securities | Maximum | Level II | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Conditional prepayment rate | 20.00% | |
Market yields basis points spreads to treasury securities (as a percent) | 3.00% | |
Investments | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Transfers out of Level 3 | $ (9,088) | |
Financial instruments and other inventory positions owned | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Transfers out of Level 3 | (5,216) | |
Financial instruments and other inventory positions owned | Taxable municipal securities | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Transfers out of Level 3 | $ (5,216) |
Fair Value of Financial Instr58
Fair Value of Financial Instruments - Valuation of Financial Instruments by Pricing Observability Levels (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Equity securities | $ 4,791 | $ 9,505 |
Convertible securities | 17,039 | 18,460 |
Fixed income securities | 59,735 | 48,654 |
Taxable securities | 125,692 | 111,591 |
Tax-exempt securities | 509,219 | 416,966 |
Short-term securities | 72,164 | 33,068 |
Mortgage-backed securities | 117,891 | 121,794 |
U.S. government agency securities | 155,894 | 188,140 |
U.S. government securities | 0 | 7,729 |
Derivative contracts | 39,493 | 35,027 |
Derivative contracts | (411,816) | (377,436) |
Total financial instruments and other inventory positions owned | 1,101,918 | 990,934 |
Equity securities | 21,949 | 15,740 |
Fixed income securities | 43,553 | 39,909 |
U.S. government agency securities | 13,584 | 21,267 |
U.S. government securities | 180,462 | 159,037 |
Derivative contracts | 5,105 | 3,202 |
Derivative contracts | (428,646) | (391,446) |
Total financial instruments and other inventory positions sold, but not yet purchased | 264,653 | 239,155 |
Securities posted as collateral to its counterparties | 0 | 0 |
Level I | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Equity securities | 4,031 | 7,569 |
U.S. government securities | 7,729 | |
Derivative contracts | 87 | 164 |
Total financial instruments and other inventory positions owned | 4,118 | 15,462 |
Cash equivalents | 766 | 130,138 |
Investments at fair value | 36,922 | 34,874 |
Total assets | 41,806 | 180,474 |
Equity securities | 17,837 | 13,489 |
U.S. government securities | 180,462 | 159,037 |
Derivative contracts | 149 | |
Total financial instruments and other inventory positions sold, but not yet purchased | 198,299 | 172,675 |
Level II | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Equity securities | 760 | 1,936 |
Convertible securities | 17,039 | 18,460 |
Fixed income securities | 59,735 | 48,654 |
Taxable securities | 125,692 | 105,775 |
Tax-exempt securities | 508,042 | 415,789 |
Short-term securities | 71,416 | 32,348 |
Mortgage-backed securities | 670 | |
U.S. government agency securities | 155,894 | 188,140 |
Derivative contracts | 451,217 | 412,299 |
Total financial instruments and other inventory positions owned | 1,389,795 | 1,224,071 |
Total assets | 1,389,795 | 1,224,071 |
Equity securities | 4,112 | 2,251 |
Fixed income securities | 43,553 | 39,909 |
U.S. government agency securities | 13,584 | 21,267 |
Derivative contracts | 428,343 | 387,351 |
Total financial instruments and other inventory positions sold, but not yet purchased | 489,592 | 450,778 |
Level III | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Taxable securities | 5,816 | |
Tax-exempt securities | 1,177 | 1,177 |
Short-term securities | 748 | 720 |
Mortgage-backed securities | 117,891 | 121,124 |
Derivative contracts | 5 | |
Total financial instruments and other inventory positions owned | 119,821 | 128,837 |
Investments at fair value | 110,477 | 107,907 |
Total assets | 230,298 | 236,744 |
Derivative contracts | 5,408 | 7,148 |
Total financial instruments and other inventory positions sold, but not yet purchased | 5,408 | 7,148 |
Measured on a recurring basis | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Equity securities | 4,791 | 9,505 |
Convertible securities | 17,039 | 18,460 |
Fixed income securities | 59,735 | 48,654 |
Taxable securities | 125,692 | 111,591 |
Tax-exempt securities | 509,219 | 416,966 |
Short-term securities | 72,164 | 33,068 |
Mortgage-backed securities | 117,891 | 121,794 |
U.S. government agency securities | 155,894 | 188,140 |
U.S. government securities | 7,729 | |
Derivative contracts | 39,493 | 35,027 |
Total financial instruments and other inventory positions owned | 1,101,918 | 990,934 |
Cash equivalents | 766 | 130,138 |
Investments at fair value | 147,399 | 142,781 |
Total assets | 1,250,083 | 1,263,853 |
Equity securities | 21,949 | 15,740 |
Fixed income securities | 43,553 | 39,909 |
U.S. government agency securities | 13,584 | 21,267 |
U.S. government securities | 180,462 | 159,037 |
Derivative contracts | 5,105 | 3,202 |
Total financial instruments and other inventory positions sold, but not yet purchased | $ 264,653 | $ 239,155 |
Fair Value of Financial Instr59
Fair Value of Financial Instruments - Changes in Fair Value Associated with Level III Financial Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | $ 236,744 | $ 200,960 |
