Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Nov. 01, 2017 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | PJC | |
Entity Registrant Name | Piper Jaffray Companies | |
Entity Central Index Key | 1,230,245 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 15,109,138 |
Consolidated Statements of Fina
Consolidated Statements of Financial Condition - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Assets | ||
Cash and cash equivalents | $ 40,916 | $ 41,359 |
Cash and cash equivalents segregated for regulatory purposes | 6,016 | 29,015 |
Receivables: | ||
Customers | 0 | 31,917 |
Brokers, dealers and clearing organizations | 80,880 | 212,730 |
Securities purchased under agreements to resell | 0 | 159,697 |
Financial instruments and other inventory positions owned | 763,946 | 464,610 |
Financial instruments and other inventory positions owned and pledged as collateral | 335,382 | 594,361 |
Total financial instruments and other inventory positions owned | 1,099,328 | 1,058,971 |
Fixed assets (net of accumulated depreciation and amortization of $61,312 and $58,308, respectively) | 24,286 | 25,343 |
Goodwill | 81,855 | 196,218 |
Intangible assets (net of accumulated amortization of $81,483 and $70,017, respectively) | 25,768 | 37,234 |
Investments | 179,527 | 168,057 |
Net deferred income tax assets | 145,817 | 97,833 |
Other assets | 55,443 | 67,129 |
Total assets | 1,739,836 | 2,125,503 |
Liabilities and Shareholders’ Equity | ||
Short-term financing | 76,797 | 418,832 |
Senior notes | 125,000 | 175,000 |
Payables: | ||
Customers | 0 | 29,352 |
Brokers, dealers and clearing organizations | 54,265 | 40,842 |
Securities sold under agreements to repurchase | 0 | 15,046 |
Financial instruments and other inventory positions sold, but not yet purchased | 357,735 | 299,357 |
Accrued compensation | 288,299 | 288,255 |
Other liabilities and accrued expenses | 50,955 | 42,553 |
Total liabilities | 953,051 | 1,309,237 |
Shareholders’ equity: | ||
Common stock, $0.01 par value: Shares authorized: 100,000,000 at September 30, 2017 and December 31, 2016; Shares issued: 19,512,328 at September 30, 2017 and 19,535,307 at December 31, 2016; Shares outstanding: 12,899,902 at September 30, 2017 and 12,391,970 at December 31, 2016 | 195 | 195 |
Additional paid-in capital | 786,527 | 788,927 |
Retained earnings | 227,095 | 257,188 |
Less common stock held in treasury, at cost: 6,612,426 at September 30, 2017 and 7,143,337 shares at December 31, 2016 | (274,089) | (284,461) |
Accumulated other comprehensive loss | (1,462) | (2,599) |
Total common shareholders’ equity | 738,266 | 759,250 |
Noncontrolling interests | 48,519 | 57,016 |
Total shareholders’ equity | 786,785 | 816,266 |
Total liabilities and shareholders’ equity | $ 1,739,836 | $ 2,125,503 |
Consolidated Statements of Fin3
Consolidated Statements of Financial Condition (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Accumulated depreciation and amortization on fixed assets | $ 61,312 | $ 58,308 |
Accumulated amortization on intangible assets | $ 81,483 | $ 70,017 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 19,512,328 | 19,535,307 |
Common stock, shares outstanding | 12,899,902 | 12,391,970 |
Common stock held in treasury, shares | 6,612,426 | 7,143,337 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Revenues: | ||||
Investment banking | $ 190,482 | $ 136,682 | $ 461,260 | $ 338,034 |
Institutional brokerage | 34,873 | 42,189 | 111,083 | 122,423 |
Asset management | 12,818 | 15,256 | 44,011 | 43,699 |
Interest | 7,164 | 7,343 | 22,649 | 24,094 |
Investment income/(loss) | (422) | 4,806 | 15,406 | 14,019 |
Total revenues | 244,915 | 206,276 | 654,409 | 542,269 |
Interest expense | 4,348 | 5,429 | 15,568 | 17,383 |
Net revenues | 240,567 | 200,847 | 638,841 | 524,886 |
Non-interest expenses: | ||||
Compensation and benefits | 169,469 | 135,186 | 438,161 | 356,770 |
Outside services | 7,495 | 10,288 | 27,612 | 28,923 |
Occupancy and equipment | 8,127 | 8,743 | 24,846 | 25,311 |
Communications | 7,136 | 7,845 | 22,025 | 22,469 |
Marketing and business development | 6,683 | 7,629 | 22,512 | 23,804 |
Trade execution and clearance | 2,125 | 2,008 | 5,864 | 5,686 |
Restructuring and integration costs | 0 | 0 | 0 | 10,206 |
Goodwill impairment | 114,363 | 0 | 114,363 | 0 |
Intangible asset amortization | 3,822 | 8,010 | 11,466 | 15,400 |
Back office conversion costs | 1,293 | 0 | 3,027 | 0 |
Other operating expenses | 2,290 | 2,687 | 8,525 | 7,915 |
Total non-interest expenses | 322,803 | 182,396 | 678,401 | 496,484 |
Income/(loss) before income tax expense/(benefit) | (82,236) | 18,451 | (39,560) | 28,402 |
Income tax benefit | (31,423) | 6,515 | (26,912) | 8,767 |
Net income/(loss) | (50,813) | 11,936 | (12,648) | 19,635 |
Net income/(loss) applicable to noncontrolling interests | (1,100) | 1,278 | 3,217 | 4,602 |
Net income/(loss) applicable to Piper Jaffray Companies | (49,713) | 10,658 | (15,865) | 15,033 |
Net income/(loss) applicable to Piper Jaffray Companies’ common shareholders | $ (50,415) | $ 8,582 | $ (18,106) | $ 12,476 |
Earnings/(loss) per common share | ||||
Basic | $ (3.91) | $ 0.70 | $ (1.42) | $ 0.98 |
Diluted | (3.91) | 0.70 | (1.42) | 0.97 |
Dividends declared per common share | $ 0.31 | $ 0 | $ 0.9375 | $ 0 |
Weighted average number of common shares outstanding | ||||
Basic | 12,898 | 12,282 | 12,774 | 12,787 |
Diluted | 12,975 | 12,298 | 12,945 | 12,801 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income/(loss) | $ (50,813) | $ 11,936 | $ (12,648) | $ 19,635 |
Other comprehensive income/(loss), net of tax: | ||||
Foreign currency translation adjustment | 142 | (587) | 1,137 | (1,843) |
Comprehensive income/(loss) | (50,671) | 11,349 | (11,511) | 17,792 |
Comprehensive income/(loss) applicable to noncontrolling interests | (1,100) | 1,278 | 3,217 | 4,602 |
Comprehensive income/(loss) applicable to Piper Jaffray Companies | $ (49,571) | $ 10,071 | $ (14,728) | $ 13,190 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Operating Activities: | ||
Net income/(loss) | $ (12,648) | $ 19,635 |
Adjustments to reconcile net income to net cash provided by/(used in) operating activities: | ||
Depreciation and amortization of fixed assets | 5,343 | 4,724 |
Deferred income taxes | (47,984) | 715 |
Stock-based and deferred compensation | 26,459 | 43,839 |
Goodwill impairment | 114,363 | 0 |
Amortization of intangible assets | 11,466 | 15,400 |
Amortization of forgivable loans | 5,207 | 6,894 |
Decrease/(increase) in operating assets: | ||
Cash and cash equivalents segregated for regulatory purposes | 22,999 | 35,000 |
Receivables: | ||
Customers | 31,917 | (46,398) |
Brokers, dealers and clearing organizations | 131,850 | (21,478) |
Securities purchased under agreements to resell | 159,697 | (10,492) |
Net financial instruments and other inventory positions owned | 18,021 | (72,758) |
Investments | (11,470) | (4,767) |
Other assets | 7,185 | (8,898) |
Payables: | ||
Customers | (29,352) | 13,366 |
Brokers, dealers and clearing organizations | 13,423 | 153,795 |
Securities sold under agreements to repurchase | (15,046) | (2,018) |
Accrued compensation | 4,666 | (51,569) |
Other liabilities and accrued expenses | 7,864 | (32,005) |
Net cash provided by operating activities | 443,960 | 42,985 |
Investing Activities: | ||
Business acquisitions, net of cash acquired | 0 | 71,019 |
Purchases of fixed assets, net | (4,310) | (7,360) |
Net cash used in investing activities | (4,310) | (78,379) |
Financing Activities: | ||
Decrease in short-term financing | (342,035) | (20,405) |
Repayment of variable rate senior notes | 50,000 | 0 |
Decrease in securities sold under agreements to repurchase | 0 | (21,292) |
Payment of cash dividend | (14,217) | 0 |
Increase/(decrease) in noncontrolling interests | (11,714) | 10,189 |
Repurchase of common stock | (25,065) | (70,428) |
Proceeds from stock option exercises | 1,703 | 119 |
Net cash used in financing activities | (441,328) | (101,817) |
Currency adjustment: | ||
Effect of exchange rate changes on cash | 1,235 | (1,328) |
Net decrease in cash and cash equivalents | (443) | (138,539) |
Cash and cash equivalents at beginning of period | 41,359 | 189,910 |
Cash and cash equivalents at end of period | 40,916 | 51,371 |
Supplemental disclosure of cash flow information – | ||
Interest | 15,397 | 17,679 |
Income taxes | 7,781 | 22,148 |
Non-cash investing and financing activities – | ||
25,525 shares for the nine months ended September 30, 2016 | 0 | 1,074 |
198,981 shares and 843,889 shares for the nine months ended September 30, 2017 and 2016, respectively | $ 16,187 | $ 35,089 |
Consolidated Statements of Cas7
Consolidated Statements of Cash Flows (Parenthetical) - shares | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Statement of Cash Flows [Abstract] | ||
Issuance of common stock related to the acquisition of Simmons & Company International: | 0 | 25,525 |
Issuance of restricted common stock for annual equity award: | 198,981 | 843,889 |
Organization and Basis of Prese
Organization and Basis of Presentation | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Basis of Presentation | Organization and Basis of Presentation Organization Piper Jaffray Companies is the parent company of Piper Jaffray & Co. ("Piper Jaffray"), a securities broker dealer and investment banking firm; Piper Jaffray Ltd., a firm providing securities brokerage and mergers and acquisitions services in Europe; Advisory Research, Inc. ("ARI"), which provides asset management services to separately managed accounts, closed-end and open-end funds and partnerships; Piper Jaffray Investment Group Inc., which consists of entities providing alternative asset management services; Piper Jaffray Financial Products Inc. and Piper Jaffray Financial Products II Inc., entities that facilitate derivative transactions; and other immaterial subsidiaries. Effective August 7, 2017, Piper Jaffray transitioned from a self clearing securities broker dealer to a fully disclosed clearing model. Pershing LLC ("Pershing") is Piper Jaffray's clearing broker dealer responsible for the clearance and settlement of firm and customer cash and security transactions. Piper Jaffray Companies and its subsidiaries (collectively, the "Company") operate in two reporting segments: Capital Markets and Asset Management. A summary of the activities of each of the Company’s business segments is as follows: Capital Markets The Capital Markets segment provides investment banking services and institutional sales, trading and research services. Investment banking services include management of and participation in underwritings, financial advisory services and public finance activities. Revenues are generated through the receipt of advisory and financing fees. Institutional sales, trading and research services focus on the trading of equity and fixed income products with institutions, government and non-profit entities. Revenues are generated through commissions and sales credits earned on equity and fixed income institutional sales activities, net interest revenues on trading securities held in inventory, and profits and losses from trading these securities. Also, the Company generates revenue through strategic trading and investing activities, which focus on investments in municipal bonds, U.S. government agency securities, and merchant banking activities involving equity or debt investments in late stage private companies. The Company has created alternative asset management funds in merchant banking, energy and senior living in order to invest firm capital and to manage capital from outside investors. The Company receives management and performance fees for managing these funds. Asset Management The Asset Management segment provides traditional asset management services with product offerings in equity securities and master limited partnerships to institutions and individuals. Revenues are generated in the form of management and performance fees. Revenues are also generated through investments in the partnerships and funds that the Company manages. Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") for interim financial information and the rules and regulations of the Securities and Exchange Commission ("SEC"). Pursuant to this guidance, certain information and disclosures have been omitted that are included within complete annual financial statements. Except as disclosed herein, there have been no material changes in the information reported in the financial statements and related disclosures in the Company's Annual Report on Form 10-K for the year ended December 31, 2016 . The consolidated financial statements include the accounts of Piper Jaffray Companies, its wholly owned subsidiaries, and all other entities in which the Company has a controlling financial interest. Noncontrolling interests represent equity interests in consolidated entities that are not attributable, either directly or indirectly, to Piper Jaffray Companies. Noncontrolling interests include the minority equity holders’ proportionate share of the equity in the Company's alternative asset management funds. All material intercompany balances have been eliminated. Management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Although these estimates and assumptions are based on the best information available, actual results could differ from those estimates. |
Accounting Policies and Pronoun
Accounting Policies and Pronouncements | 9 Months Ended |
Sep. 30, 2017 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Accounting Policies and Pronouncements | Accounting Policies and Pronouncements Summary of Significant Accounting Policies Refer to the Company's Annual Report on Form 10-K for the year ended December 31, 2016 for a full description of the Company's significant accounting policies. Changes to the Company's significant accounting policies are described below. Stock-Based Compensation Financial Accounting Standards Board ("FASB") Accounting Standards Codification Topic 718, "Compensation – Stock Compensation," ("ASC 718") requires all stock-based compensation to be expensed on the consolidated statements of operations based on the grant date fair value of the award. Compensation expense related to stock-based awards that do not require future service are recognized in the year in which the awards were deemed to be earned. Stock-based awards that require future service are amortized over the relevant service period. Forfeitures of awards with service conditions are accounted for when they occur. See Note 16 for additional information on the Company's accounting for stock-based compensation. Adoption of New Accounting Standards Stock-Based Compensation In March 2016, the FASB issued Accounting Standard Update ("ASU") No. 2016-09, "Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting" ("ASU 2016-09"). ASU 2016-09 made targeted amendments to the accounting for share-based payments to employees. It became effective for the Company as of January 1, 2017. There was no impact to the Company’s retained earnings upon adoption of ASU 2016-09. Under ASU 2016-09, the Company recognizes the income tax effects of stock awards in the income statement when the awards vest or are settled. For the nine months ended September 30, 2017 , this accounting change resulted in the recording of a $9.1 million tax benefit for stock awards vesting during the period. Prior to the adoption of this ASU, this amount would have been recorded directly to additional paid-in capital. In addition, the Company has elected to account for forfeitures of awards with service conditions as they occur. This will result in dividends originally charged against retained earnings for forfeited, unvested stock-based payment awards to be reclassified to compensation expense in the period in which the forfeiture occurs. Furthermore, tax impacts from the vesting of stock-based compensation are presented as an operating activity on the consolidated statements of cash flows on a prospective basis. Goodwill Impairment In January 2017, the FASB issued ASU No. 2017-04, "Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment" ("ASU 2017-04"). ASU 2017-04 eliminates the requirement to calculate the implied fair value of goodwill (i.e., perform a hypothetical purchase price allocation) to measure a goodwill impairment charge. Instead, entities will record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value. ASU 2017-04 is effective