Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Oct. 28, 2016 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | INSTITUTIONAL FINANCIAL MARKETS, INC. | |
Entity Central Index Key | 1,270,436 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2016 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 | |
Current Fiscal Year End Date | --12-31 | |
Trading Symbol | ifmi | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 12,089,182 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 | |
Assets | |||
Cash and cash equivalents | $ 10,085 | $ 14,115 | |
Receivables from brokers, dealers, and clearing agencies | 68,910 | 39,812 | |
Due from related parties | 73 | 77 | |
Other receivables | 2,512 | 4,079 | |
Investments-trading | 131,006 | 94,741 | |
Other investments, at fair value | 7,860 | 14,880 | |
Receivables under resale agreements | 288,286 | 128,011 | |
Goodwill | [1] | 7,992 | 7,992 |
Other assets | 4,651 | 4,708 | |
Total assets | 521,375 | 308,415 | |
Liabilities | |||
Payables to brokers, dealers, and clearing agencies | 75,825 | 55,779 | |
Due to related parties | 50 | 50 | |
Accounts payable and other liabilities | 3,364 | 3,362 | |
Accrued compensation | 4,080 | 3,612 | |
Trading securities sold, not yet purchased | 55,539 | 39,184 | |
Securities sold under agreement to repurchase | 302,800 | 127,913 | |
Deferred income taxes | 3,794 | 3,804 | |
Debt | 29,290 | 28,535 | |
Total liabilities | 474,742 | 262,239 | |
Commitments and contingencies (See note 16) | |||
Stockholders' Equity: | |||
Voting Non-Convertible Preferred Stock, $0.001 par value per share, 4,983,557 shares authorized, 4,983,557 shares issued and outstanding | 5 | 5 | |
Common Stock, $0.001 par value per share, 100,000,000 shares authorized, 12,095,382 and 13,350,553 shares issued and outstanding, respectively, including 739,616 and 315,434 unvested or restricted share awards, respectively | 12 | 13 | |
Additional paid-in capital | 69,382 | 71,570 | |
Accumulated other comprehensive loss | (997) | (939) | |
Accumulated deficit | (29,536) | (30,889) | |
Total stockholders' equity | 38,866 | 39,760 | |
Non-controlling interest | 7,767 | 6,416 | |
Total equity | 46,633 | 46,176 | |
Total liabilities and equity | $ 521,375 | $ 308,415 | |
[1] | Goodwill and intangible assets as of September 30, 2016 and 2015 are allocated to the Capital Markets and Asset Management business segments as indicated in the table above. |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2016 | Dec. 31, 2015 |
Common Stock, par value | $ 0.001 | $ 0.001 |
Common Stock, shares authorized | 100,000,000 | 100,000,000 |
Common Stock, shares issued | 12,095,382 | 13,350,553 |
Common Stock, shares outstanding | 12,095,382 | 13,350,553 |
Common Stock, unvested or restricted share awards | 739,616 | 315,434 |
Series E Preferred Stock [Member] | ||
Preferred Stock, par value | $ 0.001 | $ 0.001 |
Preferred Stock, shares authorized | 4,983,557 | 4,983,557 |
Preferred Stock, shares issued | 4,983,557 | 4,983,557 |
Preferred Stock, shares outstanding | 4,983,557 | 4,983,557 |
Consolidated Statements Of Oper
Consolidated Statements Of Operations And Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | ||
Revenues | |||||
Net trading | $ 10,486 | $ 8,333 | $ 31,973 | $ 22,346 | |
Asset management | 1,781 | 2,332 | 5,662 | 6,890 | |
New issue and advisory | 811 | 2,119 | 2,176 | 4,268 | |
Principal transactions and other income | 1,012 | 143 | 2,379 | 3,268 | |
Total revenues | 14,090 | 12,927 | 42,190 | 36,772 | |
Operating expenses | |||||
Compensation and benefits | 7,464 | 7,044 | 24,392 | 20,783 | |
Business development, occupancy, equipment | 718 | 901 | 2,033 | 2,543 | |
Subscriptions, clearing, and execution | 1,678 | 1,786 | 4,702 | 5,132 | |
Professional fees and other operating | 1,513 | 2,488 | 4,718 | 6,353 | |
Depreciation and amortization | 66 | 150 | 220 | 611 | |
Total operating expenses | 11,439 | 12,369 | 36,065 | 35,422 | |
Operating income / (loss) | 2,651 | 558 | 6,125 | 1,350 | |
Non-operating income / (expense) | |||||
Interest expense | (991) | (984) | (2,973) | (2,951) | |
Income/ (loss) before income tax expense / (benefit) | 1,660 | (426) | 3,152 | (1,601) | |
Income tax expense / (benefit) | 130 | 221 | 157 | 267 | |
Net income / (loss) | 1,530 | (647) | 2,995 | (1,868) | |
Less: Net (loss) / income attributable to the non-controlling interest | 489 | (114) | 925 | (432) | |
Net income / (loss) attributable to IFMI | $ 1,041 | $ (533) | $ 2,070 | $ (1,436) | |
Income / (loss) per common share-basic: | |||||
Basic Income / (loss) per common share | $ 0.09 | $ (0.03) | $ 0.17 | $ (0.09) | |
Weighted average shares outstanding-basic | 11,807,417 | 15,229,340 | 12,328,238 | 15,202,628 | |
Income / (loss) per common share-diluted: | |||||
Diluted Income / (loss) per common share | $ 0.09 | $ (0.03) | $ 0.17 | $ (0.09) | |
Weighted average shares outstanding-diluted | [1] | 17,261,992 | 20,553,430 | 17,743,570 | 20,526,718 |
Dividends declared per common share | $ 0.02 | $ 0.02 | $ 0.06 | $ 0.06 | |
Comprehensive income / (loss): | |||||
Net income / (loss) | $ 1,530 | $ (647) | $ 2,995 | $ (1,868) | |
Other comprehensive income / (loss) item: | |||||
Foreign currency translation adjustments, net of tax of $0 | (30) | 56 | (156) | (182) | |
Other comprehensive income / (loss), net of tax of $0 | (30) | 56 | (156) | (182) | |
Comprehensive income / (loss) | 1,500 | (591) | 2,839 | (2,050) | |
Less: comprehensive income / (loss) attributable to the non-controlling interest | 480 | (219) | 876 | (479) | |
Comprehensive income / (loss) attributable to IFMI | $ 1,020 | $ (372) | $ 1,963 | $ (1,571) | |
[1] | For the nine months ended 2016 and 2015, weighted average common shares outstanding excludes a total of 0 and 5,406 shares, respectively representing restricted Operating LLC membership units, restricted Common Stock, and restricted units of Common Stock that would be anti-dilutive because of the Company's net loss. For the three months ended September 30, 2016 and 2015, weighted average common shares outstanding excludes a total of 0 and 11,838 shares, respectively, representing restricted Operating LLC membership units, restricted Common Stock, and restricted units of Common Stock that would be anti-dilutive because of the Company's net loss. For the nine and three months ended September 30, 2016 and 2015, weighted average common shares outstanding also excludes 2,749,167 shares from the assumed conversion of the 8.0% Convertibles Notes because the inclusion of the converted shares would be anti-dilutive. |
Consolidated Statements Of Ope5
Consolidated Statements Of Operations And Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Consolidated Statements of Operations And Comprehensive Income/(Loss) [Abstract] | ||||
Foreign currency translation adjustments, tax | $ 0 | $ 0 | $ 0 | $ 0 |
Other comprehensive income / (loss), tax | $ 0 | $ 0 | $ 0 | $ 0 |
Consolidated Statement Of Chang
Consolidated Statement Of Changes In Equity - 9 months ended Sep. 30, 2016 - USD ($) $ in Thousands | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-In Capital [Member] | Retained Earnings/ (Accumulated Deficit) [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Total Stockholders' Equity [Member] | Non-Controlling Interest [Member] | Total |
Balance at Dec. 31, 2015 | $ 5 | $ 13 | $ 71,570 | $ (30,889) | $ (939) | $ 39,760 | $ 6,416 | $ 46,176 |
Net income | 2,070 | 2,070 | 925 | 2,995 | ||||
Other comprehensive income / (loss) | (107) | (107) | (49) | (156) | ||||
Acquisition / (surrender) of additional units of consolidated subsidiary, net | (552) | 49 | (503) | 503 | ||||
Equity-based compensation and vesting of shares | 1 | 701 | 702 | 300 | 1,002 | |||
Shares withheld for employee taxes | (20) | (20) | (8) | (28) | ||||
Purchase and retirement of Common Stock | (2) | (2,317) | (2,319) | (2,319) | ||||
Dividends/Distributions | (717) | (717) | (320) | (1,037) | ||||
Balance at Sep. 30, 2016 | $ 5 | $ 12 | $ 69,382 | $ (29,536) | $ (997) | $ 38,866 | $ 7,767 | $ 46,633 |
Consolidated Statements Of Cash
Consolidated Statements Of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Operating activities | ||
Net income (loss) | $ 2,995 | $ (1,868) |
Adjustments to reconcile net income / (loss) to net cash provided by (used in) operating activities: | ||
Equity-based compensation | 1,002 | 1,016 |
Accretion of income on other investments, at fair value | (1,005) | (1,918) |
Realized loss / (gain) on other investments | 2,062 | 3,209 |
Change in unrealized (gain) loss on other investments, at fair value | (1,775) | (1,633) |
Depreciation and amortization | 220 | 611 |
Amortization of discount on debt | 755 | 863 |
Deferred tax provision/(benefit) | (10) | 161 |
Change in operating assets and liabilities, net: | ||
(Increase) decrease in other receivables | 1,567 | 3,096 |
(Increase) decrease in investments-trading | (36,265) | (13,471) |
(Increase) decrease in other assets | 98 | 1,100 |
(Increase) decrease in receivables under resale agreement | (160,275) | (27,055) |
Change in receivables from / payables to related parties, net | 4 | 346 |
Increase (decrease) in accrued compensation | 468 | (886) |
Increase (decrease) in accounts payable and other liabilities | 60 | (809) |
Increase (decrease) in trading securities sold, not yet purchased, net | 16,355 | 12,172 |
Change in receivables from/ payables to brokers, dealers, and clearing agencies, net | (9,052) | (9,743) |
Increase (decrease) in securities sold under agreement to repurchase | 174,887 | 26,829 |
Net cash provided by (used in) operating activities | (7,909) | (7,980) |
Investing activities | ||
Purchase of investments-other investments, at fair value | (237) | (11) |
Sales and returns of principal - other investments, at fair value | 7,924 | 10,625 |
Purchase of furniture, equipment, and leasehold improvements | (210) | (110) |
Net cash provided by (used in) investing activities | 7,477 | 10,504 |
Financing activities | ||
Cash used to net share settle equity awards | (28) | |
Purchase and retirement of Common Stock | (2,319) | |
IFMI non-controlling interest distributions | (320) | (322) |
IFMI dividends | (717) | (928) |
Net cash provided by (used in) financing activities | (3,384) | (1,250) |
Effect of exchange rate on cash | (214) | (148) |
Net increase (decrease) in cash and cash equivalents | (4,030) | 1,126 |
Cash and cash equivalents, beginning of period | 14,115 | 12,253 |
Cash and cash equivalents, end of period | $ 10,085 | $ 13,379 |
Organization And Nature Of Oper
Organization And Nature Of Operations | 9 Months Ended |
Sep. 30, 2016 | |
Organization And Nature Of Operations [Abstract] | |
Organization And Nature Of Operations | 1. ORGANIZATION AND NATURE OF OPERATIONS The Formation Transaction Cohen Brothers, LLC (“Cohen Brothers” ) was formed on October 7, 2004 by Cohen Bros. Financial, LLC (“CBF”). Cohen Brothers was established to acquire the net assets of CBF’s subsidiaries (the “Formation Transaction”): Cohen Bros. & Company, Inc.; Cohen Frères SAS; Dekania Investors, LLC; Emporia Capital Management, LLC; and the majority interest in Cohen Bros. & Toroian Investment Management, Inc. The Formation Transaction was accomplished through a series of transactions occurring between March 4, 2005 and May 31, 2005. The Company From its formation until December 16, 2009, Cohen Brothers operated as a privately owned limited liability company. On December 16, 2009, Cohen Brothers completed its merger (the “Merger”) with a subsidiary of Alesco Financial Inc. (“AFN”) , a publicly traded real estate investment trust. As a result of the Merger, AFN contributed substantially all of its assets into Cohen Brothers in exchange for newly issued membership units directly from Cohen Brothers. In addition, AFN received additional Cohen Brothers membership interests directly from its members in exchange for AFN common stock. In accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), the Merger was accounted for as a reverse acquisition, and Cohen Brothers was deemed to be the accounting acquirer. As a result, all of AFN’s assets and liabilities were required to be revalued at fair value as of the acquisition date. The remaining membership interests of Cohen Brothers that were not held by AFN were included as a component of non-controlling interest in the consolidated balance sheet. Subsequent to the Merger, AFN was renamed Cohen & Company Inc. In January 2011, it was renamed again as Institutional Financial Markets, Inc. (“IFMI”). Effective January 1, 2010, the Company ceased to qualify as a real estate investment trust, or a REIT. The Company trades on the NYSE MKT LLC (formerly known as the NYSE Amex LLC) under the ticker symbol “IFMI.” The Company is a financial services company specializing in fixed income markets. As of September 30, 2016 , the Company had $3.80 billion in assets under management (“AUM”) of which 95.0% , or $3.61 billion , was in collateralized debt obligations (“CDOs”). In these financial statements, the “Company” refers to IFMI and its subsi diaries on a consolidated basis. “IFMI, LLC” (formerly Cohen Brothers, LLC) or the “Operating LLC” refers to the main operating subsidiary of the Company. “Cohen Brothers” refers to the pre-Merger Cohen Brothers, LLC and its subsidiaries . “AFN” refers to the pre-merger Alesco Financial Inc. and its subsidiaries. When the term “IFMI” is used, it is referring to the parent company itself, Institutional Financial Markets, Inc. “JVB Holdings” refers to J . V . B . Financial Holdings, L.L.C. “JVB” refers to J . V . B . Financial Group LLC, a broker dealer subsidiary. “CCFL” refers to Cohen & Company Financial Limited (formerly known as EuroDekania Management LTD), a subsidiary regulated by the Financial Conduct Authority (formerly known as Financial Services A uthority) in the United Kingdom. “EuroDekania” refers to EuroDekania (Cayman) Ltd., a Cayman Islands exempted company that is externally managed by CCFL. The Company’s business is organized into the following three business segments. Capital Markets : The Company’s Capital Markets business segment consists primarily of f ixed income sales, trading, matched book repo financing , new issue placements in corporate and securitized products, and advisory services. The Company’s fixed income sales and trading group provides trade execution to corporate investors, institutional investors, mortgage originators, and other smaller broker-dealers. The Company specializes in a variety of products, including but not limited to: corporate bonds, asset backed securities (“ABS”), mortgage backed securities (“ MBS”), residential mortgage backed securities (“RMBS”), CDOs, collateralized loan obligations (“CLOs”), collateralized bond obligations (“CBOs”), collateralized mortgage obligations (“CMOs”), municipal securities, to-be-announced securities (“TBAs”) and other forward agency MBS contracts, Small Business Administration (“SBA”) loans, U.S. government bonds, U.S. government agency securities, brokered deposits and certificates of deposit (“ CDs ”) for small banks, and hybrid capital of financial institutions including trust preferred securities (“TruPS”), whole loans, and other structured financial instruments. The Company also offers execution and brokerage services for equity products. The Company carries out its capital market activities primarily through its subsidiaries: JVB in the United State s and CCFL in Europe. See note 4 regarding the potential sale of European operations. Principal Investing : The Company’s Principal Investing business segment is comprised of investments that the Company has made using its own capital excluding investments the Company makes to support our Capital Markets business segment. These investments are a component of our other investments, at fair value in our consolidated balance sheet. Asset Management : The Company’s Asset Management business segment manages assets within CDOs, permanent capital vehicles, managed accounts, and investment funds (collectively referred to as “Investment Vehicles”). A CDO is a form of secured borrowing. The borrowing is secured by different types of fixed income assets such as corporate or mortgage loans or bonds. The borrowing is in the form of a securitization, which means that the lenders are actually investing in notes backed by the assets. In the event of default, the lenders will have recourse only to the assets securing the loan. The Company’s Asset Management business segment includes its fee-based asset management operations , which include ongoing base and incentive management fees. The Company generates its revenue by business segment primarily through the following activities. Capital Markets · Trading activities of the Company, which include execution and brokerage services, securities lending activities, riskless trading activities as well as gains and losses (unrealized and realized) and income and expense earned on securities and derivatives classified as trading; and · New issue and advisory revenue comprised primarily of (i) new issue revenue associated with originating, arranging, and placing newly created financial instruments; and (ii) revenue from advisory services. Principal Investing · Gains and losses (unrealized and realized) and income and expense earned on securities classified as other investments, at fair value. Asset Management · Asset management fees for the Company’s on-going asset management services provided to certain Investment Vehicles, which may include fees both senior and subordinate to the securities in the Investment Vehicles, and incentive management fees earned based on the performance of the various Investment Vehicles. |
Basis Of Presentation
Basis Of Presentation | 9 Months Ended |
Sep. 30, 2016 | |
Organization And Nature Of Operations [Abstract] | |
Basis Of Presentation | 2. BASIS OF PRESENTATION The financial statements of the Company included herein were prepared in conformity with U.S. GAAP for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The information furnished includes all adjustments and accruals of a normal recurring nature, which, in the opinion of management, are necessary for a fair presentation of results for the interim month periods. All intercompany accounts and transactions have been eliminated in consolidation. The results for the nine months ended September 30, 2016 and 2015 are not necessarily indicative of the results for the entire year or any subsequent interim period. These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 . Capitalized terms used herein without definition have the meanings ascribed to them in the Annual Report on Form 10-K for the year ended December 31, 2015 . Certain other prior period amounts have been reclassified to conform to the current period presentation. |
Summary Of Significant Accounti
Summary Of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2016 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary Of Significant Accounting Policies | 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Adoption of New Accounting Standards In April 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2014-08 , Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity (“ASU 2014-08”) , which changes the criteria for reporting discontinued operations and requires additional disclosures about discontinued operations. The guidance in this ASU raises the threshold for a disposal to qualify as a discontinued operation and certain other disposals that do not meet the definition of a discontinued operation. Under the new provisions, only disposals representing a strategic shift in operations – that is or will have a major effect on an entity’s operations and financial results should be presented as a discontinued operation. The new provisions also require new disclosures related to individually material disposals that do not meet the definition of a discontinued operation, an entity’s continuing involvement with a discontinued operation following the disposal date and retained equity method investments in a discontinued operation. The Company’s adoption of the provisions of ASU 2014-08 effective January 1, 2015 did not have an effect on the Company’s consolidated financial position, results of operations, or cash flows. In June 2014, the FASB issued ASU No. 2014-11, Transfers and Servicing (Topic 860): Repurchase to Maturity Transactions, Repurchase Financings, and Disclosures, which changes the accounting for repurchase-to-maturity transactions that are repurchase agreements where the maturity of the security transferred as collateral matches the maturity of the repurchase agreement. According to the new guidance, all repurchase-to-maturity transactions will be accounted for as secured borrowing transactions in the same way as other repurchase agreements rather than as sales of a financial asset and forward commitment to repurchase. The amendments also change the accounting for repurchase financing arrangements that are transactions involving the transfer of a financial asset to a counterparty executed contemporaneously with a reverse repurchase agreement with the same counter party. A ll repurchase financings will now be accounted for separately, which will result in secured lending accounting for the reverse repurchase agreement. The guidance also requires new disclosures about transfers that are accounted for as sales in transactions that are economically similar to repurchase agreements and increased transparency about the types of collateral pledged in repurchase agreements and similar transactions accounted for as secured borrowings. The Company’s ado ption of the provisions of ASU 2014-11 effective January 1, 2015 did not have an effect on the Company’s consolidated financial position, results of operations, or cash flows. See note 9. In June 2014, the FASB issued ASU No. 2014-12, Compensation-Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide that a Performance Target could be Achieved After the Requisite Service Period , which requires a performance target that affects vesting and that could be achieved after the requisite service period be accounted for as a performance condition rather than as a non-vesting condition that affects the grant-date fair value of the award. The Company’s adoption of the provisions of ASU 2014-12 effective January 1, 2016 did not have an effect on the Company’s consolidated financial position, results of operations, or cash flows. In August 2014, the FASB issued ASU No. 2014-13, Measuring the Financial Assets and the Financial Liabilities of a Consolidated Collateralized Financing Entity , which provides a measurement alternative for an entity that consolidates collateralized financing entities. A collateralized financing entity is a variable interest entity with nominal or no equity that holds financial assets and issues beneficial interests in those financial assets. The beneficial interests, which are financial liabilities of the collateralized financing entity, have contractual recourse only to the related assets of the collateralized financing entity. If elected, the alternative method results in the reporting entity measuring both the financial assets and financial liabilities of the collateralized financing entity using the more observable of the two fair value measurements, which effectively removes measurement differences between the financial assets and financial liabilities of the collateralized financing entity previously recorded as net income (loss) attributable to non-controlling and other beneficial interests and as an adjustment to appropriated retained earnings. The reporting entity continues to measure its own beneficial interests in the collateralized financing entity (other than those that represent compensation for services) at fair value. The Company’s adoption of the provisions of ASU 2014-1 3 effective January 1, 2016 did not have an effect on the Company’s consolidated financial position, results of operations, or cash flows. In November 2014, the FASB issued ASU No. 2014-16, Derivatives and Hedging (Topic 815) : Determining whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share is More Akin to Debt or to Equity, which clarifies that an entity must consider all relevant terms and features when evaluating the nature of the host contract. Additionally, the amendments state that no one term or feature would define the host contract’s economic characteristics and risks. Instead, the economic characteristics and risks of the hybrid financial instrument as a whole would determine the nature of the host contract. The Company’s adoption of the provisions of ASU 2014-16 effective January 1, 2016 did not have an effect on the Company’s consolidated financial position, results of operations, or cash flows. In January 2015, the FASB issued ASU No. 2015-01, Income Statement – Extraordinary and Unusual Items (Subtopic 225-20), Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items , which eliminates from U.S. GAAP the requirement of extraordinary items to be separately classified on the income statement. If an event meets the criteria for extraordinary classification, the item should be shown separately in the income statement, net of tax. The amendments in this ASU also require applicable income taxes and earnings per share to be disclose. The Company’s adoption of the provisions of ASU 2015-01 effective Januar y 1, 2016 did not have an effect on the Company’s consolidated financial position, results of operations, or cash flows. In February 2015, the FASB issued ASU No. 2015-02, Consolidation (Topic 810) – Amendments to the Consolidation Analysis, which makes targeted amendments to the current consolidation guidance and ends the deferral granted to investment companies from applying the variable interest entity (“ VIE ”) guidance. The revised consolidation guidance, among other things, (i) modifies the evaluation of whether limited partnerships and similar legal entities are VIEs or voting interest entities, (ii) eliminates the presumption that a general partner should consolidate a limited partnership, and (iii) modifies the consolidation analysis of reporting entities that are involved with VIEs through fee arrangements and related party relationships. The Company’s adoption of the provisions of ASU 2015-02 effective January 1, 2016 did not have an effect on the Company’s consolidated financial position, results of operations, or cash flows. However, the Company previously treated its management contracts with certain securitizat ion entities that are VIEs as variable interest s . Therefore, the Company disclosed certain information related to these interests in its variable interest entity footnote. Upon adoption of this ASU, these management contracts are not considered variable interests. Therefore, in cases where the Company’s only interest in certain VIEs i s its management contract, the Company is no longer required to include certain disclosures related to those variable interest entities. See note 11. In April 2015, the FASB issued ASU No. 2015-03, Interest-Imputation of Interest (Subtopic 835-30), Simplifying the Presentation of Debt Issuance Costs , which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement for debt issuance costs are not affected by the amendments in this update. Upon adoption of the provisions of ASU 2015-03 effective January 1, 2016, the Company reclassified it s deferred financing costs as of December 31, 2015. This resulted in a reduction in other assets of $410 and a reduction in debt of $410 in the Company’s consolidated balance sheet as of December 31, 2015. In May 2015, the FASB issued ASU No. 2015-07, Fair Value Measurement (Topic 820) – Disclosures for Investments in Certain Entities that Calculate Net Asset Value per Share (or its Equivalent) . Reporting entities are permitted to use net asset value (“NAV”) as a practical expedient to measure the fair value of certain inves tments. Previously , investments that use the NAV practical expedi ent to measure fair value were categorized within the fair value hierarchy as level 2 or level 3 investments depending on their redemption attributes, which has led to diver sity in practice. This ASU remove s the requirement to categorize within the fair value hierarchy all investments that use the NAV practical expedient for fair value meas urement purposes. The ASU remove s the requirement to make certain disclosures for all investments that are eligible to be measured at fair value using the NAV practical expedient. Rather, those disclosures are limited to investments for which the entity has elected to measure the fair value using that practical e xpedient. The Company’s adoption of ASU 2015-07 effective January 1, 2016 did not have an effect on the Company’s consolidated financial position, results of operations, or cash flows. However, as a result of this adoption, the Company no longer classifies its investment in EuroDekania (for which it uses the practical expedient) within the fair value hierarchy. See note 7. In September 2015, the FASB issued ASU No. 2015-16, Business Combinations (Topic 805), Simplifying the Accounting for Measurement-Period Adjustments , which includes amendments that eliminate the requirement to restate prior period financial statements for measurement period adjustments following a business combination. The new guidance requires that the cumulative impact of a measurement period adjustment (including the impact on prior periods) be recognized in the reporting period in which the adjustment is identified. The prior period impact of the adjustment should be either presented separately on the face of the income statement or disclosed in the notes to the financial statements. The Company’s adoption of the provisions of ASU 2015-16 effective January 1, 2016 did not have an effect on the Company’s consolidated financial position, results of operations, or cash flows. B. Recent Accounting Developments In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which replaces existing revenue recognition guidance in Topic 605, Revenue Recognition. The core principle of this ASU is to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Subsequently, the FASB issued a series of modifying ASUs that do not change the core principle of the guidance stated in ASU 2014-09. The modifying ASUs include: ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), ASU 2016-10 , Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing , ASU 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow Scope Improvements and Practical Expedients. The Company must adopt the amendments in ASU 2016-08, ASU 2016-10, and ASU 2016-12 with the adoption of ASU 2014-09. The effective date for all of the amendments in these ASUs is for annual periods beginning after December 15, 2017, including interim reporting periods within that reporting period as amended by ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date . Early application is permitted. The Company is currently evaluating the new guidance to determine the impact it may have on the Company’s consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-01, Financial Instruments-Overall (Subtopic 825-10) . The amendments in ASU 2016-01, among other things: require equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income; require public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; require separate presentation of financial assets and liabilities by measurement category and form of financial asset; and eliminate the requirement for public business entities to disclose the methods(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact of these amendments on the presentation in its consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). Under the new guidance, lessees will be required to recognize the following for all leases with the exception of short-term leases: (i) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (ii) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Lessor accounting is largely unchanged. Certain targeted improvements were made to align, where necessary, lessor accounting with the lessee accounting model and Topic 606, Revenue from Contracts with Customers. The ASU is effective for entities for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early application is permitted. The Company is currently evaluating this new guidance to determine the impact it may have on its consolidated financial statements. In March 2016, the FASB issued ASU 2016-06, Derivatives and Hedging (Topic 815): Contingent Put and Call Options in Debt Instruments. This ASU clarifies what steps are required when assessing whether the economic characteristics and risks of call (put) options are clearly and closely related to the economic characteristics and risks of their debt hosts, which is one of the criteria for bifurcating an embedded derivative. Consequently, when a call (put) option is contingently exercisable, an entity does not have to assess whether the event that triggers the ability to exercise a call (put) option is related to interest rates or credit risks. This ASU is effective for fiscal years beginning after December 15, 2016. Early adoption is permitted and if adopted on an interim period, any adjustments must be reflected as of the beginning of the fiscal year that includes the interim period. The Company is currently evaluating this new guidance to determine the impact it may have on its consolidated financial statements. In March 2016, the FASB issued ASU 2016-07, Investments - Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting . This ASU eliminates the requirement that when an investment qualifies for use of the equity method as a result of an increase in the level of ownership interest or degree of influence, an investor must adjust the investment, results of operations, and retained earnings retroactively on a step-by-step basis as if the equity method had been in effect during all previous periods that the investment had been held. The amendments require that the equity method investor add the cost of acquiring the additional interest in the investee to the current basis of the investor’s previously held interest and adopt the equity method of accounting as of the date the investment becomes qualified for equity method accounting. If an entity has an available-for-sale equity security that becomes qualified for the equity method of accounting it should recognize through earnings the unrealized holding gain or loss in accumulated other comprehensive income at the date the investment becomes qualified for use of the equity method . This ASU is effective for fiscal years beginning after December 15, 2016 and should be applied prospectively upon the effective date to increases in the level of ownership interest or degree of influence that result. Early adoption is permitted. The Company is currently evaluating this new guidance to determine the impact it may have on its consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting . This ASU simplifies several aspects of the accounting for share-based payment award transactions including: (i) income tax consequences; (ii) classification of awards as either equity or liabilities; and (iii) classification on the statement of cash flows. The effective date for this ASU is for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted. The Company is currently evaluating the new guidance to determine the impact it may have on the Company’s consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . The amendments in this ASU require the measurement of all expected credit losses for financial assets held at the reporting date to be based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates. Many of the loss estimation techniques applied today will still be permitted, although the inputs to those techniques will change to reflect the full amount of expected credit losses. In addition, the ASU amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. The amendments in this ASU are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently evaluating the new guidance to determine the impact it may have on the Company’s consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments . The amendments in this ASU provide cash flow statement classification guidance on eight specific cash flow presentation issues with the objective of reducing existing diversity in practice. This ASU is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early application is permitted, including adoption in an interim period. The Company is currently evaluating the new guidance to determine the impact it may have on the Company’s consolidated financial statements. C . Fair Value of Financial Instruments The following methods and assumptions were used by the Company in estimating the fair value of its financial instruments. These determinations were based on available market information and appropriate valuation methodologies. Considerable judgment is required to interpret market data to develop the estimates and, therefore, these estimates may not necessarily be indicative of the amount the Company could realize in a current market exchange. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts. Refer to note 7 for a discussion of the fair value hierarchy with respect to investments-trading; other investments, at fair value ; and derivatives held by the Company. Cash E quivalents : Cash equivalents are carried at historical cost, which is assumed to approximate fair value. The estimated fair value measurement of cash equivalents is classified within level 1 of the valuation hierarchy. Investments-trading : These amounts are carried at fair value. The fair value is based on either quoted market prices of an active exchange, independent broker market quotations, market price quotations from third party pricing services, or valuation models when quotations are not available. See note 7 for disclosures about the categorization of the fair value measurements of inve stments-trading within the fair value hierarchy. Other investments, at fair value : These amounts are carried at fair value. The fair value is based on quoted market prices of an active exchange, independent broker market quotations, or valuation models when quotations are not available. In the case of investments in alternative investment funds, fair value is generally based on the reported net asset value of the underlying fund. See note 7 for disclosures concerning the categorization of the fair value measurements of other investments, at fair value within the three level fair value hierarchy . Receivables under resale agreements : Receivables under resale agreements are carried at their contracted resale price, have short-term maturities, and are repriced frequently or bear market interest rates and, accordingly, these contracts are at amounts that approximate fair value. The estimated fair value measurements of receivables under resale agreements are based on observations of actual market activity and are generally classified within level 2 of the fair value hierarchy . Trading securities sold, not yet purchased : These amounts are carried at fair value. The fair value is based on quoted market prices of an active exchange, independent market quotations, market price quotations from third party pricing services, or valuation models when quotations are not available. See note 7 for disclosures concerning the categorization of the fair value measurements of trading securities sold, not yet purchased within the three level fair value hierarchy. Securities sold under agreement to repurchase : The liabilities for securities sold under agreement to repurchase are carried at their contracted repurchase price, have short-term maturities, and are repriced frequently with amounts normally due in one month or less and, accordingly, these contracts are at amounts that approximate fair value. The estimated fair value measurements of securities sold under agreement to repurchase are based on observations of actual market activity and are generally classified within level 2 of the fair value hierarchy. Debt : These amounts are carried at outstanding principal less unamortized discount and deferred financing costs . However, a substantial portion of the debt was assumed in the Merger and recorded at fair value as of that date. As of September 30, 2016 and December 31, 2015 , the fair value of the Company’s debt was estimated to be $34,684 and $35,200 , respectively. The estimated fair value measurements of the debt are generally based on discounted cash flow models prepared by the Company’s management primarily using discount rates for similar instruments issued to companies with similar credit risks to the Company and are generally classified within level 3 of the fair value hierarchy. Derivatives : These amounts are carried at fair value. Derivatives may be included as a component of investments-trading; trading securities sold, not yet purchased; and other investments, at fair value. See notes 7 and 8. The fair value is generally based on quoted market prices on an exchange that is deemed to be active for derivative instruments such as foreign currency forward contracts and Eurodollar futures. For other derivative instruments , the fair value is generally based on market price quotations from third party pricing services. See note 7 for disclosures concerning the categorization of the fair value measurements within the three level fair value hierarchy. |
Dispositions
Dispositions | 9 Months Ended |
Sep. 30, 2016 | |
Dispositions [Abstract] | |
Dispositions | 4. DISPOSITIONS Sale of European Operations - Update Although the Company believes that, given the passage of time, there is a very low probability of this transaction closing in the future, given the potential value to the Company of the proposed transaction if it were to close and based on C&Co Europe Acquisition LLC’s indication that it continues to evaluate its options, the Company has decided not to exercise its right to terminate the transaction at this time. The Company will continue to evaluate the probability of closing and its right to terminate the transaction . |
Receivables From And Payables T
Receivables From And Payables To Brokers, Dealers, And Clearing Agencies | 9 Months Ended |
Sep. 30, 2016 | |
Receivables From And Payables To Brokers, Dealers, And Clearing Agencies [Abstract] | |
Receivables from and Payables to Brokers, Dealers, and Clearing Agencies | 5. RECEIVABLES FROM AND PAYABLES TO BROKERS, DEALERS , AND CLEARING AGENCIES Amounts receivable from brokers, dealers, and clearing agencies consisted of the following at September 30, 2016 and December 31, 2015 . RECEIVABLES FROM BROKERS, DEALERS, AND CLEARING AGENCIES (Dollars in Thousands) September 30, 2016 December 31, 2015 Deposits with clearing agencies $ 750 $ 864 Unsettled regular way trades, net 15,398 4,367 Receivables from clearing agencies 52,762 34,581 Receivables from brokers, dealers, and clearing agencies $ 68,910 $ 39,812 Amounts payable to brokers, dealers, and clearing agencies consisted of the following at September 30, 2016 and December 31, 2015 . PAYABLES TO BROKERS, DEALERS, AND CLEARING AGENCIES (Dollars in Thousands) September 30, 2016 December 31, 2015 Margin payable $ 75,825 $ 55,779 Payables to brokers, dealers, and clearing agencies $ 75,825 $ 55,779 Deposits with clearing agencies represent contractual amounts the Company is required to deposit with its clearing agents. Securities transactions that settle in the regular way are recorded on the trade date, as if they had settled. The related amounts receivable and payable for unsettled securities transactions are recorded net in receivables from or payables to brokers, dealers, and clearing agencies on the Company’s consolidated balance sheet. Receivables from clearing agencies are primarily comprised of cash received by the Company upon execution of short trades that is restricted from withdrawal by the clearing agency. Margin payable represents borrowings from clearing agencies to finance the Company’s trading inventory. Effectively, all of the Company’s trading assets and deposits with clearing agencies serve as collateral for the margin payable. These assets are held by the Company’s clearing agency. The Company incurre d interest on margin payable of $450 and $436 for the nine months September 30, 2016 and 2015 , respectively, $171 and $156 for the three months ended September 30, 2016 and 2015, respectively. |
Financial Instruments
Financial Instruments | 9 Months Ended |
Sep. 30, 2016 | |
Financial Instruments [Abstract] | |
Financial Instruments | 6. FINANCIAL INSTRUMENTS Investments—Trading The following table provides detail of the investments classified as investments-trading as of the periods indicated. INVESTMENTS - TRADING (Dollars in Thousands) September 30, 2016 December 31, 2015 U.S. government agency MBS and CMOs $ 10,872 $ 3,225 U.S. government agency debt securities 16,838 12,737 RMBS 171 98 U.S. Treasury securities 4,014 1,355 Other ABS 94 2,048 SBA loans 22,212 29,931 Corporate bonds and redeemable preferred stock 43,186 19,873 Foreign government bonds 1,045 - Municipal bonds 26,000 24,053 Certificates of deposit 778 263 Derivatives 5,744 1,158 Equity securities 52 - Investments-trading $ 131,006 $ 94,741 Trading Securities Sold, Not Yet Purchased The following table provides detail of the trading securities sold, not yet purchased as of the periods indicated. TRADING SECURITIES SOLD, NOT YET PURCHASED (Dollars in Thousands) September 30, 2016 December 31, 2015 U.S. Treasury securities $ 22,636 $ 12,050 Corporate bonds and redeemable preferred stock 28,228 25,851 Municipal bonds 20 20 Derivatives 4,655 1,181 Equity securities - 82 Trading securities sold, not yet purchased $ 55,539 $ 39,184 The Company tries to manage its exposure to changes in interest rates for the interest rate sensitive securities it holds by entering into offsetting short positions for similar fixed rate securities. The Company included the net change in unrealized gains (losses) of investments – trading and trading securities sold, not yet purchased in the amount of $ 1,262 and $ 700 for the nine months ended September 30, 2016 and 2015 , respectively, in net trading revenue in the Company’s consolidated statements of operations. Other Investments, at fair value The following table s provide detail of the investments included within other investments, at fair value. OTHER INVESTMENTS, AT FAIR VALUE (Dollars in Thousands) September 30, 2016 Amortized Cost Carrying Value Unrealized Gain / (Loss) CLOs $ 7,499 $ 6,229 $ (1,270) CDOs 191 28 (163) EuroDekania 4,916 1,241 (3,675) Residential loans 87 359 272 Foreign currency forward contracts - 3 3 Other investments, at fair value $ 12,693 $ 7,860 $ (4,833) December 31, 2015 Amortized Cost Carrying Value Unrealized Gain / (Loss) CLOs $ 14,877 $ 11,569 $ (3,308) CDOs 193 34 (159) EuroDekania 5,300 2,502 (2,798) Tiptree 1,009 353 (656) Other securities 176 43 (133) Residential loans 111 383 272 Foreign currency forward contracts - (4) (4) Other investments, at fair value $ 21,666 $ 14,880 $ (6,786) |
Fair Value Disclosures
Fair Value Disclosures | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Disclosures | 7. FAIR VALUE DISCLOSURES Fair Value Option The Company has elected to account for certain of its other financial assets at fair value under the fair value option provisions of FASB Accounting Standards Codification (“ ASC ”) 825. The primary reason for electing the fair value option, when it first became available in 2008, was to reduce the burden of monitoring the differences between the cost and the fair value of the Company’s investments, previously classified as available for sale securities, including the assessment as to whether the declines are temporary in nature and to further remove an element of management judgment. In addition, the election was made for certain investments that were previously required to be accounted for under the equity method because their fair value measurements were readily obtainable. Such financial assets accounted for at fair value include: · securities that would otherwise qualify for available for sale treatment; · investments in equity method affiliates where the affiliate has all of the attributes in FASB ASC 946-10-15-2 (commonly referred to as investment companies); and · investments in residential loans. The changes in fair value (realized and unrealized gains and losses) of these instruments for which the Company has elected the fair value option are recorded in principal transactions and other income in the consolidated statements of operations. All of the investments for which the Company has elected the fair value option are included as a component of other investments, at fair value in the consolidated balance sheets. The Company recognized net gains (losses) of $ (287) and $(1,576) related to changes in fair value of investments that are included as a component of other investments, at fair value during the nine months ended September 30, 2016 and 2015 , respectively. The Company recognized net gains (losses) of $281 and $(1,222) related to changes in fair value of investments that are included as a component of other investments, at fair value during the three months ended September 30, 2016 and 2015 . Fair Value Measurements In accordance with FASB ASC 820, the Company has categorized its financial instruments, based on the priority of the inputs to the valuation technique, into a three level fair value hierarchy. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurement). The three levels of the hierarchy under FASB ASC 820 are described below. Level 1 Financial assets and liabilities whose values are based on unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. Level 2 Financial assets and liabilities whose values are based on one or more of the following: 1. Quoted prices for similar assets or liabilities in active markets; 2. Quoted prices for identical or similar assets or liabilities in non-active markets; 3. Pricing models whose inputs, other than quoted prices, are observable for substantially the full term of the asset or liability; or 4. Pricing models whose inputs are derived principally from or corroborated by observable market data through correlation or other means for substantially the full term of the asset or liability. Level 3 Financial assets and liabilities whose values are based on prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable. These inputs reflect management’s own assumptions about the assumptions a market participant would use in pricing the asset or liability. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability. Both observable and unobservable inputs may be used to determine the fair value of positions that the Company has classified within the level 3 category. As a result, the unrealized gains and losses for assets and liabilities within the level 3 category presented in the tables below may include changes in fair value that were attributable to both observable (e.g., changes in market interest rates) and unobservable (e.g., changes in unobservable long-dated volatilities) inputs. A review of the fair value hierarchy classifications is conducted on a quarterly basis. Changes in the type of inputs may result in a reclassification for certain financial assets or liabilities . There were no transfers between level 1 and level 2 of the fair value hierarchy during the nine months ended September 30, 2016 and 2015 . Reclassifications impacting level 3 of the fair value hierarchy are reported as transfers in or transfers out of the level 3 category as of the beginning of the quarter in which reclassifications occur. The following table s present information about the Company’s assets and liabilities measured at fair value on a recurring basis as of September 30, 2016 and December 31, 2015 , and indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value. FAIR VALUE MEASUREMENTS ON A RECURRING BASIS September 30, 2016 (Dollars in Thousands) Significant Significant Quoted Prices in Other Observable Unobservable Active Markets Inputs Inputs Assets Fair Value (Level 1) (Level 2) (Level 3) Investments-trading: U.S. government agency MBS and CMOs $ 10,872 $ - $ 10,872 $ - U.S. government agency debt securities 16,838 - 16,838 - RMBS 171 - 171 - U.S. Treasury securities 4,014 4,014 - - Other ABS 94 - 94 - SBA loans 22,212 - 22,212 - Corporate bonds and redeemable preferred stock 43,186 - 43,186 - Foreign government bonds 1,045 - 1,045 - Municipal bonds 26,000 - 26,000 - Certificates of deposit 778 - 778 - Derivatives 5,744 - 5,744 - Equity securities 52 - 52 - Total investments - trading $ 131,006 $ 4,014 $ 126,992 $ - Other investments, at fair value: CLOs $ 6,229 $ - $ - $ 6,229 CDOs 28 - - 28 Residential loans 359 - 359 - Foreign currency forward contracts 3 3 - - 6,619 $ 3 $ 359 $ 6,257 EuroDekania (1) 1,241 Total other investments, at fair value $ 7,860 Liabilities Trading securities sold, not yet purchased: U.S. Treasury securities $ 22,636 $ 22,636 $ - $ - Corporate bonds 28,228 - 28,228 - Municipal bonds 20 - 20 - Derivatives 4,655 - 4,655 - Total trading securities sold, not yet purchased $ 55,539 $ 22,636 $ 32,903 $ - (1) Hybrid Securities Fund—European. FAIR VALUE MEASUREMENTS ON A RECURRING BASIS December 31, 2015 (Dollars in Thousands) Significant Significant Quoted Prices in Other Observable Unobservable Active Markets Inputs Inputs Assets Fair Value (Level 1) (Level 2) (Level 3) Investments-trading: U.S. government agency MBS and CMOs $ 3,225 $ - $ 3,225 $ - U.S. government agency debt securities 12,737 - 12,737 - RMBS 98 - 98 - U.S. Treasury securities 1,355 1,355 - - Other ABS 2,048 - 2,048 - SBA loans 29,931 - 29,931 - Corporate bonds and redeemable preferred stock 19,873 - 19,873 - Municipal bonds 24,053 - 24,053 - Certificates of deposit 263 - 263 - Derivatives 1,158 - 1,158 - Total investments - trading $ 94,741 $ 1,355 $ 93,386 $ - Other investments, at fair value: Tiptree (2) $ 353 $ 353 $ - $ - Other equity securities 43 28 15 - CLOs 11,569 - - 11,569 CDOs 34 - - 34 Residential loans 383 - 383 - Foreign currency forward contracts (4) (4) - - 12,378 $ 377 $ 398 $ 11,603 EuroDekania (1) 2,502 - Total other investments, at fair value $ 14,880 Liabilities Trading securities sold, not yet purchased: U.S. Treasury securities $ 12,050 $ 12,050 $ - $ - Corporate bonds and redeemable preferred stock 25,851 - 25,851 - Municipal bonds 20 - 20 - Derivatives 1,181 - 1,181 - Equity securities 82 82 - - Total trading securities sold, not yet purchased $ 39,184 $ 12,132 $ 27,052 $ - (1) Hybrid Securities Fund—European. (2) Diversified Holding Company. The following provides a brief description of the types of financial instruments the Company holds ; the methodology for estimat ing fair value; and the level within the hierarchy of the estimate. The discussion that follows applies regardless of whether the instrument is included in investments-trading; other investments, at fair value; or trading securities sold, not yet purchased. U.S. Government Agency MBS and CMOs : These are securities that are generally traded over-the-counter. The Company generally values these securities using third party quotations such as unadjusted broker-dealer quoted prices or market price quotations from third party pricing services. These valuations are based on a market approach. This is considered a level 2 valuation in the hierarchy. U.S. Government Agency Debt Securities : Callable and non-callable U.S. government agency debt securities are measured primarily based on quoted market prices obtained from third party pricing services. Non-callable U.S. government agency debt securities are generally classified within level 1 and callable U.S. government agency debt securities are classified within level 2 of the valuation hierarchy. RMBS and CMBS : The Company generally values these securities using third party quotations such as unadjusted broker-dealer quoted prices or market price quotations from third party pricing services. These valuations are based on a market approach. The Company generally classifies the fair value of these securities based on third party quotations within level 2 of the valuation hierarchy. U.S. Treasury Securities : U.S. Treasury securities include U.S. Treasury bonds and notes and the fair values of the U.S. Treasury securities are based on quoted prices or market activity in active markets. Valuation adjustments are not applied. The Company classifies the fair value of these securities within level 1 of the valuation hierarchy. CLOs, CDOs, and ABS : CLOs, CDOs, and ABS are interests in securitizations. ABS may include, but are not limited to, securities backed by auto loans, credit card receivables, or student loans. Where the Company is able to obtain independent market quotations from at least two broker-dealers and where a price within the range of at least two broker-dealers is used or market price quotations from third party pricing services is used, these interests in securitizations will generally be classified as level 2 of the valuation hierarchy. These valuations are based on a market approach. The independent market quotations from broker-dealers are generally nonbinding. The Company seeks quotations from broker-dealers that historically have actively traded, monitored, issued, and been knowledgeable about the interests in securitizations. The Company generally believes that to the extent that it (1) receives two quotations in a similar range from broker-dealers knowledgeable about these interests in securitizations, and (2) believes the broker-dealers gather and utilize observable market information such as new issue activity in the primary market, trading activity in the secondary market, credit spreads versus historical levels, bid-ask spreads, and price consensus among market participants and sources, then classification as level 2 of the valuation hierarchy is appropriate. In the absence of two broker-dealer market quotations, a single broker-dealer market quotation may be used without corroboration of the quote in which case the Company generally classifies the fair value within level 3 of the valuation hierarchy. If quotations are unavailable, prices observed by the Company for recently executed market transactions may be used or valuation models prepared by the Company’s management may be used, which are based on an income approach. These models prepared by the Company’s management include estimates, and the valuations derived from them could differ materially from amounts realizable in an open market exchange. Each CLO and CDO position is evaluated independently taking into consideration available comparable market levels, underlying collateral performance and pricing, deal structures, and liquidity. Fair values based on internal valuation models prepared by the Company’s management are generally classified within level 3 of the valuation hierarchy. Establishing fair value is inherently subjective (given the volatile and sometimes illiquid markets for certain interests in securitizations) and requires management to make a number of assumptions, including assumptions about the future of interest rates, discount rates, and the timing of cash flows. The assumptions the Company applies are specific to each security. Although the Company may rely on internal calculations to compute the fair value of certain interest in securitizations, the Company requests and considers indications of fair value from third party pricing services to assist in the valuation process. SBA Loans : SBA loans include loans and SBA interest only strips. In the case of loans, the Company generally values these securities using third party quotations such as unadjusted broker-dealer quoted prices, internal valuation models using observable inputs, or market price quotations from third party pricing services. The Company generally classifies these investments within level 2 of the valuation hierarchy. These valuations are based on a market approach. SBA interest only strips do not trade in an active market with readily available prices. Accordingly, the Company generally uses valuation models to determine fair value and classifies the fair value of the SBA interest only strips within level 2 or level 3 of the valuation hierarchy depending on if the model inputs are observable or not. Corporate Bonds and Redeemable Preferred Stock : The Company uses recently executed transactions or third party quotations from independent pricing services to arrive at the fair value of its investments in corporate bonds and redeemable preferred stock. These valuations are based on a market approach. The Company generally classifies the fair value of these bonds within level 2 of the valuation hierarchy. In instances