Purchases | 35,820 | 120,346 |
Sales | (27,824) | (99,129) |
Transfers out | (14,304) | |
Realized gains/ (losses) | 1,078 | 2,152 |
Unrealized gains/ (losses) | (1,216) | 14,134 |
Ending balance | 230,298 | 238,463 |
Unrealized gains/ (losses) for assets held at period end | 1,660 | 15,032 |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | 7,148 | 7,822 |
Purchases | 0 | (5,814) |
Sales | (9,882) | 0 |
Realized gains/(losses) | 9,882 | 5,814 |
Unrealized gains/ (losses) | (1,740) | 404 |
Ending balance | 5,408 | 8,226 |
Unrealized gains/ (losses) for liabilities held at period end | 4,534 | 4,318 |
Financial instruments and other inventory positions owned | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | 128,837 | 126,795 |
Purchases | 26,519 | 120,346 |
Sales | (27,824) | (98,947) |
Transfers out | (5,216) | |
Realized gains/ (losses) | 1,078 | 1,970 |
Unrealized gains/ (losses) | (3,573) | 831 |
Ending balance | 119,821 | 150,995 |
Unrealized gains/ (losses) for assets held at period end | (697) | 1,729 |
Investments | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | 107,907 | 74,165 |
Purchases | 9,301 | |
Sales | 0 | (182) |
Transfers out | (9,088) | |
Realized gains/ (losses) | 0 | 182 |
Unrealized gains/ (losses) | 2,357 | 13,303 |
Ending balance | 110,477 | 87,468 |
Unrealized gains/ (losses) for assets held at period end | 2,357 | 13,303 |
Taxable securities | Financial instruments and other inventory positions owned | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | 5,816 | |
Sales | (611) | |
Transfers out | (5,216) | |
Realized gains/ (losses) | 11 | |
Tax-exempt securities | Financial instruments and other inventory positions owned | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | 1,177 | 1,186 |
Unrealized gains/ (losses) | (10) | |
Ending balance | 1,177 | 1,176 |
Unrealized gains/ (losses) for assets held at period end | (10) | |
Short-term securities | Financial instruments and other inventory positions owned | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | 720 | 720 |
Sales | 0 | |
Realized gains/ (losses) | 0 | |
Unrealized gains/ (losses) | (28) | 0 |
Ending balance | 748 | 720 |
Unrealized gains/ (losses) for assets held at period end | 28 | |
Mortgage-backed securities | Financial instruments and other inventory positions owned | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | 121,124 | 124,749 |
Purchases | 26,519 | 119,826 |
Sales | (27,213) | (98,947) |
Realized gains/ (losses) | 1,067 | 2,490 |
Unrealized gains/ (losses) | (3,606) | (241) |
Ending balance | 117,891 | 147,877 |
Unrealized gains/ (losses) for assets held at period end | (730) | 517 |
Derivative contracts | Financial instruments and other inventory positions owned | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | 140 | |
Purchases | 520 | |
Realized gains/ (losses) | (520) | |
Unrealized gains/ (losses) | 5 | 1,082 |
Ending balance | 5 | 1,222 |
Unrealized gains/ (losses) for assets held at period end | 5 | 1,222 |
Derivative contracts | Financial instruments and other inventory positions sold, but not yet purchased | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | 7,148 | 7,822 |
Purchases | (5,814) | |
Sales | (9,882) | 0 |
Transfers out | 0 | 0 |
Realized gains/(losses) | 9,882 | 5,814 |
Unrealized gains/ (losses) | (1,740) | 404 |
Ending balance | 5,408 | 8,226 |
Unrealized gains/ (losses) for liabilities held at period end | $ 4,534 | $ 4,318 |
Variable Interest Entities Va60
Variable Interest Entities Variable Interest Entities (Details) - Variable Interest Entity, Primary Beneficiary $ in Thousands | Mar. 31, 2016USD ($) |
Variable Interest Entity [Line Items] | |
Consolidated VIE assets | $ 495,258 |
Consolidated VIE liabilities | 352,119 |
Receivables from brokers, dealers and clearing organizations | |
Variable Interest Entity [Line Items] | |
Consolidated VIE assets | 46,753 |
Financial instruments and other inventory positions owned and pledged as collateral | |
Variable Interest Entity [Line Items] | |
Consolidated VIE assets | 349,618 |
Investments | |
Variable Interest Entity [Line Items] | |
Consolidated VIE assets | 89,068 |
Other assets | |
Variable Interest Entity [Line Items] | |
Consolidated VIE assets | 9,819 |
Short-term financing | |
Variable Interest Entity [Line Items] | |
Consolidated VIE liabilities | 179,236 |
Payables to brokers, dealer and clearing organizations | |
Variable Interest Entity [Line Items] | |
Consolidated VIE liabilities | 89,245 |
Financial instruments and other inventory positions sold, but not yet purchased | |
Variable Interest Entity [Line Items] | |
Consolidated VIE liabilities | 74,112 |
Other liabilities and accrued expenses | |
Variable Interest Entity [Line Items] | |
Consolidated VIE liabilities | $ 9,526 |
Variable Interest Entities - Ad
Variable Interest Entities - Additional Information (Details) - Variable Interest Entity, Not Primary Beneficiary, Aggregated Disclosure [Member] - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Variable Interest Entity [Line Items] | ||
Nonconsolidated assets related to VIEs | $ 900,000,000 | $ 400,000,000 |
Maximum exposure to loss for nonconsolidated VIEs | 12,400,000 | |