for the Company’s annual and any interim goodwill impairment tests in fiscal years beginning after December 15, 2019 and should be applied prospectively. Early adoption is permitted for interim and annual goodwill impairment testing dates after January 1, 2017. The Company adopted ASU 2017-04 effective July 1, 2017. Future Adoption of New Applicable Accounting Standards Revenue Recognition In May 2014, the FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers (Topic 606)," ("ASU 2014-09"), which supersedes current revenue recognition guidance, including most industry-specific guidance. ASU 2014-09, as amended, requires a company to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods and services, and also requires enhanced disclosures. The Company has identified its revenues and costs that are within the scope of the new guidance. The current broker dealer industry treatment of netting deal expenses with investment banking revenues will change under the new guidance. As a result of adopting ASU 2014-09, the Company will generally present deal expenses on a gross basis on the consolidated statements of operations, rather than the current presentation of netting deal expenses for completed investment banking deals within revenues. This change will not impact earnings, however, the Company will report higher revenues and higher non-compensation expenses. In addition, the Company expects to defer the recognition of performance fees on its merchant banking, energy and senior living alternative asset management funds until such fees are no longer subject to reversal, which will cause a delay in the recognition of these fees as revenue. The Company anticipates that its current methods of recognizing investment banking revenues will not be significantly impacted by the new guidance. The AICPA industry task forces on broker dealers and asset management, the AICPA’s Revenue Recognition Working Group and the AICPA’s Financial Reporting Executive Committee (FinREC) continue to issue interpretive guidance on ASU 2014-09. The Company will continue to evaluate the potential impact of this guidance. The Company will adopt this guidance effective as of January 1, 2018 under the modified retrospective method, in which the cumulative effect of applying the standard will be recognized at the date of initial application. As of September 30, 2017 , the estimated cumulative effect that the Company would recognize as an adjustment to retained earnings upon adoption will be less than $2 million , net of tax. Recognition and Measurement of Financial Assets and Financial Liabilities In January 2016, the FASB issued ASU No. 2016-01, "Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities" ("ASU 2016-01"). The amendments in ASU 2016-01 address certain aspects of the recognition, measurement, presentation and disclosure of financial instruments. ASU 2016-01 is effective for annual and interim periods beginning after December 15, 2017. Except for the early application guidance outlined in ASU 2016-01, early adoption is not permitted. The adoption of ASU 2016-01 is not expected to have a material impact on the Company's results of operations or financial position, but may impact the Company's disclosures. Leases In February 2016, the FASB issued ASU No. 2016-02, "Leases (Topic 842)" ("ASU 2016-02"). ASU 2016-02 requires lessees to recognize a right-of-use asset and lease liability on the consolidated statements of financial position and disclose key information about leasing arrangements. The recognition, measurement and presentation of expenses and cash flows arising from a lease by a lessee have not significantly changed from current U.S. GAAP. ASU 2016-02 is effective for annual and interim periods beginning after December 15, 2018. As of December 31, 2016, the Company had approximately 65 operating leases for office space with aggregate minimum lease commitments of $78.4 million . The Company is evaluating other service contracts which may include embedded leases. Upon adoption of ASU 2016-02, the Company does not expect material changes to the recognition of rent expense in its consolidated statements of operations. The impact of the new guidance on Piper Jaffray’s net capital is expected to be minimal. Financial Instruments – Credit Losses In June 2016, the FASB issued ASU No. 2016-13, "Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" ("ASU 2016-13"). The new guidance requires an entity to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts as opposed to delaying recognition until the loss was probable of occurring. ASU 2016-13 is effective for annual and interim periods beginning after December 15, 2019. Early adoption is permitted for annual and interim periods beginning after December 15, 2018. The Company does not expect the adoption of ASU 2016-13 to have a material impact on its consolidated financial statements. Statement of Cash Flows In August 2016, the FASB issued ASU No. 2016-15, "Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments" ("ASU 2016-15"). ASU 2016-15 clarifies how entities should classify certain cash receipts and cash payments on the statement of cash flows. The amendments in ASU 2016-15 are effective for annual and interim periods beginning after December 31, 2017 and should be applied retrospectively. Early adoption is permitted. The Company expects that only a limited number of amendments will impact the presentation of its consolidated statements of cash flows. In November 2016, the FASB issued ASU No. 2016-18, "Statement of Cash Flows (Topic 230): Restricted Cash" ("ASU 2016-18"). Under ASU 2016-18, restricted cash will be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period amounts shown on the consolidated statements of cash flows. ASU 2016-18 is effective for annual and interim periods beginning after December 15, 2017 and should be applied retrospectively. Early adoption is permitted. |
Acquisition of Simmons & Compan
Acquisition of Simmons & Company International | 9 Months Ended |
Sep. 30, 2017 | |
Business Combinations [Abstract] | |
Acquisition of Simmons & Company International | Acquisition of Simmons & Company International On February 26, 2016 , the Company completed the acquisition of Simmons & Company International ("Simmons"), an employee-owned investment bank and broker dealer focused on the energy industry. The economic value of the acquisition was approximately $140.0 million . The Company acquired net assets with a fair value of $119.3 million . As part of the purchase price, the Company issued 1,149,340 restricted shares valued at $48.2 million as equity consideration on the acquisition date. Employees must fulfill service requirements in exchange for the rights to the shares. Compensation expense will be amortized on a straight-line basis over the requisite service period of one or three years (a weighted average service period of 2.7 years ). The fair value of the restricted stock was determined using the market price of the Company's common stock on the date of the acquisition. The Company also entered into acquisition-related compensation arrangements with certain employees of $20.6 million which consisted of cash ( $9.0 million ) and restricted stock ( $11.6 million ) for retention purposes. Compensation expense related to these arrangements will be amortized on a straight-line basis over the requisite service period of three years . Additional cash compensation may be available to certain investment banking employees subject to exceeding an investment banking revenue threshold during the three year post-acquisition period to the extent they are employed by the Company at the time of payment. Amounts estimated to be payable related to this performance award plan will be recorded as compensation expense on the consolidated statements of operations over the requisite performance period of three years . As of September 30, 2017 , the Company had accrued $14.4 million related to this performance award plan. The acquisition was accounted for pursuant to FASB Accounting Standards Codification Topic 805, "Business Combinations." Accordingly, the purchase price was allocated to the acquired assets and liabilities assumed based on their estimated fair values as of the acquisition date. The excess of the purchase price over the net assets acquired was allocated between goodwill and intangible assets within the Capital Markets segment. The Company recorded $60.7 million of goodwill on its consolidated statements of financial condition, of which $59.4 million is expected to be deductible for income tax purposes. In management's opinion, the goodwill represents the reputation and operating expertise of Simmons. Identifiable intangible assets purchased by the Company consisted of customer relationships and the Simmons trade name with acquisition-date fair values of $17.5 million and $9.1 million , respectively. Transaction costs of $0.9 million were incurred for the nine months ended September 30, 2016 , and are included in restructuring and integration costs on the consolidated statements of operations. Simmons’ results of operations have been included in the Company's consolidated financial statements prospectively beginning on the date of acquisition. The acquisition has been fully integrated with the Company's existing operations. Accordingly, post-acquisition revenues and net income are not discernible. The following unaudited pro forma financial data assumes the acquisition had occurred on January 1, 2015, the beginning of the prior annual period in which the acquisition occurred. Pro forma results have been prepared by adjusting the Company's historical results to include Simmons' results of operations adjusted for the following changes: amortization expense was adjusted to account for the acquisition-date fair value of intangible assets; compensation and benefits expenses were adjusted to reflect such expenses based on the Company’s compensation arrangements and the restricted stock issued as equity consideration; and the income tax effect of applying the Company's statutory tax rates to Simmons’ results of operations. The Company's unaudited pro forma information presented does not necessarily reflect the results of operations that would have resulted had the acquisition been completed at the beginning of the applicable period presented, does not contemplate anticipated operational efficiencies of the combined entities, nor does it indicate the results of operations in future periods. Nine Months Ended (Dollars in thousands) September 30, 2016 Net revenues $ 532,683 Net income applicable to Piper Jaffray Companies 15,642 |
Financial Instruments and Other
Financial Instruments and Other Inventory Positions Owned and Financial Instruments and Other Inventory Positions Sold, but Not Yet Purchased | 9 Months Ended |
Sep. 30, 2017 | |
Financial Instruments Owned and Sold, Not yet Purchased [Abstract] | |
Financial Instruments and Other Inventory Positions Owned and Financial Instruments and Other Inventory Positions Sold, Not Yet Purchased | Financial Instruments and Other Inventory Positions Owned and Financial Instruments and Other Inventory Positions Sold, but Not Yet Purchased September 30, December 31, (Dollars in thousands) 2017 2016 Financial instruments and other inventory positions owned: Corporate securities: Equity securities $ 66,904 $ 6,363 Convertible securities 70,900 103,486 Fixed income securities 27,480 21,018 Municipal securities: Taxable securities 37,073 63,090 Tax-exempt securities 374,348 559,329 Short-term securities 177,873 35,175 Mortgage-backed securities 4,321 5,638 U.S. government agency securities 300,832 205,685 U.S. government securities 17,205 29,970 Derivative contracts 22,392 29,217 Total financial instruments and other inventory positions owned 1,099,328 1,058,971 Less noncontrolling interests (1) — (57,700 ) $ 1,099,328 $ 1,001,271 Financial instruments and other inventory positions sold, but not yet purchased: Corporate securities: Equity securities $ 100,403 $ 89,453 Fixed income securities 21,149 17,324 U.S. government agency securities 26,703 6,723 U.S. government securities 203,995 180,650 Derivative contracts 5,485 5,207 Total financial instruments and other inventory positions sold, but not yet purchased 357,735 299,357 Less noncontrolling interests (2) — (631 ) $ 357,735 $ 298,726 (1) Noncontrolling interests attributable to third party ownership in a consolidated municipal bond fund consist of $1.3 million of taxable municipal securities, $55.2 million of tax-exempt municipal securities, and $1.2 million of derivative contracts as of December 31, 2016 . (2) Noncontrolling interests attributable to third party ownership in a consolidated municipal bond fund consist of U.S. government securities as of December 31, 2016 . At September 30, 2017 and December 31, 2016 , financial instruments and other inventory positions owned in the amount of $335.4 million and $594.4 million , respectively, had been pledged as collateral for short-term financings and repurchase agreements. Financial instruments and other inventory positions sold, but not yet purchased represent obligations of the Company to deliver the specified security at the contracted price, thereby creating a liability to purchase the security in the market at prevailing prices. The Company is obligated to acquire the securities sold short at prevailing market prices, which may exceed the amount reflected on the consolidated statements of financial condition. The Company economically hedges changes in the market value of its financial instruments and other inventory positions owned using inventory positions sold, but not yet purchased, interest rate derivatives, credit default swap index contracts, U.S. treasury bond futures and exchange traded options. Derivative Contract Financial Instruments The Company uses interest rate swaps, interest rate locks, credit default swap index contracts, U.S. treasury bond futures and equity option contracts as a means to manage risk in certain inventory positions. The Company also enters into interest rate swaps to facilitate customer transactions. The following describes the Company’s derivatives by the type of transaction or security the instruments are economically hedging. Customer matched-book derivatives: The Company enters into interest rate derivative contracts in a principal capacity as a dealer to satisfy the financial needs of its customers. The Company simultaneously enters into an interest rate derivative contract with a third party for the same notional amount to hedge the interest rate and credit risk of the initial client interest rate derivative contract. In certain limited instances, the Company has only hedged interest rate risk with a third party, and retains uncollateralized credit risk as described below. The instruments use interest rates based upon either the London Interbank Offer Rate ("LIBOR") index or the Securities Industry and Financial Markets Association ("SIFMA") index. Trading securities derivatives: The Company enters into interest rate derivative contracts and uses U.S. treasury bond futures to hedge interest rate and market value risks associated with its fixed income securities. These instruments use interest rates based upon either the Municipal Market Data ("MMD") index, LIBOR or the SIFMA index. The Company also enters into credit default swap index contracts to hedge credit risk associated with its taxable fixed income securities and option contracts to hedge market value risk associated with its convertible securities. Derivatives are reported on a net basis by counterparty (i.e., the net payable or receivable for derivative assets and liabilities for a given counterparty) when a legal right of offset exists and on a net basis by cross product when applicable provisions are stated in master netting agreements. Cash collateral received or paid is netted on a counterparty basis, provided a legal right of offset exists. The total absolute notional contract amount, representing the absolute value of the sum of gross long and short derivative contracts, provides an indication of the volume of the Company's derivative activity and does not represent gains and losses. The following table presents the gross fair market value and the total absolute notional contract amount of the Company's outstanding derivative instruments, prior to counterparty netting, by asset or liability position: September 30, 