where the fair values of securities are based on quoted prices in active markets (for example with redeemable preferred stock), the Company classifies the fair value of these securities within level 1 of the valuation hierarchy. Municipal Bonds : Municipal bonds, which include obligations of U.S. states, municipalities, and political subdivisions, primarily include bonds or notes issued by U.S. municipalities. The Company generally values these securities using third party quotations such as market price quotations from third party pricing services. The Company generally classifies the fair value of these bonds within level 2 of the valuation hierarchy. The valuations are based on a market approach. In instances where the Company is unable to obtain reliable market price quotations from third party pricing services, the Company will use its own internal valuation models. In these cases, the Company will classify such securities as level 3 within the hierarchy until it is able to obtain third party pricing. Exchange Traded Funds : Exchange traded funds are investment funds that trade in active markets, similar to public company stocks and are included with equity securities in t he tables above. The fair value of exchange traded fund s is based on quoted prices in active markets. Valuation adjustments are not applied. The Company classifies the fair value of these securities within level 1 of the valuation hierarchy. Equity Securities : The fair value of equity securities that represent investments in publicly traded companies (common or preferred shares, options, warrants, a nd other equity investments) is determined using the closing price of the security as of the reporting date. These are securities that are traded on a recognized liquid exchange. This is considered a level 1 value in the valuation hierarchy. In some cases, the Company has owned options or warrants in newly publicly traded companies when the option or warrant itself is not publicly traded. In those cases, the Company used an internal valuation model and classified the investment within level 3 of the valuation hierarchy. The non-exchange traded equity options and warrants were measured using the Black-Scholes model with key inputs impacting the valuation including the underlying security price, implied volatility, dividend yield, interest rate curve, strike price, and maturity date. Once the securities underlying the options or warrants (not the options or warrants themselves) have quoted prices available in an active market, the Company attributes a value to the warrants using the Black-Scholes model based on the respective price of the options or warrants and the quoted prices of the securities underlying the options or warrants and key observable inputs. In this case, the Company will generally classify the options or warrants as level 2 within the valuation hierarchy because the inputs to the valuation model are now observable. If the option or warrant itself begins to trade on a liquid exchange, the Company will discontinue using a valuation model and will begin to use the public exchange price at which point it will be classified as level 1 in the valuation hierarchy. Other equity securities represent investments in investment funds and other non-publicly traded entities. Substantially all of these other entities have the attributes of investment companies as described in FASB ASC 946-15-2. The Company estimates the fair value of these entities using the reported net asset value per share as of the reporting date in accordance with the “practical expedient” provisions related to investments in certain entities that calculate net asset value per share (or its equivalent) included in FASB ASC 820 for all entities. The Company do e s not classify these investments within the fair value hierarchy . Residential Loans : Management utilizes home price indices or market indications to value the residential loans. These are considered level 2 in the hierarchy. Certificates of Deposit : The fair value of certificates of deposit is estimated using valuations provided by third party pricing services. Certificates of deposit are generally categorized in level 2 of the valuation hierarchy. Derivatives Foreign Currency Forward Contracts Foreign currency forward contracts are exchange-traded derivatives, which transact on an exchange that is deemed to be active. The fair value of the foreign currency forward contracts is based on current quoted market prices. Valuation adjustments are not applied. These are considered a level 1 value in the hierarchy. See note 8. TBAs and Other Forward Agency MBS C ontracts The Company generally values these securities using third party quotations such as unadjusted broker-dealer quoted prices or market price quotations from third party pricing services. TBAs and other forward agency MBS contracts are generally classified within level 2 of the fair value hierarchy. If there is limited transaction activity or less transparency to observe market based inputs to valuation models, TBAs and other forward agency MBS contracts are classified in level 3 of the fair value hie rarchy. Unrealized gains on TBAs and other forward agency MBS contracts are included in investments-trading on the Company’s consolidated balance sheets and unrealized losses on TBAs and other forward agency MBS contracts are included in trading securities sold, not yet purchased on the Company’s consolidated balance sheets. See note 8. Other Extended Settlement Trades When the Company buys or sells a financial instrument that will not settle in the regular time frame, the Company will account for that purchase and sale on the settlement date rather than the trade date. In those cases, the Company accounts for the transaction between trade date and settlement date as a derivative (as either a purchase commitment or sale commitment). The Company will record an unrealized gain or unrealized loss on the derivative for the difference between the fair value of the underlying financial instrument as of the reporting date and the agreed upon transaction price. The Company will determine the fair value of the financial instrument using the methodologies described above. Level 3 Financial Assets and Liabilities Financial Instruments Measured at Fair Value on a Recurring Basis The following tables present additional information about assets and liabilities measured at fair value on a recurring basis and for which the Company has utilized level 3 inputs to determine fair value. LEVEL 3 ROLLFORWARD Nine Months Ended September 30, 2016 (Dollars in Thousands) December 31, 2015 Net trading Gains and losses (2) Transfers into Level 3 Transfers out of level 3 Accretion of income (2) Purchases Sales and returns of capital September 30, 2016 Change in unrealized gains /(losses) (1) Assets Other investments, at fair value CLOs $ 11,569 $ - $ 746 $ - $ - $ 1,005 $ - $ (7,091) $ 6,229 $ 872 CDOs 34 - (4) - - - - (2) 28 (4) Total other investments, fair value $ 11,603 $ - $ 742 $ - $ - $ 1,005 $ - $ (7,093) $ 6,257 $ 868 (1) Represents the change in unrealized gains and losses for the period included in earnings for assets held at the end of the reporting period. (2) Recorded as a component of principal transactions and other income in the consolidated statement of operations. LEVEL 3 ROLLFORWARD Nine Months Ended September 30, 2015 (Dollars in Thousands) December 31, 2014 Net trading Gains and losses (2) Transfers into Level 3 Transfers out of level 3 Accretion of income (2) Purchases Sales and returns of capital September 30, 2015 Change in unrealized gains /(losses) (1) Assets Other investments, at fair value CLOs $ 21,518 $ - $ (1,525) $ - $ - $ 1,918 $ - $ (7,463) $ 14,448 $ 56 CDOs 11 - 20 - - - - - 31 20 Total other investments, fair value $ 21,529 $ - $ (1,505) $ - $ - $ 1,918 $ - $ (7,463) $ 14,479 $ 76 (1) Represents the change in unrealized gains and losses for the period included in earnings for assets held at the end of the reporting period. (2) Recorded as a component of principal transactions and other income in the consolidated statement of operations. LEVEL 3 ROLLFORWARD Three Months Ended September 30, 2016 (Dollars in Thousands) June 30, 2016 Net trading Gains and losses (2) Transfers into Level 3 Transfers out of level 3 Accretion of income (2) Purchases Sales and returns of capital September 30, 2016 Change in unrealized gains /(losses) (1) Assets Other investments, at fair value CLOs $ 8,028 $ - $ 392 $ - $ - $ 250 $ - $ (2,441) $ 6,229 $ 580 CDOs 30 - - - - - - (2) 28 - Total other investments, fair value $ 8,058 $ - $ 392 $ - $ - $ 250 $ - $ (2,443) $ 6,257 $ 580 (1) Represents the change in unrealized gains and losses for the period included in earnings for assets held at the end of the reporting period. (2) Recorded as a component of principal transactions and other income in the consolidated statement of operations LEVEL 3 ROLLFORWARD Three Months Ended September 30, 2015 (Dollars in Thousands) June 30, 2015 Net trading Gains and losses (2) Transfers into Level 3 Transfers out of level 3 Accretion of income (2) Purchases Sales and returns of capital September 30, 2015 Change in unrealized gains /(losses) (1) Assets Other investments, at fair value CLOs $ 16,248 $ - $ (1,338) $ - $ - $ 586 $ - $ (1,048) $ 14,448 $ (272) CDOs 27 - 4 - - - - - 31 4 Total other investments, fair value $ 16,275 $ - $ (1,334) $ - $ - $ 586 $ - $ (1,048) $ 14,479 $ (268) (1) Represents the change in unrealized gains and losses for the period included in earnings for assets held at the end of the reporting period. (2) Recorded as a component of principal transactions and other income in the consolidated statement of operations The circumstances that would result in transferring certain financial instruments from level 2 to level 3 of the valuation hierarchy would typically include what the Company believes to be a decrease in the availability, utility, and reliability of observable market information such as new issue activity in the primary market, trading activity in the secondary market, credit spreads versus historical levels, bid-ask spreads, and price consensus among market participants and sources. During the nine and three months ended September 30, 2016 and 2015 , there were no transfers into or out of level 3 of the valuation hierarchy. The following tables provide the quantitative information about level 3 fair value measurements as of September 30, 2016 and December 31, 2015 . QUANTITATIVE INFORMATION ABOUT LEVEL 3 FAIR VALUE MEASUREMENTS (Dollars in Thousands) Significant Range of Fair Value Valuation Unobservable Weighted Significant September 30, 2016 Technique Inputs Average Inputs Assets Other investments, at fair value CLOs $ 6,229 Discounted Cash Flow Model Yield 18.8% 13.5% - 29.0% Duration (years) 6.0 5.6 - 6.9 Default rate 2.0% 2.0% QUANTITATIVE INFORMATION ABOUT LEVEL 3 FAIR VALUE MEASUREMENTS (Dollars in Thousands) Significant Range of Fair Value Valuation Unobservable Weighted Significant December 31, 2015 Technique Inputs Average Inputs Assets Other investments, at fair value CLOs $ 11,569 Discounted Cash Flow Model Yield 20.1% 16.0 - 30.0% Duration (years) 6.6 6.3 - 7.6 Default rate 2.0% 2.0% Sensitivity of Fair Value to Changes in Significant Unobservable Inputs For recurring fair value measurements categorized within level 3 of the fair value hierarchy, the sensitivity of the fair value measurement to changes in significant unobservable inputs and interrelationships between those unobservable inputs (if any) are described below. · CLOs : The Company uses a discounted cash flow model to determine the fair value of its investments in CLOs. Changes in the yield, duration, and default rate assumptions would impact the fair value determined. The longer the duration, the lower the fair value of the investment. The higher the yield, the lower the fair value of the investment. The higher the default rate, the lower the fair value of the investment. Investments in Certain Entities that Calculate Net Asset Value Per Share (or its Equivalent) The following table presents additional information about investments in certain entities that calculate net asset value per share (regardless of whether the “practical expedient” provisions of FASB ASC 820 have been applied), which are measured at fair value on a recurring basis at September 30, 2016 and December 31, 2015 . FAIR VALUE MEASUREMENTS OF INVESTMENTS IN CERTAIN ENTITIES THAT CALCULATE NET ASSET VALUE PER SHARE (OR ITS EQUIVALENT) (Dollars in Thousands) Fair Value September 30, 2016 Unfunded Commitments Redemption Frequency Redemption Notice Period Other investments, at fair value EuroDekania (a) $ 1,241 N/A N/A N/A $ 1,241 Fair Value December 31, 2015 Unfunded Commitments Redemption Frequency Redemption Notice Period Other investments, at fair value EuroDekania (a) $ 2,502 N/A N/A N/A $ 2,502 N/A Not applicable. EuroDekania does not offer redemptions and investors in EuroDekania have no commitments to make additional investments. (a) EuroDekania owns investments in hybrid capital securities that have attributes of debt and equity, primarily in the form of subordinated debt issued by insurance companies, banks , and bank holding companies based primarily in Western Europe; widely syndicated leveraged loans issued by European corporations; CMBS, including subordinated interests in first mortgage real estate loans; and RMBS and other ABS backed by consumer and commercial receivables. The majority of the assets are denominated in Euros and U.K. Pounds Sterling. The fair value of the investment in this category has been estimated using the NAV per share of the investment in accordance with the “practical expedient” provisions of FASB ASC 820. |
Derivative Financial Instrument
Derivative Financial Instruments | 9 Months Ended |
Sep. 30, 2016 | |
Derivative Financial Instruments [Abstract] | |
Derivative Financial Instruments | 8. DERIVATIVE FINANCIAL INSTRUMENTS FASB ASC 815, Derivatives and Hedging (“FASB ASC 815”), provides for optional hedge accounting. When a derivative is deemed to be a hedge and certain documentation and effectiveness testing requirements are met, reporting entities are allowed to record all or a portion of the change in the fair value of a designated hedge as an adjustment to other comprehensive income (“OCI”) rather than as a gain or loss in the statements of operations. To date, the Company has not designated any derivatives as hedges under the provisions included in FASB ASC 815. Derivative financial instruments are recorded at fair value. If the derivative was entered into as part of the Company’s broker-dealer operations, it will be included as a component of investments-trading or trading securities sold, not yet purchased. If it is entered into to hedge for another financial instrument included in other investments, at fair value then the derivative will be included as a component of other investments, at fair value. The Company may, from time to time, enter into derivatives to manage its risk exposures arising from (i) fluctuations in foreign currency rates with respect to the Company’s investments in foreign currency denominated investments; (ii) the Company’s investments in interest sensitive investments; and (iii) the Company’s facilitation of mortgage-backed trading. Derivatives entered into by the Company, from time to time, may include (i) foreign currency forward contracts; (ii) purchase and sale agreements of TBAs and other forward agency MBS contracts; and (iii) other extended settlement trades. TBAs are forward contracts to purchase or sell MBS whose collateral remain “to be announced” until just prior to the trade settlement. In addition to TBAs, the Company sometimes enters into forward purchases or sales of agency MBS where the underlying collateral has been identified. These transactions are referred to as other forward agency MBS contracts. TBAs and other forward agency MBS contracts are accounted for as derivatives by the Company under FASB ASC 815. The settlement of these transactions is not expected to have a material effect on the Company’s consolidated financial statements. In addition to TBAs and other forward agency MBS contracts as part of the Company’s broker-dealer operations, the Company may from time to time enter into other securities or loan trades that do not settle within the normal securities settlement period. In those cases, the purchase or sale of the security or loan is not recorded until the settlement date. However, from the trade date until the settlement date, the Company’s interest in the security is accounted for as a derivative as either a forward purchase commitment or forward sale commitment. Derivatives involve varying degrees of off-balance sheet risk, whereby changes in the level or volatility of interest rates or market values of the underlying financial instruments may result in changes in the value of a particular financial instrument in excess of its carrying amount. Depending on the Company’s investment strategy, realized and unrealized gains and losses are recognized in principal transactions and other income or in net trading in the Company’s consolidated statements of operations on a trade date basis. The Company may, from time to time, enter into the following derivative instruments. Foreign Currency Forward Contracts The Company invests in foreign currency denominated investments that expose it to fluctuations in foreign currency rates, and, therefore, the Company may, from time to time, hedge such exposure by using foreign currency forward contracts. The Company carries the foreign currency forward contracts at fair value and includes them as a component of other investments, at fair value in the Company’s consolidated balance sheets . As of September 30, 2016 and December 31, 2015 , the Company had outstanding foreign currency forward contracts with a notional amount of 1.625 million Euros and 2.750 million Euros, respectively. EuroDollar Futures The Company invests in floating rate investments that expose it to fluctuations in interest rates and, therefore, the Company may, from time to time, hedge such exposure using EuroDollar futures. The Company carries such EuroDollar future contracts at fair value and includes them as a component of investments-trading or trading securities sold, not yet purchased in the Company’s consolidated balance sheets. As of September 30, 2016 and December 31, 2015, the Company had no outstanding EuroDollar future contracts. TBAs and Other Forward Agency MBS Contracts The Company enters into TBAs and other forward agency MBS transactions for three main reasons. (i) The Company trades U.S. government agency obligations. In connection with these activities, the Company may be required to maintain inventory in order to facilitate customer transactions. In order to mitigate exposure to market risk, the Company may enter into the purchase and sale of TBAs and other forward agency MBS contracts. (ii) The Company also enters into TBAs and other forward agency MBS contracts in order to assist clients (generally small to mid-size mortgage loan originators) in hedging the interest rate risk associated with the mortgages owned by these clients. (iii) Finally, the Company may enter into TBAs and other forward agency MBS contracts on a speculative basis. The Company carries the TBAs and other forward agency MBS contracts at fair value and includes them as a component of investments-trading or trading securities sold, not yet purchased in the Company’s consolidated balance sheets. At September 30, 2016 , the Company had open TBA and other forward MBS purchase agreements in the notional amount of $ 1,390,865 and open TBA and other forward MBS sale agreements in the notional amount of $ 1,390,865 . At December 31, 2015 , the Company had open TBA and other forward agency MBS purchase agreements in the notional amount of $ 699,460 and open TBA sale agreements in the notional amount of $ 677,450 . Other Extended Settlement Trades When the Company buys or sells a financial instrument that will not settle in the regular time frame, the Company will account for that purchase and sale on the settlement date rather than the trade date. In those cases, the Company accounts for the transaction between trade date and settlement date as a derivative as either a forward purchase commitment or a forward sale commitment. The Company will record an unrealized gain or unrealized loss on the derivative for the difference between the fair value of the underlying financial instrument as of the reporting date and the agreed upon transaction price. At September 30, 2016 , the Company had open forward purchase commitments of $12,477 and open forward sale commitments of $0 . At December 31, 2015, the Company had open forward purchase commitments of $3,075 and open forward sale commitments of $0 . The following table presents the Company’s derivative financial instruments and the amount and location of the fair value (unrealized gain / (loss)) recognized in the consolidated balance sheets as of September 30, 2016 and December 31, 2015 . DERIVATIVE FINANCIAL INSTRUMENTS-BALANCE SHEET INFORMATION (Dollars in Thousands) Derivative Financial Instruments Not Designated as Hedging Instruments Under FASB ASC 815 Balance Sheet Classification September 30, 2016 December 31, 2015 TBAs and other forward agency MBS Investments-trading $ 5,744 $ 1,158 Foreign currency forward contracts Other investments, at fair value 3 (4) TBAs and other forward agency MBS Trading securities sold, not yet purchased (4,655) (1,181) $ 1,092 $ (27) The following table presents the Company’s derivative financial instruments and the amount and location of the net gain (loss) recognized in the consolidated statement of operations. DERIVATIVE FINANCIAL INSTRUMENTS-STATEMENT OF OPERATIONS INFORMATION (Dollars in Thousands) Derivative Financial Instruments Not Designated as Hedging Instruments Under FASB ASC 815 Income Statement Classification Nine Months Ended September 30, 2016 Nine Months Ended September 30, 2015 Foreign currency forward contracts Revenue-principal transactions and other income $ (83) $ 286 Other extended settlement trades Revenue-net trading (3) 2 TBAs and other forward agency MBS Revenue-net trading 6,286 4,158 $ 6,200 $ 4,446 DERIVATIVE FINANCIAL INSTRUMENTS-STATEMENT OF OPERATIONS INFORMATION (Dollars in Thousands) Derivative Financial Instruments Not Designated as Hedging Instruments Under FASB ASC 815 Income Statement Classification Three Months Ended September 30, 2016 Three Months Ended September 30, 2015 Foreign currency forward contracts Revenue-principal transactions and other income $ (30) $ (2) Other extended settlement trades Revenue-net trading (3) (26) TBAs and other forward agency MBS Revenue-net trading 2,075 1,115 $ 2,042 $ 1,087 |
Collateralized Securities Trans
Collateralized Securities Transactions | 9 Months Ended |
Sep. 30, 2016 | |
Collateralized Securities Transactions [Abstract] | |
Collateralized Securities Transactions | 9. COLLATERALIZED SECURITIES TRANSACTIONS Reverse repurchase agreements and r epurchase agreements, principally collateralized by U.S. government and federal agency obligations and MBS, are treated as collateralized financing transactions and are recorded at their contracted resale or repurchase amounts plus accrued interest. The resulting interest income and expense are included in net trading in the consolidated statements of operations. In the normal course of doing business, the Company enters into reverse repurchase agreements that permit it to re-pledge or resell the securities to others. The Company enters into reverse repurchase agreements as part of its matched book repo financing business, to acquire securities to cover short positions, or as an investment. The Company enters into repurchase agreements as part of its matched book repo financing business or to finance the Company’s securities positions held in inventory. At September 30, 2016 and December 31, 2015 , the Company held reverse repurchase agreements of $ 288,286 and $ 128,011 , respectively, and the fair value of securities received as collateral under reverse repurchase agreements was $ 303,372 and $ 137,232 , respectively. As of September 30, 2016, the reverse repurchase agreement balance was comprised of receivables collateralized by seven securities with a single counterparty. As of December 31, 2015, the reverse repurchase agreement balance was com prised o f receivables collateralized by three securities with a single counterparty. At September 30, 2016 and December 31, 2015 , the Company had repurchase agreements of $ 302,800 and $ 127,913 , respectively, and the fair value of securities pledged as collateral under repurchase agreements was $ 318,092 and $ 137,232 , respectively. These amounts include collateral for reverse repurchase agreements that were re-pledged as collateral for repurchase agreements. The following table is a summary of the remaining contractual maturity of the gross obligations under repurchase agreements accounted for as secured borrowings segregated by the underlying collateral pledged. REPURCHASE AGREEMENTS ACCOUNTED FOR AS SECURED BORROWINGS (Dollars in Thousands) September 30, 2016 Remaining Contractual Maturity of the Agreements Overnight and Continuous Up to 30 days 30 - 90 days Greater than 90 days Total U.S. government agency MBS $ - $ 246,770 $ 41,310 $ - $ 288,080 SBA Loans 14,720 - - 14,720 $ 14,720 $ 246,770 $ 41,310 $ - $ 302,800 Amount recognized $ 302,800 REPURCHASE AGREEMENTS ACCOUNTED FOR AS SECURED BORROWINGS (Dollars in Thousands) December 31, 2015 Remaining Contractual Maturity of the Agreements Overnight and Continuous Up to 30 days 30 - 90 days Greater than 90 days Total U.S. government agency MBS $ - $ 127,913 $ - $ - $ 127,913 $ - $ 127,913 $ - $ - $ 127,913 Amount recognized $ 127,913 |
Other Assets and Accounts Payab
Other Assets and Accounts Payable and Other Liabilities | 9 Months Ended |
Sep. 30, 2016 | |
Other Assets and Accounts Payable and Other Liabilities [Abstract] | |
Other Assets And Accounts Payable And Other Liabilities | 10. OTHER ASSETS AND ACCOUNTS PAYABLE AND OTHER LIABILITIES The following table provides information about other assets as of the dates indicated. OTHER ASSETS (Dollars in Thousands) September 30, 2016 December 31, 2015 Deferred costs $ 600 $ 600 Prepaid expenses 1,197 1,359 Prepaid income taxes 93 - Security deposits 1,828 1,845 Miscellaneous other assets 146 161 Cost method investment 65 11 Furniture, equipment, and leasehold improvements, net 556 566 Intangible assets 166 166 Other assets $ 4,651 $ 4,708 The following table provides information about a ccounts payable and other liabilities as of the dates indicated. ACCOUNTS PAYABLE AND OTHER LIABILITIES (Dollars in Thousands) September 30, 2016 December 31, 2015 Accounts payable $ 144 $ 494 Rent payable 174 390 Accrued interest payable 302 138 Accrued interest on securities sold, not yet purchased 571 491 Payroll taxes payable 523 594 Other general accrued expenses 1,650 1,255 Accounts payable and other liabilities $ 3,364 $ 3,362 |
Variable Interest Entities
Variable Interest Entities | 9 Months Ended |
Sep. 30, 2016 | |
Variable Interest Entities [Abstract] | |
Variable Interest Entities | 11. VARIABLE INTEREST ENTITIES As a general matter, a reporting entity must consolidate a VIE when it is deemed to be the primary beneficiary. The primary beneficiary is the entity that has both (a) the power to direct the matters that most significantly impact the VIE ’ s financial performance and (b) a significant variable interest in the VIE. For the reporting periods present ed herein, the Company has determined that it is not the primary beneficiary of, and therefore has not consolidated, a VIE. The Company is involved with VIEs in three main ways : (i) as part of the Company’s principal investing portfolio; (ii) as part of the Company’s asset management activities; and (iii) within the Company’s trading portfolio. The Company’s Principal Investing Portfolio For each investment made within the principal investing portfolio, the Company assesses whether the investee is a VIE and if the Company is the primary beneficiary. As of September 30, 2016 , the Company had variable interests in various securitization VIEs, but determined that it was not the primary beneficiary, and, therefore, was not consolidating the securitization VIEs. The maximum potential financ ial statement loss the Company w ould incur if the securitization vehicles were to defaul t on all of their obligations would be the loss of value of the interests in securitizations that the Company holds in its inventory a t the time. The Company did not provide financial support to these VIEs during the nine months ended September 30, 2016 and 2015 and had no liabilities, contingent liabilities, or guarantees (implicit or explicit) related to these VIEs at September 30, 2016 and December 31, 2015 . The Company’s Asset Management Activities For each investment management contract entered into by the Company, the Company assesses whether the entity being managed is a VIE and if the Company is the primary beneficiary. The Company serves as collateral asset manager to certain securitizations that are VIEs. Under the current guidance of ASU 2015-02, the Company has concluded that its asset management cont racts should not be considered variable interest s . Currently, the Company has no other interests in entities it manages that are considered variable interests. Therefor e, the Company is not the primary beneficiary of any securitizations that it manages. The Company’s Trading Portfolio From time to time, the Company may have an interest in a VIE through the investments it makes as part of its trading activities. Because of the high volume of trading activity the Company experiences, the Company does not perform a formal assessment of each individual investment within its trading portfolio to determine if t he investee is a VIE and if the Company is a primary beneficiary. Even if the Company were to obtain a variable interest in a VIE through its trading portfolio, the Company would not be deemed to be the primary beneficiary for two main reasons: (a) the Company does not usually obtain the power to direct activities that most significantly impact any i nvestee’s financial performance and (b) a scope exception exists within the consolidation guidance for cases where the reporting entity is a broker- dealer and any control (either as the primary beneficiary of a VIE or through a controlling interest i n a voting interest entity) was deemed to be temporary. In the extremely unlikely case that the Company somehow obtained the power to direct and a significant variab le interest in an investee in its trading portfolio that was a VIE, any such control would be temporary due to the rapid turnover within the trading portfolio. The following table presents the carrying amounts of the assets in the Company’s consolidated balance sheets that relate t o the Company’s variable intere st s in identified VIEs with the exception of (i) the two trust VIEs that hold the Company’s junior subordinated notes (see note 12) and (ii) any security that represents an interest in a VIE that is included in investments-trading or securities sold but not yet purchased in the Company’s consolidated balance sheets. The table below shows the Company’s maximum exposure to loss associated with these identified nonconsolidated VIEs in which it holds variable interests at September 30, 2016 and December 31, 2015 . CARRYING VALUE OF VARIABLE INTERESTS IN NON-CONSOLIDATED VARIABLE INTEREST ENTITIES (Dollars in Thousands) September 30, 2016 December 31, 2015 Other Investments, at fair value $ 6,257 $ 11,603 Maximum Exposure $ 6,257 $ 11,603 |