Nonconsolidated liabilities related to VIEs | $ 0 | $ 0 |
Receivables from and Payables62
Receivables from and Payables to Brokers, Dealers and Clearing Organizations - Amounts Receivable from Brokers, Dealers and Clearing Organizations (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Brokers and Dealers [Abstract] | ||
Receivable arising from unsettled securities transactions | $ 46,753 | $ 62,105 |
Deposits paid for securities borrowed | 63,819 | 47,508 |
Receivable from clearing organizations | 5,068 | 3,155 |
Deposits with clearing organizations | 60,877 | 27,019 |
Securities failed to deliver | 6,341 | 2,100 |
Other | 2,921 | 6,062 |
Total brokers, dealers and clearing organizations | $ 185,779 | $ 147,949 |
Receivables from and Payables63
Receivables from and Payables to Brokers, Dealers and Clearing Organizations - Amounts Payable to Brokers, Dealers and Clearing Organizations (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Brokers and Dealers [Abstract] | ||
Payable arising from unsettled securities transactions | $ 161,648 | $ 34,445 |
Payable to clearing organizations | 65 | 3,115 |
Securities failed to receive | 3,196 | 4,468 |
Other | 6,022 | 6,103 |
Total brokers, dealers and clearing organizations | $ 170,931 | $ 48,131 |
Collateralized Securities Tra64
Collateralized Securities Transactions - Summary of Repurchase Liabilities, Fair Market Value of Related Collateral Pledged and Interest Rate Charged (Details) $ in Thousands | Mar. 31, 2016USD ($) |
Assets Sold under Agreements to Repurchase [Line Items] | |
Repurchase Liabilities | $ 53,544 |
Fair Market Value | 67,905 |
Term up to 30 day maturities: | Mortgage-backed securities | |
Assets Sold under Agreements to Repurchase [Line Items] | |
Repurchase Liabilities | 32,685 |
Fair Market Value | $ 47,153 |
Term up to 30 day maturities: | Mortgage-backed securities | Minimum | |
Assets Sold under Agreements to Repurchase [Line Items] | |
Interest Rate | 2.1783% |
Term up to 30 day maturities: | Mortgage-backed securities | Maximum | |
Assets Sold under Agreements to Repurchase [Line Items] | |
Interest Rate | 2.3656% |
On demand maturities: | U.S. government agency securities | |
Assets Sold under Agreements to Repurchase [Line Items] | |
Repurchase Liabilities | $ 1,912 |
Fair Market Value | $ 2,020 |
Interest Rate | 0.65% |
On demand maturities: | U.S. government securities | |
Assets Sold under Agreements to Repurchase [Line Items] | |
Repurchase Liabilities | $ 18,947 |
Fair Market Value | $ 18,732 |
Interest Rate | 0.10% |
Collateralized Securities Tra65
Collateralized Securities Transactions Offsetting Assets and Liabilities (Details) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Offsetting Assets and Liabilities [Abstract] | ||
Reverse repurchase agreements, gross recognized assets | $ 119,084,000 | |
Reverse repurchase agreements, gross amount offset on the consolidated statements of financial condition | (1,912,000) | $ 0 |
Reverse repurchase agreements, net amounts presented on the consolidated statements of financial condition | 117,172,000 | 136,983,000 |
Reverse repurchase agreements, gross amounts of financial instruments not offset on the consolidated statements of financial condition | 0 | |
Reverse repurchase agreements, gross amounts of collateral received not offset on the consolidated statements of financial condition | (117,172,000) | |
Reverse repurchase agreements, net amount | 0 | |
Securities borrowed, gross recognized assets | 63,819,000 | |
Securities borrowed, gross amount offset on the consolidated statements of financial condition | 0 | |
Securities borrowed, net amounts presented on the consolidated statements of financial condition | 63,819,000 | |
Securities borrowed, gross amounts of financial instruments not offset on the consolidated statements of financial condition | 0 | |
Securities borrowed, gross amounts of collateral received not offset on the consolidated statements of financial condition | (63,819,000) | |
Securities borrowed, net amount | 0 | |
Repurchase agreements, gross recognized liabilities | 53,544,000 | |
Repurchase agreements, gross amount offset on the consolidated statements of financial condition | (1,912,000) | |
Repurchase agreements, net amount presented on the consolidated statements of financial condition | 51,632,000 | $ 45,319,000 |
Repurchase agreements, gross amount of financial instruments not offset on the consolidated statements of financial condition | 0 | |
Repurchase agreements, gross amount of collateral pledged not offset on the consolidated statements of financial condition | (51,632,000) | |
Repurchase agreements, net amount | $ 0 |
Collateralized Securities Tra66
Collateralized Securities Transactions - Additional Information (Detail) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Disclosure of Repurchase Agreements [Abstract] | ||
Securities purchased under agreements to resell, securities borrowed and margin agreements on terms that permit to repledge or resell the securities to others | $ 184,700,000 | $ 185,800,000 |