2017 December 31, 2016 (Dollars in thousands) Derivative Derivative Notional Derivative Derivative Notional Derivative Category Assets (1) Liabilities (2) Amount Assets (1) Liabilities (2) Amount Interest rate Customer matched-book $ 270,149 $ 255,102 $ 3,178,725 $ 288,955 $ 272,819 $ 3,330,207 Trading securities 686 4,456 345,850 13,952 1,707 423,550 Credit default swap index Trading securities — — — — 127 7,470 $ 270,835 $ 259,558 $ 3,524,575 $ 302,907 $ 274,653 $ 3,761,227 (1) Derivative assets are included within financial instruments and other inventory positions owned on the consolidated statements of financial condition. (2) Derivative liabilities are included within financial instruments and other inventory positions sold, but not yet purchased on the consolidated statements of financial condition. The Company’s derivative contracts do not qualify for hedge accounting, therefore, unrealized gains and losses are recorded on the consolidated statements of operations. The gains and losses on the related economically hedged inventory positions are not disclosed below as they are not in qualifying hedging relationships. The following table presents the Company’s unrealized gains/(losses) on derivative instruments: Three Months Ended Nine Months Ended (Dollars in thousands) September 30, September 30, Derivative Category Operations Category 2017 2016 2017 2016 Interest rate derivative contract Investment banking $ (300 ) $ (1,901 ) $ (1,076 ) $ (3,953 ) Interest rate derivative contract Institutional brokerage 1,627 8,438 (16,028 ) 819 Credit default swap index contract Institutional brokerage 4,304 74 4,482 3,958 Futures and equity option derivative contracts Institutional brokerage — 107 — 255 $ 5,631 $ 6,718 $ (12,622 ) $ 1,079 Credit risk associated with the Company’s derivatives is the risk that a derivative counterparty will not perform in accordance with the terms of the applicable derivative contract. Credit exposure associated with the Company’s derivatives is driven by uncollateralized market movements in the fair value of the contracts with counterparties and is monitored regularly by the Company’s financial risk committee. The Company considers counterparty credit risk in determining derivative contract fair value. The majority of the Company’s derivative contracts are substantially collateralized by its counterparties, who are major financial institutions. The Company has a limited number of counterparties who are not required to post collateral. Based on market movements, the uncollateralized amounts representing the fair value of the derivative contract can become material, exposing the Company to the credit risk of these counterparties. As of September 30, 2017 , the Company had $20.8 million of uncollateralized credit exposure with these counterparties (notional contract amount of $181.8 million ), including $15.4 million of uncollateralized credit exposure with one counterparty. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Based on the nature of the Company’s business and its role as a "dealer" in the securities industry or as a manager of alternative asset management funds, the fair values of its financial instruments are determined internally. The Company’s processes are designed to ensure that the fair values used for financial reporting are based on observable inputs wherever possible. In the event that observable inputs are not available, unobservable inputs are developed based on an evaluation of all relevant empirical market data, including prices evidenced by market transactions, interest rates, credit spreads, volatilities and correlations and other security-specific information. Valuation adjustments related to illiquidity or counterparty credit risk are also considered. In estimating fair value, the Company may utilize information provided by third party pricing vendors to corroborate internally-developed fair value estimates. The Company employs specific control processes to determine the reasonableness of the fair value of its financial instruments. The Company’s processes are designed to ensure that the internally-estimated fair values are accurately recorded and that the data inputs and the valuation techniques used are appropriate, consistently applied, and that the assumptions are reasonable and consistent with the objective of determining fair value. Individuals outside of the trading departments perform independent pricing verification reviews as of each reporting date. The Company has established parameters which set forth when the fair value of securities are independently verified. The selection parameters are generally based upon the type of security, the level of estimation risk of a security, the materiality of the security to the Company’s financial statements, changes in fair value from period to period, and other specific facts and circumstances of the Company’s securities portfolio. In evaluating the initial internally-estimated fair values made by the Company’s traders, the nature and complexity of securities involved (e.g., term, coupon, collateral, and other key drivers of value), level of market activity for securities, and availability of market data are considered. The independent price verification procedures include, but are not limited to, analysis of trade data (both internal and external where available), corroboration to the valuation of positions with similar characteristics, risks and components, or comparison to an alternative pricing source, such as a discounted cash flow model. The Company’s valuation committee, comprised of members of senior management and risk management, provides oversight and overall responsibility for the internal control processes and procedures related to fair value measurements. The following is a description of the valuation techniques used to measure fair value. Cash Equivalents Cash equivalents include highly liquid investments with original maturities of 90 days or less. Actively traded money market funds are measured at their net asset value and classified as Level I. Financial Instruments and Other Inventory Positions Owned The Company records financial instruments and other inventory positions owned and financial instruments and other inventory positions sold, but not yet purchased at fair value on the consolidated statements of financial condition with unrealized gains and losses reflected on the consolidated statements of operations. Equity securities – Exchange traded equity securities are valued based on quoted prices from the exchange for identical assets or liabilities as of the period-end date. To the extent these securities are actively traded and valuation adjustments are not applied, they are categorized as Level I. Non-exchange traded equity securities (principally hybrid preferred securities) are measured primarily using broker quotations, prices observed for recently executed market transactions and internally-developed fair value estimates based on observable inputs and are categorized within Level II of the fair value hierarchy. Convertible securities – Convertible securities are valued based on observable trades, when available. Accordingly, these convertible securities are categorized as Level II. Corporate fixed income securities – Fixed income securities include corporate bonds which are valued based on recently executed market transactions of comparable size, internally-developed fair value estimates based on observable inputs, or broker quotations. Accordingly, these corporate bonds are categorized as Level II. Taxable municipal securities – Taxable municipal securities are valued using recently executed observable trades or market price quotations and therefore are generally categorized as Level II. Certain illiquid taxable municipal securities are valued using market data for comparable securities (maturity and sector) and management judgment to infer an appropriate current yield or other model-based valuation techniques deemed appropriate by management based on the specific nature of the individual security and are therefore categorized as Level III. Tax-exempt municipal securities – Tax-exempt municipal securities are valued using recently executed observable trades or market price quotations and therefore are generally categorized as Level II. Certain illiquid tax-exempt municipal securities are valued using market data for comparable securities (maturity and sector) and management judgment to infer an appropriate current yield or other model-based valuation techniques deemed appropriate by management based on the specific nature of the individual security and are therefore categorized as Level III. Short-term municipal securities – Short-term municipal securities include auction rate securities, variable rate demand notes, and other short-term municipal securities. Variable rate demand notes and other short-term municipal securities are valued using recently executed observable trades or market price quotations and therefore are generally categorized as Level II. Auction rate securities with limited liquidity are categorized as Level III and are valued using discounted cash flow models with unobservable inputs such as the Company’s expected recovery rate on the securities. Mortgage-backed securities – Mortgage-backed securities are valued using observable trades, when available. Certain mortgage-backed securities are valued using models where inputs to the model are directly observable in the market, or can be derived principally from or corroborated by observable market data. These mortgage-backed securities are categorized as Level II. Other mortgage-backed securities, which are principally collateralized by residential mortgages, have experienced low volumes of executed transactions resulting in less observable transaction data. Certain mortgage-backed securities collateralized by residential mortgages are valued using cash flow models that utilize unobservable inputs including credit default rates, prepayment rates, loss severity and valuation yields. As judgment is used to determine the range of these inputs, these mortgage-backed securities are categorized as Level III. U.S. government agency securities – U.S. government agency securities include agency debt bonds and mortgage bonds. Agency debt bonds are valued by using either direct price quotes or price quotes for comparable bond securities and are categorized as Level II. Mortgage bonds include bonds secured by mortgages, mortgage pass-through securities, agency collateralized mortgage-obligation ("CMO") securities and agency interest-only securities. Mortgage pass-through securities, CMO securities and interest-only securities are valued using recently executed observable trades or other observable inputs, such as prepayment speeds and therefore are generally categorized as Level II. Mortgage bonds are valued using observable market inputs, such as market yields ranging from 205 - 853 basis points ("bps") on spreads over U.S. treasury securities, or models based upon prepayment expectations ranging from 0% - 18% conditional prepayment rate ("CPR"). These securities are categorized as Level II. U.S. government securities – U.S. government securities include highly liquid U.S. treasury securities which are generally valued using quoted market prices and therefore categorized as Level I. The Company does not transact in securities of countries other than the U.S. government. Derivatives – Derivative contracts include interest rate swaps, interest rate locks, credit default swap index contracts, U.S. treasury bond futures and equity option contracts. These instruments derive their value from underlying assets, reference rates, indices or a combination of these factors. The Company's equity option derivative contracts are valued based on quoted prices from the exchange for identical assets or liabilities as of the period-end date. To the extent these contracts are actively traded and valuation adjustments are not applied, they are categorized as Level I. The Company’s credit default swap index contracts are valued using market price quotations and are classified as Level II. The majority of the Company’s interest rate derivative contracts, including both interest rate swaps and interest rate locks, are valued using market standard pricing models based on the net present value of estimated future cash flows. The valuation models used do not involve material subjectivity as the methodologies do not entail significant judgment and the pricing inputs are market observable, including contractual terms, yield curves and measures of volatility. These instruments are classified as Level II within the fair value hierarchy. Certain interest rate locks transact in less active markets and were valued using valuation models that included the previously mentioned observable inputs and certain unobservable inputs that required significant judgment, such as the premium over the MMD curve. These instruments are classified as Level III. Investments The Company’s investments valued at fair value include equity investments in private companies and partnerships, investments in registered mutual funds, warrants of public and private companies and private company debt. Investments in registered mutual funds are valued based on quoted prices on active markets and classified as Level I. Company-owned warrants, which have a cashless exercise option, are valued based upon the Black-Scholes option-pricing model and certain unobservable inputs. The Company applies a liquidity discount to the value of its warrants in public and private companies. For warrants in private companies, valuation adjustments, based upon management’s judgment, are made to account for differences between the measured security and the stock volatility factors of comparable companies. Company-owned warrants are reported as Level III assets. Investments in private companies are valued based on an assessment of each underlying security, considering rounds of financing, third party transactions and market-based information, including comparable company transactions, trading multiples (e.g., multiples of revenue and earnings before interest, taxes, depreciation and amortization ("EBITDA")) and changes in market outlook, among other factors. These securities are generally categorized as Level III. Fair Value Option – The fair value option permits the irrevocable fair value option election on an instrument-by-instrument basis at initial recognition of an asset or liability or upon an event that gives rise to a new basis of accounting for that instrument. The fair value option was elected for certain merchant banking and other investments at inception to reflect economic events in earnings on a timely basis. Merchant banking and other equity investments of $13.9 million and $19.7 million , included within investments on the consolidated statements of financial condition, are accounted for at fair value and are classified as Level III assets at September 30, 2017 and December 31, 2016 , respectively. The realized and unrealized net gains from fair value changes included in earnings as a result of electing to apply the fair value option to certain financial assets were $1.4 million and $1.0 million for the nine months ended September 30, 2017 and 2016 , respectively. The following table summarizes quantitative information about the significant unobservable inputs used in the fair value measurement of the Company’s Level III financial instruments as of September 30, 2017 : Valuation Weighted Technique Unobservable Input Range Average Assets: Financial instruments and other inventory positions owned: Municipal securities: Tax-exempt securities Discounted cash flow Expected recovery rate (% of par) (2) 5 - 60% 19.4% Short-term securities Discounted cash flow Expected recovery rate (% of par) (2) 66 - 94% 91.0% Mortgage-backed securities: Collateralized by residential mortgages Discounted cash flow Credit default rates (3) 1 - 10% 2.7% Prepayment rates (4) 2 - 18% 10.0% Loss severity (3) 5 - 50% 32.6% Valuation yields (3) 5 - 6% 5.3% Derivative contracts: Interest rate locks Discounted cash flow Premium over the MMD curve (1) 4 - 20 bps 11.3 bps Investments at fair value: Equity securities in private companies Market approach Revenue multiple (2) 2 - 6 times 4.8 times EBITDA multiple (2) 10 - 15 times 12.2 times Liabilities: Financial instruments and other inventory positions sold, but not yet purchased: Derivative contracts: Interest rate locks Discounted cash flow Premium over the MMD curve (1) 1 - 21 bps 10.9 bps Sensitivity of the fair value to changes in unobservable inputs: (1) Significant increase/(decrease) in the unobservable input in isolation would result in a significantly lower/(higher) fair value measurement. (2) Significant increase/(decrease) in the unobservable input in isolation would result in a significantly higher/(lower) fair value measurement. (3) Significant changes in any of these inputs in isolation could result in a significantly different fair value. Generally, a change in the assumption used for credit default rates is accompanied by a directionally similar change in the assumption used for the loss severity and a directionally inverse change in the assumption for valuation yields. (4) The potential impact of changes in prepayment rates on fair value is dependent on other security-specific factors, such as the par value and structure. Changes in the prepayment rates may result in directionally similar or directionally inverse changes in fair value depending on whether the security trades at a premium or discount to the par value. The following table summarizes the valuation of the Company’s financial instruments by pricing observability levels defined in FASB Accounting Standards Codification Topic 820, "Fair Value Measurement" ("ASC 820") as of September 30, 2017 : Counterparty and Cash Collateral (Dollars in thousands) Level I Level II Level III Netting (1) Total Assets: Financial instruments and other inventory positions owned: Corporate securities: Equity securities $ 2,466 $ 64,438 $ — $ — $ 66,904 Convertible securities — 70,900 — — 70,900 Fixed income securities — 27,480 — — 27,480 Municipal securities: Taxable securities — 37,073 — — 37,073 Tax-exempt securities — 373,598 750 — 374,348 Short-term securities — 177,168 705 — 177,873 Mortgage-backed securities — — 4,321 — 4,321 U.S. government agency securities — 300,832 — — 300,832 U.S. government securities 17,205 — — — 17,205 Derivative contracts — 270,149 686 (248,443 ) 22,392 Total financial instruments and other inventory positions owned 19,671 1,321,638 6,462 (248,443 ) 1,099,328 Cash equivalents 4,112 — — — 4,112 Investments at fair value 37,778 — 130,160 (2) — 167,938 Total assets $ 61,561 $ 1,321,638 $ 136,622 $ (248,443 ) $ 1,271,378 Liabilities: Financial instruments and other inventory positions sold, but not yet purchased: Corporate securities: Equity securities $ 100,181 $ 222 $ — $ — $ 100,403 Fixed income securities — 21,149 — — 21,149 U.S. government agency securities — 26,703 — — 26,703 U.S. government securities 164,084 39,911 — — 203,995 Derivative contracts — 255,308 4,250 (254,073 ) 5,485 Total financial instruments and other inventory positions sold, but not yet purchased $ 264,265 $ 343,293 $ 4,250 $ (254,073 ) $ 357,735 (1) Represents cash collateral and the impact of netting on a counterparty basis. The Company had no securities posted as collateral to its counterparties. (2) Noncontrolling interests of $44.9 million are attributable to third party ownership in consolidated merchant banking and senior living funds. The following table summarizes the valuation of the Company’s financial instruments by pricing observability levels defined in ASC 820 as of December 31, 2016 : Counterparty and Cash Collateral (Dollars in thousands) Level I Level II Level III Netting (1) Total Assets: Financial instruments and other inventory positions owned: Corporate securities: Equity securities $ 82 $ 6,281 $ — $ — $ 6,363 Convertible securities — 103,486 — — 103,486 Fixed income securities — 21,018 — — 21,018 Municipal securities: Taxable securities — 60,404 2,686 — 63,090 Tax-exempt securities — 558,252 1,077 — 559,329 Short-term securities — 34,431 744 — 35,175 Mortgage-backed securities — 273 5,365 — 5,638 U.S. government agency securities — 205,685 — — 205,685 U.S. government securities 29,970 — — — 29,970 Derivative contracts — 288,955 13,952 (273,690 ) 29,217 Total financial instruments and other inventory positions owned 30,052 1,278,785 23,824 (273,690 ) 1,058,971 Cash equivalents 768 — — — 768 Investments at fair value 32,783 — 123,319 (2) — 156,102 Total assets $ 63,603 $ 1,278,785 $ 147,143 $ (273,690 ) $ 1,215,841 Liabilities: Financial instruments and other inventory positions sold, but not yet purchased: Corporate securities: Equity securities $ 89,453 $ — $ — $ — $ 89,453 Fixed income securities — 17,324 — — 17,324 U.S. government agency securities — 6,723 — — 6,723 U.S. government securities 180,650 — — — 180,650 Derivative contracts — 273,166 1,487 (269,446 ) 5,207 Total financial instruments and other inventory positions sold, but not yet purchased $ 270,103 $ 297,213 $ 1,487 $ (269,446 ) $ 299,357 (1) Represents cash collateral and the impact of netting on a counterparty basis. The Company had no securities posted as collateral to its counterparties. (2) Noncontrolling interests of $45.1 million are attributable to third party ownership in consolidated merchant banking and senior living funds. The Company’s Level III assets were $136.6 million and $147.1 million , or 10.7 percent and 12.1 percent of financial instruments measured at fair value at September 30, 2017 and December 31, 2016 , respectively. The value of transfers between levels are recognized at the beginning of the reporting period. There were no significant transfers between Level I, Level II or Level III for the nine months ended September 30, 2017 . The following tables summarize the changes in fair value associated with Level III financial instruments held at the beginning or end of the periods presented: Unrealized gains/ (losses) for assets/ Balance at Realized Unrealized Balance at liabilities held at June 30, Transfers Transfers gains/ gains/ September 30, September 30, (Dollars in thousands) 2017 Purchases Sales in out (losses) (1) (losses) (1) 2017 2017 (1) Assets: Financial instruments and other inventory positions owned: Municipal securities: Tax-exempt securities $ 1,117 $ — $ (267 ) $ — $ — $ — $ (100 ) $ 750 $ (100 ) Short-term securities 721 — — — — — (16 ) 705 (16 ) Mortgage-backed securities 4,251 — — — — — 70 4,321 70 Derivative contracts 383 105 — — — (105 ) 303 686 686 Total financial instruments and other inventory positions owned 6,472 105 (267 ) — — (105 ) 257 6,462 640 Investments at fair value 113,885 18,250 — — — — (1,975 ) 130,160 (1,975 ) Total assets $ 120,357 $ 18,355 $ (267 ) $ — $ — $ (105 ) $ (1,718 ) $ 136,622 $ (1,335 ) Liabilities: Financial instruments and other inventory positions sold, but not yet purchased: Derivative contracts $ 5,573 $ — $ 3,461 $ — $ — $ (3,461 ) $ (1,323 ) $ 4,250 $ 1,430 Total financial instruments and other inventory positions sold, but not yet purchased $ 5,573 $ — $ 3,461 $ — $ — $ (3,461 ) $ (1,323 ) $ 4,250 $ 1,430 (1) Realized and unrealized gains/(losses) related to financial instruments, with the exception of customer matched-book derivatives, are reported in institutional brokerage on the consolidated statements of operations. Realized and unrealized gains/(losses) related to customer matched-book derivatives are reported in investment banking. Realized and unrealized gains/(losses) related to investments are reported in investment banking revenues or investment income/(loss) on the consolidated statements of operations. Unrealized gains/ (losses) for assets/ Balance at Realized Unrealized Balance at liabilities held at June 30, Transfers Transfers gains/ gains/ September 30, September 30, (Dollars in thousands) 2016 Purchases Sales in out (losses) (1) (losses) (1) 2016 2016 (1) Assets: Financial instruments and other inventory positions owned: Municipal securities: Tax-exempt securities $ 1,177 $ — $ — $ — $ — $ — $ — $ 1,177 $ — Short-term securities 748 — — — — — — 748 — Mortgage-backed securities 56,053 — (44,006 ) — — 1,440 190 13,677 111 Derivative contracts 18 — — — — — 942 960 960 Total financial instruments and other inventory positions owned 57,996 — (44,006 ) — — 1,440 1,132 16,562 1,071 Investments at fair value 122,786 12,011 (21,309 ) — — 10,336 (7,709 ) 116,115 2,570 Total assets $ 180,782 $ 12,011 $ (65,315 ) $ — $ — $ 11,776 $ (6,577 ) $ 132,677 $ 3,641 Liabilities: Financial instruments and other inventory positions sold, but not yet purchased: Derivative contracts $ 14,785 $ (5,922 ) $ 171 $ — $ — $ 5,751 $ (7,497 ) $ 7,288 $ (1,263 ) Total financial instruments and other inventory positions sold, but not yet purchased $ 14,785 $ (5,922 ) $ 171 $ — $ — $ 5,751 $ (7,497 ) $ 7,288 $ (1,263 ) (1) Realized and unrealized gains/(losses) related to financial instruments, with the exception of customer matched-book derivatives, are reported in institutional brokerage on the consolidated statements of operations. Realized and unrealized gains/(losses) related to customer matched-book derivatives are reported in investment banking. Realized and unrealized gains/(losses) related to investments are reported in investment banking revenues or investment income/(loss) on the consolidated statements of operations. Unrealized gains/ (losses) for assets/ Balance at Realized Unrealized Balance at liabilities held at December 31, Transfers Transfers gains/ gains/ September 30, September 30, (Dollars in thousands) 2016 Purchases Sales in out (losses) (1) (losses) (1) 2017 2017 (1) Assets: Financial instruments and other inventory positions owned: Municipal securities: Taxable securities $ 2,686 $ — $ (2,703 ) $ — $ — $ 716 $ (699 ) $ — $ — Tax-exempt securities 1,077 — (267 ) — — — (60 ) 750 (60 ) Short-term securities 744 — (25 ) — — 2 (16 ) 705 (16 ) Mortgage-backed securities 5,365 997 (1,854 ) — — 296 (483 ) 4,321 (90 ) Derivative contracts 13,952 350 (11,978 ) — — 11,628 (13,266 ) 686 686 Total financial instruments and other inventory positions owned 23,824 1,347 (16,827 ) — — 12,642 (14,524 ) 6,462 520 Investments at fair value 123,319 25,444 (25,211 ) — (601 ) 9,399 (2,190 ) 130,160 7,704 Total assets $ 147,143 $ 26,791 $ (42,038 ) $ — $ (601 ) $ 22,041 $ (16,714 ) $ 136,622 $ 8,224 Liabilities: Financial instruments and other inventory positions sold, but not yet purchased: Derivative contracts $ 1,487 $ (719 ) $ 11,219 $ — $ — $ (10,500 ) $ 2,763 $ 4,250 $ 4,125 Total financial instruments and other inventory positions sold, but not yet purchased $ 1,487 $ (719 ) $ 11,219 $ — $ — $ (10,500 ) $ 2,763 $ 4,250 $ 4,125 (1) Realized and unrealized gains/(losses) related to financial instruments, with the exception of customer matched-book derivatives, are reported in institutional brokerage on the consolidated statements of operations. Realized and unrealized gains/(losses) related to customer matched-book derivatives are reported in investment banking. Realized and unrealized gains/(losses) related to investments are reported in investment banking revenues or investment income/(loss) on the consolidated statements of operations. Unrealized gains/ (losses) for assets/ Balance at Realized Unrealized Balance at liabilities held at December 31, Transfers Transfers gains/ gains/ September 30, September 30, (Dollars in thousands) 2015 Purchases Sales in out (losses) (1) (losses) (1) 2016 2016 (1) Assets: Financial instruments and other inventory positions owned: Municipal securities: Taxable securities $ 5,816 $ — $ (611 ) $ — $ (5,216 ) $ 11 $ — $ — $ — Tax-exempt securities 1,177 — — — — — — 1,177 — Short-term securities 720 — — — — — 28 748 28 Mortgage-backed securities 121,124 26,519 (133,913 ) — — 3,285 (3,338 ) 13,677 241 Derivative contracts — 246 — — — (246 ) 960 960 960 Total financial instruments and other inventory positions owned 128,837 26,765 (134,524 ) — (5,216 ) 3,050 (2,350 ) 16,562 1,229 Investments at fair value 109,444 27,683 (21,309 ) — (9,088 ) 10,336 (951 ) 116,115 (1,223 ) Total assets $ 238,281 $ 54,448 $ (155,833 ) $ — $ (14,304 ) $ 13,386 $ (3,301 ) $ 132,677 $ 6 Liabilities: Financial instruments and other inventory positions sold, but not yet purchased: Derivative contracts $ 7,148 $ (23,700 ) $ 171 $ — $ — $ 23,529 $ 140 $ 7,288 $ 7,288 Total financial instruments and other inventory positions sold, but not yet purchased $ 7,148 $ (23,700 ) $ 171 $ — $ — $ 23,529 $ 140 $ 7,288 $ 7,288 (1) Realized and unrealized gains/(losses) related to financial instruments, with the exception of customer matched-book derivatives, are reported in institutional brokerage on the consolidated statements of operations. Realized and unrealized gains/(losses) related to customer matched-book derivatives are reported in investment banking. Realized and unrealized gains/(losses) related to investments are reported in investment banking revenues or investment income/(loss) on the consolidated statements of operations. The carrying values of the Company’s cash, securities either purchased or sold under agreements to resell, receivables and payables either from or to customers and brokers, dealers and clearing organizations and short-term financings approximate fair value due to their liquid or short-term nature. Non-Recurring Fair Value Measurement During the third quarter of 2017, the Company recorded a goodwill impairment charge of $114.4 million representing the full value of goodwill attributable to the asset management reporting unit. The fair value measurement used in the analysis was calculated using the income approach (discounted cash flow method) and market approach (earnings multiples of public company comparables). The discounted cash flow model was calculated using unobservable inputs, such as revenue and EBITDA forecasts, which are classified as Level III within the fair value hierarchy. See Note 11 for further discussion. |
Variable Interest Entities
Variable Interest Entities | 9 Months Ended |
Sep. 30, 2017 | |
Variable Interest Entity, Reporting Entity Involvement, Maximum Loss Exposure, Determination Methodology and Factors [Abstract] | |
Variable Interest Entities | Variable Interest Entities ("VIEs") The Company has investments in and/or acts as the managing partner of various partnerships, limited liability companies, and registered mutual funds. These entities were established for the purpose of investing in securities of public or private companies, or municipal debt obligations, or providing financing to senior living facilities, and were initially financed through the capital commitments or seed investments of the members. VIEs are entities in which equity investors lack the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities. The determination as to whether an entity is a VIE is based on the structure and nature of each entity. The Company also considers other characteristics such as the power through voting rights or similar rights to direct the activities of an entity that most significantly impact the entity’s economic performance and how the entity is financed. The Company is required to consolidate all VIEs for which it is considered to be the primary beneficiary. The determination as to whether the Company is considered to be the primary beneficiary is based on whether the Company has both the power to direct the activities of the VIE that most significantly impact the entity’s economic performance and the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE. Consolidated VIEs The Company’s consolidated VIEs at September 30, 2017 include certain alternative asset management funds in which the Company has an investment and, as the managing partner, is deemed to have both the power to direct the most significant activities of the funds and the right to receive benefits (or the obligation to absorb losses) that could potentially be significant to these funds. The following table presents information about the carrying value of the assets and liabilities of the VIEs which are consolidated by the Company and included on the consolidated statements of financial condition at September 30, 2017 . The assets can only be used to settle the liabilities of the respective VIE, and the creditors of the VIEs do not have recourse to the general credit of the Company. The assets and liabilities are presented prior to consolidation, and thus a portion of these assets and liabilities are eliminated in consolidation. Alternative Asset (Dollars in thousands) Management Funds Assets: Receivables from brokers, dealers and clearing organizations $ 15,765 Financial instruments and other inventory positions owned and pledged as collateral 149,632 Investments 112,834 Other assets 4,621 Total assets $ 282,852 Liabilities: Short-term financing $ 76,797 Payables to brokers, dealers and clearing organizations 46,627 Financial instruments and other inventory positions sold, but not yet purchased 21,813 Other liabilities and accrued expenses 18,344 Total liabilities $ 163,581 The Company has investments in a grantor trust which was established as part of a nonqualified deferred compensation plan. The Company is the primary beneficiary of the grantor trust. Accordingly, the assets and liabilities of the grantor trust are consolidated by the Company on the consolidated statements of financial condition. See Note 16 for additional information on the nonqualified deferred compensation plan. Nonconsolidated VIEs The Company determined it is not the primary beneficiary of certain VIEs and accordingly does not consolidate them. These VIEs had net assets approximating $0.6 billion and $0.8 billion at September 30, 2017 and December 31, 2016 , respectively. The Company’s exposure to loss from these VIEs is $6.4 million , which is the carrying value of its capital contributions recorded in investments on the consolidated statements of financial condition at September 30, 2017 . The Company had no liabilities related to these VIEs at September 30, 2017 and December 31, 2016 , respectively. Furthermore, the Company has not provided financial or other support to these VIEs that it was not previously contractually required to provide as of September 30, 2017 . |