Debt
Debt | 9 Months Ended |
Sep. 30, 2016 | |
Debt [Abstract] | |
Debt | 12. DEBT The Company had the following debt outstanding as of the dates indicated. DETAIL OF DEBT (Dollars in Thousands) Description Current Outstanding Par September 30, 2016 December 31, 2015 Interest Rate Terms Interest (3) Maturity Convertible senior notes: 8.00% convertible senior notes (the "8.0% Convertible Notes") $ 8,248 $ 8,248 $ 8,248 Fixed 8.00 % September 2018 (1) Less unamortized debt issuance costs (309) (410) 8,248 7,939 7,838 Junior subordinated notes: Alesco Capital Trust I 28,125 (2) 12,462 12,084 Variable 4.76 % July 2037 Sunset Financial Statutory Trust I 20,000 (2) 8,889 8,613 Variable 4.99 % March 2035 $ 48,125 21,351 20,697 Total $ 29,290 $ 28,535 (1) The holders of the 8.0% Convertible Notes may convert all or any part of the outstanding principal amount of the 8.0% Convertible Notes at any time prior to maturity into shares of the Company’s Common Stock at a conversion price of $3.00 per share, subject to customary anti-dilution adjustments. (2) The junior subordinated notes listed represent debt the Company owes to the two trusts noted above. The total par amount ow ed by the Company to the trusts is $49,614 . However, the Company owns the common stock of the trusts in a total par amount of $1,489 . The Company pays interest (and at maturity, principal) to the trusts on the entire $49,614 junio r notes outstanding. T he Company receives back from the trusts the pro rata share of interest and principal on the common stock the Company holds of $1,489. Accordingly, the Company shows the net par value not held by it of $48,125 in the table above. These trusts are VIEs and the Company does not consolidate them even though the Company holds common stock. The Company carries the common stock on its balance sheet at a value of $0 . (3) Represents the interest rate in effect as of the last day of the reporting period. Refer to note 17 to the Company’s consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, for a discussion of the Company’s debt . |
Equity
Equity | 9 Months Ended |
Sep. 30, 2016 | |
Equity [Abstract] | |
Equity | 13. EQUITY Stockholders’ Equity Common Equity : The following table reflects the activity for the nine months ended September 30, 2016 related to the number of shares of unrestricted Common Stock that the Company had issued . Common Stock Shares December 31, 2015 13,035,119 Vesting of shares 254,828 Shares withheld for employee taxes (25,701) Retirement of common stock (1,908,480) September 30, 2016 11,355,766 Acquisition and Surrender of Additional Units of the Operating LLC, net : Effective January 1, 2011, IFMI and the Operating LLC entered into a Unit Issuance and Surrender Agreement (the “UIS Agreement”), which was approved by IFMI’s board of directors and the board of managers of the Operating LLC. In an effort to maintain a 1:1 ratio of Common Stock to the number of membership units IFMI holds in the Operating LLC, the UIS Agreement calls for the issuance of additional membership units of the Operating LLC to IFMI when IFMI issues its Common Stock to employees under existing equity compensation plans. In certain cases, the UIS Agreement calls for IFMI to surrender units to the Operating LLC when certain restricted shares are forfeited by the employee or repurchased. During the nine months ended September 30, 2016, IFMI received and surrendered units of the Operating LLC. The following table displays the amount of units received (net of surrenders) by IFMI. Operating LLC Membership Units Units related to UIS Agreement 467,002 Units surrendered from retirement of IFMI Common Stock (1,908,480) Total (1,441,478) The Company recognized a net decrease in additional paid in capital of $552 and a net increase in accumulated other comprehensive income of $49 with an offsetting increase in non-controlling interest of $503 in connection with the acquisition and surrender of additional units of the Operating LLC. The following schedule presents the effects of changes in IFMI’s ownership interest in the Operating LLC on the equity attributable to IFMI for the nine months ended September 30, 2016 and 2015. September 30, 2016 September 30, 2015 Net income / (loss) attributable to IFMI $ 2,070 $ (1,436) Transfers (to) from the non-controlling interest: Increase / (decrease) in IFMI's paid in capital for the acquisition / (surrender) of additional units in consolidated subsidiary, net (552) 88 Changes from net income / (loss) attributable to IFMI and transfers (to) from the non-controlling interest $ 1,518 $ (1,348) Repurchases of Common Stock On March 17, 2016, the Company entered into a letter agreement (the “10b5-1 Plan ”) with Sandler O’Neill & Partners, L.P. (“Agent”). Pursuant to the 10b5-1 Plan, Agent agreed to use its commercially reasonable efforts to purchase, on the Company’s behalf, up to $1,000 of the shares of Common Stock on any day that the NYSE MKT is open for business. Purchases made under the 10b5-1 Plan commenced on March 17, 2016 and will end no later than December 15, 2016. Pursuant to the 10b5-1 Plan, purchases of Common Stock may be made in public and private transactions and must comply with Rule 10b-18 under the Exchange Act. The 10b5-1 Plan is designed to comply with Rule 10b5-1 under the Exchange Act. The 10b5-1 Plan was entered into in connection with the Company’s existing repurchase plan, as previously disclosed in the Company’s periodic reports, which permits the Company to repurchase shares of Common Stock from time to time in open market purchases or privately negotiated transactions. During the nine months ended September 30, 2016, the Company repurchased 214,480 shares in the open market (both pursuant to the 10b5-1 Plan and prior to the Plan being in effect) for a total purchase price of $201 . During the three months ended September 30, 2016, the Company repurchased 80,400 shares for a total purchase price of $79 . In addition, on March 21, 2016, the Company (i) repurchased 650,000 shares of Common Stock, from an unrelated third-party in a privately negotiated transaction for an aggregate purchase price of $813 , which represents a per share price of $1.25 , and (ii) repurchased an aggregate of 1,044,000 shares of Common Stock from an investment manager representing certain stockholders that are unrelated to the Company in a separate privately negotiated transaction for an aggregate purchase price of $1,305 , which represents a per share price of $1.25 . The Company repurchased all of these shares of Common Stock using cash on hand. Rights Agreement On August 3, 2016, the Company entered into a Section 382 Rights Agreement (the “Rights Agreement”) between the Company and Computershare, Inc. The Company’s board of directors adopted the Rights Agreement in an effort to protect stockholder value by attempting to protect against a possible limitation on the Company’s ability to use its net operating loss and net capital loss carry forwards to reduce potential future federal income tax obligations. The Rights Agreement provides for a distribution of one preferred stock purchase right for each share of the Company’s Common Stock, par value $0.001 per share, outstanding to stockholders of record at the close of business on August 15, 2016. Each Right entitles the registered holder to purchase from the Company a unit consisting of one ten -thousandth of a share of the Company’s Series C Junior Participating Preferred Stock, par value $0.001 per share, at a Purchase Price of $100.00 per Unit subject to adjustment. The rights will become exercisable following (i) the 10th day after a public announcement that a person or group of affiliated or associated persons has acquired beneficial ownership of 4.95% or more of the Company’s Common Stock or (ii) the 10 th business day following the commencement of a tender offer or exchange offer that would result in a person or group having ownership of 4.95% or more of the Company’s Common Stock. The rights have no voting privileges and the Rights Agreement will expire on the earliest of (i) the close of business on December 31, 2019, (ii) the time at which the rights are redeemed pursuant to the Rights Agreement, (iii) the time at which the rights are exchanged pursuant to the Rights Agreement, (iv) the repeal of Section 382 of the Internal Revenue Code or any successor statute if the Company’s board of directors determines that the Rights Agreement is no longer necessary or desirable for the preservation of certain tax benefits, and (v) the beginning of the taxable year of the Company to which the Company’s Board of Directors determines that certain tax benefits may not be carried forward. No rights were exercisable at September 30, 2016. There was no impact to the Company’s financial results as a result of the adoption of the Rights Agreement. The terms and the conditions of the rights are set forth in the Section 382 Rights Agreement filed on Form 8-A with the Securities and Exchange Commission on August 3, 2016. |
Net Capital Requirements
Net Capital Requirements | 9 Months Ended |
Sep. 30, 2016 | |
Net Capital Requirements [Abstract] | |
Net Capital Requirements | 14 . NET CAPITAL REQUIREMENTS JVB is subject to the net capital provision of Rule 15c3-1 under the Exchange Act, which requires the maintenance of minimum net capital, as defined therein. As of September 30, 2016 , JVB’s adjusted net capital was $ 38,220 , which exceeded the minimum requirements by $37,970 . CCFL, a subsidiary of the Company regulated by the United Kingdom Financial Conduct Authority (the “ FCA ”) , is subject to the net liquid capital provision of the Financial Services and Markets Act 2000, GENPRU 2.140R to 2.1.57R, relating to financial prudence with regards to the European Investment Services Directive and the European Capital Adequacy Directive, which requires the maintenance of minimum liquid capital, as defined therein. As of September 30, 2016 , the total minimum required net liquid capital was $ 532 , an d net liquid capital in CCFL was $801 , which exceeded the minimum requirements by $ 269 and was in compliance with the net liquid capital provisions. See note 4. |
Earnings _ (Loss) Per Common Sh
Earnings / (Loss) Per Common Share | 9 Months Ended |
Sep. 30, 2016 | |
Earnings / (Loss) Per Common Share [Abstract] | |
Earnings / (Loss) Per Common Share | 15 . EARNINGS / (Loss) PER COMMON SHARE The following table presents a reconciliation of basic and diluted earnings / (loss) per common share for the periods indicated. EARNINGS / (LOSS) PER COMMON SHARE (Dollars in Thousands, except share or per share information) Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Net income / (loss) attributable to IFMI $ 1,041 $ (533) $ 2,070 $ (1,436) Add/ (deduct): Income / (loss) attributable to non-controlling interest attributable to Operating LLC membership units exchangeable into IFMI shares (1) 489 (114) 925 (432) Add / (deduct): Adjustment (2) (23) (72) (33) (72) Net income / (loss) on a fully converted basis $ 1,507 $ (719) $ 2,962 $ (1,940) Weighted average common shares outstanding - Basic 11,807,417 15,229,340 12,328,238 15,202,628 Unrestricted Operating LLC membership units exchangeable into IFMI shares (1) 5,324,090 5,324,090 5,324,090 5,324,090 Dilutive Impact of restricted units or shares 130,485 - 91,242 - Weighted average common shares outstanding - Diluted (3) 17,261,992 20,553,430 17,743,570 20,526,718 Net income / (loss) per common share - Basic $ 0.09 $ (0.03) $ 0.17 $ (0.09) Net income / (loss) per common share - Diluted $ 0.09 $ (0.03) $ 0.17 $ (0.09) (1) The Operating LLC membership units not held by IFMI (that is, those held by the non-controlling interest for the nine months ended September 30, 2016 and 2015 ) may be redeemed and exchanged into shares of the Company on a one -to-one basis. The Operating LLC membership units not held by IFMI are redeemable at each IFMI member’s option, at any time, for (i) cash in an amount equal to the average of the per share closing prices of Common Stock for the ten consecutive trading days immediately preceding the date the Company receives the member’s redemption notice, or (ii) at the Company’s option, one share of Common Stock , subject, in each case, to appropriate adjustment upon the occurrence of an issuance of additional shares of Common Stock as a dividend or other distribution on the outstanding C ommon S tock, or a further subdivision or combination of the outstanding shares of Common Stock . These membership units enter into the computation of diluted net income / (loss) per common share when the effect is not anti-dilutive using the if-converted method. (2) An adjustment is included for the following reasons: (i) if the Operating LLC membership units had been converted at the beginning of the period, the Company would have incurred a higher income tax expense or realized a higher inc ome tax benefit, as applicable and (ii) to adjust the non-controlling interest amount to be consistent with the weighted average share calculation. (3) For the nine months ended 2016 and 2015 , weighted average common shares outstanding excludes a total of 0 and 5,406 shares, respectively representing restricted Operating LLC membership units, restricted Common Stock , and restricted units of Common Stock that would be anti-dilutive because of the Company’s net loss. For the three months ended September 30, 2016 and 2015 , weighted average common shares outstanding excludes a total of 0 and 11,838 shares , respectively, representing restricted Operating LLC membership units, restricted Common Stock , and restricted units of Common Stock that would be anti-dilutive because of the Company’s net loss . For the nine and three months ended September 30, 2016 and 2015 , weighted average common shares outstanding also excludes 2,749,167 shares from the assumed conversion of the 8.0% Convertibles Notes because the inclusion of the converted shares would be anti-dilutive. |
Commitments And Contingencies
Commitments And Contingencies | 9 Months Ended |
Sep. 30, 2016 | |
Commitments And Contingencies [Abstract] | |
Commitments And Contingencies | 16. COMMITMENTS AND CONTINGENCIES Legal and Regulatory Proceedings In October 2013, the Company received a Pennsylvania corporate net income tax assessment from the Pennsylvania Department of Revenue in the amount of $4,683 (including penalties) plus interest related to a subsidiary of AFN for the 2009 tax year. The assessment denied this subsidiary’s Keystone Opportunity Zone (“KOZ”) credit for that year. The Company filed an administrative appeal of this assessment with the Pennsylvania Department of Revenue Board of Appeals, which was denied in June 2014. The Company filed an appeal with the Pennsylvania Board of Finance and Revenue, which was also denied in May 2015. The Company has filed an appeal with the Pennsylvania Commonwealth Court. The Company has evaluated the assessment in accordance with the provisions of ASC 740 and determined not to record any reserve for this assessment. In addition to the matters set forth above, the Company is a party to various routine legal proceedings, claims, and regulatory inquiries arising out of the ordinary course of the Company’s business. Management believes that the results of these routine legal proceedings, claims, and regulatory matters will not have a material adverse effect on the Company’s financial condition, or on the Company’s operations and cash flows. However, the Company cannot estimate the legal fees and expenses to be incurred in connection with these routine matters and, therefore, is unable to determine whether these future legal fees and expenses will have a material impact on the Company’s operations and cash flows. It is the Company’s policy to expense legal and other fees as incurred. |
Segment And Geographic Informat
Segment And Geographic Information | 9 Months Ended |
Sep. 30, 2016 | |
Segment and Geographic Information [Abstract] | |
Segment And Geographic Information | 17. SEGMENT AND GEOGRAPHIC INFORMATION Segment Information The Company operates within three business segments: Capital Markets, Principal Investing , and Asset Management. See note 1. The Company’s business segment information was prepared using the following methodologies and generally represents the information that is relied upon by management in its decision making processes: (a) Revenues and expenses directly associated with each business segment are included in determining net income / (loss) by segment; and (b) Indirect expenses (such as general and administrative expenses including executive and indirect overhead costs) not directly associated with specific business segments are not allocated to the business segments’ statements of operations. Accordingly, the Company presents segment information consistent with internal management reporting. See note (1) in the table below for more detail on unallocated items. The following tables present the financial information for the Company’s segments for the periods indicated. SEGMENT INFORMATION Statement of Operations Information Nine Months Ended September 30, 2016 Capital Asset Principal Segment Unallocated Markets Management Investing Total (1) Total Net trading $ 31,973 $ - $ - $ 31,973 $ - $ 31,973 Asset management - 5,662 - 5,662 - 5,662 New issue and advisory 2,176 - - 2,176 - 2,176 Principal transactions and other income 140 1,541 698 2,379 - 2,379 Total revenues 34,289 7,203 698 42,190 - 42,190 Total operating expenses 26,662 2,394 369 29,425 6,640 36,065 Operating income / (loss) 7,627 4,809 329 12,765 (6,640) 6,125 Interest expense - - - - (2,973) (2,973) Income / (loss) before income taxes 7,627 4,809 329 12,765 (9,613) 3,152 Income tax expense / (benefit) - - - - 157 157 Net income / (loss) 7,627 4,809 329 12,765 (9,770) 2,995 Less: Net income / (loss) attributable to the non-controlling interest - - - - 925 925 Net income / (loss) attributable to IFMI $ 7,627 $ 4,809 $ 329 $ 12,765 $ (10,695) $ 2,070 Other statement of operations data Depreciation and amortization (included in total operating expense) $ 90 $ 2 $ - $ 92 $ 128 $ 220 SEGMENT INFORMATION Statement of Operations Information Nine Months Ended September 30, 2015 Capital Asset Principal Segment Unallocated Markets Management Investing Total (1) Total Net trading $ 22,346 $ - $ - $ 22,346 $ - $ 22,346 Asset management - 6,890 - 6,890 - 6,890 New issue and advisory 4,268 - - 4,268 - 4,268 Principal transactions and other income 233 2,905 130 3,268 - 3,268 Total revenues 26,847 9,795 130 36,772 - 36,772 Total operating expenses 24,024 2,993 377 27,394 8,028 35,422 Operating income / (loss) 2,823 6,802 (247) 9,378 (8,028) 1,350 Interest expense (29) - - (29) (2,922) (2,951) Income / (loss) before income taxes 2,794 6,802 (247) 9,349 (10,950) (1,601) Income tax expense / (benefit) - - - - 267 267 Net income / (loss) 2,794 6,802 (247) 9,349 (11,217) (1,868) Less: Net income / (loss) attributable to the non-controlling interest - - - - (432) (432) Net income / (loss) attributable to IFMI $ 2,794 $ 6,802 $ (247) $ 9,349 $ (10,785) $ (1,436) Other statement of operations data Depreciation and amortization (included in total operating expense) $ 417 $ 16 $ - $ 433 $ 178 $ 611 SEGMENT INFORMATION Statement of Operations Information Three Months Ended September 30, 2016 Capital Asset Principal Segment Unallocated Markets Management Investing Total (1) Total Net trading $ 10,486 $ - $ - $ 10,486 $ - $ 10,486 Asset management - 1,781 - 1,781 - 1,781 New issue and advisory 811 - - 811 - 811 Principal transactions and other income 30 441 541 1,012 - 1,012 Total revenues 11,327 2,222 541 14,090 - 14,090 Total operating expenses 8,556 779 117 9,452 1,987 11,439 Operating income / (loss) 2,771 1,443 424 4,638 (1,987) 2,651 Interest expense - - - - (991) (991) Income / (loss) before income taxes 2,771 1,443 424 4,638 (2,978) 1,660 Income tax expense / (benefit) - - - - 130 130 Net income / (loss) 2,771 1,443 424 4,638 (3,108) 1,530 Less: Net income / (loss) attributable to the non-controlling interest - - - - 489 489 Net income / (loss) attributable to IFMI $ 2,771 $ 1,443 $ 424 $ 4,638 $ (3,597) $ 1,041 Other statement of operations data Depreciation and amortization (included in total operating expense) $ 20 $ 1 $ - $ 21 $ 45 $ 66 SEGMENT INFORMATION Statement of Operations Information Three Months Ended September 30, 2015 Capital Asset Principal Segment Unallocated Markets Management Investing Total (1) Total Net trading $ 8,333 $ - $ - $ 8,333 $ - $ 8,333 Asset management - 2,332 - 2,332 - 2,332 New issue and advisory 2,119 - - 2,119 - 2,119 Principal transactions and other income 71 832 (760) 143 - 143 Total revenues 10,523 3,164 (760) 12,927 - 12,927 Total operating expenses 8,606 1,003 127 9,736 2,633 12,369 Operating income / (loss) 1,917 2,161 (887) 3,191 (2,633) 558 Interest expense (29) - - (29) (955) (984) Income / (loss) before income taxes 1,888 2,161 (887) 3,162 (3,588) (426) Income tax expense / (benefit) - - - - 221 221 Net income / (loss) 1,888 2,161 (887) 3,162 (3,809) (647) Less: Net income / (loss) attributable to the non-controlling interest - - - - (114) (114) Net income / (loss) attributable to IFMI $ 1,888 $ 2,161 $ (887) $ 3,162 $ (3,695) $ (533) Other statement of operations data Depreciation and amortization (included in total operating expense) $ 87 $ 5 $ - $ 92 $ 58 $ 150 (1) Unallocated includes certain expenses incurred by indirect overhead and support departments (such as the executive, finance, legal, information technology, human resources, risk, compliance, and other similar overhead and support departments). Some of the items not allocated include: (1) operating expenses (such as cash compensation and benefits, equity-based compensation expense, professional fees, travel and entertainment, consulting fees, and rent) related to support departments excluding certain departments that directly support the Capital Markets business segment; (2) interest expense on debt; and (3) income taxes. Management does not consider these items necessary for an understanding of the operating results of these business segments and such amounts are excluded in business segment reporting to the chief operating decision maker. BALANCE SHEET DATA As of September 30, 2016 (Dollars in Thousands) Capital Asset Principal Segment Unallocated Markets Management Investing Total (1) Total Total Assets $ 504,142 $ 1,927 $ 8,003 $ 514,072 $ 7,303 $ 521,375 Included within total assets: Goodwill (2) $ 7,937 $ 55 $ - $ 7,992 $ - $ 7,992 Intangible assets (2) $ 166 $ - $ - $ 166 $ - $ 166 BALANCE SHEET DATA December 31, 2015 (Dollars in Thousands) Capital Asset Principal Segment Unallocated Markets Management Investing Total (1) Total Total Assets $ 281,813 $ 3,245 $ 15,039 $ 300,097 $ 8,318 $ 308,415 Included within total assets: Goodwill (2) $ 7,937 $ 55 $ - $ 7,992 $ - $ 7,992 Intangible assets (2) $ 166 $ - $ - $ 166 $ - $ 166 (1) Unallocated assets primarily include: (1) amounts due from related parties; (2) furniture and equipment, net; and (3) other assets that are not considered necessary for an understan ding of business segment assets. S uch amounts are excluded in business segment reporting to the chief operating decision maker. (2) Goodwill and intangible assets as of September 30, 2016 and 2015 are allocated to the Capital Markets and Asset Management business segments as indicated in the table above. Geographic Information The Company conducts its business activities through offices in the following locations: (1) United States and (2) United Kingdom and other. Total revenues by geographic area are summarized as follows. GEOGRAPHIC DATA (Dollars in Thousands) Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Total Revenues: United States $ 12,758 $ 10,179 $ 38,309 $ 30,634 United Kingdom & Other 1,332 2,748 3,881 6,138 Total $ 14,090 $ 12,927 $ 42,190 $ 36,772 Long-lived assets attributable to an individual country, other than the United States, are not material. |
Supplemental Cash Flow Disclosu
Supplemental Cash Flow Disclosure | 9 Months Ended |
Sep. 30, 2016 | |
Supplemental Cash Flow Disclosure [Abstract] | |
Supplemental Cash Flow Disclosure | 18 . SUPPLEMENTAL CASH FLOW DISCLOSURE Interest paid by the Company on its debt was $ 2,079 and $ 2,103 for the nine months ended September 30, 2016 and 2015 , respectively. The Company paid income taxes of $ 276 and $ 224 for the nine months ended September 30, 2016 and 2015 , respectively. The Company received $16 and $0 of income tax refunds for the nine months ended September 30, 2016 and 2015 , respectively. For the nine months ended September 30, 2016 , the Company had the following significant non-cash transactions that are not reflected on the statement of cash flows: · The Company net surrendered units of the Operating LLC . The Company recognized a net decrease in additional paid-in capital of $ 552 , a net increase of $ 49 in accumulated other comprehensive income, and a n increase of $ 503 in non -controlling interest. For the nine months ended September 30, 2015 , the Company had the following significant non-cash transactions that are not reflected on the statement of cash flows: · The Company acquired additional units of the Operating LLC. The Company recognized a net increase in additional paid-in capital of $88 , a net decrease of $6 in accumulated other comprehensive income, and a net decrease of $82 in non-controlling interest. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 1 9 . RELATED PARTY TRANSACTIONS The Company has identified the following related party transactions for the nine months ended September 30, 2016 and 2015 . The transactions are listed by related party and, unless otherwise noted in the text of the description, the amounts are disclosed in the tables at the end of this section. A. Cohen Bros. Financial, LLC (“CBF”) and EBC 2013 Family Trust (“EBC”) CBF has been identified as a related party because (i) CBF is a non-controlling interest of the Company and (ii) CBF is wholly owned by Mr. Cohen. In September 2013, EBC, as an assignee of CBF, made a $4,000 investment in the Company. Mr. Cohen is a trustee of EBC. The Company issued $2,400 in principal amount of the 8.0% Convertible Notes, and $1,600 of Common Stock to EBC. See note D listed below and notes 4 and 17 to the Company’s consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015. The Company incurred interest expense on this debt, which is disclosed as part of interest expense incurred in the table at the end of this section. B. The Bancorp, Inc. The Bancorp, Inc. (“TBBK”) is identified as a related party because Mr. Cohen is TBBK’s chairman. TBBK maintained deposits for the Company in the amount of $46 and $43 as of September 30, 2016 and December 31, 2015 , respectively. These amounts are not disclosed in the tables at the end of this section. As part of the Company’s broker-dealer operations, the Company from time to time purchases securities from third parties and sells those securities to TBBK. The Company may purchase securities from TBBK and ultimately sell those securities to third parties. In either of the cases listed above, the Company includes the trading revenue earned (i.e. the gain or loss realized, or commission earned) by the Company for the entire transaction in the amounts disclosed as part of net trading in the table at the end of this section. From time to time, the Company will enter into repurchase agreements with TBBK as its counterparty. As of September 30, 2016 and December 31, 2015 , the Company had repurchase agreements with TBBK as the counterp arty of $39,532 and $0 , respectively. As of September 30, 2016 and December 31, 2015 , the fair value of the collateral provided to TBBK by the Company relating to these repurchase agreements was $41,764 and $0 , respectively. These amounts are included as a component of securities sold under agreement to repurchase in the Company’s consolidated balance sheet s . The Company incurred interest expense related to repurchase agreements with TBBK as its counterparty in the amount s of $301 and $146 for the nine and three months ended September 30, 2016 , respectively, and $428 and $133 for the nine and three months ended September 30, 2015 , respectively, which were included as a component of net trading revenue in the Company’s consolidated statements of operations. These amounts are not disclosed in the tables at the end this section. C. Resource Securities, Inc. (formerly known as Chadwick Securities, Inc.), a registered broker-dealer subsidiary of Resource America, Inc. (“REXI”) REXI wa s a publicly traded specialized asset management company in the commercial finance, real estate, and financial fund management sectors. It has been identified as a related party because the former chairman of the board of REXI is the father of the vice chairman of the Company’s board of directors and of the board of managers of the Operating LLC, president and chief executive of the Company’s European business, and president of CCFL (formerly the Company’s chairman and chief executive officer) until REXI was sold to an unrelated third party effective September 2016. From that point forward, REXI is not a related party. D. Mead Park Capital Partners LLC (“Mead Park Capital”) and Mead Park Advisors LLC (“Mead Park”), Mr. Ricciardi, and Mr. DiMaio Investment in IFMI by Mead Park Capital In September 2013, Mead Park Capital made a $9,746 investment in the Company. The Company issued $5,848 in principal amount of the 8.0% Convertible Notes and $3,898 of Common Stock to Mead Park Capital (which were convertible, at any time by the holder thereof prior to the maturity of the notes into 1,949,167 shares of Common Stock ). At that time Jack DiMaio, Jr. the Company’s Chairman of the Board, was the chief executive officer and founder of Mead Park Capital and Christopher Ricciardi, the Company’s former president , was a member of Mead Park Capital. In connection with the September 25, 2013 closing of the transactions contemplated by the definitive agreements relating to Mead Park Capital’s investment in the Company, Jack DiMaio, Jr. and Mr. Ricciardi were elected to the Company’s board of directors. Mr. DiMaio was also named the chairman of the Company’s board of directors. Mr. Ricciardi is no longer a director of the Company. See notes 4 and 17 to the Company’s consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015. Concurrent with the appointment of Mr. DiMaio and Mr. Ricciardi to the Company’s board of directors, Mead Park Capital was considered a related party of the Company. The Company incurred interest expense on this debt, which is disclosed as part of interest expense incurred in the tables at the end of this section. On August 28, 2015, Mead Park Capital sold $4,386 of the 8.0% Convertible Notes and 1,461,876 shares of Common Stock to the Edward E. Cohen IRA, of which Edward E. Cohen is the benefactor. Edward E. Cohen is th e father of Daniel G. Cohen. Common Stock and 8.0% Convertible Notes sold in this transaction represented substantially all of the amounts beneficially owned by Mr. DiMaio. Also as a result of this transaction, Mr. DiMaio was no longer a member of Mead Park Capital. Mr. DiMaio remains the chairman of the Company’s board of directors. Mr. Ricciardi remained a member and sole manager of Mead Park Capital. On October 16, 2015, the Company entered into the Termination Agreement. Pursuant to the Termination Agreement, in connection with the termination of the Mead Park Purchase Agreement (as defined below) and all rights and obligations thereunder and the mutual release of claims set forth in the Termination Agreement, on October 16, 2015: (i) Mead Park Capital transferred to the Company 487,291 shares of the Company’s Common Stock; (ii) the Ricciardi Parties transferred to the Company 1,512,709 shares of Common Stock; (iii) the Company and Mead Park Capital terminated in its entirety, effective October 16, 2015, that certain Securities Purchase Agreement, dated as of May 9, 2013, by and among the Company, Mead Park Capital , and, solely for purposes of Section 6.3 thereof, Mead Park Holdings LP (the “Mead Park Purchase Agreement”); and (iv) the Company transferred $4,000 in cash to accounts designated by Mr. Ricciardi for the benefit of the Ricciardi Parties and Mead Park Capital. The Termination Agreement provides that, during the period beginning on October 16, 2015 and ending on October 16, 2016 (the “Termination Agreement Period”), if the Company or its majority owned subsidiary, IFMI, LLC , makes any public or nonpublic offering or sale of any securities (“New Securities”), subject to certain exceptions, then Mr. Ricciardi will be afforded the opportunity to acquire, for the same price and on the same terms as New Securities are proposed to be offered to others, up to the amount of New Securities required to enable Mr. Ricciardi to maintain his proportionate equivalent interest in the Company immediately prior to any such issuance of New Securities. In addition, pursuant to the Termination Agreement, if, during the Termination Agreement Period, any meeting occurs at which the Company’s stockholders vote for the election of the Company’s directors, then (i) the Company’s board of directors will nominate Mr. Ricciardi to stand for election to the board at such meeting and (ii) the Company’s board of directors will (a) recommend to the Company’s stockholders the election o f Mr. Ricciardi at such meeting and (b) solicit proxies for Mr. Ricciardi in connection with such meeting to the same extent as it does for any of its other nominees to the Company’s board of directors. Mr. Ricciardi did not sell any of the 8.0% Convertible Notes beneficially owned by him as part of either the August 28, 2015 or October 16, 2015 transactions. During 2015, Mead Park Capital transferre d the remaining notes it held in the amount of $1,462 to Mr. Ricciardi. At the Company’s annual meeting held on December 21, 2015, Mr. Ricciardi was not reelected to the Company’s board of directors. Subsequent to this date, Mr. Ricciardi is no longer considered a related party. CDO Sub-Advisory Agreement with Mead Park Advisors, LLC In July 2014, IFMI’s subsidiaries, Cohen & Company Financial Management LLC (“CCFM”) and Dekania Capital Management, LLC (“DCM”), entered into a CDO sub-advisory agreement with Mead Park Advisors, LLC (“Mead Park Advisors”) whereby Mead Park Advisors renders investment advice and provide s assistance to CCFM and DCM with respect to their management of certain C DOs. The Company incurred consulting fee expense related to this sub-advisory agreement, which is disclosed as part of professional fee and other operating in the tables at the end of this section. Mead Park Advisors remains a related party of the Company because Mr. DiMaio maintains an ownership interest in it. E. The Edward E. Cohen IRA On August 28, 2015, $4,386 in principal amount of the 8.0% Convertible Notes originally issued to Mead Park Capital in September 2013 was purchased by the Edward E. Cohen IRA of which Edward E. Cohen is the benefactor. Edward E. Cohen is the father of Daniel G. Cohen. The Company incurred interest expense on this debt, which is disclosed as part of interest expense incurred in the tables at the end of this section. F. Woodlea Consulting, LLC In March 2015, the Operating LLC entered into an advisory agreement with Woodlea Consulting, LLC (“Woodlea”), a Delaware limited liability company of which Mr. Ricciardi is the sole owner. Woodlea rendered advisory services on the execution of strategic alternatives to the Operating LLC. The advisory agreement was terminated on June 2, 2015. Mr. Ricciardi was a member of the Company’s board of directors during the entire term of this advisory agreement. The Company incurred consulting fee expense related to this agreement, which is disclosed as part of professional fee and other operating in the tables at the end of this section. The following tables display the routine transactions recognized in the statements of operations from the identified related parties that are described above. RELATED PARTY TRANSACTIONS Nine Months Ended September 30, 2016 (Dollars in Thousands) Management fee revenue Net trading Principal transactions Income / (loss) from equity method affiliates Professional fee and other operating Interest expense incurred EBC $ - $ - $ - $ - $ - $ 173 Edward E. Cohen IRA - - - - - 317 Mead Park Advisors, LLC - - - - 150 - $ - $ - $ - $ - $ 150 $ 490 RELATED PARTY TRANSACTIONS Nine Months Ended September 30, 2015 (Dollars in Thousands) Management fee revenue Net trading Principal transactions Income / (loss) from equity method affiliates Professional fee and other operating Interest expense incurred EBC $ - $ - $ - $ - $ - $ 170 Edward E. Cohen IRA - - - - - 105 Mead Park Capital - - - - - 309 Mead Park Advisors, LLC - - - - 150 - Woodlea - - - - 39 - $ - $ - $ - $ - $ 189 $ 584 RELATED PARTY TRANSACTIONS Three Months Ended September 30, 2016 (Dollars in Thousands) Management fee revenue Net trading Principal transactions Income / (loss) from equity method affiliates Professional fee and other operating Interest expense incurred EBC $ - $ - $ - $ - $ - $ 58 Edward E. Cohen IRA - - - - - 107 Mead Park Advisors, LLC - - - - 50 - $ - $ - $ - $ - $ 50 $ 165 RELATED PARTY TRANSACTIONS Three Months Ended September 30, 2015 (Dollars in Thousands) Management fee revenue Net trading Principal transactions Income / (loss) from equity method affiliates Professional fee and other operating Interest expense incurred EBC $ - $ - $ - $ - $ - $ 57 Edward E. Cohen IRA - - - - - 105 Mead Park Capital - - - - - 35 Mead Park Advisors, LLC - - - - 50 - $ - $ - $ - $ - $ 50 $ 197 The following related party transactions are non-routine and are not included in the tables above. H. Directors and Employees The Company has entered into employment agreements with Dani el G. Cohen, its vice chairman and Joseph W. Pooler, Jr., its chief financial officer. T he Company has entered into its standard indemnification agreement with each of its directors and executive officers. The Company has a sublease agreement for certain office space with the Company’s chairman of the board. The Company receives payments under this agreement. The payments are recorded as a reduction in the related rent and utility expenses. The Company recorded a reduction in the rent and utility expenses in the amount of $16 and $6 for the nine and three months ended September 30, 2016 , respectively , and $16 and $7 for the nine and three months ended September 30, 2015, respectively. The Company sold a car it owned to Daniel Cohen for $9 in September 2015 resulting in a $9 gain. The Company maintains a 401 (k) savings plan covering substantially all of its employees. The Company matches 50% of employee contributions for all participants not to exceed 3% of their salary. Contributions made on behalf of the Company were $188 and $40 for the nine and three months ended September 30, 2016 , and $180 and $38 , respectively, for the nine and three months ended September 30, 2015 , respectively. |
Due From _ Due To Related Parti
Due From / Due To Related Parties | 9 Months Ended |
Sep. 30, 2016 | |
Due From / Due To Related Parties [Abstract] | |
Due From / Due To Related Parties | 20 . DUE FROM / DUE TO RELATED PARTIES The following table summarizes the outstanding due from / to related parties. These amounts may result from normal operating advances or from timing differences between the transactions disclosed in note 19 and final settlement of those transactions in cash. All amounts are primarily non-interest bearing. DUE FROM/DUE TO RELATED PARTIES (Dollars in Thousands) September 30, 2016 December 31, 2015 Employees & other $ 73 $ 77 Due from Related Parties $ 73 $ 77 Mead Park $ 50 $ 50 Due to Related Parties $ 50 $ 50 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | 2 1. SUBSEQUENT EVENT On October 3, 2016, IFMI, LLC, entered into an Investment Agreement (the “Investment Agreement”), by and between IFMI and JKD Capital Partners I LTD (the “Investor”). The Investor is owned by Jack J. DiMaio, the Chairman of the Company’s Board of Directors, and his spouse. Pursuant to the Investment Agreement, the Investor agreed to invest up to $12,000 into IFMI, LLC (the “Investment”), $6,000 of which was paid by Investor to IFMI, LLC on October 3, 2016. In exchange for the Investment, IFMI, LLC agreed to pay to the Investor, in arrears following each calendar quarter during the term of the Investment Agreement, an amount equal to 50% of the difference between (i) the revenues generated during such quarter by the activities of the Institutional Corporate Trading business of JVB, and (ii) certain expenses incurred by the Institutional Corporate Trading business during such calendar quarter (each such quarterly payment, an “Investment Return Payment”). The term of the Investment Agreement commenced on October 3, 2016 and will continue until a Redemption (as defined below) occurs, unless the Investment Agreement is earlier terminated. The Investor may terminate the Investment Agreement (i) upon 90 days’ prior written notice to IFMI, LLC if IFMI, LLC or its affiliates modify any of their policies or procedures governing the operation of their businesses or change the way they operate their business and such modification has a material adverse effect on the amounts payable to the Investor under the Investment Agreement; or (ii) upon 60 days’ prior written notice to IFMI, LLC if the employment of Lester Brafman, the Company’s Chief Executive Officer, is terminated. IFMI, LLC may terminate the Investment Agreement upon 60 days’ prior written notice to the Investor if Mr. DiMaio ceases to control the day-to-day operations of the Investor. Upon a termination of the Investment Agreement, IFMI, LLC will pay to the Investor an amount equal to the “Investment Balance” (as such term is defined in the Investment Agreement) as of the day prior to such termination. At any time following October 3, 2019, the Investor or IFMI, LLC may, upon two months’ notice to the other party, cause IFMI, LLC to pay (a “Redemption”) to the Investor an amount equal to the “Investment Balance” (as such term is defined in the Investment Agreement) as of the day prior to such Redemption. If IFMI, LLC or JVB sells JVB’s Institutional Corporate Trading business to any unaffiliated third party, and such sale is not part of a larger sale of all or substantially all of the assets or equity securities of IFMI, LLC or JVB, IFMI, LLC will to pay to the Investor an amount equal to 25% of the net consideration paid to IFMI, LLC in connection with such sale, after deducting certain amounts and certain expenses incurred by IFMI, LLC or JVB in connection with such sale. |
Summary Of Significant Accoun29
Summary Of Significant Accounting Policies (Policy) | 9 Months Ended |
Sep. 30, 2016 | |
Summary of Significant Accounting Policies [Abstract] | |
Adoption Of New Accounting Standards | A. Adoption of New Accounting Standards In April 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2014-08 , Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity (“ASU 2014-08”) , which changes the criteria for reporting discontinued operations and requires additional disclosures about discontinued operations. The guidance in this ASU raises the threshold for a disposal to qualify as a discontinued operation and certain other disposals that do not meet the definition of a discontinued operation. Under the new provisions, only disposals representing a strategic shift in operations – that is or will have a major effect on an entity’s operations and financial results should be presented as a discontinued operation. The new provisions also require new disclosures related to individually material disposals that do not meet the definition of a discontinued operation, an entity’s continuing involvement with a discontinued operation following the disposal date and retained equity method investments in a discontinued operation. The Company’s adoption of the provisions of ASU 2014-08 effective January 1, 2015 did not have an effect on the Company’s consolidated financial position, results of operations, or cash flows. In June 2014, the FASB issued ASU No. 2014-11, Transfers and Servicing (Topic 860): Repurchase to Maturity Transactions, Repurchase Financings, and Disclosures, which changes the accounting for repurchase-to-maturity transactions that are repurchase agreements where the maturity of the security transferred as collateral matches the maturity of the repurchase agreement. According to the new guidance, all repurchase-to-maturity transactions will be accounted for as secured borrowing transactions in the same way as other repurchase agreements rather than as sales of a financial asset and forward commitment to repurchase. The amendments also change the accounting for repurchase financing arrangements that are transactions involving the transfer of a financial asset to a counterparty executed contemporaneously with a reverse repurchase agreement with the same counter party. A ll repurchase financings will now be accounted for separately, which will result in secured lending accounting for the reverse repurchase agreement. The guidance also requires new disclosures about transfers that are accounted for as sales in transactions that are economically similar to repurchase agreements and increased transparency about the types of collateral pledged in repurchase agreements and similar transactions accounted for as secured borrowings. The Company’s ado ption of the provisions of ASU 2014-11 effective January 1, 2015 did not have an effect on the Company’s consolidated financial position, results of operations, or cash flows. See note 9. In June 2014, the FASB issued ASU No. 2014-12, Compensation-Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide that a Performance Target could be Achieved After the Requisite Service Period , which requires a performance target that affects vesting and that could be achieved after the requisite service period be accounted for as a performance condition rather than as a non-vesting condition that affects the grant-date fair value of the award. The Company’s adoption of the provisions of ASU 2014-12 effective January 1, 2016 did not have an effect on the Company’s consolidated financial position, results of operations, or cash flows. In August 2014, the FASB issued ASU No. 2014-13, Measuring the Financial Assets and the Financial Liabilities of a Consolidated Collateralized Financing Entity , which provides a measurement alternative for an entity that consolidates collateralized financing entities. A collateralized financing entity is a variable interest entity with nominal or no equity that holds financial assets and issues beneficial interests in those financial assets. The beneficial interests, which are financial liabilities of the collateralized financing entity, have contractual recourse only to the related assets of the collateralized financing entity. If elected, the alternative method results in the reporting entity measuring both the financial assets and financial liabilities of the collateralized financing entity using the more observable of the two fair value measurements, which effectively removes measurement differences between the financial assets and financial liabilities of the collateralized financing entity previously recorded as net income (loss) attributable to non-controlling and other beneficial interests and as an adjustment to appropriated retained earnings. The reporting entity continues to measure its own beneficial interests in the collateralized financing entity (other than those that represent compensation for services) at fair value. The Company’s adoption of the provisions of ASU 2014-1 3 effective January 1, 2016 did not have an effect on the Company’s consolidated financial position, results of operations, or cash flows. In November 2014, the FASB issued ASU No. 2014-16, Derivatives and Hedging (Topic 815) : Determining whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share is More Akin to Debt or to Equity, which clarifies that an entity must consider all relevant terms and features when evaluating the nature of the host contract. Additionally, the amendments state that no one term or feature would define the host contract’s economic characteristics and risks. Instead, the economic characteristics and risks of the hybrid financial instrument as a whole would determine the nature of the host contract. The Company’s adoption of the provisions of ASU 2014-16 effective January 1, 2016 did not have an effect on the Company’s consolidated financial position, results of operations, or cash flows. In January 2015, the FASB issued ASU No. 2015-01, Income Statement – Extraordinary and Unusual Items (Subtopic 225-20), Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items , which eliminates from U.S. GAAP the requirement of extraordinary items to be separately classified on the income statement. If an event meets the criteria for extraordinary classification, the item should be shown separately in the income statement, net of tax. The amendments in this ASU also require applicable income taxes and earnings per share to be disclose. The Company’s adoption of the provisions of ASU 2015-01 effective Januar y 1, 2016 did not have an effect on the Company’s consolidated financial position, results of operations, or cash flows. In February 2015, the FASB issued ASU No. 2015-02, Consolidation (Topic 810) – Amendments to the Consolidation Analysis, which makes targeted amendments to the current consolidation guidance and ends the deferral granted to investment companies from applying the variable interest entity (“ VIE ”) guidance. The revised consolidation guidance, among other things, (i) modifies the evaluation of whether limited partnerships and similar legal entities are VIEs or voting interest entities, (ii) eliminates the presumption that a general partner should consolidate a limited partnership, and (iii) modifies the consolidation analysis of reporting entities that are involved with VIEs through fee arrangements and related party relationships. The Company’s adoption of the provisions of ASU 2015-02 effective January 1, 2016 did not have an effect on the Company’s consolidated financial position, results of operations, or cash flows. However, the Company previously treated its management contracts with certain securitizat ion entities that are VIEs as variable interest s . Therefore, the Company disclosed certain information related to these interests in its variable interest entity footnote. Upon adoption of this ASU, these management contracts are not considered variable interests. Therefore, in cases where the Company’s only interest in certain VIEs i s its management contract, the Company is no longer required to include certain disclosures related to those variable interest entities. See note 11. In April 2015, the FASB issued ASU No. 2015-03, Interest-Imputation of Interest (Subtopic 835-30), Simplifying the Presentation of Debt Issuance Costs , which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement for debt issuance costs are not affected by the amendments in this update. Upon adoption of the provisions of ASU 2015-03 effective January 1, 2016, the Company reclassified it s deferred financing costs as of December 31, 2015. This resulted in a reduction in other assets of $410 and a reduction in debt of $410 in the Company’s consolidated balance sheet as of December 31, 2015. In May 2015, the FASB issued ASU No. 2015-07, Fair Value Measurement (Topic 820) – Disclosures for Investments in Certain Entities that Calculate Net Asset Value per Share (or its Equivalent) . Reporting entities are permitted to use net asset value (“NAV”) as a practical expedient to measure the fair value of certain inves tments. Previously , investments that use the NAV practical expedi ent to measure fair value were categorized within the fair value hierarchy as level 2 or level 3 investments depending on their redemption attributes, which has led to diver sity in practice. This ASU remove s the requirement to categorize within the fair value hierarchy all investments that use the NAV practical expedient for fair value meas urement purposes. The ASU remove s the requirement to make certain disclosures for all investments that are eligible to be measured at fair value using the NAV practical expedient. Rather, those disclosures are limited to investments for which the entity has elected to measure the fair value using that practical e xpedient. The Company’s adoption of ASU 2015-07 effective January 1, 2016 did not have an effect on the Company’s consolidated financial position, results of operations, or cash flows. However, as a result of this adoption, the Company no longer classifies its investment in EuroDekania (for which it uses the practical expedient) within the fair value hierarchy. See note 7. In September 2015, the FASB issued ASU No. 2015-16, Business Combinations (Topic 805), Simplifying the Accounting for Measurement-Period Adjustments , which includes amendments that eliminate the requirement to restate prior period financial statements for measurement period adjustments following a business combination. The new guidance requires that the cumulative impact of a measurement period adjustment (including the impact on prior periods) be recognized in the reporting period in which the adjustment is identified. The prior period impact of the adjustment should be either presented separately on the face of the income statement or disclosed in the notes to the financial statements. The Company’s adoption of the provisions of ASU 2015-16 effective January 1, 2016 did not have an effect on the Company’s consolidated financial position, results of operations, or cash flows. |
Recent Accounting Developments | B. Recent Accounting Developments In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which replaces existing revenue recognition guidance in Topic 605, Revenue Recognition. The core principle of this ASU is to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Subsequently, the FASB issued a series of modifying ASUs that do not change the core principle of the guidance stated in ASU 2014-09. The modifying ASUs include: ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), ASU 2016-10 , Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing , ASU 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow Scope Improvements and Practical Expedients. The Company must adopt the amendments in ASU 2016-08, ASU 2016-10, and ASU 2016-12 with the adoption of ASU 2014-09. The effective date for all of the amendments in these ASUs is for annual periods beginning after December 15, 2017, including interim reporting periods within that reporting period as amended by ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date . Early application is permitted. The Company is currently evaluating the new guidance to determine the impact it may have on the Company’s consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-01, Financial Instruments-Overall (Subtopic 825-10) . The amendments in ASU 2016-01, among other things: require equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income; require public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; require separate presentation of financial assets and liabilities by measurement category and form of financial asset; and eliminate the requirement for public business entities to disclose the methods(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact of these amendments on the presentation in its consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). Under the new guidance, lessees will be required to recognize the following for all leases with the exception of short-term leases: (i) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (ii) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Lessor accounting is largely unchanged. Certain targeted improvements were made to align, where necessary, lessor accounting with the lessee accounting model and Topic 606, Revenue from Contracts with Customers. The ASU is effective for entities for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early application is permitted. The Company is currently evaluating this new guidance to determine the impact it may have on its consolidated financial statements. In March 2016, the FASB issued ASU 2016-06, Derivatives and Hedging (Topic 815): Contingent Put and Call Options in Debt Instruments. This ASU clarifies what steps are required when assessing whether the economic characteristics and risks of call (put) options are clearly and closely related to the economic characteristics and risks of their debt hosts, which is one of the criteria for bifurcating an embedded derivative. Consequently, when a call (put) option is contingently exercisable, an entity does not have to assess whether the event that triggers the ability to exercise a call (put) option is related to interest rates or credit risks. This ASU is effective for fiscal years beginning after December 15, 2016. Early adoption is permitted and if adopted on an interim period, any adjustments must be reflected as of the beginning of the fiscal year that includes the interim period. The Company is currently evaluating this new guidance to determine the impact it may have on its consolidated financial statements. In March 2016, the FASB issued ASU 2016-07, Investments - Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting . This ASU eliminates the requirement that when an investment qualifies for use of the equity method as a result of an increase in the level of ownership interest or degree of influence, an investor must adjust the investment, results of operations, and retained earnings retroactively on a step-by-step basis as if the equity method had been in effect during all previous periods that the investment had been held. The amendments require that the equity method investor add the cost of acquiring the additional interest in the investee to the current basis of the investor’s previously held interest and adopt the equity method of accounting as of the date the investment becomes qualified for equity method accounting. If an entity has an available-for-sale equity security that becomes qualified for the equity method of accounting it should recognize through earnings the unrealized holding gain or loss in accumulated other comprehensive income at the date the investment becomes qualified for use of the equity method . This ASU is effective for fiscal years beginning after December 15, 2016 and should be applied prospectively upon the effective date to increases in the level of ownership interest or degree of influence that result. Early adoption is permitted. The Company is currently evaluating this new guidance to determine the impact it may have on its consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting . This ASU simplifies several aspects of the accounting for share-based payment award transactions including: (i) income tax consequences; (ii) classification of awards as either equity or liabilities; and (iii) classification on the statement of cash flows. The effective date for this ASU is for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted. The Company is currently evaluating the new guidance to determine the impact it may have on the Company’s consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . The amendments in this ASU require the measurement of all expected credit losses for financial assets held at the reporting date to be based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates. Many of the loss estimation techniques applied today will still be permitted, although the inputs to those techniques will change to reflect the full amount of expected credit losses. In addition, the ASU amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. The amendments in this ASU are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently evaluating the new guidance to determine the impact it may have on the Company’s consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments . The amendments in this ASU provide cash flow statement classification guidance on eight specific cash flow presentation issues with the objective of reducing existing diversity in practice. This ASU is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early application is permitted, including adoption in an interim period. The Company is currently evaluating the new guidance to determine the impact it may have on the Company’s consolidated financial statements. |