Securities either pledged or otherwise transferred to others in connection with financing activities or to satisfy commitments under financial instruments and other inventory positions sold, but not yet purchased | 174,600,000 | 175,800,000 |
Reverse repurchase agreements, offset value | 0 | |
Securities loaned | $ 0 | $ 0 |
Investments (Details)
Investments (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Investments, All Other Investments [Abstract] | ||
Investments at fair value | $ 147,399 | $ 142,781 |
Investments at cost | 2,892 | 3,299 |
Investments accounted for under the equity method | 13,410 | 17,781 |
Total investments | 163,701 | 163,861 |
Less investments attributable to noncontrolling interests (1) | (33,562) | (40,069) |
Investments less portion attributable to noncontolling interest | $ 130,139 | $ 123,792 |
Investments - Additional Inform
Investments - Additional Information (Details) $ in Millions | Mar. 31, 2016USD ($) |
Investments, All Other Investments [Abstract] | |
Estimated fair market value of investments carried at cost | $ 4.8 |
Other Assets (Details)
Other Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Net deferred income tax assets | $ 60,018 | $ 66,810 |
Fee receivables | 16,858 | 18,362 |
Accrued interest receivables | 7,236 | 6,145 |
Forgivable loans, net | 10,682 | 10,234 |
Income tax receivables | 10,946 | 0 |
Prepaid expenses | 7,590 | 6,161 |
Other | 18,114 | 11,490 |
Total other assets | $ 131,444 | $ 119,202 |
Goodwill and Intangible Asset70
Goodwill and Intangible Assets - Changes in Carrying Value of Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Goodwill | ||
Goodwill beginning balance | $ 217,976 | |
Goodwill acquired | 71,900 | |
Measurement period adjustment | (14) | |
Goodwill ending balance | 289,862 | |
Intangible assets | ||
Intangible assets beginning balance | 30,530 | |
Intangible assets acquired | 14,597 | |
Measurement period adjustments | 14 | |
Amortization of intangible assets | (3,296) | $ (1,773) |
Intangible assets ending balance | 41,845 | |
Capital Markets | ||
Goodwill | ||
Goodwill beginning balance | 21,132 | |
Measurement period adjustment | (14) | |
Goodwill ending balance | 93,018 | |
Intangible assets | ||
Intangible assets beginning balance | 8,256 | |
Measurement period adjustments | 14 | |
Amortization of intangible assets | (1,909) | (263) |
Intangible assets ending balance | 20,958 | |
Asset Management | ||
Goodwill | ||
Goodwill beginning balance | 196,844 | |
Measurement period adjustment | 0 | |
Goodwill ending balance | 196,844 | |
Intangible assets | ||
Intangible assets beginning balance | 22,274 | |
Intangible assets acquired | 0 | |
Measurement period adjustments | 0 | |
Amortization of intangible assets | (1,387) | $ (1,510) |
Intangible assets ending balance | 20,887 | |
Simmons & Company International | ||
Goodwill | ||
Goodwill acquired | 71,900 | |
Simmons & Company International | Capital Markets | ||
Goodwill | ||
Goodwill acquired | 71,900 | |
Intangible assets | ||
Intangible assets acquired | $ 14,597 |
Goodwill and Intangible Asset71
Goodwill and Intangible Assets Goodwill and Intangible Assets - Aggregate Future Intangible Asset Amortization Expense (Details) $ in Thousands | Mar. 31, 2016USD ($) |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |
Remainder of 2016 | $ 12,180 |
2,017 | 12,183 |
2,018 | 6,516 |
2,019 | 6,009 |
2,020 | 1,427 |
Thereafter | 670 |
Total | $ 38,985 |
Goodwill and Intangible Asset72
Goodwill and Intangible Assets Goodwill and Intangible Assets - Additional Details (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Feb. 26, 2016 | |
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets acquired | $ 14,597 | |
Simmons & Company International | Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Identifiable intangible assets acquired | $ 13,800 | |
Simmons & Company International | Simmons trade name | ||
Finite-Lived Intangible Assets [Line Items] | ||
Identifiable intangible assets acquired | $ 800 | |
Capital Markets | Simmons & Company International | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets acquired | $ 14,597 | |
Weighted Average | Simmons & Company International | Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted average life | 2 years | |
Weighted Average | Simmons & Company International | Simmons trade name | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted average life | 5 years |
Short-Term Financing - Summary
Short-Term Financing - Summary of Short Term Financing and Weighted Average Interest Rate on Borrowings (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Short-term Debt [Line Items] | ||
Oustanding Balance | $ 459,043 | $ 446,190 |
Commercial paper (secured) | ||
Short-term Debt [Line Items] | ||
Oustanding Balance | $ 279,807 | $ 276,894 |
Weighted Average Interest Rate | 1.88% | 1.7376% |
Prime broker arrangement | ||
Short-term Debt [Line Items] | ||
Oustanding Balance | $ 179,236 | $ 169,296 |
Weighted Average Interest Rate | 1.18% | 1.0745% |
Short-Term Financing - Addition
Short-Term Financing - Additional Information (Detail) | 3 Months Ended | |
Mar. 31, 2016USD ($)banksprogram | Dec. 31, 2015USD ($) | |
Short-term Debt [Line Items] | ||