Receivables from and Payables t
Receivables from and Payables to Brokers, Dealers and Clearing Organizations | 9 Months Ended |
Sep. 30, 2017 | |
Brokers and Dealers [Abstract] | |
Receivables from and Payables to Brokers, Dealers and Clearing Organizations | Receivables from and Payables to Brokers, Dealers and Clearing Organizations September 30, December 31, (Dollars in thousands) 2017 2016 Receivable arising from unsettled securities transactions $ 15,765 $ 132,724 Deposits paid for securities borrowed — 27,573 Receivable from clearing organizations 36,891 3,293 Deposits with clearing organizations 12,409 35,713 Securities failed to deliver — 975 Other 15,815 12,452 Total receivables from brokers, dealers and clearing organizations $ 80,880 $ 212,730 September 30, December 31, (Dollars in thousands) 2017 2016 Payable arising from unsettled securities transactions $ 49,160 $ 13,948 Payable to clearing organizations — 15,893 Securities failed to receive — 3,043 Other 5,105 7,958 Total payables to brokers, dealers and clearing organizations $ 54,265 $ 40,842 The Company has established an arrangement to obtain financing from Pershing related to the majority of its trading activities. Under the Company's fully disclosed clearing agreement, the majority of its securities inventories and all of its customer activities are held by or cleared through Pershing. Financing under this arrangement is secured primarily by securities, and collateral limitations could reduce the amount of funding available under this arrangement. The funding is at the discretion of Pershing and could be denied. The Company's clearing arrangement activities are recorded net from trading activity. The Company's fully disclosed clearing agreement includes a covenant requiring Piper Jaffray to maintain excess net capital of $120 million . Deposits paid for securities borrowed approximate the market value of the securities. Securities failed to deliver and receive represent the contract value of securities that have not been delivered or received by the Company on settlement date. |
Collateralized Securities Trans
Collateralized Securities Transactions | 9 Months Ended |
Sep. 30, 2017 | |
Disclosure of Repurchase Agreements [Abstract] | |
Collateralized Securities Transactions | Collateralized Securities Transactions As discussed in Note 1 , Piper Jaffray transitioned from a self clearing securities broker dealer to a fully disclosed clearing model in the third quarter of 2017. The Company’s current financing and prior customer securities activities involve the Company using securities as collateral. In the event that the counterparty does not meet its contractual obligation to return securities used as collateral (e.g., pursuant to the terms of a repurchase agreement), or customers did not deposit additional securities or cash for margin when required, the Company may be exposed to the risk of reacquiring the securities or selling the securities at unfavorable market prices in order to satisfy its obligations. The Company seeks to control this risk by monitoring the market value of securities pledged or used as collateral on a daily basis and requiring adjustments in the event of excess market exposure. The Company also uses unaffiliated third party custodians to administer the underlying collateral for certain of its short-term financings to mitigate risk. In a reverse repurchase agreement the Company purchases financial instruments from a seller, typically in exchange for cash, and agrees to resell the same or substantially the same financial instruments to the seller at a stated price plus accrued interest in the future. In a repurchase agreement, the Company sells financial instruments to a buyer, typically for cash, and agrees to repurchase the same or substantially the same financial instruments from the buyer at a stated price plus accrued interest at a future date. Even though repurchase and reverse repurchase agreements involve the legal transfer of ownership of financial instruments, they are accounted for as financing arrangements because they require the financial instruments to be repurchased or resold at maturity of the agreement. In a securities borrowed transaction, the Company borrows securities from a counterparty in exchange for cash. When the Company returns the securities, the counterparty returns the cash. Interest is generally paid periodically over the life of the transaction. Prior to transitioning to a fully disclosed clearing model, the Company obtained securities purchased under agreements to resell, securities borrowed and margin agreements on terms that permit it to repledge or resell the securities to others, typically pursuant to repurchase agreements. The Company obtained securities with a fair value of approximately $192.2 million at December 31, 2016 , of which $185.2 million had been pledged or otherwise transferred to satisfy its commitments under financial instruments and other inventory positions sold, but not yet purchased. Reverse repurchase agreements, repurchase agreements and securities borrowed and loaned are reported on a net basis by counterparty when a legal right of offset exists. The Company had no outstanding securities lending arrangements as of September 30, 2017 or December 31, 2016 . See Note 4 for information related to the Company's offsetting of derivative contracts. |
Investments
Investments | 9 Months Ended |
Sep. 30, 2017 | |
Investments, All Other Investments [Abstract] | |
Investments | Investments The Company’s investments include investments in private companies and partnerships, registered mutual funds, warrants of public and private companies and private company debt. September 30, December 31, (Dollars in thousands) 2017 2016 Investments at fair value $ 167,938 $ 156,102 Investments at cost 3,068 2,755 Investments accounted for under the equity method 8,521 9,200 Total investments 179,527 168,057 Less investments attributable to noncontrolling interests (1) (44,932 ) (45,123 ) $ 134,595 $ 122,934 (1) Noncontrolling interests are attributable to third party ownership in consolidated merchant banking and senior living funds. At September 30, 2017 , investments carried on a cost basis had an estimated fair market value of $4.6 million . Because valuation estimates were based upon management’s judgment, investments carried at cost would be categorized as Level III assets in the fair value hierarchy, if they were carried at fair value. Investments accounted for under the equity method include general and limited partnership interests. The carrying value of these investments is based on the investment vehicle’s net asset value. The net assets of investment partnerships consist of investments in both marketable and non-marketable securities. The underlying investments held by such partnerships are valued based on the estimated fair value determined by management in the Company's capacity as general partner or investor and, in the case of investments in unaffiliated investment partnerships, are based on financial statements prepared by the unaffiliated general partners. |
Other Assets
Other Assets | 9 Months Ended |
Sep. 30, 2017 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Assets | Other Assets September 30, December 31, (Dollars in thousands) 2017 2016 Fee receivables $ 21,968 $ 22,840 Accrued interest receivables 7,612 9,259 Forgivable loans, net 8,422 9,307 Prepaid expenses 5,122 6,363 Secured loan receivables 2,975 6,236 Other 9,344 13,124 Total other assets $ 55,443 $ 67,129 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Capital Asset (Dollars in thousands) Markets Management Total Goodwill Balance at December 31, 2016 $ 81,855 $ 114,363 $ 196,218 Impairment charge — (114,363 ) (114,363 ) Balance at September 30, 2017 $ 81,855 $ — $ 81,855 Intangible assets Balance at December 31, 2016 $ 19,320 $ 17,914 $ 37,234 Amortization of intangible assets (7,633 ) (3,833 ) (11,466 ) Balance at September 30, 2017 $ 11,687 $ 14,081 $ 25,768 The Company tests goodwill and indefinite-life intangible assets for impairment on an annual basis and on an interim basis when circumstances exist that could indicate possible impairment. The Company tests for impairment at the reporting unit level, which is generally one level below its operating segments. The Company has identified two reporting units: capital markets and asset management. When testing for impairment, the Company has the option to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after making an assessment, the Company determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then further analysis is unnecessary. However, if the Company concludes otherwise, then the Company is required to perform a two-step impairment test, which requires management to make judgments in determining what assumptions to use in the calculation. The first step requires a comparison of the fair value of the reporting unit to its carrying value, including allocated goodwill. The estimated fair value of the reporting unit is derived based on valuation techniques that a market participant would use. The Company estimates the fair value of the reporting unit using the income approach (discounted cash flow method) and market approach (earnings and/or transaction multiples). As discussed in Note 2, the Company adopted ASU 2017-04 effective July 1, 2017. ASU 2017-04 eliminates the second step from the goodwill impairment test. Accordingly, the Company will record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value. The Company identified impairment indicators in the third quarter of 2017 related to the asset management reporting unit and performed an interim goodwill impairment test as of July 31, 2017, which resulted in a non-cash goodwill impairment charge of $114.4 million . The fair value of the asset management reporting unit was calculated using the income approach (discounted cash flow method based on revenue and EBITDA forecasts) and market approach (earnings multiples of comparable public companies). The impairment charge resulted from declining profitability in 2017 as decreases in revenues relating to higher fee product offerings have not been fully offset by new revenues on assets gained in lower fee product offerings. The shift in revenue mix is attributable, in part, to the extended cycle of investors favoring passive investment vehicles over active management. The Company also evaluated its intangible assets (indefinite and definite-lived) related to the asset management reporting unit and concluded there was no impairment. |
Short-Term Financing
Short-Term Financing | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Short-Term Financing | Short-Term Financing Outstanding Balance Weighted Average Interest Rate September 30, December 31, September 30, December 31, (Dollars in thousands) 2017 2016 2017 2016 Commercial paper (secured) $ — $ 147,021 N/A 2.12 % Prime broker arrangements 76,797 271,811 1.98 % 1.49 % Total short-term financing $ 76,797 $ 418,832 The Company issues secured commercial paper to fund a portion of its securities inventory. The commercial paper notes ("CP Notes") can be issued with maturities of 27 days to 270 days from the date of issuance. The CP Notes are currently issued under two separate programs, CP Series A and CP Series II A, and are secured by different inventory classes. CP Series III A was discontinued during the third quarter of 2017. The CP Notes are interest bearing or sold at a discount to par with an interest rate based on LIBOR plus an applicable margin. CP Series II A includes a revised covenant that requires the Company’s U.S. broker dealer subsidiary to maintain excess net capital of $100 million . At September 30, 2017 , the Company had no CP Notes outstanding. The Company has established arrangements to obtain financing with prime brokers related to its municipal bond fund and convertible securities. Financing under these arrangements is primarily secured by municipal securities, and collateral limitations could reduce the amount of funding available under the arrangements. Prime broker financing activities are recorded net of receivables from trading activity. The funding is at the discretion of the prime brokers subject to a notice period. The Company has both committed and uncommitted short-term bank line financing available on a secured basis. The Company uses these credit facilities in the ordinary course of business to fund a portion of its daily operations and the amount borrowed under these credit facilities varies daily based on the Company’s funding needs. The Company’s committed short-term bank line financing at September 30, 2017 consisted of a one -year $200 million committed revolving credit facility with U.S. Bank, N.A., which was renewed in December 2016. Advances under this facility are secured by certain marketable securities. The facility includes a covenant that requires the Company’s U.S. broker dealer subsidiary to maintain minimum net capital of $120 million , and the unpaid principal amount of all advances under this facility will be due on December 16, 2017 . The Company pays a nonrefundable commitment fee on the unused portion of the facility on a quarterly basis. At September 30, 2017 , the Company had no advances against this line of credit. The Company’s uncommitted secured line at September 30, 2017 totaled $85 million and is dependent on having appropriate collateral, as determined by the bank agreement, to secure an advance under the line. The availability of the Company’s uncommitted line is subject to approval by the bank each time an advance is requested and may be denied. At September 30, 2017 , the Company had no advances against this line of credit. |
Senior Notes
Senior Notes | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Senior Notes | Senior Notes The Company has entered into variable and fixed rate senior notes with certain entities advised by Pacific Investment Management Company ("PIMCO"). The following table presents the outstanding balance by note class: Outstanding Balance September 30, December 31, (Dollars in thousands) 2017 2016 Class A Notes $ — $ 50,000 Class C Notes 125,000 125,000 Total senior notes $ 125,000 $ 175,000 On October 8, 2015 , the Company entered into a second amended and restated note purchase agreement ("Second Amended and Restated Note Purchase Agreement") under which the Company issued $125 million of fixed rate Class C Notes. The Class C Notes bear interest at an annual fixed rate of 5.06 percent , are payable semi-annually and mature on October 9, 2018 . The unpaid principal amount is due in full on the maturity date and may not be prepaid by the Company. The variable rate Class A Notes were repaid by the Company upon maturity on May 31, 2017 . The Second Amended and Restated Note Purchase Agreement includes customary events of default and covenants that, among other things, require the Company to maintain a minimum consolidated tangible net worth and regulatory net capital, limit the Company's leverage ratio and require the Company to maintain a minimum ratio of operating cash flow to fixed charges. At September 30, 2017 , the Company was in compliance with all covenants. The senior notes are recorded at amortized cost. As of September 30, 2017 , the fair value of the fixed rate Class C Notes was approximately $125.7 million . |