Fair Value of Financial Instruments | C . Fair Value of Financial Instruments The following methods and assumptions were used by the Company in estimating the fair value of its financial instruments. These determinations were based on available market information and appropriate valuation methodologies. Considerable judgment is required to interpret market data to develop the estimates and, therefore, these estimates may not necessarily be indicative of the amount the Company could realize in a current market exchange. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts. Refer to note 7 for a discussion of the fair value hierarchy with respect to investments-trading; other investments, at fair value ; and derivatives held by the Company. Cash E quivalents : Cash equivalents are carried at historical cost, which is assumed to approximate fair value. The estimated fair value measurement of cash equivalents is classified within level 1 of the valuation hierarchy. Investments-trading : These amounts are carried at fair value. The fair value is based on either quoted market prices of an active exchange, independent broker market quotations, market price quotations from third party pricing services, or valuation models when quotations are not available. See note 7 for disclosures about the categorization of the fair value measurements of inve stments-trading within the fair value hierarchy. Other investments, at fair value : These amounts are carried at fair value. The fair value is based on quoted market prices of an active exchange, independent broker market quotations, or valuation models when quotations are not available. In the case of investments in alternative investment funds, fair value is generally based on the reported net asset value of the underlying fund. See note 7 for disclosures concerning the categorization of the fair value measurements of other investments, at fair value within the three level fair value hierarchy . Receivables under resale agreements : Receivables under resale agreements are carried at their contracted resale price, have short-term maturities, and are repriced frequently or bear market interest rates and, accordingly, these contracts are at amounts that approximate fair value. The estimated fair value measurements of receivables under resale agreements are based on observations of actual market activity and are generally classified within level 2 of the fair value hierarchy . Trading securities sold, not yet purchased : These amounts are carried at fair value. The fair value is based on quoted market prices of an active exchange, independent market quotations, market price quotations from third party pricing services, or valuation models when quotations are not available. See note 7 for disclosures concerning the categorization of the fair value measurements of trading securities sold, not yet purchased within the three level fair value hierarchy. Securities sold under agreement to repurchase : The liabilities for securities sold under agreement to repurchase are carried at their contracted repurchase price, have short-term maturities, and are repriced frequently with amounts normally due in one month or less and, accordingly, these contracts are at amounts that approximate fair value. The estimated fair value measurements of securities sold under agreement to repurchase are based on observations of actual market activity and are generally classified within level 2 of the fair value hierarchy. Debt : These amounts are carried at outstanding principal less unamortized discount and deferred financing costs . However, a substantial portion of the debt was assumed in the Merger and recorded at fair value as of that date. As of September 30, 2016 and December 31, 2015 , the fair value of the Company’s debt was estimated to be $34,684 and $35,200 , respectively. The estimated fair value measurements of the debt are generally based on discounted cash flow models prepared by the Company’s management primarily using discount rates for similar instruments issued to companies with similar credit risks to the Company and are generally classified within level 3 of the fair value hierarchy. Derivatives : These amounts are carried at fair value. Derivatives may be included as a component of investments-trading; trading securities sold, not yet purchased; and other investments, at fair value. See notes 7 and 8. The fair value is generally based on quoted market prices on an exchange that is deemed to be active for derivative instruments such as foreign currency forward contracts and Eurodollar futures. For other derivative instruments , the fair value is generally based on market price quotations from third party pricing services. See note 7 for disclosures concerning the categorization of the fair value measurements within the three level fair value hierarchy. |
Receivables From And Payables30
Receivables From And Payables To Brokers, Dealers, And Clearing Agencies (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Receivables From And Payables To Brokers, Dealers, And Clearing Agencies [Abstract] | |
Schedule Of Due To (From) Broker-Dealers And Clearing Organizations | Amounts receivable from brokers, dealers, and clearing agencies consisted of the following at September 30, 2016 and December 31, 2015 . RECEIVABLES FROM BROKERS, DEALERS, AND CLEARING AGENCIES (Dollars in Thousands) September 30, 2016 December 31, 2015 Deposits with clearing agencies $ 750 $ 864 Unsettled regular way trades, net 15,398 4,367 Receivables from clearing agencies 52,762 34,581 Receivables from brokers, dealers, and clearing agencies $ 68,910 $ 39,812 Amounts payable to brokers, dealers, and clearing agencies consisted of the following at September 30, 2016 and December 31, 2015 . PAYABLES TO BROKERS, DEALERS, AND CLEARING AGENCIES (Dollars in Thousands) September 30, 2016 December 31, 2015 Margin payable $ 75,825 $ 55,779 Payables to brokers, dealers, and clearing agencies $ 75,825 $ 55,779 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Financial Instruments [Abstract] | |
Schedule Of Trading Securities | INVESTMENTS - TRADING (Dollars in Thousands) September 30, 2016 December 31, 2015 U.S. government agency MBS and CMOs $ 10,872 $ 3,225 U.S. government agency debt securities 16,838 12,737 RMBS 171 98 U.S. Treasury securities 4,014 1,355 Other ABS 94 2,048 SBA loans 22,212 29,931 Corporate bonds and redeemable preferred stock 43,186 19,873 Foreign government bonds 1,045 - Municipal bonds 26,000 24,053 Certificates of deposit 778 263 Derivatives 5,744 1,158 Equity securities 52 - Investments-trading $ 131,006 $ 94,741 |
Schedule Of Trading Securities Sold, Not Yet Purchased | TRADING SECURITIES SOLD, NOT YET PURCHASED (Dollars in Thousands) September 30, 2016 December 31, 2015 U.S. Treasury securities $ 22,636 $ 12,050 Corporate bonds and redeemable preferred stock 28,228 25,851 Municipal bonds 20 20 Derivatives 4,655 1,181 Equity securities - 82 Trading securities sold, not yet purchased $ 55,539 $ 39,184 |
Schedule Of Other Investments | OTHER INVESTMENTS, AT FAIR VALUE (Dollars in Thousands) September 30, 2016 Amortized Cost Carrying Value Unrealized Gain / (Loss) CLOs $ 7,499 $ 6,229 $ (1,270) CDOs 191 28 (163) EuroDekania 4,916 1,241 (3,675) Residential loans 87 359 272 Foreign currency forward contracts - 3 3 Other investments, at fair value $ 12,693 $ 7,860 $ (4,833) December 31, 2015 Amortized Cost Carrying Value Unrealized Gain / (Loss) CLOs $ 14,877 $ 11,569 $ (3,308) CDOs 193 34 (159) EuroDekania 5,300 2,502 (2,798) Tiptree 1,009 353 (656) Other securities 176 43 (133) Residential loans 111 383 272 Foreign currency forward contracts - (4) (4) Other investments, at fair value $ 21,666 $ 14,880 $ (6,786) |
Fair Value Disclosures (Tables)
Fair Value Disclosures (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Schedule Of Assets And Liabilities Measured At Fair Value On A Recurring Basis | FAIR VALUE MEASUREMENTS ON A RECURRING BASIS September 30, 2016 (Dollars in Thousands) Significant Significant Quoted Prices in Other Observable Unobservable Active Markets Inputs Inputs Assets Fair Value (Level 1) (Level 2) (Level 3) Investments-trading: U.S. government agency MBS and CMOs $ 10,872 $ - $ 10,872 $ - U.S. government agency debt securities 16,838 - 16,838 - RMBS 171 - 171 - U.S. Treasury securities 4,014 4,014 - - Other ABS 94 - 94 - SBA loans 22,212 - 22,212 - Corporate bonds and redeemable preferred stock 43,186 - 43,186 - Foreign government bonds 1,045 - 1,045 - Municipal bonds 26,000 - 26,000 - Certificates of deposit 778 - 778 - Derivatives 5,744 - 5,744 - Equity securities 52 - 52 - Total investments - trading $ 131,006 $ 4,014 $ 126,992 $ - Other investments, at fair value: CLOs $ 6,229 $ - $ - $ 6,229 CDOs 28 - - 28 Residential loans 359 - 359 - Foreign currency forward contracts 3 3 - - 6,619 $ 3 $ 359 $ 6,257 EuroDekania (1) 1,241 Total other investments, at fair value $ 7,860 Liabilities Trading securities sold, not yet purchased: U.S. Treasury securities $ 22,636 $ 22,636 $ - $ - Corporate bonds 28,228 - 28,228 - Municipal bonds 20 - 20 - Derivatives 4,655 - 4,655 - Total trading securities sold, not yet purchased $ 55,539 $ 22,636 $ 32,903 $ - (1) Hybrid Securities Fund—European. FAIR VALUE MEASUREMENTS ON A RECURRING BASIS December 31, 2015 (Dollars in Thousands) Significant Significant Quoted Prices in Other Observable Unobservable Active Markets Inputs Inputs Assets Fair Value (Level 1) (Level 2) (Level 3) Investments-trading: U.S. government agency MBS and CMOs $ 3,225 $ - $ 3,225 $ - U.S. government agency debt securities 12,737 - 12,737 - RMBS 98 - 98 - U.S. Treasury securities 1,355 1,355 - - Other ABS 2,048 - 2,048 - SBA loans 29,931 - 29,931 - Corporate bonds and redeemable preferred stock 19,873 - 19,873 - Municipal bonds 24,053 - 24,053 - Certificates of deposit 263 - 263 - Derivatives 1,158 - 1,158 - Total investments - trading $ 94,741 $ 1,355 $ 93,386 $ - Other investments, at fair value: Tiptree (2) $ 353 $ 353 $ - $ - Other equity securities 43 28 15 - CLOs 11,569 - - 11,569 CDOs 34 - - 34 Residential loans 383 - 383 - Foreign currency forward contracts (4) (4) - - 12,378 $ 377 $ 398 $ 11,603 EuroDekania (1) 2,502 - Total other investments, at fair value $ 14,880 Liabilities Trading securities sold, not yet purchased: U.S. Treasury securities $ 12,050 $ 12,050 $ - $ - Corporate bonds and redeemable preferred stock 25,851 - 25,851 - Municipal bonds 20 - 20 - Derivatives 1,181 - 1,181 - Equity securities 82 82 - - Total trading securities sold, not yet purchased $ 39,184 $ 12,132 $ 27,052 $ - (1) Hybrid Securities Fund—European. (2) Diversified Holding Company. |
Schedule Of Assets And Liabilities Measured With Level 3 Inputs | LEVEL 3 ROLLFORWARD Nine Months Ended September 30, 2016 (Dollars in Thousands) December 31, 2015 Net trading Gains and losses (2) Transfers into Level 3 Transfers out of level 3 Accretion of income (2) Purchases Sales and returns of capital September 30, 2016 Change in unrealized gains /(losses) (1) Assets Other investments, at fair value CLOs $ 11,569 $ - $ 746 $ - $ - $ 1,005 $ - $ (7,091) $ 6,229 $ 872 CDOs 34 - (4) - - - - (2) 28 (4) Total other investments, fair value $ 11,603 $ - $ 742 $ - $ - $ 1,005 $ - $ (7,093) $ 6,257 $ 868 (1) Represents the change in unrealized gains and losses for the period included in earnings for assets held at the end of the reporting period. (2) Recorded as a component of principal transactions and other income in the consolidated statement of operations. LEVEL 3 ROLLFORWARD Nine Months Ended September 30, 2015 (Dollars in Thousands) December 31, 2014 Net trading Gains and losses (2) Transfers into Level 3 Transfers out of level 3 Accretion of income (2) Purchases Sales and returns of capital September 30, 2015 Change in unrealized gains /(losses) (1) Assets Other investments, at fair value CLOs $ 21,518 $ - $ (1,525) $ - $ - $ 1,918 $ - $ (7,463) $ 14,448 $ 56 CDOs 11 - 20 - - - - - 31 20 Total other investments, fair value $ 21,529 $ - $ (1,505) $ - $ - $ 1,918 $ - $ (7,463) $ 14,479 $ 76 (1) Represents the change in unrealized gains and losses for the period included in earnings for assets held at the end of the reporting period. (2) Recorded as a component of principal transactions and other income in the consolidated statement of operations. LEVEL 3 ROLLFORWARD Three Months Ended September 30, 2016 (Dollars in Thousands) June 30, 2016 Net trading Gains and losses (2) Transfers into Level 3 Transfers out of level 3 Accretion of income (2) Purchases Sales and returns of capital September 30, 2016 Change in unrealized gains /(losses) (1) Assets Other investments, at fair value CLOs $ 8,028 $ - $ 392 $ - $ - $ 250 $ - $ (2,441) $ 6,229 $ 580 CDOs 30 - - - - - - (2) 28 - Total other investments, fair value $ 8,058 $ - $ 392 $ - $ - $ 250 $ - $ (2,443) $ 6,257 $ 580 (1) Represents the change in unrealized gains and losses for the period included in earnings for assets held at the end of the reporting period. (2) Recorded as a component of principal transactions and other income in the consolidated statement of operations LEVEL 3 ROLLFORWARD Three Months Ended September 30, 2015 (Dollars in Thousands) June 30, 2015 Net trading Gains and losses (2) Transfers into Level 3 Transfers out of level 3 Accretion of income (2) Purchases Sales and returns of capital September 30, 2015 Change in unrealized gains /(losses) (1) Assets Other investments, at fair value CLOs $ 16,248 $ - $ (1,338) $ - $ - $ 586 $ - $ (1,048) $ 14,448 $ (272) CDOs 27 - 4 - - - - - 31 4 Total other investments, fair value $ 16,275 $ - $ (1,334) $ - $ - $ 586 $ - $ (1,048) $ 14,479 $ (268) (1) Represents the change in unrealized gains and losses for the period included in earnings for assets held at the end of the reporting period. (2) Recorded as a component of principal transactions and other income in the consolidated statement of operations |
Quantitative Information About Level 3 Fair Value Measurements | QUANTITATIVE INFORMATION ABOUT LEVEL 3 FAIR VALUE MEASUREMENTS (Dollars in Thousands) Significant Range of Fair Value Valuation Unobservable Weighted Significant September 30, 2016 Technique Inputs Average Inputs Assets Other investments, at fair value CLOs $ 6,229 Discounted Cash Flow Model Yield 18.8% 13.5% - 29.0% Duration (years) 6.0 5.6 - 6.9 Default rate 2.0% 2.0% QUANTITATIVE INFORMATION ABOUT LEVEL 3 FAIR VALUE MEASUREMENTS (Dollars in Thousands) Significant Range of Fair Value Valuation Unobservable Weighted Significant December 31, 2015 Technique Inputs Average Inputs Assets Other investments, at fair value CLOs $ 11,569 Discounted Cash Flow Model Yield 20.1% 16.0 - 30.0% Duration (years) 6.6 6.3 - 7.6 Default rate 2.0% 2.0% |
Fair Value, Investments, Entities That Calculate Net Asset Value Per Share | FAIR VALUE MEASUREMENTS OF INVESTMENTS IN CERTAIN ENTITIES THAT CALCULATE NET ASSET VALUE PER SHARE (OR ITS EQUIVALENT) (Dollars in Thousands) Fair Value September 30, 2016 Unfunded Commitments Redemption Frequency Redemption Notice Period Other investments, at fair value EuroDekania (a) $ 1,241 N/A N/A N/A $ 1,241 Fair Value December 31, 2015 Unfunded Commitments Redemption Frequency Redemption Notice Period Other investments, at fair value EuroDekania (a) $ 2,502 N/A N/A N/A $ 2,502 N/A Not applicable. EuroDekania does not offer redemptions and investors in EuroDekania have no commitments to make additional investments. (a) EuroDekania owns investments in hybrid capital securities that have attributes of debt and equity, primarily in the form of subordinated debt issued by insurance companies, banks , and bank holding companies based primarily in Western Europe; widely syndicated leveraged loans issued by European corporations; CMBS, including subordinated interests in first mortgage real estate loans; and RMBS and other ABS backed by consumer and commercial receivables. The majority of the assets are denominated in Euros and U.K. Pounds Sterling. The fair value of the investment in this category has been estimated using the NAV per share of the investment in accordance with the “practical expedient” provisions of FASB ASC 820. |
Derivative Financial Instrume33
Derivative Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Derivative Financial Instruments [Abstract] | |
Balance Sheet Information | DERIVATIVE FINANCIAL INSTRUMENTS-BALANCE SHEET INFORMATION (Dollars in Thousands) Derivative Financial Instruments Not Designated as Hedging Instruments Under FASB ASC 815 Balance Sheet Classification September 30, 2016 December 31, 2015 TBAs and other forward agency MBS Investments-trading $ 5,744 $ 1,158 Foreign currency forward contracts Other investments, at fair value 3 (4) TBAs and other forward agency MBS Trading securities sold, not yet purchased (4,655) (1,181) $ 1,092 $ (27) |
Statement Of Operations Information | DERIVATIVE FINANCIAL INSTRUMENTS-STATEMENT OF OPERATIONS INFORMATION (Dollars in Thousands) Derivative Financial Instruments Not Designated as Hedging Instruments Under FASB ASC 815 Income Statement Classification Nine Months Ended September 30, 2016 Nine Months Ended September 30, 2015 Foreign currency forward contracts Revenue-principal transactions and other income $ (83) $ 286 Other extended settlement trades Revenue-net trading (3) 2 TBAs and other forward agency MBS Revenue-net trading 6,286 4,158 $ 6,200 $ 4,446 DERIVATIVE FINANCIAL INSTRUMENTS-STATEMENT OF OPERATIONS INFORMATION (Dollars in Thousands) Derivative Financial Instruments Not Designated as Hedging Instruments Under FASB ASC 815 Income Statement Classification Three Months Ended September 30, 2016 Three Months Ended September 30, 2015 Foreign currency forward contracts Revenue-principal transactions and other income $ (30) $ (2) Other extended settlement trades Revenue-net trading (3) (26) TBAs and other forward agency MBS Revenue-net trading 2,075 1,115 $ 2,042 $ 1,087 |
Collateralized Securities Tra34
Collateralized Securities Transactions (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Collateralized Securities Transactions [Abstract] | |
Schedule Of Repurchase Agreements Accounted For As Secured Borrowings | REPURCHASE AGREEMENTS ACCOUNTED FOR AS SECURED BORROWINGS (Dollars in Thousands) September 30, 2016 Remaining Contractual Maturity of the Agreements Overnight and Continuous Up to 30 days 30 - 90 days Greater than 90 days Total U.S. government agency MBS $ - $ 246,770 $ 41,310 $ - $ 288,080 SBA Loans 14,720 - - 14,720 $ 14,720 $ 246,770 $ 41,310 $ - $ 302,800 Amount recognized $ 302,800 REPURCHASE AGREEMENTS ACCOUNTED FOR AS SECURED BORROWINGS (Dollars in Thousands) December 31, 2015 Remaining Contractual Maturity of the Agreements Overnight and Continuous Up to 30 days 30 - 90 days Greater than 90 days Total U.S. government agency MBS $ - $ 127,913 $ - $ - $ 127,913 $ - $ 127,913 $ - $ - $ 127,913 Amount recognized $ 127,913 |
Other Assets and Accounts Pay35
Other Assets and Accounts Payable and Other Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Other Assets and Accounts Payable and Other Liabilities [Abstract] | |
Schedule Of Other Assets | OTHER ASSETS (Dollars in Thousands) September 30, 2016 December 31, 2015 Deferred costs $ 600 $ 600 Prepaid expenses 1,197 1,359 Prepaid income taxes 93 - Security deposits 1,828 1,845 Miscellaneous other assets 146 161 Cost method investment 65 11 Furniture, equipment, and leasehold improvements, net 556 566 Intangible assets 166 166 Other assets $ 4,651 $ 4,708 |
Schedule Of Accounts Payable And Other Liabilities | ACCOUNTS PAYABLE AND OTHER LIABILITIES (Dollars in Thousands) September 30, 2016 December 31, 2015 Accounts payable $ 144 $ 494 Rent payable 174 390 Accrued interest payable 302 138 Accrued interest on securities sold, not yet purchased 571 491 Payroll taxes payable 523 594 Other general accrued expenses 1,650 1,255 Accounts payable and other liabilities $ 3,364 $ 3,362 |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Variable Interest Entities [Abstract] | |
Schedule Of Variable Interest Entities | CARRYING VALUE OF VARIABLE INTERESTS IN NON-CONSOLIDATED VARIABLE INTEREST ENTITIES (Dollars in Thousands) September 30, 2016 December 31, 2015 Other Investments, at fair value $ 6,257 $ 11,603 Maximum Exposure $ 6,257 $ 11,603 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Debt [Abstract] | |
Debt Outstanding | DETAIL OF DEBT (Dollars in Thousands) Description Current Outstanding Par September 30, 2016 December 31, 2015 Interest Rate Terms Interest (3) Maturity Convertible senior notes: 8.00% convertible senior notes (the "8.0% Convertible Notes") $ 8,248 $ 8,248 $ 8,248 Fixed 8.00 % September 2018 (1) Less unamortized debt issuance costs (309) (410) 8,248 7,939 7,838 Junior subordinated notes: Alesco Capital Trust I 28,125 (2) 12,462 12,084 Variable 4.76 % July 2037 Sunset Financial Statutory Trust I 20,000 (2) 8,889 8,613 Variable 4.99 % March 2035 $ 48,125 21,351 20,697 Total $ 29,290 $ 28,535 (1) The holders of the 8.0% Convertible Notes may convert all or any part of the outstanding principal amount of the 8.0% Convertible Notes at any time prior to maturity into shares of the Company’s Common Stock at a conversion price of $3.00 per share, subject to customary anti-dilution adjustments. (2) The junior subordinated notes listed represent debt the Company owes to the two trusts noted above. The total par amount ow ed by the Company to the trusts is $49,614 . However, the Company owns the common stock of the trusts in a total par amount of $1,489 . The Company pays interest (and at maturity, principal) to the trusts on the entire $49,614 junio r notes outstanding. T he Company receives back from the trusts the pro rata share of interest and principal on the common stock the Company holds of $1,489. Accordingly, the Company shows the net par value not held by it of $48,125 in the table above. These trusts are VIEs and the Company does not consolidate them even though the Company holds common stock. The Company carries the common stock on its balance sheet at a value of $0 . (3) Represents the interest rate in effect as of the last day of the reporting period. |
Equity (Tables)
Equity (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Equity [Abstract] | |
Schedule Of Unrestricted Common Stock Activity | Common Stock Shares December 31, 2015 13,035,119 Vesting of shares 254,828 Shares withheld for employee taxes (25,701) Retirement of common stock (1,908,480) September 30, 2016 11,355,766 |
Operating LLC Membership Units | Operating LLC Membership Units Units related to UIS Agreement 467,002 Units surrendered from retirement of IFMI Common Stock (1,908,480) Total (1,441,478) |
Schedule Of Effects Of Changes In Ownership Interest Subsidiary | September 30, 2016 September 30, 2015 Net income / (loss) attributable to IFMI $ 2,070 $ (1,436) Transfers (to) from the non-controlling interest: Increase / (decrease) in IFMI's paid in capital for the acquisition / (surrender) of additional units in consolidated subsidiary, net (552) 88 Changes from net income / (loss) attributable to IFMI and transfers (to) from the non-controlling interest $ 1,518 $ (1,348) |
Earnings _ (Loss) Per Common 39
Earnings / (Loss) Per Common Share (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Earnings / (Loss) Per Common Share [Abstract] | |
Schedule of Earnings / (Loss) Per Common Share | EARNINGS / (LOSS) PER COMMON SHARE (Dollars in Thousands, except share or per share information) Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Net income / (loss) attributable to IFMI $ 1,041 $ (533) $ 2,070 $ (1,436) Add/ (deduct): Income / (loss) attributable to non-controlling interest attributable to Operating LLC membership units exchangeable into IFMI shares (1) 489 (114) 925 (432) Add / (deduct): Adjustment (2) (23) (72) (33) (72) Net income / (loss) on a fully converted basis $ 1,507 $ (719) $ 2,962 $ (1,940) Weighted average common shares outstanding - Basic 11,807,417 15,229,340 12,328,238 15,202,628 Unrestricted Operating LLC membership units exchangeable into IFMI shares (1) 5,324,090 5,324,090 5,324,090 5,324,090 Dilutive Impact of restricted units or shares 130,485 - 91,242 - Weighted average common shares outstanding - Diluted (3) 17,261,992 20,553,430 17,743,570 20,526,718 Net income / (loss) per common share - Basic $ 0.09 $ (0.03) $ 0.17 $ (0.09) Net income / (loss) per common share - Diluted $ 0.09 $ (0.03) $ 0.17 $ (0.09) (1) The Operating LLC membership units not held by IFMI (that is, those held by the non-controlling interest for the nine months ended September 30, 2016 and 2015 ) may be redeemed and exchanged into shares of the Company on a one -to-one basis. The Operating LLC membership units not held by IFMI are redeemable at each IFMI member’s option, at any time, for (i) cash in an amount equal to the average of the per share closing prices of Common Stock for the ten consecutive trading days immediately preceding the date the Company receives the member’s redemption notice, or (ii) at the Company’s option, one share of Common Stock , subject, in each case, to appropriate adjustment upon the occurrence of an issuance of additional shares of Common Stock as a dividend or other distribution on the outstanding C ommon S tock, or a further subdivision or combination of the outstanding shares of Common Stock . These membership units enter into the computation of diluted net income / (loss) per common share when the effect is not anti-dilutive using the if-converted method. (2) An adjustment is included for the following reasons: (i) if the Operating LLC membership units had been converted at the beginning of the period, the Company would have incurred a higher income tax expense or realized a higher inc ome tax benefit, as applicable and (ii) to adjust the non-controlling interest amount to be consistent with the weighted average share calculation. (3) For the nine months ended 2016 and 2015 , weighted average common shares outstanding excludes a total of 0 and 5,406 shares, respectively representing restricted Operating LLC membership units, restricted Common Stock , and restricted units of Common Stock that would be anti-dilutive because of the Company’s net loss. For the three months ended September 30, 2016 and 2015 , weighted average common shares outstanding excludes a total of 0 and 11,838 shares , respectively, representing restricted Operating LLC membership units, restricted Common Stock , and restricted units of Common Stock that would be anti-dilutive because of the Company’s net loss . For the nine and three months ended September 30, 2016 and 2015 , weighted average common shares outstanding also excludes 2,749,167 shares from the assumed conversion of the 8.0% Convertibles Notes because the inclusion of the converted shares would be anti-dilutive. |
Segment and Geographic Inform40
Segment and Geographic Information (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Segment and Geographic Information [Abstract] | |