Short-term financing | $ 459,043,000 | $ 446,190,000 |
Commercial paper (secured) | ||
Short-term Debt [Line Items] | ||
Number of commercial paper programs | program | 3 | |
Short-term financing | $ 279,807,000 | $ 276,894,000 |
Commercial paper (secured) | Minimum | ||
Short-term Debt [Line Items] | ||
Debt term | 27 days | |
Commercial paper (secured) | Maximum | ||
Short-term Debt [Line Items] | ||
Debt term | 270 days | |
Commercial paper (secured) | CP Series A | Weighted Average | ||
Short-term Debt [Line Items] | ||
Debt term | 67 days | |
Commercial paper (secured) | CP Series II A | Weighted Average | ||
Short-term Debt [Line Items] | ||
Debt term | 6 days | |
Commercial paper (secured) | CP Series III A | ||
Short-term Debt [Line Items] | ||
Excess net capital required | $ 120,000,000 | |
Commercial paper (secured) | CP Series III A | Weighted Average | ||
Short-term Debt [Line Items] | ||
Debt term | 26 days | |
Bank lines (secured) | Committed Credit Facility | ||
Short-term Debt [Line Items] | ||
Debt term | 1 year | |
Line of credity, maximum borrowing capacity | $ 250,000,000 | |
Minimum net capital required | 120,000,000 | |
Short-term financing | 0 | |
Bank lines (secured) | Uncommitted Credit Facility | ||
Short-term Debt [Line Items] | ||
Line of credity, maximum borrowing capacity | 185,000,000 | |
Short-term financing | $ 0 | |
Number of banks | banks | 2 |
Senior Notes Senior Notes (Deta
Senior Notes Senior Notes (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Debt Instrument [Line Items] | ||
Senior Notes | $ 175,000 | $ 175,000 |
Senior Notes | Class A Variable Rate Senior Notes Due May 2017 | ||
Debt Instrument [Line Items] | ||
Senior Notes | 50,000 | 50,000 |
Senior Notes | Class C Fixed Rate Senior Notes Due October 2018 | ||
Debt Instrument [Line Items] | ||
Senior Notes | $ 125,000 | $ 125,000 |
Senior Notes - Additional Infor
Senior Notes - Additional Information (Details) - Senior Notes - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2016 | Oct. 08, 2015 | |
Debt Instrument [Line Items] | ||
Minimum net capital required | $ 120 | |
Class A Variable Rate Senior Notes Due May 2017 | LIBOR | ||
Debt Instrument [Line Items] | ||
Reference rate | P3M | |
Basis spread on variable rate | 3.00% | |
Class C Fixed Rate Senior Notes Due October 2018 | ||
Debt Instrument [Line Items] | ||
Face amount | $ 125 | |
Annual fixed rate | 5.06% | |
Fair value disclosure | $ 128.4 |
Commitments and Contingencies A
Commitments and Contingencies Aggregate Minimum Lease Commitments Under Operating Leases (Details) $ in Thousands | Mar. 31, 2016USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Remainder of 2016 | $ 11,837 |
2,017 | 14,025 |
2,018 | 12,935 |
2,019 | 11,285 |
2,020 | 10,779 |
Thereafter | 26,078 |
Total | $ 86,939 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) $ in Millions | 3 Months Ended |
Mar. 31, 2016USD ($)unit | |
Loss Contingencies [Line Items] | |
Number of complaints | 3 |
Settlement agreement amount | $ | $ 9.8 |
CALIFORNIA | |
Loss Contingencies [Line Items] | |
Number of complaints | 18 |
NEW YORK | |
Loss Contingencies [Line Items] | |
Number of complaints | 2 |
Restructuring and Integration C
Restructuring and Integration Costs (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2016USD ($) | |
Restructuring Cost and Reserve [Line Items] | |
Pre-tax restructuring charges | $ 6 |
Severance, benefits and outplacement costs | |
Restructuring Cost and Reserve [Line Items] | |
Pre-tax restructuring charges | 5.4 |
Contract terminations costs | |
Restructuring Cost and Reserve [Line Items] | |
Pre-tax restructuring charges | $ 0.6 |
Shareholders' Equity - Addition
Shareholders' Equity - Additional Information (Detail) - USD ($) | 3 Months Ended | |||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | Aug. 14, 2015 | |
Equity, Class of Treasury Stock [Line Items] | ||||
Aggregate purchase price | $ 19,445,000 | $ 42,566,000 | ||
Stockholders' Equity Attributable to Noncontrolling Interest | $ 47,757,000 | $ 49,161,000 | ||
Shares of common stock purchased from restricted stock award related to recipients' employment tax obligations | 169,282 | 178,928 | ||
Repurchase of common stock for employee tax withholding | $ 7,100,000 | $ 9,846,000 | ||
Reissuance of treasury shares as a result of employee vesting | 476,062 | 518,106 | ||
Other comprehensive income or loss attributed to noncontrolling interests | $ 0 | $ 0 | ||
Merchant banking fund | ||||
Equity, Class of Treasury Stock [Line Items] | ||||
Stockholders' Equity Attributable to Noncontrolling Interest | 34,900,000 | 31,800,000 | ||
Municipal bond fund with limited employee investors | ||||
Equity, Class of Treasury Stock [Line Items] | ||||
Stockholders' Equity Attributable to Noncontrolling Interest | 7,900,000 | 7,000,000 | ||
Senior living fund | ||||
Equity, Class of Treasury Stock [Line Items] | ||||
Stockholders' Equity Attributable to Noncontrolling Interest | $ 5,000,000 | |||
Other private equity investments | ||||
Equity, Class of Treasury Stock [Line Items] | ||||
Stockholders' Equity Attributable to Noncontrolling Interest | $ 10,400,000 | |||