Legal Contingencies
Legal Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal Contingencies | Legal Contingencies The Company has been named as a defendant in various legal actions, including complaints and litigation and arbitration claims, arising from its business activities. Such actions include claims related to securities brokerage and investment banking activities, and certain class actions that primarily allege violations of securities laws and seek unspecified damages, which could be substantial. Also, the Company is involved from time to time in investigations and proceedings by governmental agencies and self-regulatory organizations ("SROs") which could result in adverse judgments, settlement, penalties, fines or other relief. The Company has established reserves for potential losses that are probable and reasonably estimable that may result from pending and potential legal actions, investigations and regulatory proceedings. Reasonably possible losses in excess of amounts accrued at September 30, 2017 are not material. In many cases, however, it is inherently difficult to determine whether any loss is probable or even possible or to estimate the amount or range of any potential loss, particularly where proceedings may be in relatively early stages or where plaintiffs are seeking substantial or indeterminate damages. Matters frequently need to be more developed before a loss or range of loss can reasonably be estimated. Given uncertainties regarding the timing, scope, volume and outcome of pending and potential legal actions, investigations and regulatory proceedings and other factors, the amounts of reserves and ranges of reasonably possible losses are difficult to determine and of necessity subject to future revision. Subject to the foregoing, management of the Company believes, based on currently available information, after consultation with outside legal counsel and taking into account its established reserves, that pending legal actions, investigations and regulatory proceedings will be resolved with no material adverse effect on the consolidated statements of financial condition, results of operations or cash flows of the Company. However, if during any period a potential adverse contingency should become probable or resolved for an amount in excess of the established reserves, the results of operations and cash flows in that period and the financial condition as of the end of that period could be materially adversely affected. In addition, there can be no assurance that material losses will not be incurred from claims that have not yet been brought to the Company’s attention or are not yet determined to be reasonably possible. |
Shareholders' Equity
Shareholders' Equity | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
Shareholders' Equity | Shareholders’ Equity Share Repurchases Effective August 14, 2015, the Company's board of directors authorized the repurchase of up to $150.0 million in common shares through September 30, 2017 . During the nine months ended September 30, 2017 , the Company repurchased 36,936 shares at an average price of $67.62 per share for an aggregate purchase price of $2.5 million related to this authorization. During the nine months ended September 30, 2016 , the Company repurchased 1,536,226 shares at an average price of $38.89 per share for an aggregate purchase price of $59.7 million related to this authorization. This authorization expired on September 30, 2017. On August 10, 2017, the Company's board of directors authorized the repurchase of up to $150.0 million in common shares, effective from September 30, 2017 through September 30, 2019 . The Company also purchases shares of common stock from restricted stock award recipients upon the award vesting as recipients sell shares to meet their employment tax obligations. The Company purchased 308,801 shares and 255,164 shares, or $22.6 million and $10.7 million of the Company’s common stock for this purpose during the nine months ended September 30, 2017 and 2016 , respectively. Issuance of Shares The Company issues common shares out of treasury stock as a result of employee restricted share vesting and exercise transactions as discussed in Note 16 . During the nine months ended September 30, 2017 and 2016 , the Company issued 850,925 shares and 731,758 shares, respectively, related to these obligations. Dividends Beginning in 2017, the Company initiated the payment of a quarterly cash dividend to holders of its common stock. The Company's board of directors determines the declaration and payment of dividends on a quarterly basis, and is free to change the Company's dividend policy at any time. On October 26, 2017 , the board of directors declared a cash dividend of $0.3125 per share to be paid on December 15, 2017 , to shareholders of record as of the close of business on November 29, 2017 . During the nine months ended September 30, 2017, the Company declared and paid dividends of $0.9375 per share, totaling $14.2 million . Noncontrolling Interests The consolidated financial statements include the accounts of Piper Jaffray Companies, its wholly owned subsidiaries and other entities in which the Company has a controlling financial interest. Noncontrolling interests represent equity interests in consolidated entities that are not attributable, either directly or indirectly, to Piper Jaffray Companies. Noncontrolling interests include the minority equity holders’ proportionate share of the equity in merchant banking funds of $35.1 million and a senior living fund aggregating $13.4 million as of September 30, 2017 . As of December 31, 2016 , noncontrolling interests included the minority equity holders’ proportionate share of the equity in a merchant banking fund of $35.0 million , a municipal bond fund with employee investors of $9.2 million and a senior living fund aggregating $12.8 million . Ownership interests in entities held by parties other than the Company’s common shareholders are presented as noncontrolling interests within shareholders’ equity, separate from the Company’s own equity. Revenues, expenses and net income or loss are reported on the consolidated statements of operations on a consolidated basis, which includes amounts attributable to both the Company’s common shareholders and noncontrolling interests. Net income or loss is then allocated between the Company and noncontrolling interests based upon their relative ownership interests. Net income applicable to noncontrolling interests is deducted from consolidated net income to determine net income applicable to the Company. There was no other comprehensive income or loss attributed to noncontrolling interests for the nine months ended September 30, 2017 and 2016 , respectively. The following table presents the changes in shareholders' equity for the nine months ended September 30, 2017 : Common Common Total Shares Shareholders’ Noncontrolling Shareholders’ (Amounts in thousands, except share amounts) Outstanding Equity Interests Equity Balance at December 31, 2016 12,391,970 $ 759,250 $ 57,016 $ 816,266 Net income/(loss) — (15,865 ) 3,217 (12,648 ) Dividends — (14,228 ) — (14,228 ) Amortization/issuance of restricted stock (1) — 31,163 — 31,163 Issuance of treasury shares for options exercised 26,149 1,703 — 1,703 Issuance of treasury shares for restricted stock vestings 824,776 — — — Repurchase of common stock through share repurchase program (36,936 ) (2,497 ) — (2,497 ) Repurchase of common stock for employee tax withholding (308,801 ) (22,568 ) — (22,568 ) Shares reserved/issued for director compensation 2,744 171 — 171 Other comprehensive income — 1,137 — 1,137 Fund capital distributions, net — — (11,714 ) (11,714 ) Balance at September 30, 2017 12,899,902 $ 738,266 $ 48,519 $ 786,785 (1) Includes amortization of restricted stock as part of deal consideration for the acquisition of Simmons. See Note 3 for further discussion. |
Compensation Plans
Compensation Plans | 9 Months Ended |
Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Compensation Plans | Compensation Plans Stock-Based Compensation Plans The Company maintains two stock-based compensation plans, the Piper Jaffray Companies Amended and Restated 2003 Annual and Long-Term Incentive Plan (the "Incentive Plan") and the 2016 Employment Inducement Award Plan (the "Inducement Plan"). The Company’s equity awards are recognized on the consolidated statements of operations at grant date fair value over the service period of the award less forfeitures. The following table provides a summary of the Company’s outstanding equity awards (in shares or units) as of September 30, 2017 : Incentive Plan Restricted Stock Annual grants 906,347 Sign-on grants 247,341 1,153,688 Inducement Plan Restricted Stock 260,231 Total restricted stock related to compensation 1,413,919 Simmons Deal Consideration (1) 821,141 Total restricted stock outstanding 2,235,060 Incentive Plan Restricted Stock Units Leadership grants 273,574 (1) The Company issued restricted stock with service conditions as part of deal consideration for the acquisition of Simmons. See Note 3 for further discussion. Incentive Plan The Incentive Plan permits the grant of equity awards, including restricted stock, restricted stock units and non-qualified stock options, to the Company’s employees and directors for up to 8.2 million shares of common stock ( 1.0 million shares remained available for future issuance under the Incentive Plan as of September 30, 2017 ). The Company believes that such awards help align the interests of employees and directors with those of shareholders and serve as an employee retention tool. The Incentive Plan provides for accelerated vesting of awards if there is a severance event, a change in control of the Company (as defined in the Incentive Plan), in the event of a participant’s death, and at the discretion of the compensation committee of the Company’s board of directors. Restricted Stock Awards Restricted stock grants are valued at the market price of the Company’s common stock on the date of grant and are amortized over the requisite service period. The Company grants shares of restricted stock to employees as part of year-end compensation ("Annual Grants") and upon initial hiring or as a retention award ("Sign-on Grants"). The Company’s Annual Grants are made each year in February. Annual Grants vest ratably over three years in equal installments. The Annual Grants provide for continued vesting after termination of employment, so long as the employee does not violate certain post-termination restrictions set forth in the award agreement or any agreements entered into upon termination. The Company determined the service inception date precedes the grant date for the Annual Grants, and that the post-termination restrictions do not meet the criteria for an in-substance service condition, as defined by ASC 718. Accordingly, restricted stock granted as part of the Annual Grants is expensed in the one -year period in which those awards are deemed to be earned, which is generally the calendar year preceding the February grant date. For example, the Company recognized compensation expense during fiscal 2016 for its February 2017 Annual Grant. If an equity award related to the Annual Grants is forfeited as a result of violating the post-termination restrictions, the lower of the fair value of the award at grant date or the fair value of the award at the date of forfeiture is recorded within the consolidated statements of operations as a reversal of compensation expense. Sign-on Grants are used as a recruiting tool for new employees and are issued to current employees as a retention tool. These awards have both cliff and ratable vesting terms, and the employees must fulfill service requirements in exchange for rights to the awards. Compensation expense is amortized on a straight-line basis from the grant date over the requisite service period, generally one to five years. Employees forfeit unvested shares upon termination of employment and a reversal of compensation expense is recorded. Annually, the Company grants stock to its non-employee directors. The stock-based compensation paid to non-employee directors is fully expensed on the grant date and included within outside services expense on the consolidated statements of operations. Restricted Stock Units The Company grants restricted stock units to its leadership team ("Leadership Grants"). 2017 Leadership Grant Restricted stock units granted in 2017 will vest and convert to shares of common stock at the end of the performance period only if the Company satisfies predetermined performance and/or market conditions over the 36 -month performance period from January 1, 2017 through December 31, 2019. Under the terms of the award, the number of units that will actually vest and convert to shares will be based on the extent to which the Company achieves specified targets during the performance period. The maximum payout leverage under this grant is 150 percent . Up to 75 percent of the award can be earned based on the Company achieving certain average adjusted return on equity targets, as defined in the terms of the award agreement. The fair value of this portion of the award was based on the closing price of the Company's common stock on the grant date. If the Company determines that it is probable that the performance condition will be achieved, compensation expense is amortized on a straight-line basis over the 36 -month performance period. The probability that the performance condition will be achieved is reevaluated each reporting period with changes in estimated outcomes accounted for using a cumulative effect adjustment to compensation expense. Compensation expense will be recognized only if the performance condition is met. Employees forfeit unvested share units upon termination of employment with a corresponding reversal of compensation expense. As of September 30, 2017 , the Company has determined that the performance condition is probable of achieving 50 percent of the grant award. Up to 75 percent of the award can be earned based on the Company’s total shareholder return relative to members of a predetermined peer group. The market condition must be met for the award to vest and compensation cost will be recognized regardless if the market condition is satisfied. Compensation expense is amortized on a straight-line basis over the 36 -month requisite service period. Employees forfeit unvested share units upon termination of employment with a corresponding reversal of compensation expense. For this portion of the award, the fair value on the grant date was determined using a Monte Carlo simulation with the following assumptions: Risk-free Expected Stock Grant Year Interest Rate Price Volatility 2017 1.62% 35.9% Because the market condition portion of the award vesting depends on the Company’s total shareholder return relative to a peer group, the valuation modeled the performance of the peer group as well as the correlation between the Company and the peer group. The expected stock price volatility assumption was determined using historical volatility, as correlation coefficients can only be developed through historical volatility. The risk-free interest rate was determined based on the three -year U.S. Treasury bond yield. Leadership Grants Prior to 2017 Restricted stock units granted prior to 2017 contain market condition criteria and will vest and convert to shares of common stock at the end of each 36 -month performance period only if the Company's stock performance satisfies predetermined market conditions over the performance period. Under the terms of the grants, the number of units that will vest and convert to shares will be based on the Company's stock performance achieving specified targets during each performance period. Compensation expense is recognized over each 36 -month performance period. Up to 50 percent of these awards can be earned based on the Company’s total shareholder return relative to members of a predetermined peer group and