Schedule Of Segment Reporting Information | SEGMENT INFORMATION Statement of Operations Information Nine Months Ended September 30, 2016 Capital Asset Principal Segment Unallocated Markets Management Investing Total (1) Total Net trading $ 31,973 $ - $ - $ 31,973 $ - $ 31,973 Asset management - 5,662 - 5,662 - 5,662 New issue and advisory 2,176 - - 2,176 - 2,176 Principal transactions and other income 140 1,541 698 2,379 - 2,379 Total revenues 34,289 7,203 698 42,190 - 42,190 Total operating expenses 26,662 2,394 369 29,425 6,640 36,065 Operating income / (loss) 7,627 4,809 329 12,765 (6,640) 6,125 Interest expense - - - - (2,973) (2,973) Income / (loss) before income taxes 7,627 4,809 329 12,765 (9,613) 3,152 Income tax expense / (benefit) - - - - 157 157 Net income / (loss) 7,627 4,809 329 12,765 (9,770) 2,995 Less: Net income / (loss) attributable to the non-controlling interest - - - - 925 925 Net income / (loss) attributable to IFMI $ 7,627 $ 4,809 $ 329 $ 12,765 $ (10,695) $ 2,070 Other statement of operations data Depreciation and amortization (included in total operating expense) $ 90 $ 2 $ - $ 92 $ 128 $ 220 SEGMENT INFORMATION Statement of Operations Information Nine Months Ended September 30, 2015 Capital Asset Principal Segment Unallocated Markets Management Investing Total (1) Total Net trading $ 22,346 $ - $ - $ 22,346 $ - $ 22,346 Asset management - 6,890 - 6,890 - 6,890 New issue and advisory 4,268 - - 4,268 - 4,268 Principal transactions and other income 233 2,905 130 3,268 - 3,268 Total revenues 26,847 9,795 130 36,772 - 36,772 Total operating expenses 24,024 2,993 377 27,394 8,028 35,422 Operating income / (loss) 2,823 6,802 (247) 9,378 (8,028) 1,350 Interest expense (29) - - (29) (2,922) (2,951) Income / (loss) before income taxes 2,794 6,802 (247) 9,349 (10,950) (1,601) Income tax expense / (benefit) - - - - 267 267 Net income / (loss) 2,794 6,802 (247) 9,349 (11,217) (1,868) Less: Net income / (loss) attributable to the non-controlling interest - - - - (432) (432) Net income / (loss) attributable to IFMI $ 2,794 $ 6,802 $ (247) $ 9,349 $ (10,785) $ (1,436) Other statement of operations data Depreciation and amortization (included in total operating expense) $ 417 $ 16 $ - $ 433 $ 178 $ 611 SEGMENT INFORMATION Statement of Operations Information Three Months Ended September 30, 2016 Capital Asset Principal Segment Unallocated Markets Management Investing Total (1) Total Net trading $ 10,486 $ - $ - $ 10,486 $ - $ 10,486 Asset management - 1,781 - 1,781 - 1,781 New issue and advisory 811 - - 811 - 811 Principal transactions and other income 30 441 541 1,012 - 1,012 Total revenues 11,327 2,222 541 14,090 - 14,090 Total operating expenses 8,556 779 117 9,452 1,987 11,439 Operating income / (loss) 2,771 1,443 424 4,638 (1,987) 2,651 Interest expense - - - - (991) (991) Income / (loss) before income taxes 2,771 1,443 424 4,638 (2,978) 1,660 Income tax expense / (benefit) - - - - 130 130 Net income / (loss) 2,771 1,443 424 4,638 (3,108) 1,530 Less: Net income / (loss) attributable to the non-controlling interest - - - - 489 489 Net income / (loss) attributable to IFMI $ 2,771 $ 1,443 $ 424 $ 4,638 $ (3,597) $ 1,041 Other statement of operations data Depreciation and amortization (included in total operating expense) $ 20 $ 1 $ - $ 21 $ 45 $ 66 SEGMENT INFORMATION Statement of Operations Information Three Months Ended September 30, 2015 Capital Asset Principal Segment Unallocated Markets Management Investing Total (1) Total Net trading $ 8,333 $ - $ - $ 8,333 $ - $ 8,333 Asset management - 2,332 - 2,332 - 2,332 New issue and advisory 2,119 - - 2,119 - 2,119 Principal transactions and other income 71 832 (760) 143 - 143 Total revenues 10,523 3,164 (760) 12,927 - 12,927 Total operating expenses 8,606 1,003 127 9,736 2,633 12,369 Operating income / (loss) 1,917 2,161 (887) 3,191 (2,633) 558 Interest expense (29) - - (29) (955) (984) Income / (loss) before income taxes 1,888 2,161 (887) 3,162 (3,588) (426) Income tax expense / (benefit) - - - - 221 221 Net income / (loss) 1,888 2,161 (887) 3,162 (3,809) (647) Less: Net income / (loss) attributable to the non-controlling interest - - - - (114) (114) Net income / (loss) attributable to IFMI $ 1,888 $ 2,161 $ (887) $ 3,162 $ (3,695) $ (533) Other statement of operations data Depreciation and amortization (included in total operating expense) $ 87 $ 5 $ - $ 92 $ 58 $ 150 (1) Unallocated includes certain expenses incurred by indirect overhead and support departments (such as the executive, finance, legal, information technology, human resources, risk, compliance, and other similar overhead and support departments). Some of the items not allocated include: (1) operating expenses (such as cash compensation and benefits, equity-based compensation expense, professional fees, travel and entertainment, consulting fees, and rent) related to support departments excluding certain departments that directly support the Capital Markets business segment; (2) interest expense on debt; and (3) income taxes. Management does not consider these items necessary for an understanding of the operating results of these business segments and such amounts are excluded in business segment reporting to the chief operating decision maker. |
Reconciliation Of Assets From Segment To Consolidated | BALANCE SHEET DATA As of September 30, 2016 (Dollars in Thousands) Capital Asset Principal Segment Unallocated Markets Management Investing Total (1) Total Total Assets $ 504,142 $ 1,927 $ 8,003 $ 514,072 $ 7,303 $ 521,375 Included within total assets: Goodwill (2) $ 7,937 $ 55 $ - $ 7,992 $ - $ 7,992 Intangible assets (2) $ 166 $ - $ - $ 166 $ - $ 166 BALANCE SHEET DATA December 31, 2015 (Dollars in Thousands) Capital Asset Principal Segment Unallocated Markets Management Investing Total (1) Total Total Assets $ 281,813 $ 3,245 $ 15,039 $ 300,097 $ 8,318 $ 308,415 Included within total assets: Goodwill (2) $ 7,937 $ 55 $ - $ 7,992 $ - $ 7,992 Intangible assets (2) $ 166 $ - $ - $ 166 $ - $ 166 (1) Unallocated assets primarily include: (1) amounts due from related parties; (2) furniture and equipment, net; and (3) other assets that are not considered necessary for an understan ding of business segment assets. S uch amounts are excluded in business segment reporting to the chief operating decision maker. (2) Goodwill and intangible assets as of September 30, 2016 and 2015 are allocated to the Capital Markets and Asset Management business segments as indicated in the table above. |
Revenue By Geographic Area | GEOGRAPHIC DATA (Dollars in Thousands) Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Total Revenues: United States $ 12,758 $ 10,179 $ 38,309 $ 30,634 United Kingdom & Other 1,332 2,748 3,881 6,138 Total $ 14,090 $ 12,927 $ 42,190 $ 36,772 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Related Party Transactions [Abstract] | |
Schedule Of Related Party Transactions | RELATED PARTY TRANSACTIONS Nine Months Ended September 30, 2016 (Dollars in Thousands) Management fee revenue Net trading Principal transactions Income / (loss) from equity method affiliates Professional fee and other operating Interest expense incurred EBC $ - $ - $ - $ - $ - $ 173 Edward E. Cohen IRA - - - - - 317 Mead Park Advisors, LLC - - - - 150 - $ - $ - $ - $ - $ 150 $ 490 RELATED PARTY TRANSACTIONS Nine Months Ended September 30, 2015 (Dollars in Thousands) Management fee revenue Net trading Principal transactions Income / (loss) from equity method affiliates Professional fee and other operating Interest expense incurred EBC $ - $ - $ - $ - $ - $ 170 Edward E. Cohen IRA - - - - - 105 Mead Park Capital - - - - - 309 Mead Park Advisors, LLC - - - - 150 - Woodlea - - - - 39 - $ - $ - $ - $ - $ 189 $ 584 RELATED PARTY TRANSACTIONS Three Months Ended September 30, 2016 (Dollars in Thousands) Management fee revenue Net trading Principal transactions Income / (loss) from equity method affiliates Professional fee and other operating Interest expense incurred EBC $ - $ - $ - $ - $ - $ 58 Edward E. Cohen IRA - - - - - 107 Mead Park Advisors, LLC - - - - 50 - $ - $ - $ - $ - $ 50 $ 165 RELATED PARTY TRANSACTIONS Three Months Ended September 30, 2015 (Dollars in Thousands) Management fee revenue Net trading Principal transactions Income / (loss) from equity method affiliates Professional fee and other operating Interest expense incurred EBC $ - $ - $ - $ - $ - $ 57 Edward E. Cohen IRA - - - - - 105 Mead Park Capital - - - - - 35 Mead Park Advisors, LLC - - - - 50 - $ - $ - $ - $ - $ 50 $ 197 |
Due from _ Due to Related Par42
Due from / Due to Related Parties (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Due From / Due To Related Parties [Abstract] | |
Schedule of Due From / Due To Related Parties | DUE FROM/DUE TO RELATED PARTIES (Dollars in Thousands) September 30, 2016 December 31, 2015 Employees & other $ 73 $ 77 Due from Related Parties $ 73 $ 77 Mead Park $ 50 $ 50 Due to Related Parties $ 50 $ 50 |
Organization and Nature of Op43
Organization and Nature of Operations (Narrative) (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2016USD ($)segment | |
Securities [Line Items] | |
Assets under management | $ 3,800 |
Number of Operating Segments | segment | 3 |
CDOs [Member] | |
Securities [Line Items] | |
Assets under management | $ 3,610 |
Assets under management which are collateralized debt obligations percentage | 95.00% |
Summary of Significant Accoun44
Summary of Significant Accounting Policies (Narrative) (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2015 | |
Summary Of Significant Accounting Policies [Line Items] | ||
Maximum normal term for resale agreements | 1 month | |
Estimated debt in fair value | $ 34,684 | $ 35,200 |
Other assets | (4,651) | (4,708) |
Debt | $ (29,290) | (28,535) |
Restatement Adjustment [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Other assets | 410 | |
Debt | $ 410 |
Receivables From And Payables45
Receivables From And Payables To Brokers, Dealers, And Clearing Agencies (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Receivables From And Payables To Brokers, Dealers, And Clearing Agencies [Abstract] | ||||
Interest On Margin Payable | $ 171 | $ 156 | $ 450 | $ 436 |
Receivables From And Payables46
Receivables From And Payables To Brokers, Dealers, And Clearing Agencies (Schedule Of Due To (From) Broker-Dealers And Clearing Organizations) (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Receivables from Brokers-Dealers and Clearing Organizations [Abstract] | ||
Deposits with clearing agencies | $ 750 | $ 864 |
Unsettled regular way trades, net | 15,398 | 4,367 |
Receivables from clearing agencies | 52,762 | 34,581 |
Receivables from brokers, dealers, and clearing agencies | 68,910 | 39,812 |
Payables to Broker-Dealers and Clearing Organizations [Abstract] | ||
Margin payable | 75,825 | 55,779 |
Payables to brokers, dealers, and clearing agencies | $ 75,825 | $ 55,779 |
Financial Instruments (Narrativ
Financial Instruments (Narrative) (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Financial Instruments [Abstract] | ||
Unrealized gain (losses) in net trading revenue | $ 1,262 | $ 700 |
Financial Instruments (Schedule
Financial Instruments (Schedule Of Trading Securities) (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Investments-trading | $ 131,006 | $ 94,741 |
U.S. Government Agency MBS And CMOs [Member] | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Investments-trading | 10,872 | 3,225 |
U.S. Government Agency Debt Securities [Member] | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Investments-trading | 16,838 | 12,737 |
RMBS [Member] | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Investments-trading | 171 | 98 |
U.S. Treasury Securities [Member] | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Investments-trading | 4,014 | 1,355 |
Other ABS [Member] | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Investments-trading | 94 | 2,048 |
SBA Loans [Member] | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Investments-trading | 22,212 | 29,931 |
Corporate Bonds And Redeemable Preferred Stock [Member] | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Investments-trading | 43,186 | 19,873 |
Foreign Government Bonds [Member] | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Investments-trading | 1,045 | |
Municipal Bonds [Member] | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Investments-trading | 26,000 | 24,053 |
Certificates Of Deposit [Member] | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Investments-trading | 778 | 263 |
Derivatives [Member] | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Investments-trading | 5,744 | $ 1,158 |
Equity Securities [Member] | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Investments-trading | $ 52 |
Financial Instruments (Schedu49
Financial Instruments (Schedule Of Trading Securities Sold, Not Yet Purchased) (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Security Owned and Sold, Not yet Purchased, at Fair Value [Line Items] | ||
Trading securities sold, not yet purchased | $ 55,539 | $ 39,184 |
U.S. Treasury Securities [Member] | ||
Security Owned and Sold, Not yet Purchased, at Fair Value [Line Items] | ||
Trading securities sold, not yet purchased | 22,636 | 12,050 |
Corporate Bonds And Redeemable Preferred Stock [Member] | ||
Security Owned and Sold, Not yet Purchased, at Fair Value [Line Items] | ||
Trading securities sold, not yet purchased | 28,228 | 25,851 |
Municipal Bonds [Member] | ||
Security Owned and Sold, Not yet Purchased, at Fair Value [Line Items] | ||
Trading securities sold, not yet purchased | 20 | 20 |
Derivatives [Member] | ||
Security Owned and Sold, Not yet Purchased, at Fair Value [Line Items] | ||
Trading securities sold, not yet purchased | $ 4,655 | 1,181 |
Equity Securities [Member] | ||
Security Owned and Sold, Not yet Purchased, at Fair Value [Line Items] | ||
Trading securities sold, not yet purchased | $ 82 |
Financial Instruments (Schedu50
Financial Instruments (Schedule Of Other Investments) (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Schedule of Investments [Line Items] | ||
Other investments, Amortized Cost | $ 12,693 | $ 21,666 |
Other investments, Carrying Value | 7,860 | 14,880 |
Other investments, Unrealized Gain (Loss) | (4,833) | (6,786) |
EuroDekania [Member] | ||
Schedule of Investments [Line Items] | ||
Other investments, Amortized Cost | 4,916 | 5,300 |
Other investments, Carrying Value | 1,241 | 2,502 |
Other investments, Unrealized Gain (Loss) | (3,675) | (2,798) |
Tiptree Financial, Inc. [Member] | ||
Schedule of Investments [Line Items] | ||
Other investments, Amortized Cost | 1,009 | |
Other investments, Carrying Value | 353 | |
Other investments, Unrealized Gain (Loss) | (656) | |
Other Equity Securities [Member] | ||
Schedule of Investments [Line Items] | ||
Other investments, Amortized Cost | 176 | |
Other investments, Carrying Value | 43 | |
Other investments, Unrealized Gain (Loss) | (133) | |
CLO's [Member] | ||
Schedule of Investments [Line Items] | ||
Other investments, Amortized Cost | 7,499 | 14,877 |
Other investments, Carrying Value | 6,229 | 11,569 |
Other investments, Unrealized Gain (Loss) | (1,270) | (3,308) |
CDOs [Member] | ||
Schedule of Investments [Line Items] | ||
Other investments, Amortized Cost | 191 | 193 |
Other investments, Carrying Value | 28 | 34 |
Other investments, Unrealized Gain (Loss) | (163) | (159) |
Residential Loans [Member] | ||
Schedule of Investments [Line Items] | ||
Other investments, Amortized Cost | 87 | 111 |
Other investments, Carrying Value | 359 | 383 |
Other investments, Unrealized Gain (Loss) | 272 | 272 |
Foreign Currency Forward Contracts [Member] | ||
Schedule of Investments [Line Items] | ||
Other investments, Carrying Value | 3 | (4) |
Other investments, Unrealized Gain (Loss) | $ 3 | $ (4) |
Fair Value Disclosures (Narrati
Fair Value Disclosures (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Fair Value, Assets, Level 1 to Level 2 Transfers, Amount | $ 0 | $ 0 | $ 0 | $ 0 |
Fair Value, Liabilities, Level 1 to Level 2 Transfers, Amount | 0 | 0 | 0 | 0 |
Fair value, option, changes in fair value, gains (losses) | 281 | (1,222) | (287) | (1,576) |
Alternative Investments [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Fair value of assets transfers into level 3 | ||||
Fair value of assets transfers out of level 3 |
Fair Value Disclosures (Schedul
Fair Value Disclosures (Schedule Of Assets And Liabilities Measured At Fair Value On A Recurring Basis) (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total investments-trading | $ 131,006 | $ 94,741 | |
Other investments, measured using hierarchy | 6,619 | 12,378 | |
Other investments, Carrying Value | 7,860 | 14,880 | |
Trading securities sold, not yet purchased | 55,539 | 39,184 | |
Quoted Prices In Active Markets (Level 1) [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total investments-trading | 4,014 | 1,355 | |
Other investments, measured using hierarchy | 3 | 377 | |
Trading securities sold, not yet purchased | 22,636 | 12,132 | |
Significant Other Observable Inputs (Level 2) [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total investments-trading | 126,992 | 93,386 | |
Other investments, measured using hierarchy | 359 | 398 | |
Trading securities sold, not yet purchased | 32,903 | 27,052 | |
Significant Unobservable Inputs (Level 3) [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Other investments, measured using hierarchy | 6,257 | 11,603 | |
U.S. Government Agency MBS And CMOs [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total investments-trading | 10,872 | 3,225 | |
U.S. Government Agency MBS And CMOs [Member] | Significant Other Observable Inputs (Level 2) [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total investments-trading | 10,872 | 3,225 | |
U.S. Government Agency Debt Securities [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total investments-trading | 16,838 | 12,737 | |
U.S. Government Agency Debt Securities [Member] | Significant Other Observable Inputs (Level 2) [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total investments-trading | 16,838 | 12,737 | |
RMBS [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total investments-trading | 171 | 98 | |
RMBS [Member] | Significant Other Observable Inputs (Level 2) [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total investments-trading | 171 | 98 | |
U.S. Treasury Securities [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total investments-trading | 4,014 | 1,355 | |
Trading securities sold, not yet purchased | 22,636 | 12,050 | |
U.S. Treasury Securities [Member] | Quoted Prices In Active Markets (Level 1) [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total investments-trading | 4,014 | 1,355 | |
Trading securities sold, not yet purchased | 22,636 | 12,050 | |
Other ABS [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total investments-trading | 94 | 2,048 | |
Other ABS [Member] | Significant Other Observable Inputs (Level 2) [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total investments-trading | 94 | 2,048 | |
SBA Loans [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total investments-trading | 22,212 | 29,931 | |
SBA Loans [Member] | Significant Other Observable Inputs (Level 2) [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total investments-trading | 22,212 | 29,931 | |
Corporate Bonds And Redeemable Preferred Stock [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total investments-trading | 43,186 | 19,873 | |
Trading securities sold, not yet purchased | 28,228 | 25,851 | |
Corporate Bonds And Redeemable Preferred Stock [Member] | Significant Other Observable Inputs (Level 2) [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total investments-trading | 43,186 | 19,873 | |
Trading securities sold, not yet purchased | 28,228 | 25,851 | |
Foreign Government Bonds [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total investments-trading | 1,045 | ||
Foreign Government Bonds [Member] | Significant Other Observable Inputs (Level 2) [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total investments-trading | 1,045 | ||
Municipal Bonds [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total investments-trading | 26,000 | 24,053 | |
Trading securities sold, not yet purchased | 20 | 20 | |
Municipal Bonds [Member] | Significant Other Observable Inputs (Level 2) [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total investments-trading | 26,000 | 24,053 | |
Trading securities sold, not yet purchased | 20 | 20 | |
Certificates Of Deposit [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total investments-trading | 778 | 263 | |
Certificates Of Deposit [Member] | Significant Other Observable Inputs (Level 2) [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total investments-trading | 778 | 263 | |
Derivatives [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total investments-trading | 5,744 | 1,158 | |
Trading securities sold, not yet purchased | 4,655 | 1,181 | |
Derivatives [Member] | Significant Other Observable Inputs (Level 2) [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total investments-trading | 5,744 | 1,158 | |
Trading securities sold, not yet purchased | 4,655 | 1,181 | |
Equity Securities [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total investments-trading | 52 | ||
Trading securities sold, not yet purchased | 82 | ||
Equity Securities [Member] | Quoted Prices In Active Markets (Level 1) [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Trading securities sold, not yet purchased | 82 | ||
Equity Securities [Member] | Significant Other Observable Inputs (Level 2) [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total investments-trading | 52 | ||
Tiptree Financial, Inc. [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Other investments, measured using hierarchy | [1] | 353 | |
Other investments, Carrying Value | 353 | ||
Tiptree Financial, Inc. [Member] | Quoted Prices In Active Markets (Level 1) [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Other investments, measured using hierarchy | [1] | 353 | |
Other Equity Securities [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Other investments, measured using hierarchy | 43 | ||
Other investments, Carrying Value | 43 | ||
Other Equity Securities [Member] | Quoted Prices In Active Markets (Level 1) [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Other investments, measured using hierarchy | 28 | ||
Other Equity Securities [Member] | Significant Other Observable Inputs (Level 2) [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Other investments, measured using hierarchy | 15 | ||
CLO's [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Other investments, measured using hierarchy | 6,229 | 11,569 | |
CLO's [Member] | Significant Unobservable Inputs (Level 3) [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Other investments, measured using hierarchy | 6,229 | 11,569 | |
CDOs [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Other investments, measured using hierarchy | 28 | 34 | |
CDOs [Member] | Significant Unobservable Inputs (Level 3) [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Other investments, measured using hierarchy | 28 | 34 | |
Residential Loans [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Other investments, measured using hierarchy | 359 | 383 | |
Residential Loans [Member] | Significant Other Observable Inputs (Level 2) [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Other investments, measured using hierarchy | 359 | 383 | |
Foreign Currency Forward Contracts [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Other investments, measured using hierarchy | 3 | (4) | |
Foreign Currency Forward Contracts [Member] | Quoted Prices In Active Markets (Level 1) [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Other investments, measured using hierarchy | 3 | (4) | |
EuroDekania [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Other investments, measured using net asset value | [2] | 1,241 | 2,502 |
Other investments, Carrying Value | $ 1,241 | $ 2,502 | |
[1] | Diversified Holding Company. | ||
[2] | Hybrid Securities Fund-European. |
Fair Value Disclosures (Sched53
Fair Value Disclosures (Schedule Of Assets And Liabilities Measured With Level 3 Inputs) (Details) - Alternative Investments [Member] - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | ||
Schedule of additional information about assets and liabilities measured at fair value on a recurring basis level 3 inputs | |||||
Level 3 inputs, Beginning balance | $ 8,058 | $ 16,275 | $ 11,603 | $ 21,529 | |
Transfers into Level 3 | |||||
Transfers out of Level 3 | |||||
Accretion of income | [1] | 250 | 586 | 1,005 | 1,918 |
Purchases | |||||
Sales and returns of capital | (2,443) | (1,048) | (7,093) | (7,463) | |
Level 3 inputs, Ending balance | 6,257 | 14,479 | 6,257 | 14,479 | |
Change in unrealized gains /(losses) | [2] | 580 | (268) | 868 | 76 |
Trading Revenue [Member] | |||||
Schedule of additional information about assets and liabilities measured at fair value on a recurring basis level 3 inputs | |||||
Transactions included in income | |||||
Principal Investing [Member] | |||||
Schedule of additional information about assets and liabilities measured at fair value on a recurring basis level 3 inputs | |||||
Transactions included in income | [1] | 392 | (1,334) | 742 | (1,505) |
CLO's [Member] | |||||
Schedule of additional information about assets and liabilities measured at fair value on a recurring basis level 3 inputs | |||||
Level 3 inputs, Beginning balance | 8,028 | 16,248 | 11,569 | 21,518 | |
Transfers into Level 3 | |||||
Transfers out of Level 3 | |||||
Accretion of income | [1] | 250 | 586 | 1,005 | 1,918 |
Purchases | |||||
Sales and returns of capital | (2,441) | (1,048) | (7,091) | (7,463) | |
Level 3 inputs, Ending balance | 6,229 | 14,448 | 6,229 | 14,448 | |
Change in unrealized gains /(losses) | [2] | 580 | (272) | 872 | 56 |
CLO's [Member] | Trading Revenue [Member] | |||||
Schedule of additional information about assets and liabilities measured at fair value on a recurring basis level 3 inputs | |||||
Transactions included in income | |||||
CLO's [Member] | Principal Investing [Member] | |||||
Schedule of additional information about assets and liabilities measured at fair value on a recurring basis level 3 inputs | |||||
Transactions included in income | [1] | 392 | (1,338) | 746 | (1,525) |
CDOs [Member] | |||||
Schedule of additional information about assets and liabilities measured at fair value on a recurring basis level 3 inputs | |||||
Level 3 inputs, Beginning balance | 30 | 27 | 34 | 11 | |
Transfers into Level 3 | |||||
Transfers out of Level 3 | |||||
Accretion of income | [1] | ||||
Purchases | |||||
Sales and returns of capital | (2) | (2) | |||
Level 3 inputs, Ending balance | $ 28 | 31 | 28 | 31 | |
Change in unrealized gains /(losses) | [2] | 4 | (4) | 20 | |
CDOs [Member] | Trading Revenue [Member] | |||||
Schedule of additional information about assets and liabilities measured at fair value on a recurring basis level 3 inputs | |||||
Transactions included in income | |||||
CDOs [Member] | Principal Investing [Member] | |||||
Schedule of additional information about assets and liabilities measured at fair value on a recurring basis level 3 inputs | |||||
Transactions included in income | [1] | $ 4 | $ (4) | $ 20 | |
[1] | Recorded as a component of principal transactions and other income in the consolidated statement of operations. | ||||
[2] | Represents the change in unrealized gains and losses for the period included in earnings for assets held at the end of the reporting period. |
Fair Value Disclosures (Quantit
Fair Value Disclosures (Quantitative Information About Level 3 Fair Value Measurements) (Details) - Significant Unobservable Inputs (Level 3) [Member] - CLO's [Member] - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Fair Value | $ 6,229 | $ 11,569 |
Minimum [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Yield | 13.50% | 16.00% |
Duration | 5 years 7 months 6 days | 6 years 3 months 18 days |
Maximum [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Yield | 29.00% | 30.00% |
Duration | 6 years 10 months 24 days | 7 years 7 months 6 days |
Weighted Average [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Yield | 18.80% | 20.10% |
Duration | 6 years | 6 years 7 months 6 days |
Default rate | 2.00% | 2.00% |
Fair Value Disclosures (Fair Va
Fair Value Disclosures (Fair Value, Investments, Entities That Calculate Net Asset Value Per Share) (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2015 | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |||
Redemption frequency | |||
Other Investment Vehicles [Member] | |||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |||
Other investments, at fair value | $ 1,241 | $ 2,502 | |
EuroDekania [Member] | |||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |||
Other investments, at fair value | [1] | $ 1,241 | 2,502 |
Redemption frequency | [2],[3] | N/A | |
EuroDekania [Member] | Other Investment Vehicles [Member] | |||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |||
Other investments, at fair value | [2] | $ 1,241 | $ 2,502 |
[1] | Hybrid Securities Fund-European. | ||
[2] | EuroDekania owns investments in hybrid capital securities that have attributes of debt and equity, primarily in the form of subordinated debt issued by insurance companies, banks, and bank holding companies based primarily in Western Europe; widely syndicated leveraged loans issued by European corporations; CMBS, including subordinated interests in first mortgage real estate loans; and RMBS and other ABS backed by consumer and commercial receivables. The majority of the assets are denominated in Euros and U.K. Pounds Sterling. The fair value of the investment in this category has been estimated using the NAV per share of the investment in accordance with the "practical expedient" provisions of FASB ASC 820. | ||
[3] | Not applicable. EuroDekania does not offer redemptions and investors in EuroDekania have no commitments to make additional investments. |
Derivative Financial Instrume56
Derivative Financial Instruments (Narrative) (Details) € in Thousands | Sep. 30, 2016EUR (€) | Sep. 30, 2016USD ($) | Dec. 31, 2015EUR (€) | Dec. 31, 2015USD ($) |
TBA And Other Forward Agency MBS [Member] | Short [Member] | ||||
Derivative [Line Items] | ||||
Derivative, Notional Amount | $ 1,390,865,000 | $ 677,450,000 | ||
TBA And Other Forward Agency MBS [Member] | Long [Member] | ||||
Derivative [Line Items] | ||||
Derivative, Notional Amount | 1,390,865,000 | 699,460,000 | ||
Foreign Currency Forward Contracts [Member] | ||||
Derivative [Line Items] | ||||
Derivative, Notional Amount | € | € 1,625 | € 2,750 | ||
EuroDollar Futures Contracts [Member] | ||||
Derivative [Line Items] | ||||
Derivative, Notional Amount | 0 | 0 | ||
Other Extended Settlement Trades [Member] | ||||
Derivative [Line Items] | ||||
Forward purchase commitment | 12,477,000 | 3,075,000 | ||
Forward sale commitment | $ 0 | $ 0 |
Derivative Financial Instrume57
Derivative Financial Instruments (Balance Sheet Information) (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Derivatives, Fair Value [Line Items] | ||
Derivative, Fair Value, Net | $ 1,092 | $ (27) |
Investments-Trading [Member] | TBA And Other Forward Agency MBS [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative, Fair Value, Net | 5,744 | 1,158 |
Other Investment At Fair Value [Member] | Foreign Currency Forward Contracts [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative, Fair Value, Net | 3 | (4) |
Trading Securities Sold, Not Yet Purchased [Member] | TBA And Other Forward Agency MBS [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative, Fair Value, Net | $ (4,655) | $ (1,181) |
Derivative Financial Instrume58
Derivative Financial Instruments (Statement Of Operations Information) (Details) - Not Designated as Hedging Instruments [Member] - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Derivative [Line Items] | ||||
Derivative financial instruments, net gain (loss) recognized | $ 2,042 | $ 1,087 | $ 6,200 | $ 4,446 |
Revenue - Principal Transactions And Other Income [Member] | Foreign Currency Forward Contracts [Member] | ||||
Derivative [Line Items] | ||||
Derivative financial instruments, net gain (loss) recognized | (30) | (2) | (83) | 286 |
Revenue - Net Trading [Member] | Other Extended Settlement Trades [Member] | ||||
Derivative [Line Items] | ||||
Derivative financial instruments, net gain (loss) recognized | (3) | (26) | (3) | 2 |
Revenue - Net Trading [Member] | TBA And Other Forward Agency MBS [Member] | ||||
Derivative [Line Items] | ||||