Share Repurchase Program Authorized 2015 | ||||
Equity, Class of Treasury Stock [Line Items] | ||||
Repurchase of common stock, authorized amount | $ 150,000,000 | |||
Shares repurchased | 351,791 | |||
Average share price | $ 35.14 | |||
Aggregate purchase price | $ 12,400,000 | |||
Repurchase of common stock, amount remaining under this authorization | $ 119,200,000 |
Shareholders' Equity - Rollforw
Shareholders' Equity - Rollforward (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||
Common Shareholders' Equity at period end | $ 783,659 | |
Noncontrolling interests at period end | 49,161 | |
Total Shareholders' Equity at period end | 832,820 | |
Common Shareholders' Equity, Net income | 2,437 | $ 16,972 |
Noncontrolling Interests, Net income | 749 | 4,830 |
Total Shareholders' Equity, Net income | 3,186 | $ 21,802 |
Amortization/issuance of restricted stock | $ 37,120 | |
Issuance of common stock as deal consideration for Simmons | 25,525 | 0 |
Issuance of common stock as deal consideration for Simmons | $ 2,647 | |
Repurchased of common stock through share repurchase program | $ (12,364) | |
Repurchase of common stock for employee tax withholding | (169,282) | (178,928) |
Repurchase of common stock for employee tax withholding | $ (7,081) | |
Reduced tax benefit from stock-based compensation | (895) | |
Shares reserved/issued for director compensation | 60 | |
Other comprehensive loss | (403) | |
Deconsolidation of investment partnerships (1) | (9,415) | |
Fund capital withdrawals, net | 7,262 | |
Common Shareholders' Equity at period end | 805,180 | |
Noncontrolling Interest at period end | 47,757 | |
Total Shareholders' Equity at period end | $ 852,937 | |
Common shares outstanding | ||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||
Common Shares Outstanding at period end | 13,311,016 | |
Issuance of common stock as deal consideration for Simmons | 25,525 | |
Issuance of treasury shares for restricted stock vestings | 450,537 | |
Repurchase of common stock through share repurchase program | (351,791) | |
Repurchase of common stock for employee tax withholding | (169,282) | |
Shares reserved/issued for director compensation | 1,780 | |
Common Shares Outstanding at period end | 13,267,785 | |
Common shareholders' equity | ||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||
Amortization/issuance of restricted stock | $ 37,120 | |
Issuance of common stock as deal consideration for Simmons | 2,647 | |
Repurchased of common stock through share repurchase program | (12,364) | |
Repurchase of common stock for employee tax withholding | (7,081) | |
Reduced tax benefit from stock-based compensation | (895) | |
Shares reserved/issued for director compensation | 60 | |
Other comprehensive loss | (403) | |
Fund capital withdrawals, net | 0 | |
Noncontrolling Interests | ||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Line Items] | ||
Amortization/issuance of restricted stock | 0 | |
Issuance of common stock as deal consideration for Simmons | 0 | |
Repurchased of common stock through share repurchase program | 0 | |
Repurchase of common stock for employee tax withholding | 0 | |
Reduced tax benefit from stock-based compensation | 0 | |
Shares reserved/issued for director compensation | 0 | |
Other comprehensive loss | 0 | |
Deconsolidation of investment partnerships (1) | (9,415) | |
Fund capital withdrawals, net | $ 7,262 |
Compensation Plans - Summary of
Compensation Plans - Summary of Outstanding Equity Awards (Details) - shares | Mar. 31, 2016 | Dec. 31, 2015 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock options outstanding | 146,560 | 157,201 |
Restricted Stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted stock outstanding | 2,850,220 | 1,287,915 |
Leadership grants | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted stock outstanding | 356,242 | 356,242 |
Amended And Restated 2003 Annual And Long-Term Incentive Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted stock outstanding | 2,850,220 | |
Stock options outstanding | 146,560 | |
Amended And Restated 2003 Annual And Long-Term Incentive Plan | Annual grants | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted stock outstanding | 1,332,725 | |
Amended And Restated 2003 Annual And Long-Term Incentive Plan | Sign-on grants | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted stock outstanding | 370,899 | |
Amended And Restated 2003 Annual And Long-Term Incentive Plan | Simmons deal consideration (1) | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted stock outstanding | 1,146,596 | |
Amended And Restated 2003 Annual And Long-Term Incentive Plan | Leadership grants | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted stock outstanding | 356,242 |
Compensation Plans - RSU Valuat
Compensation Plans - RSU Valuation Assumptions (Details) - Restricted Stock Units | 3 Months Ended |
Mar. 31, 2016 | |
2,015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk-free Interest Rate | 0.90% |
Expected Stock Price Volatility | 29.80% |
2,014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk-free Interest Rate | 0.82% |