up to 50 percent of the awards can be earned based on the Company’s total shareholder return. The fair value of the awards on the grant date was determined using a Monte Carlo simulation with the following assumptions: Risk-free Expected Stock Grant Year Interest Rate Price Volatility 2016 0.98% 34.9% 2015 0.90% 29.8% 2014 0.82% 41.3% The expected stock price volatility assumptions were determined using historical volatility, as correlation coefficients can only be developed through historical volatility. The risk-free interest rates were determined based on three -year U.S. Treasury bond yields. Stock Options The Company previously granted options to purchase Piper Jaffray Companies common stock to employees and non-employee directors in fiscal years 2004 through 2008. Employee and director options were expensed by the Company on a straight-line basis over the required service period, based on the estimated fair value of the award on the date of grant using a Black-Scholes option-pricing model. As described above pertaining to the Company’s Annual Grants of restricted shares, stock options granted to employees were expensed in the calendar year preceding the annual February grant date. For example, the Company recognized compensation expense during fiscal 2007 for its February 2008 option grant. The maximum term of the stock options granted to employees and directors was ten years. The Company has not granted stock options since 2008, and all awards have been exercised or expired as of March 31, 2017. Inducement Plan The Company established the Inducement Plan in conjunction with the acquisition of Simmons. The Company granted $11.6 million ( 286,776 shares) in restricted stock under the Inducement Plan on May 15, 2016 . These shares cliff vest in three years . Inducement Plan awards are amortized as compensation expense on a straight-line basis over the vesting period. Employees forfeit unvested Inducement Plan shares upon termination of employment and a reversal of compensation expense is recorded. Stock-Based Compensation Activity The Company recorded compensation expense of $13.5 million and $17.9 million for the three months ended September 30, 2017 and 2016 , respectively, and $25.8 million and $42.0 million for the nine months ended September 30, 2017 and 2016 , respectively, related to employee restricted stock and restricted stock unit awards. Forfeitures were $0.7 million and $0.5 million for the three months ended September 30, 2017 and 2016 , respectively, and $3.0 million and $0.6 million , for the nine months ended September 30, 2017 and 2016 , respectively. The tax benefit related to stock-based compensation totaled $4.5 million and $5.2 million for the three months ended September 30, 2017 and 2016 , respectively, and $16.2 million and $11.8 million for the nine months ended September 30, 2017 and 2016 , respectively. The following table summarizes the changes in the Company’s unvested restricted stock: Unvested Weighted Average Restricted Stock Grant Date (in Shares) Fair Value December 31, 2016 2,874,117 $ 43.12 Granted 241,691 77.95 Vested (701,380 ) 44.85 Canceled (179,368 ) 42.68 September 30, 2017 2,235,060 $ 46.38 The following table summarizes the changes in the Company’s unvested restricted stock units: Unvested Weighted Average Restricted Grant Date Stock Units Fair Value December 31, 2016 374,460 $ 21.63 Granted 35,981 84.10 Vested (115,290 ) 23.42 Canceled (21,577 ) 27.81 September 30, 2017 273,574 $ 28.61 As of September 30, 2017 , there was $29.4 million of total unrecognized compensation cost related to restricted stock and restricted stock units expected to be recognized over a weighted average period of 1.6 years . The following table summarizes the changes in the Company’s outstanding stock options: Weighted Average Weighted Remaining Options Average Contractual Term Aggregate Outstanding Exercise Price (in Years) Intrinsic Value December 31, 2016 30,613 $ 65.86 0.3 $ 203,291 Granted — — Exercised (26,149 ) 65.13 Canceled — — Expired (4,464 ) 70.13 September 30, 2017 — $ — 0.0 $ — As of September 30, 2017 , there was no unrecognized compensation cost related to stock options expected to be recognized over future years. The intrinsic value of options exercised was $0.3 million and the resulting tax benefit realized was $0.1 million for the nine months ended September 30, 2017 . The intrinsic value of options exercised and the resulting tax benefit realized were immaterial for the nine months ended September 30, 2016 . Deferred Compensation Plans The Company maintains various deferred compensation arrangements for employees. The nonqualified deferred compensation plan is an unfunded plan which allows certain highly compensated employees, at their election, to defer a percentage of their base salary, commissions and/or cash bonuses. The deferrals vest immediately and are non-forfeitable. The amounts deferred under this plan are held in a grantor trust. The Company invests, as a principal, in investments to economically hedge its obligation under the nonqualified deferred compensation plan. Investments in the grantor trust, consisting of mutual funds, totaled $29.9 million and $24.4 million as of September 30, 2017 and December 31, 2016 , respectively, and are included in investments on the consolidated statements of financial condition. The compensation deferred by the employees is expensed in the period earned. The deferred compensation liability was $30.0 million and $24.5 million as of September 30, 2017 and December 31, 2016 , respectively. Changes in the fair value of the investments made by the Company are reported in investment income and changes in the corresponding deferred compensation liability are reflected as compensation and benefits expense on the consolidated statements of operations. On August 9, 2017, the Company's board of directors approved the discontinuance of future deferral elections by participants for performance periods beginning after December 31, 2017. The Piper Jaffray Companies Mutual Fund Restricted Share Investment Plan is a fully funded deferred compensation plan which allows eligible employees to elect to receive a portion of the incentive compensation they would otherwise receive in the form of restricted stock, instead in restricted mutual fund shares ("MFRS Awards") of investment funds. MFRS Awards are awarded to qualifying employees in February of each year, and represent a portion of their compensation for performance in the preceding year similar to the Company's Annual Grants. MFRS Awards vest ratably over three years in equal installments and provide for continued vesting after termination of employment so long as the employee does not violate certain post-termination restrictions set forth in the award agreement or any agreement entered into upon termination. Forfeitures are recorded as a reduction of compensation and benefits expense within the consolidated statements of operations. MFRS Awards are owned by employee recipients (subject to aforementioned vesting restrictions) and as such are not included on the consolidated statements of financial condition. The Company has also granted MFRS Awards to new employees as a recruiting tool. Employees must fulfill service requirements in exchange for rights to the awards. Compensation expense from these awards are amortized on a straight-line basis over the requisite service period of two to five years . |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share The Company calculates earnings per share using the two-class method. Basic earnings per common share is computed by dividing net income/(loss) applicable to Piper Jaffray Companies’ common shareholders by the weighted average number of common shares outstanding for the period. Net income/(loss) applicable to Piper Jaffray Companies’ common shareholders represents net income/(loss) applicable to Piper Jaffray Companies reduced by the allocation of earnings to participating securities. No allocation of undistributed earnings is made for periods in which a loss is incurred. Distributed earnings (e.g., dividends) are allocated to participating securities. All of the Company’s unvested restricted shares are deemed to be participating securities as they are eligible to share in the profits (e.g., receive dividends) of the Company. The Company’s restricted stock units are not participating securities as they are not eligible to receive dividends, or the dividends are forfeitable until vested. Diluted earnings per common share is calculated by adjusting the weighted average outstanding shares to assume conversion of all potentially dilutive stock options and restricted stock units. The computation of earnings per share is as follows: Three Months Ended Nine Months Ended September 30, September 30, (Amounts in thousands, except per share data) 2017 2016 2017 2016 Net income/(loss) applicable to Piper Jaffray Companies $ (49,713 ) $ 10,658 $ (15,865 ) $ 15,033 Earnings allocated to participating securities (1) (702 ) (2,076 ) (2,241 ) (2,557 ) Net income/(loss) applicable to Piper Jaffray Companies’ common shareholders (2) $ (50,415 ) $ 8,582 $ (18,106 ) $ 12,476 Shares for basic and diluted calculations: Average shares used in basic computation 12,898 12,282 12,774 12,787 Stock options — 16 — 14 Restricted stock units 77 — 171 — Average shares used in diluted computation 12,975 (3) 12,298 12,945 (3) 12,801 Earnings/(loss) per common share: Basic $ (3.91 ) $ 0.70 $ (1.42 ) $ 0.98 Diluted $ (3.91 ) (3) $ 0.70 $ (1.42 ) (3) $ 0.97 (1) Represents the allocation of distributed and undistributed earnings to participating securities. No allocation of undistributed earnings is made for periods in which a loss is incurred. Distributed earnings (e.g., dividends) are allocated to participating securities. Participating securities include all of the Company’s unvested restricted shares. The weighted average participating shares outstanding were 2,246,663 and 2,974,676 for the three months ended September 30, 2017 and 2016 , respectively, and 2,389,755 and 2,623,095 for the nine months ended September 30, 2017 and 2016 , respectively. (2) Net income/(loss) applicable to Piper Jaffray Companies’ common shareholders for diluted and basic EPS may differ under the two-class method as a result of adding the effect of the assumed exercise of stock options and restricted stock units to dilutive shares outstanding, which alters the ratio used to allocate earnings to Piper Jaffray Companies’ common shareholders and participating securities for purposes of calculating diluted and basic EPS. (3) Earnings per diluted common share is calculated using the basic weighted average number of common shares outstanding for periods in which a loss is incurred. Common shares of 2,235,060 were excluded from diluted EPS at September 30, 2017, as the Company had a net loss for these periods. The anti-dilutive effects from stock options and restricted stock units were immaterial for the nine months ended September 30, 2017 and 2016 , respectively. |
Segment Reporting
Segment Reporting | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting Basis for Presentation The Company structures its segments primarily based upon the nature of the financial products and services provided to customers and the Company’s management organization. The Company evaluates performance and allocates resources based on segment pre-tax operating income or loss and segment pre-tax operating margin. Revenues and expenses directly associated with each respective segment are included in determining their operating results. Other revenues and expenses that are not directly attributable to a particular segment are allocated based upon the Company’s allocation methodologies, including each segment’s respective net revenues, use of shared resources, headcount or other relevant measures. Segment assets are based on those directly associated with each segment, and include an allocation of certain assets based on the most relevant measures applicable, including headcount and other factors. The substantial majority of the Company's net revenues and long-lived assets are located in the U.S. Reportable segment financial results are as follows: Three Months Ended Nine Months Ended September 30, September 30, (Dollars in thousands) 2017 2016 2017 2016 Capital Markets Investment banking Financing Equities $ 22,117 $ 30,479 $ 70,229 $ 53,831 Debt 21,687 30,898 60,066 80,195 Advisory services 146,816 75,230 332,205 204,971 Total investment banking 190,620 136,607 462,500 338,997 Institutional sales and trading Equities 18,410 20,492 59,085 62,773 Fixed income 20,676 25,812 63,137 71,818 Total institutional sales and trading 39,086 46,304 122,222 134,591 Management and performance fees 678 1,353 4,172 4,112 Investment income/(loss) (660 ) 4,472 15,155 14,009 Long-term financing expenses (1,736 ) (2,253 ) (6,003 ) (6,838 ) Net revenues 227,988 186,483 598,046 484,871 Operating expenses (1) 196,409 169,745 524,702 460,628 Segment pre-tax operating income $ 31,579 $ 16,738 $ 73,344 $ 24,243 Segment pre-tax operating margin 13.9 % 9.0 % 12.3 % 5.0 % Continued on next page Three Months Ended Nine Months Ended September 30, September 30, (Dollars in thousands) 2017 2016 2017 2016 Asset Management Management and performance fees Management fees $ 12,140 $ 13,903 $ 39,839 $ 39,587 Performance fees — — — — Total management and performance fees 12,140 13,903 39,839 39,587 Investment income 439 461 956 428 Net revenues 12,579 14,364 40,795 40,015 Operating expenses (1) 126,394 12,651 153,699 35,856 Segment pre-tax operating income/(loss) $ (113,815 ) $ 1,713 $ (112,904 ) $ 4,159 Segment pre-tax operating margin (904.8 )% 11.9 % (276.8 )% 10.4 % Total Net revenues $ 240,567 $ 200,847 $ 638,841 $ 524,886 Operating expenses (1) 322,803 182,396 678,401 496,484 Pre-tax operating income/(loss) $ (82,236 ) $ 18,451 $ (39,560 ) $ 28,402 Pre-tax operating margin (34.2 )% 9.2 % (6.2 )% 5.4 % (1) Operating expenses include a $114.4 million goodwill impairment charge for the Asset Management segment, as well as intangible asset amortization as set forth in the table below: Three Months Ended Nine Months Ended September 30, September 30, (Dollars in thousands) 2017 2016 2017 2016 Capital Markets $ 2,544 $ 6,623 $ 7,633 $ 11,239 Asset Management 1,278 1,387 3,833 4,161 Total intangible asset amortization $ 3,822 $ 8,010 $ 11,466 $ 15,400 Reportable segment assets are as follows: September 30, December 31, (Dollars in thousands) 2017 2016 Capital Markets $ 1,627,722 $ 1,934,528 Asset Management 112,114 190,975 Total assets $ 1,739,836 $ 2,125,503 |
Net Capital Requirements and Ot
Net Capital Requirements and Other Regulatory Matters | 9 Months Ended |
Sep. 30, 2017 | |
Regulatory Capital Requirements [Abstract] | |
Net Capital Requirements and Other Regulatory Matters | Net Capital Requirements and Other Regulatory Matters Piper Jaffray is registered as a securities broker dealer with the SEC and is a member of various SROs and securities exchanges. The Financial Industry Regulatory Authority, Inc. ("FINRA") serves as Piper Jaffray’s primary SRO. Piper Jaffray is subject to the uniform net capital rule of the SEC and the net capital rule of FINRA. Piper Jaffray has elected to use the alternative method permitted by the SEC rule which requires that it maintain minimum net capital of $1.0 million . Advances to affiliates, repayment of subordinated debt, dividend payments and other equity withdrawals by Piper Jaffray are subject to certain approvals, notifications and other provisions of SEC and FINRA rules. At September 30, 2017 , net capital calculated under the SEC rule was $215.5 million , and exceeded the minimum net capital required under the SEC rule by $214.5 million . The Company’s committed short-term credit facility and its senior notes include covenants requiring Piper Jaffray to maintain minimum net capital of $120 million . CP Notes issued under CP Series II A include a covenant that requires Piper Jaffray to maintain excess net capital of $100 million . The Company's fully disclosed clearing agreement with Pershing also includes a covenant requiring Piper Jaffray to maintain excess net capital of $120 million . Piper Jaffray Ltd., a broker dealer subsidiary registered in the United Kingdom, is subject to the capital requirements of the Prudential Regulation Authority and the Financial Conduct Authority. As of September 30, 2017 , Piper Jaffray Ltd. was in compliance with the capital requirements of the Prudential Regulation Authority and the Financial Conduct Authority. Piper Jaffray Hong Kong Limited is licensed by the Hong Kong Securities and Futures Commission, which is subject to the liquid capital requirements of the Securities and Futures (Financial Resources) Rule promulgated under the Securities and Futures Ordinance. At September 30, 2017 , Piper Jaffray Hong Kong Limited was in compliance with the liquid capital requirements of the Hong Kong Securities and Futures Commission. |