Derivative financial instruments, net gain (loss) recognized | $ 2,075 | $ 1,115 | $ 6,286 | $ 4,158 |
Collateralized Securities Tra59
Collateralized Securities Transactions (Narrative) (Details) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016USD ($)security | Dec. 31, 2015USD ($)security | |
Collateralized Securities Transactions [Abstract] | ||
Securities reverse repurchase agreements | $ 288,286 | $ 128,011 |
Fair value of securities received as collateral under reverse repurchase agreements | $ 303,372 | $ 137,232 |
Number of securities related to reverse purchase agreements | security | 7 | 3 |
Securities sold under agreement to repurchase | $ 302,800 | $ 127,913 |
Fair value of securities pledged as collateral under repurchase agreements | $ 318,092 | $ 137,232 |
Collateralized Securities Tra60
Collateralized Securities Transactions (Schedule Of Repurchase Agreements Accounted For As Secured Borrowings) (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Assets Sold under Agreements to Repurchase [Line Items] | ||
Gross amount of recognized liabilities for repurchase agreements | $ 302,800 | $ 127,913 |
Overnight and Continuous [Member] | ||
Assets Sold under Agreements to Repurchase [Line Items] | ||
Gross amount of recognized liabilities for repurchase agreements | 14,720 | |
Up to 30 Days [Member] | ||
Assets Sold under Agreements to Repurchase [Line Items] | ||
Gross amount of recognized liabilities for repurchase agreements | 246,770 | 127,913 |
30 to 90 Days [Member] | ||
Assets Sold under Agreements to Repurchase [Line Items] | ||
Gross amount of recognized liabilities for repurchase agreements | 41,310 | |
U.S. Government Agency MBS [Member] | ||
Assets Sold under Agreements to Repurchase [Line Items] | ||
Gross amount of recognized liabilities for repurchase agreements | 288,080 | 127,913 |
U.S. Government Agency MBS [Member] | Up to 30 Days [Member] | ||
Assets Sold under Agreements to Repurchase [Line Items] | ||
Gross amount of recognized liabilities for repurchase agreements | 246,770 | $ 127,913 |
U.S. Government Agency MBS [Member] | 30 to 90 Days [Member] | ||
Assets Sold under Agreements to Repurchase [Line Items] | ||
Gross amount of recognized liabilities for repurchase agreements | 41,310 | |
SBA Loans [Member] | ||
Assets Sold under Agreements to Repurchase [Line Items] | ||
Gross amount of recognized liabilities for repurchase agreements | 14,720 | |
SBA Loans [Member] | Overnight and Continuous [Member] | ||
Assets Sold under Agreements to Repurchase [Line Items] | ||
Gross amount of recognized liabilities for repurchase agreements | $ 14,720 |
Other Assets And Accounts Pay61
Other Assets And Accounts Payable And Other Liabilities (Schedule Of Other Assets) (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Schedule of other assets | ||
Deferred costs | $ 600 | $ 600 |
Prepaid expenses | 1,197 | 1,359 |
Prepaid income taxes | 93 | |
Security deposits | 1,828 | 1,845 |
Miscellaneous other assets | 146 | 161 |
Cost method investment | 65 | 11 |
Furniture, equipment and leasehold improvements, net | 556 | 566 |
Intangible assets | 166 | 166 |
Other assets | $ 4,651 | $ 4,708 |
Other Assets and Accounts Pay62
Other Assets and Accounts Payable and Other Liabilities (Schedule Of Accounts Payable And Other Liabilities) (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Schedule of accounts payable and other liabilities | ||
Accounts payable | $ 144 | $ 494 |
Rent payable | 174 | 390 |
Accrued interest payable | 302 | 138 |
Accrued interest on securities sold, not yet purchased | 571 | 491 |
Payroll taxes payable | 523 | 594 |
Other general accrued expenses | 1,650 | 1,255 |
Accounts payable and other liabilities | $ 3,364 | $ 3,362 |
Variable Interest Entities (Nar
Variable Interest Entities (Narrative) (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Variable Interest Entities [Abstract] | ||
VIE liabilities, contingent liabilities, and guarantees | $ 0 | $ 0 |
Variable Interest Entities (Sch
Variable Interest Entities (Schedule Of Variable Interest Entities) (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Jun. 30, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Dec. 31, 2014 |
Variable Interest Entity [Line Items] | ||||||
Maximum Exposure | $ 6,257 | $ 11,603 | ||||
Alternative Investments [Member] | ||||||
Variable Interest Entity [Line Items] | ||||||
Other investments, fair value | $ 6,257 | $ 8,058 | $ 11,603 | $ 14,479 | $ 16,275 | $ 21,529 |
Debt (Debt Outstanding) (Detail
Debt (Debt Outstanding) (Details) | 9 Months Ended | ||
Sep. 30, 2016USD ($)entity$ / shares | Dec. 31, 2015USD ($) | ||
Debt Instrument [Line Items] | |||
Current Outstanding Par | $ 8,248,000 | ||
Long term debt less debt discount | 29,290,000 | $ 28,535,000 | |
Contingent Convertible Senior Notes [Member] | |||
Debt Instrument [Line Items] | |||
Less unamortized debt issuance costs | (309,000) | (410,000) | |
Long term debt less debt discount | 7,939,000 | 7,838,000 | |
Junior Subordinated Debt [Member] | |||
Debt Instrument [Line Items] | |||
Junior subordinated notes | 48,125,000 | ||
Long term debt less debt discount | 21,351,000 | 20,697,000 | |
Junior subordinated notes | $ 49,614,000 | ||
Number of trusts holding notes | entity | 2 | ||
Ownership value of common stock of trusts | $ 1,489,000 | ||
Fair value of common securities | $ 0 | ||
8.00% Contingent Convertible Senior Notes Due 2018 [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Convertible, Conversion Price | $ / shares | $ 3 | ||
8.00% Contingent Convertible Senior Notes Due 2018 [Member] | Contingent Convertible Senior Notes [Member] | |||
Debt Instrument [Line Items] | |||
Current Outstanding Par | $ 8,248,000 | ||
Long-term Debt, Gross | $ 8,248,000 | 8,248,000 | |
Debt Instrument, Interest Rate, Effective Percentage | [1] | 8.00% | |
Maturity | [2] | Sep. 25, 2018 | |
Alesco Capital Trust I [Member] | Junior Subordinated Debt [Member] | |||
Debt Instrument [Line Items] | |||
Junior subordinated notes | [3] | $ 28,125,000 | |
Long term debt less debt discount | $ 12,462,000 | 12,084,000 | |
Debt Instrument, Interest Rate, Effective Percentage | [1] | 4.76% | |
Maturity | Jul. 30, 2037 | ||
Sunset Financial Statutory Trust I [Member] | Junior Subordinated Debt [Member] | |||
Debt Instrument [Line Items] | |||
Junior subordinated notes | [3] | $ 20,000,000 | |
Long term debt less debt discount | $ 8,889,000 | $ 8,613,000 | |
Debt Instrument, Interest Rate, Effective Percentage | [1] | 4.99% | |
Maturity | Mar. 30, 2035 | ||
[1] | Represents the interest rate in effect as of the last day of the reporting period. | ||
[2] | The holders of the 8.0% Convertible Notes may convert all or any part of the outstanding principal amount of the 8.0% Convertible Notes at any time prior to maturity into shares of the Company's Common Stock at a conversion price of $3.00 per share, subject to customary anti-dilution adjustments. | ||
[3] | The junior subordinated notes listed represent debt the Company owes to the two trusts noted above. The total par amount owed by the Company to the trusts is $49,614. However, the Company owns the common stock of the trusts in a total par amount of $1,489. The Company pays interest (and at maturity, principal) to the trusts on the entire $49,614 junior notes outstanding. The Company receives back from the trusts the pro rata share of interest and principal on the common stock the Company holds of $1,489. Accordingly, the Company shows the net par value not held by it of $48,125 in the table above. These trusts are VIEs and the Company does not consolidate them even though the Company holds common stock. The Company carries the common stock on its balance sheet at a value of $0. |
Equity (Narrative) (Details)
Equity (Narrative) (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2016USD ($)$ / sharesshares | Sep. 30, 2016USD ($)$ / sharesshares | Sep. 30, 2015USD ($) | |
Permanent Equity [Line Items] | |||
Ratio of Common Stock to membership units | 1 | ||
Number of shares issuable per right | shares | 0.0001 | 0.0001 | |
Rights agreement, purchase price per unit | $ / shares | $ 100 | $ 100 | |
Maximum period from acquiring persion event to distribution date | 10 days | ||
Class of Warrant or Right, Exercise Trigger, Percentage of Common Stock Owned by Individual or Affiliates | 4.95% | ||
Series C Junior Participating Preferred Stock [Member] | |||
Permanent Equity [Line Items] | |||
Preferred Stock, par value | $ / shares | $ 0.001 | $ 0.001 | |
10b5-1 Plan [Member] | |||
Permanent Equity [Line Items] | |||
Repurchase amount authorized | $ 1,000 | $ 1,000 | |
Purchase of common stock, shares | shares | 80,400 | 214,480 | |
Purchase of common stock, value | $ 79 | $ 201 | |
Private Repurchase Transaction [Member] | |||
Permanent Equity [Line Items] | |||
Purchase of common stock, shares | shares | 650,000 | ||
Purchase of common stock, value | $ 813 | ||
Shares repurchased, price per share | $ / shares | $ 1.25 | ||
Investment Manager Repurchase [Member] | |||
Permanent Equity [Line Items] | |||
Purchase of common stock, shares | shares | 1,044,000 | ||
Purchase of common stock, value | $ 1,305 | ||
Shares repurchased, price per share | $ / shares | $ 1.25 | ||
Accumulated Other Comprehensive Income (Loss) [Member] | |||
Permanent Equity [Line Items] | |||
Redemption of non-controlling interest, net | $ 49 | $ (6) | |
Additional Paid-In Capital [Member] | |||
Permanent Equity [Line Items] | |||
Redemption of non-controlling interest, net | (552) | 88 | |
Non-Controlling Interest [Member] | |||
Permanent Equity [Line Items] | |||
Redemption of non-controlling interest, net | $ 503 | $ (82) |
Equity (Schedule Of Unrestricte
Equity (Schedule Of Unrestricted Common Stock Activity) (Details) | 9 Months Ended |
Sep. 30, 2016shares | |
Equity [Abstract] | |
Balance, Shares | 13,035,119 |
Vesting of shares | 254,828 |
Shares withheld for employee taxes | (25,701) |
Retirement of common stock | (1,908,480) |
Balance, Shares | 11,355,766 |
Equity (Operating LLC Membershi
Equity (Operating LLC Membership Units) (Details) | 9 Months Ended |
Sep. 30, 2016shares | |
Permanent Equity [Line Items] | |
Membership Units Received Net Of Surrenders | (1,441,478) |
Unit Issuance And Surrender Agreement [Member] | |
Permanent Equity [Line Items] | |
Membership Units Received Net Of Surrenders | 467,002 |
Retirement of Common Stock [Member] | |
Permanent Equity [Line Items] | |
Membership Units Received Net Of Surrenders | (1,908,480) |
Equity (Schedule Of Effects Of
Equity (Schedule Of Effects Of Changes In Ownership Interest Subsidiary) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Equity [Abstract] | ||||
Net income / (loss) attributable to IFMI | $ 1,041 | $ (533) | $ 2,070 | $ (1,436) |
Increase / (decrease) in IFMI's paid in capital for the acquisition / (surrender) of additional units in consolidated subsidiary, net | (552) | 88 | ||
Changes from net income / (loss) attributable to IFMI and transfers (to) from the non-controlling interest | $ 1,518 | $ (1,348) |
Net Capital Requirements (Detai
Net Capital Requirements (Details) $ in Thousands | Sep. 30, 2016USD ($) |
JVB [Member] | |
Net Capital Requirements [Line Items] | |
Actual Net Capital or Liquid Capital | $ 38,220 |
Excess | 37,970 |
Cohen And Company And PrinceRidge L.L.C. [Member] | |
Net Capital Requirements [Line Items] | |
Actual Net Capital or Liquid Capital | 801 |
Cohen and Company Financial Limited [Member] | |
Net Capital Requirements [Line Items] | |
Amount Required | 532 |
Excess | $ 269 |
Earnings _ (Loss) Per Common 71
Earnings / (Loss) Per Common Share (Schedule of Earnings / (Loss) Per Common Share) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | ||
Earnings Per Share [Line Items] | |||||
Net income / (loss) attributable to IFMI | $ 1,041 | $ (533) | $ 2,070 | $ (1,436) | |
Add/ (deduct): Income / (loss) attributable to non-controlling interest attributable to Operating LLC membership units exchangeable into IFMI shares | [1] | 489 | (114) | 925 | (432) |
Add / (deduct): Adjustment | [2] | (23) | (72) | (33) | (72) |
Net income / (loss) on a fully converted basis | $ 1,507 | $ (719) | $ 2,962 | $ (1,940) | |
Weighted average common shares outstanding - Basic | 11,807,417 | 15,229,340 | 12,328,238 | 15,202,628 | |
Unrestricted Operating LLC membership units exchangeable into IFMI shares | [1] | 5,324,090 | 5,324,090 | 5,324,090 | 5,324,090 |
Dilutive impact of restricted units or shares | 130,485 | 91,242 | |||
Weighted average common shares outstanding - Diluted | [3] | 17,261,992 | 20,553,430 | 17,743,570 | 20,526,718 |
Net income / (loss) per common share - Basic | $ 0.09 | $ (0.03) | $ 0.17 | $ (0.09) | |
Net income / (loss) per common share - Diluted | $ 0.09 | $ (0.03) | $ 0.17 | $ (0.09) | |
Number of shares issuable upon conversion of each unit | 1 | ||||
Number of trading days used to determine average share price | 10 days | ||||
8.00% Contingent Convertible Senior Notes Due 2018 [Member] | Contingent Convertible Senior Notes [Member] | |||||
Earnings Per Share [Line Items] | |||||
Note rate | [4] | 8.00% | 8.00% | ||
Stock Compensation Plan [Member] | |||||
Earnings Per Share [Line Items] | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 0 | 11,838 | 0 | 5,406 | |
Convertible Debt Securities [Member] | |||||
Earnings Per Share [Line Items] | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 2,749,167 | 2,749,167 | 2,749,167 | 2,749,167 | |
[1] | The Operating LLC membership units not held by IFMI (that is, those held by the non-controlling interest for the nine months ended September 30, 2016 and 2015) may be redeemed and exchanged into shares of the Company on a one-to-one basis. The Operating LLC membership units not held by IFMI are redeemable at each IFMI member's option, at any time, for (i) cash in an amount equal to the average of the per share closing prices of Common Stock for the ten consecutive trading days immediately preceding the date the Company receives the member's redemption notice, or (ii) at the Company's option, one share of Common Stock, subject, in each case, to appropriate adjustment upon the occurrence of an issuance of additional shares of Common Stock as a dividend or other distribution on the outstanding Common Stock, or a further subdivision or combination of the outstanding shares of Common Stock. These membership units enter into the computation of diluted net income / (loss) per common share when the effect is not anti-dilutive using the if-converted method. | ||||
[2] | An adjustment is included for the following reasons: (i) if the Operating LLC membership units had been converted at the beginning of the period, the Company would have incurred a higher income tax expense or realized a higher income tax benefit, as applicable and (ii) to adjust the non-controlling interest amount to be consistent with the weighted average share calculation. | ||||
[3] | For the nine months ended 2016 and 2015, weighted average common shares outstanding excludes a total of 0 and 5,406 shares, respectively representing restricted Operating LLC membership units, restricted Common Stock, and restricted units of Common Stock that would be anti-dilutive because of the Company's net loss. For the three months ended September 30, 2016 and 2015, weighted average common shares outstanding excludes a total of 0 and 11,838 shares, respectively, representing restricted Operating LLC membership units, restricted Common Stock, and restricted units of Common Stock that would be anti-dilutive because of the Company's net loss. For the nine and three months ended September 30, 2016 and 2015, weighted average common shares outstanding also excludes 2,749,167 shares from the assumed conversion of the 8.0% Convertibles Notes because the inclusion of the converted shares would be anti-dilutive. | ||||
[4] | Represents the interest rate in effect as of the last day of the reporting period. |
Commitments And Contingencies (
Commitments And Contingencies (Narrative) (Details) $ in Thousands | 1 Months Ended |
Oct. 31, 2013USD ($) | |
Commitments And Contingencies [Abstract] | |
Income Tax Examination, Estimate of Possible Loss | $ 4,683 |
Segment and Geographic Inform73
Segment and Geographic Information (Narrative) (Details) | 9 Months Ended |
Sep. 30, 2016segment | |
Segment and Geographic Information [Abstract] | |
Number of Operating Segments | 3 |
Segment and Geographic Inform74
Segment and Geographic Information (Schedule Of Segment Reporting Information) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | ||
Segment Reporting Information [Line Items] | |||||
Net trading | $ 10,486 | $ 8,333 | $ 31,973 | $ 22,346 | |
Asset management | 1,781 | 2,332 | 5,662 | 6,890 | |
New issue and advisory | 811 | 2,119 | 2,176 | 4,268 | |
Principal transactions and other income | 1,012 | 143 | 2,379 | 3,268 | |
Total revenues | 14,090 | 12,927 | 42,190 | 36,772 | |
Total operating expenses | 11,439 | 12,369 | 36,065 | 35,422 | |
Operating income / (loss) | 2,651 | 558 | 6,125 | 1,350 | |
Interest expense | (991) | (984) | (2,973) | (2,951) | |
Income/ (loss) before income tax expense / (benefit) | 1,660 | (426) | 3,152 | (1,601) | |
Income tax expense / (benefit) | 130 | 221 | 157 | 267 | |
Net income / (loss) | 1,530 | (647) | 2,995 | (1,868) | |
Less: Net income / (loss) attributable to the non-controlling interest | 489 | (114) | 925 | (432) | |
Net income / (loss) attributable to IFMI | 1,041 | (533) | 2,070 | (1,436) | |
Depreciation and amortization (included in total operating expense) | 66 | 150 | 220 | 611 | |
Operating Segments [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Net trading | 10,486 | 8,333 | 31,973 | 22,346 | |
Asset management | 1,781 | 2,332 | 5,662 | 6,890 | |
New issue and advisory | 811 | 2,119 | 2,176 | 4,268 | |
Principal transactions and other income | 1,012 | 143 | 2,379 | 3,268 | |
Total revenues | 14,090 | 12,927 | 42,190 | 36,772 | |
Total operating expenses | 9,452 | 9,736 | 29,425 | 27,394 | |
Operating income / (loss) | 4,638 | 3,191 | 12,765 | 9,378 | |
Interest expense | (29) | (29) | |||
Income/ (loss) before income tax expense / (benefit) | 4,638 | 3,162 | 12,765 | 9,349 | |
Net income / (loss) | 4,638 | 3,162 | 12,765 | 9,349 | |
Net income / (loss) attributable to IFMI | 4,638 | 3,162 | 12,765 | 9,349 | |
Depreciation and amortization (included in total operating expense) | 21 | 92 | 92 | 433 | |
Unallocated [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total operating expenses | [1] | 1,987 | 2,633 | 6,640 | 8,028 |
Operating income / (loss) | [1] | (1,987) | (2,633) | (6,640) | (8,028) |
Interest expense | [1] | (991) | (955) | (2,973) | (2,922) |
Income/ (loss) before income tax expense / (benefit) | [1] | (2,978) | (3,588) | (9,613) | (10,950) |
Income tax expense / (benefit) | [1] | 130 | 221 | 157 | 267 |
Net income / (loss) | [1] | (3,108) | (3,809) | (9,770) | (11,217) |
Less: Net income / (loss) attributable to the non-controlling interest | [1] | 489 | (114) | 925 | (432) |
Net income / (loss) attributable to IFMI | [1] | (3,597) | (3,695) | (10,695) | (10,785) |
Depreciation and amortization (included in total operating expense) | [1] | 45 | 58 | 128 | 178 |
Capital Markets [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Net trading | 10,486 | 8,333 | 31,973 | 22,346 | |
New issue and advisory | 811 | 2,119 | 2,176 | 4,268 | |
Principal transactions and other income | 30 | 71 | 140 | 233 | |
Total revenues | 11,327 | 10,523 | 34,289 | 26,847 | |
Total operating expenses | 8,556 | 8,606 | 26,662 | 24,024 | |
Operating income / (loss) | 2,771 | 1,917 | 7,627 | 2,823 | |
Interest expense | (29) | (29) | |||
Income/ (loss) before income tax expense / (benefit) | 2,771 | 1,888 | 7,627 | 2,794 | |
Net income / (loss) | 2,771 | 1,888 | 7,627 | 2,794 | |
Net income / (loss) attributable to IFMI | 2,771 | 1,888 | 7,627 | 2,794 | |
Depreciation and amortization (included in total operating expense) | 20 | 87 | 90 | 417 | |
Asset Management [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Asset management | 1,781 | 2,332 | 5,662 | 6,890 | |
Principal transactions and other income | 441 | 832 | 1,541 | 2,905 | |
Total revenues | 2,222 | 3,164 | 7,203 | 9,795 | |
Total operating expenses | 779 | 1,003 | 2,394 | 2,993 | |
Operating income / (loss) | 1,443 | 2,161 | 4,809 | 6,802 | |
Income/ (loss) before income tax expense / (benefit) | 1,443 | 2,161 | 4,809 | 6,802 | |
Net income / (loss) | 1,443 | 2,161 | 4,809 | 6,802 | |
Net income / (loss) attributable to IFMI | 1,443 | 2,161 | 4,809 | 6,802 | |
Depreciation and amortization (included in total operating expense) | 1 | 5 | 2 | 16 | |
Principal Investing [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Principal transactions and other income | 541 | (760) | 698 | 130 | |
Total revenues | 541 | (760) | 698 | 130 | |
Total operating expenses | 117 | 127 | 369 | 377 | |
Operating income / (loss) | 424 | (887) | 329 | (247) | |
Income/ (loss) before income tax expense / (benefit) | 424 | (887) | 329 | (247) | |
Net income / (loss) | 424 | (887) | 329 | (247) | |
Net income / (loss) attributable to IFMI | $ 424 | $ (887) | $ 329 | $ (247) | |
[1] | Unallocated includes certain expenses incurred by indirect overhead and support departments (such as the executive, finance, legal, information technology, human resources, risk, compliance, and other similar overhead and support departments). Some of the items not allocated include: (1) operating expenses (such as cash compensation and benefits, equity-based compensation expense, professional fees, travel and entertainment, consulting fees, and rent) related to support departments excluding certain departments that directly support the Capital Markets business segment; (2) interest expense on debt; and (3) income taxes. Management does not consider these items necessary for an understanding of the operating results of these business segments and such amounts are excluded in business segment reporting to the chief operating decision maker. |
Segment and Geographic Inform75
Segment and Geographic Information (Reconciliation Of Assets From Segment To Consolidated) (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 | |
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Total assets | $ 521,375 | $ 308,415 | |
Goodwill | [1] | 7,992 | 7,992 |
Intangible assets | [1] | 166 | 166 |
Operating Segments [Member] | |||
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Total assets | 514,072 | 300,097 | |
Goodwill | [1] | 7,992 | 7,992 |
Intangible assets | [1] | 166 | 166 |
Unallocated [Member] | |||
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Total assets | [2] | 7,303 | 8,318 |
Capital Markets [Member] | |||
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Total assets | 504,142 | 281,813 | |
Goodwill | [1] | 7,937 | 7,937 |
Intangible assets | [1] | 166 | 166 |
Asset Management [Member] | |||
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Total assets | 1,927 | 3,245 | |
Goodwill | [1] | 55 | 55 |
Principal Investing [Member] | |||
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Total assets | $ 8,003 | $ 15,039 | |
[1] | Goodwill and intangible assets as of September 30, 2016 and 2015 are allocated to the Capital Markets and Asset Management business segments as indicated in the table above. | ||
[2] | Unallocated assets primarily include: (1) amounts due from related parties; (2) furniture and equipment, net; and (3) other assets that are not considered necessary for an understanding of business segment assets. Such amounts are excluded in business segment reporting to the chief operating decision maker. |
Segment and Geographic Inform76
Segment and Geographic Information (Revenue By Geographic Area) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total Revenues | $ 14,090 | $ 12,927 | $ 42,190 | $ 36,772 |
UNITED STATES [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total Revenues | 12,758 | 10,179 | 38,309 | 30,634 |
United Kingdom & Other [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total Revenues | $ 1,332 | $ 2,748 | $ 3,881 | $ 6,138 |
Supplemental Cash Flow Disclo77
Supplemental Cash Flow Disclosure (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Debt Conversion [Line Items] | ||
Interest paid | $ 2,079 | $ 2,103 |
Income taxes paid | 276 | 224 |
Income tax refunds | 16 | 0 |
Additional Paid-In Capital [Member] | ||
Debt Conversion [Line Items] | ||
Redemption of non-controlling interest, net | (552) | 88 |
Accumulated Other Comprehensive Income (Loss) [Member] | ||
Debt Conversion [Line Items] | ||
Redemption of non-controlling interest, net | 49 | (6) |
Non-Controlling Interest [Member] | ||
Debt Conversion [Line Items] | ||
Redemption of non-controlling interest, net | $ 503 | $ (82) |
Related Party Transactions (Nar
Related Party Transactions (Narrative) (Details) - USD ($) $ in Thousands | Aug. 28, 2015 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2013 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 |
Related Party Transaction [Line Items] | |||||||||
Securities sold under agreement to repurchase | $ 302,800 | $ 302,800 | $ 127,913 | ||||||
Fair value of securities pledged as collateral under repurchase agreements | 318,092 | 318,092 | 137,232 | ||||||
Cash and cash equivalents | $ 13,379 | 10,085 | $ 13,379 | $ 10,085 | $ 13,379 | 14,115 | $ 12,253 | ||
Company matching percent | 50.00% | ||||||||
Percent of employees gross salary qualifying for matching contributions | 3.00% | ||||||||
Company plan contributions | 40 | 38 | $ 188 | 180 | |||||
EBC Family Trust [Member] | |||||||||
Related Party Transaction [Line Items] | |||||||||
Notes payable, related parties | $ 2,400 | ||||||||
Value of shares issued | 1,600 | ||||||||
Related Party Transaction, Amounts of Transaction | 4,000 | ||||||||
TBBK [Member] | |||||||||
Related Party Transaction [Line Items] | |||||||||
Securities sold under agreement to repurchase | 39,532 | 39,532 | 0 | ||||||
Fair value of securities pledged as collateral under repurchase agreements | 41,764 | 41,764 | 0 | ||||||
Interest Expense, Related Party | 146 | 133 | 301 | 428 | |||||
Cash and cash equivalents | 46 | 46 | $ 43 | ||||||
Mead Park Capital [Member] | |||||||||
Related Party Transaction [Line Items] | |||||||||
Notes payable, related parties | 5,848 | ||||||||
Value of shares issued | $ 3,898 | ||||||||
Issuance of shares upon conversion | 1,949,167 | ||||||||
Shares sold | 1,461,876 | ||||||||
Interest Expense, Related Party | 35 | 309 | |||||||
Related Party Transaction, Amounts of Transaction | $ 9,746 | ||||||||
Shares transferred to entity | 487,291 | ||||||||
Edward E. Cohen IRA [Member] | |||||||||
Related Party Transaction [Line Items] | |||||||||
Interest Expense, Related Party | 107 | 105 | 317 | 105 | |||||
Daniel G. Cohen [Member] | |||||||||
Related Party Transaction [Line Items] | |||||||||
Cash from sale of car | 9 | ||||||||
Gain on sale of car | $ 9 | ||||||||
Ricciardi Parties [Member] | |||||||||
Related Party Transaction [Line Items] | |||||||||
Convertible notes owned after transaction | $ 1,462 | ||||||||
Shares transferred to entity | 1,512,709 | ||||||||
Ricciardi Parties And Mead Park Capital [Member] | |||||||||
Related Party Transaction [Line Items] | |||||||||
Related Party Transaction, Amounts of Transaction | $ 4,000 | ||||||||
Board of Directors Chairman [Member] | |||||||||
Related Party Transaction [Line Items] | |||||||||
Revenue from Related Parties | $ 6 | $ 7 | $ 16 | $ 16 | |||||
Contingent Convertible Senior Notes [Member] | EBC Family Trust [Member] | |||||||||
Related Party Transaction [Line Items] | |||||||||
Stated interest rate | 8.00% | 8.00% | |||||||
Contingent Convertible Senior Notes [Member] | Mead Park Capital [Member] | |||||||||
Related Party Transaction [Line Items] | |||||||||
Stated interest rate | 8.00% | 8.00% | 8.00% | ||||||
Convertible notes sold | $ 4,386 | ||||||||
Contingent Convertible Senior Notes [Member] | Edward E. Cohen IRA [Member] | |||||||||
Related Party Transaction [Line Items] | |||||||||
Stated interest rate | 8.00% | ||||||||
Convertible notes purchased | $ 4,386 |
Related Party Transactions (Sch
Related Party Transactions (Schedule Of Related Party Transactions) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Related Party Transaction [Line Items] | ||||
Net trading | $ 10,486 | $ 8,333 | $ 31,973 | $ 22,346 |
Professional fees and other operating | 1,513 | 2,488 | 4,718 | 6,353 |
E.B.C. [Member] | ||||
Related Party Transaction [Line Items] | ||||
Interest expense incurred | 58 | 57 | 173 | 170 |
Edward E. Cohen IRA [Member] | ||||
Related Party Transaction [Line Items] | ||||
Interest expense incurred | 107 | 105 | 317 | 105 |
Mead Park Capital [Member] | ||||
Related Party Transaction [Line Items] | ||||
Interest expense incurred | 35 | 309 | ||
Mead Park Advisors LLC [Member] | ||||
Related Party Transaction [Line Items] | ||||
Professional fees and other operating | 50 | 50 | 150 | 150 |
Woodlea [Member] | ||||
Related Party Transaction [Line Items] | ||||
Professional fees and other operating | 39 | |||
Affiliated Entity [Member] | ||||
Related Party Transaction [Line Items] | ||||
Professional fees and other operating | 50 | 50 | 150 | 189 |
Interest expense incurred | $ 165 | $ 197 | $ 490 | $ 584 |
Due from _ Due to Related Par80
Due from / Due to Related Parties (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Related Party Transaction [Line Items] | ||
Due from Related Parties | $ 73 | $ 77 |
Due to Related Parties | 50 | 50 |
Employees And Other [Member] | ||
Related Party Transaction [Line Items] | ||
Due from Related Parties | 73 | 77 |
Mead Park Advisors LLC [Member] | ||
Related Party Transaction [Line Items] | ||
Due to Related Parties | $ 50 | $ 50 |
Subsequent Event (Narrative) (D
Subsequent Event (Narrative) (Details) - Subsequent Event [Member] $ in Thousands | Oct. 03, 2016USD ($) |
Subsequent Event [Line Items] | |
Maximum investment from related party | $ 12,000 |
Proceeds from investment | $ 6,000 |
Payments to investor, precentage of difference between specified revenue and expenses | 50.00% |
Potential percent of consideration owed to investor on qualified sale | 25.00% |
Maximum [Member] | |
Subsequent Event [Line Items] | |
Required notice period for investment agreement termination | 90 days |
Minimum [Member] | |
Subsequent Event [Line Items] | |
Required notice period for investment agreement termination | 60 days |