Expected Stock Price Volatility | 41.30% |
2,013 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk-free Interest Rate | 0.40% |
Expected Stock Price Volatility | 44.00% |
Compensation Plans - Unvested R
Compensation Plans - Unvested Restricted Stock (Details) - Restricted Stock | 3 Months Ended |
Mar. 31, 2016$ / sharesshares | |
Unvested Restricted Stock or Stock Units | |
Beginning Balance | shares | 1,287,915 |
Granted | shares | 2,042,264 |
Vested | shares | (476,062) |
Cancelled | shares | (3,897) |
Ending Balance | shares | 2,850,220 |
Weighted Average Grant Date Fair Value (in dollars per share) | |
Beginning Balance | $ / shares | $ 46.20 |
Granted | $ / shares | 41.84 |
Vested | $ / shares | 46.32 |
Cancelled | $ / shares | 46.09 |
Ending Balance | $ / shares | $ 43.06 |
Compensation Plans - Unvested85
Compensation Plans - Unvested Restricted Stock Units (Details) - Restricted Stock Units | 3 Months Ended |
Mar. 31, 2016$ / sharesshares | |
Unvested Restricted Stock or Stock Units | |
Beginning Balance | shares | 356,242 |
Granted | shares | 0 |
Vested | shares | 0 |
Cancelled | shares | 0 |
Ending Balance | shares | 356,242 |
Weighted Average Grant Date Fair Value (in dollars per share) | |
Beginning Balance | $ / shares | $ 22.18 |
Granted | $ / shares | 0 |
Vested | $ / shares | 0 |
Cancelled | $ / shares | 0 |
Ending Balance | $ / shares | $ 22.18 |
Compensation Plans - Stock Opti
Compensation Plans - Stock Options (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Options Outstanding | |||
Beginning Balance | 157,201 | ||
Granted | 0 | ||
Exercised | 0 | ||
Cancelled | 0 | ||
Expired | (10,641) | ||
Ending Balance | 146,560 | ||
Options exercisable at period end | 146,560 | ||
Weighted Average Exercise Price (in dollars per share) | |||
Beginning Balance | $ 50.35 | ||
Granted | 0 | ||
Exercised | 0 | ||
Cancelled | 0 | ||
Expired | 47.85 | ||
Ending Balance | 50.53 | ||
Options exercisable at period end | $ 50.53 | ||
Weighted Average Remaining Contractual Term (in Years) | |||
Weighted Average Remaining Contractual Term (in Years) | 1 year 8 months | 1 year 7 months 6 days | |
Options exercisable at period end | 1 year 8 months | ||
Aggregate Intrinsic Value | |||
Aggregate Intrinsic Value | $ 542,334 | $ 0 | |
Options exercisable at end of period | $ 542,334 |
Compensation Plans - Additional
Compensation Plans - Additional Information (Detail) | 3 Months Ended | ||
Mar. 31, 2016USD ($)planshares | Mar. 31, 2015USD ($) | May. 15, 2016USD ($)shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of stock-based compensation plans | plan | 1 | ||
Compensation expense related to employee restricted stock awards | $ 10,000,000 | $ 13,800,000 | |
Tax benefit related to compensation costs for stock-based compensation arrangements | $ 3,900,000 | 5,400,000 | |
Intrinsic value of options exercised | 700,000 | ||
Tax benefit realized from exercise of options | $ 300,000 | ||
Exercises during the period | shares | 0 | ||
Restricted Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unrecognized compensation cost related to restricted stock | $ 59,300,000 | ||
Weighted average period over which restricted stock expense expected to be recognized | 2 years 8 months 19 days | ||
Annual grants | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period in years | 3 years | ||
Annual grant expense period | 1 year | ||
Sign-on grants | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Grant requisite service period | 1 year | ||
Sign-on grants | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Grant requisite service period | 5 years | ||
Restricted Stock Units | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Grant requisite service period | 3 years | ||
Award earning percentage based on peer group | 50.00% | ||
Award earning percentage based on shareholder return | 50.00% | ||
Restricted stock units, performance period | 36 months | ||
Number of years risk free interest rate | 3 years | ||
Stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unrecognized compensation cost related to restricted stock | $ 0 | ||
Stock options | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Term of stock options | 10 years | ||
Amended And Restated 2003 Annual And Long-Term Incentive Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Equity award grants authorized | shares | 8,200,000 | ||
Shares available for future issuance | shares | 900,000 | ||
Forecast | 2016 Employment Inducement Award Plan | Restricted Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Shares available for future issuance | shares | 400,000 | ||
Restricted stock value available for grant | $ 11,600,000 |
Compensation Plans Compensation
Compensation Plans Compensation Plans - Deferred Compensation Plans (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | |||
Allocated Share-based Compensation Expense | $ 10 | $ 13.8 | |
Nonqualified Deferred Compensation Plan | |||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | |||
Plan Assets | 20.7 | $ 14.6 | |
Plan Liabilities | $ 20.6 | $ 14.5 | |
Mutual Fund Restricted Shares | |||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | |||
Award Vesting Period | 3 years | ||
Allocated Share-based Compensation Expense | $ 3.4 | $ 8.2 | |
New Employees | Mutual Fund Restricted Shares | Minimum | |||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | |||
Requisite service period | 2 years | ||
New Employees | Mutual Fund Restricted Shares | Maximum | |||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | |||
Requisite service period | 5 years |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Net income applicable to Piper Jaffray Companies | $ 2,437 | $ 16,972 |
Earnings allocated to participating securities (1) | (313) | (1,162) |
Net income applicable to Piper Jaffray Companies' common shareholders (2) | $ 2,124 | $ 15,810 |
Shares for basic and diluted calculations: | ||
Average shares used in basic computation | 13,160,000 | 15,294,000 |
Average shares used in diluted computation | 13,172,000 | 15,332,000 |
Earnings per common share | ||
Basic | $ 0.16 | $ 1.03 |
Diluted | $ 0.16 | $ 1.03 |
Weighted average participating shares outstanding | 1,938,759 | 1,126,906 |
Stock options | ||
Shares for basic and diluted calculations: | ||
Stock options | 12,000 | 38,000 |
Segment Reporting - Reportable
Segment Reporting - Reportable Segment Financial Results (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Segment Reporting Information [Line Items] | ||
Investment banking | $ 103,938 | $ 87,077 |
Institutional sales and trading | 32,049 | 36,036 |
Management and performance fees | 13,848 | 20,522 |
Investment income | 937 | 12,591 |
Net revenues | 153,556 | 161,871 |
Operating expenses (1) | 150,114 | 130,579 |
Segment pre-tax operating income | $ 3,442 | $ 31,292 |
Segment pre-tax operating margin | 2.20% | 19.30% |
Intangible asset amortization expense | $ 3,296 | $ 1,773 |
Capital Markets | ||
Segment Reporting Information [Line Items] | ||
Investment banking | 104,167 | 87,493 |
Institutional sales and trading | 36,723 | 40,122 |
Management and performance fees | 965 | 1,407 |
Investment income | 2,086 | 14,705 |
Long-term financing expenses | (2,292) | (1,560) |
Net revenues | 141,649 | 142,167 |
Operating expenses (1) | 138,855 | 116,203 |
Segment pre-tax operating income | $ 2,794 | $ 25,964 |
Segment pre-tax operating margin | 2.00% | 18.30% |
Intangible asset amortization expense | $ 1,909 | $ 263 |
Capital Markets | Equities financing | ||
Segment Reporting Information [Line Items] | ||
Investment banking | 6,566 | 36,007 |
Capital Markets | Debt financing | ||
Segment Reporting Information [Line Items] | ||
Investment banking | 15,972 | 20,988 |
Capital Markets | Advisory services | ||
Segment Reporting Information [Line Items] | ||
Investment banking | 81,629 | 30,498 |
Capital Markets | Equities | ||
Segment Reporting Information [Line Items] | ||
Institutional sales and trading | 19,669 | 18,905 |
Capital Markets | Fixed income | ||
Segment Reporting Information [Line Items] | ||
Institutional sales and trading | 17,054 | 21,217 |
Asset Management | ||
Segment Reporting Information [Line Items] | ||
Management fees | 12,883 | 19,107 |
Performance fees | 0 | 8 |
Management and performance fees | 12,883 | 19,115 |
Investment income | 976 | 589 |
Net revenues | 11,907 | 19,704 |
Operating expenses (1) | 11,259 | 14,376 |
Segment pre-tax operating income | $ 648 | $ 5,328 |
Segment pre-tax operating margin | 5.40% | 27.00% |
Intangible asset amortization expense | $ 1,387 | $ 1,510 |
Segment Reporting Segment Repor
Segment Reporting Segment Reporting - Reportable Segment Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Reportable segment assets | $ 2,178,415 | $ 2,138,518 |
Capital Markets | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Reportable segment assets | 1,925,541 | 1,870,272 |
Asset Management | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Reportable segment assets | $ 252,874 | $ 268,246 |
Net Capital Requirements and 92
Net Capital Requirements and Other Regulatory Matters - Additional Information (Detail) | Mar. 31, 2016USD ($) |
Schedule Of Compliance With Regulatory Capital Requirements For Broker Dealer [Line Items] | |
Minimum net capital requirement | $ 1,000,000 |
Net capital requirement, percentage of aggregate debit balances arising from customer transactions | 2.00% |
Net capital requirement, percent of aggregate debit balances under restriction on business expansion or dividend payment | 5.00% |
Net capital | $ 215,000,000 |
Minimum net capital required | 214,000,000 |
Senior Notes | |
Schedule Of Compliance With Regulatory Capital Requirements For Broker Dealer [Line Items] | |
Minimum net capital required | 120,000,000 |
Commercial Paper | CP Series III A | |
Schedule Of Compliance With Regulatory Capital Requirements For Broker Dealer [Line Items] | |
Excess net capital required | 120,000,000 |
Committed Credit Facility | Senior Notes | |
Schedule Of Compliance With Regulatory Capital Requirements For Broker Dealer [Line Items] | |
Minimum net capital required | $ 120,000,000 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Income Tax Disclosure [Abstract] | ||
Effective income tax rate, excluding noncontrolling interests | 9.50613% | 35.86275% |