Income Taxes (Notes)
Income Taxes (Notes) | 9 Months Ended |
Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company recorded an income tax benefit of $31.4 million and $26.9 million for the three and nine months ended September 30, 2017, respectively, as a result of pre-tax losses related to the $114.4 million non-cash goodwill impairment charge for the asset management reporting unit, generating a $44.2 million deferred income tax asset. See Note 11 for additional information related to the goodwill impairment charge. The tax benefit related to stock-based compensation awards vesting at values greater than the grant price was $0.3 million and $9.1 million for the three and nine months ended September 30, 2017, respectively. See Note 2 regarding the tax impact from the adoption of ASU 2016-09. The Company's effective tax rate, excluding noncontrolling interests, for the nine months ended September 30, 2017 was 62.9 percent , compared to 36.8 percent for the nine months ended September 30, 2016 . The effective tax rate was higher for the nine months ended September 30, 2017 , due to the impact of the $9.1 million tax benefit related to stock-based compensation awards vesting at values greater than the grant price during a period of pre-tax losses. |
Accounting Policies and Prono28
Accounting Policies and Pronouncements Accounting Policies and Pronouncements (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation Financial Accounting Standards Board ("FASB") Accounting Standards Codification Topic 718, "Compensation – Stock Compensation," ("ASC 718") requires all stock-based compensation to be expensed on the consolidated statements of operations based on the grant date fair value of the award. Compensation expense related to stock-based awards that do not require future service are recognized in the year in which the awards were deemed to be earned. Stock-based awards that require future service are amortized over the relevant service period. Forfeitures of awards with service conditions are accounted for when they occur. See Note 16 for additional information on the Company's accounting for stock-based compensation. |
Acquisition of Simmons & Comp29
Acquisition of Simmons & Company International (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Business Combinations [Abstract] | |
Unaudited pro forma information | The Company's unaudited pro forma information presented does not necessarily reflect the results of operations that would have resulted had the acquisition been completed at the beginning of the applicable period presented, does not contemplate anticipated operational efficiencies of the combined entities, nor does it indicate the results of operations in future periods. Nine Months Ended (Dollars in thousands) September 30, 2016 Net revenues $ 532,683 Net income applicable to Piper Jaffray Companies 15,642 |
Financial Instruments and Oth30
Financial Instruments and Other Inventory Positions Owned and Financial Instruments and Other Inventory Positions Sold, but Not Yet Purchased (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Financial Instruments Owned and Sold, Not yet Purchased [Abstract] | |
Financial Instruments and Other Inventory Positions Owned and Financial Instruments and Other Inventory Positions Sold, but not yet Purchased | September 30, December 31, (Dollars in thousands) 2017 2016 Financial instruments and other inventory positions owned: Corporate securities: Equity securities $ 66,904 $ 6,363 Convertible securities 70,900 103,486 Fixed income securities 27,480 21,018 Municipal securities: Taxable securities 37,073 63,090 Tax-exempt securities 374,348 559,329 Short-term securities 177,873 35,175 Mortgage-backed securities 4,321 5,638 U.S. government agency securities 300,832 205,685 U.S. government securities 17,205 29,970 Derivative contracts 22,392 29,217 Total financial instruments and other inventory positions owned 1,099,328 1,058,971 Less noncontrolling interests (1) — (57,700 ) $ 1,099,328 $ 1,001,271 Financial instruments and other inventory positions sold, but not yet purchased: Corporate securities: Equity securities $ 100,403 $ 89,453 Fixed income securities 21,149 17,324 U.S. government agency securities 26,703 6,723 U.S. government securities 203,995 180,650 Derivative contracts 5,485 5,207 Total financial instruments and other inventory positions sold, but not yet purchased 357,735 299,357 Less noncontrolling interests (2) — (631 ) $ 357,735 $ 298,726 (1) Noncontrolling interests attributable to third party ownership in a consolidated municipal bond fund consist of $1.3 million of taxable municipal securities, $55.2 million of tax-exempt municipal securities, and $1.2 million of derivative contracts as of December 31, 2016 . (2) Noncontrolling interests attributable to third party ownership in a consolidated municipal bond fund consist of U.S. government securities as of December 31, 2016 |
Total Absolute Notional Contract Amount | The following table presents the gross fair market value and the total absolute notional contract amount of the Company's outstanding derivative instruments, prior to counterparty netting, by asset or liability position: September 30, 2017 December 31, 2016 (Dollars in thousands) Derivative Derivative Notional Derivative Derivative Notional Derivative Category Assets (1) Liabilities (2) Amount Assets (1) Liabilities (2) Amount Interest rate Customer matched-book $ 270,149 $ 255,102 $ 3,178,725 $ 288,955 $ 272,819 $ 3,330,207 Trading securities 686 4,456 345,850 13,952 1,707 423,550 Credit default swap index Trading securities — — — — 127 7,470 $ 270,835 $ 259,558 $ 3,524,575 $ 302,907 $ 274,653 $ 3,761,227 (1) Derivative assets are included within financial instruments and other inventory positions owned on the consolidated statements of financial condition. (2) Derivative liabilities are included within financial instruments and other inventory positions sold, but not yet purchased on the consolidated statements of financial condition. |
Unrealized Gains/(Losses) on Derivative Instruments | The following table presents the Company’s unrealized gains/(losses) on derivative instruments: Three Months Ended Nine Months Ended (Dollars in thousands) September 30, September 30, Derivative Category Operations Category 2017 2016 2017 2016 Interest rate derivative contract Investment banking $ (300 ) $ (1,901 ) $ (1,076 ) $ (3,953 ) Interest rate derivative contract Institutional brokerage 1,627 8,438 (16,028 ) 819 Credit default swap index contract Institutional brokerage 4,304 74 4,482 3,958 Futures and equity option derivative contracts Institutional brokerage — 107 — 255 $ 5,631 $ 6,718 $ (12,622 ) $ 1,079 |
Fair Value of Financial Instr31
Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Information about Significant Unobservable Inputs used in Fair Value Measurement | The following table summarizes quantitative information about the significant unobservable inputs used in the fair value measurement of the Company’s Level III financial instruments as of September 30, 2017 : Valuation Weighted Technique Unobservable Input Range Average Assets: Financial instruments and other inventory positions owned: Municipal securities: Tax-exempt securities Discounted cash flow Expected recovery rate (% of par) (2) 5 - 60% 19.4% Short-term securities Discounted cash flow Expected recovery rate (% of par) (2) 66 - 94% 91.0% Mortgage-backed securities: Collateralized by residential mortgages Discounted cash flow Credit default rates (3) 1 - 10% 2.7% Prepayment rates (4) 2 - 18% 10.0% Loss severity (3) 5 - 50% 32.6% Valuation yields (3) 5 - 6% 5.3% Derivative contracts: Interest rate locks Discounted cash flow Premium over the MMD curve (1) 4 - 20 bps 11.3 bps Investments at fair value: Equity securities in private companies Market approach Revenue multiple (2) 2 - 6 times 4.8 times EBITDA multiple (2) 10 - 15 times 12.2 times Liabilities: Financial instruments and other inventory positions sold, but not yet purchased: Derivative contracts: Interest rate locks Discounted cash flow Premium over the MMD curve (1) 1 - 21 bps 10.9 bps Sensitivity of the fair value to changes in unobservable inputs: (1) Significant increase/(decrease) in the unobservable input in isolation would result in a significantly lower/(higher) fair value measurement. (2) Significant increase/(decrease) in the unobservable input in isolation would result in a significantly higher/(lower) fair value measurement. (3) Significant changes in any of these inputs in isolation could result in a significantly different fair value. Generally, a change in the assumption used for credit default rates is accompanied by a directionally similar change in the assumption used for the loss severity and a directionally inverse change in the assumption for valuation yields. (4) The potential impact of changes in prepayment rates on fair value is dependent on other security-specific factors, such as the par value and structure. Changes in the prepayment rates may result in directionally similar or directionally inverse changes in fair value depending on whether the security trades at a premium or discount to the par value. |
Valuation of Financial Instruments by Pricing Observability Levels | The following table summarizes the valuation of the Company’s financial instruments by pricing observability levels defined in FASB Accounting Standards Codification Topic 820, "Fair Value Measurement" ("ASC 820") as of September 30, 2017 : Counterparty and Cash Collateral (Dollars in thousands) Level I Level II Level III Netting (1) Total Assets: Financial instruments and other inventory positions owned: Corporate securities: Equity securities $ 2,466 $ 64,438 $ — $ — $ 66,904 Convertible securities — 70,900 — — 70,900 Fixed income securities — 27,480 — — 27,480 Municipal securities: Taxable securities — 37,073 — — 37,073 Tax-exempt securities — 373,598 750 — 374,348 Short-term securities — 177,168 705 — 177,873 Mortgage-backed securities — — 4,321 — 4,321 U.S. government agency securities — 300,832 — — 300,832 U.S. government securities 17,205 — — — 17,205 Derivative contracts — 270,149 686 (248,443 ) 22,392 Total financial instruments and other inventory positions owned 19,671 1,321,638 6,462 (248,443 ) 1,099,328 Cash equivalents 4,112 — — — 4,112 Investments at fair value 37,778 — 130,160 (2) — 167,938 Total assets $ 61,561 $ 1,321,638 $ 136,622 $ (248,443 ) $ 1,271,378 Liabilities: Financial instruments and other inventory positions sold, but not yet purchased: Corporate securities: Equity securities $ 100,181 $ 222 $ — $ — $ 100,403 Fixed income securities — 21,149 — — 21,149 U.S. government agency securities — 26,703 — — 26,703 U.S. government securities 164,084 39,911 — — 203,995 Derivative contracts — 255,308 4,250 (254,073 ) 5,485 Total financial instruments and other inventory positions sold, but not yet purchased $ 264,265 $ 343,293 $ 4,250 $ (254,073 ) $ 357,735 (1) Represents cash collateral and the impact of netting on a counterparty basis. The Company had no securities posted as collateral to its counterparties. (2) Noncontrolling interests of $44.9 million are attributable to third party ownership in consolidated merchant banking and senior living funds. The following table summarizes the valuation of the Company’s financial instruments by pricing observability levels defined in ASC 820 as of December 31, 2016 : Counterparty and Cash Collateral (Dollars in thousands) Level I Level II Level III Netting (1) Total Assets: Financial instruments and other inventory positions owned: Corporate securities: Equity securities $ 82 $ 6,281 $ — $ — $ 6,363 Convertible securities — 103,486 — — 103,486 Fixed income securities — 21,018 — — 21,018 Municipal securities: Taxable securities — 60,404 2,686 — 63,090 Tax-exempt securities — 558,252 1,077 — 559,329 Short-term securities — 34,431 744 — 35,175 Mortgage-backed securities — 273 5,365 — 5,638 U.S. government agency securities — 205,685 — — 205,685 U.S. government securities 29,970 — — — 29,970 Derivative contracts — 288,955 13,952 (273,690 ) 29,217 Total financial instruments and other inventory positions owned 30,052 1,278,785 23,824 (273,690 ) 1,058,971 Cash equivalents 768 — — — 768 Investments at fair value 32,783 — 123,319 (2) — 156,102 Total assets $ 63,603 $ 1,278,785 $ 147,143 $ (273,690 ) $ 1,215,841 Liabilities: Financial instruments and other inventory positions sold, but not yet purchased: Corporate securities: Equity securities $ 89,453 $ — $ — $ — $ 89,453 Fixed income securities — 17,324 — — 17,324 U.S. government agency securities — 6,723 — — 6,723 U.S. government securities 180,650 — — — 180,650 Derivative contracts — 273,166 1,487 (269,446 ) 5,207 Total financial instruments and other inventory positions sold, but not yet purchased $ 270,103 $ 297,213 $ 1,487 $ (269,446 ) $ 299,357 (1) Represents cash collateral and the impact of netting on a counterparty basis. The Company had no securities posted as collateral to its counterparties. (2) Noncontrolling interests of $45.1 million are attributable to third party ownership in consolidated merchant banking and senior living funds. |
Changes in Fair Value Associated with Level III Financial Instruments | The following tables summarize the changes in fair value associated with Level III financial instruments held at the beginning or end of the periods presented: Unrealized gains/ (losses) for assets/ Balance at Realized Unrealized Balance at liabilities held at June 30, Transfers Transfers gains/ gains/ September 30, September 30, (Dollars in thousands) 2017 Purchases Sales in out (losses) (1) (losses) (1) 2017 2017 (1) Assets: Financial instruments and other inventory positions owned: Municipal securities: Tax-exempt securities $ 1,117 $ — $ (267 ) $ — $ — $ — $ (100 ) $ 750 $ (100 ) Short-term securities 721 — — — — — (16 ) 705 (16 ) Mortgage-backed securities 4,251 — — — — — 70 4,321 70 Derivative contracts 383 105 — — — (105 ) 303 686 686 Total financial instruments and other inventory positions owned 6,472 105 (267 ) — — (105 ) 257 6,462 640 Investments at fair value 113,885 18,250 — — — — (1,975 ) 130,160 (1,975 ) Total assets $ 120,357 $ 18,355 $ (267 ) $ — $ — $ (105 ) $ (1,718 ) $ 136,622 $ (1,335 ) Liabilities: Financial instruments and other inventory positions sold, but not yet purchased: Derivative contracts $ 5,573 $ — $ 3,461 $ — $ — $ (3,461 ) $ (1,323 ) $ 4,250 $ 1,430 Total financial instruments and other inventory positions sold, but not yet purchased $ 5,573 $ — $ 3,461 $ — $ — $ (3,461 ) $ (1,323 ) $ 4,250 $ 1,430 (1) Realized and unrealized gains/(losses) related to financial instruments, with the exception of customer matched-book derivatives, are reported in institutional brokerage on the consolidated statements of operations. Realized and unrealized gains/(losses) related to customer matched-book derivatives are reported in investment banking. Realized and unrealized gains/(losses) related to investments are reported in investment banking revenues or investment income/(loss) on the consolidated statements of operations. Unrealized gains/ (losses) for assets/ Balance at Realized Unrealized Balance at liabilities held at June 30, Transfers Transfers gains/ gains/ September 30, September 30, (Dollars in thousands) 2016 Purchases Sales in out (losses) (1) (losses) (1) 2016 2016 (1) Assets: Financial instruments and other inventory positions owned: Municipal securities: Tax-exempt securities $ 1,177 $ — $ — $ — $ — $ — $ — $ 1,177 $ — Short-term securities 748 — — — — — — 748 — Mortgage-backed securities 56,053 — (44,006 ) — — 1,440 190 13,677 111 Derivative contracts 18 — — — — — 942 960 960 Total financial instruments and other inventory positions owned 57,996 — (44,006 ) — — 1,440 1,132 16,562 1,071 Investments at fair value 122,786 12,011 (21,309 ) — — 10,336 (7,709 ) 116,115 2,570 Total assets $ 180,782 $ 12,011 $ (65,315 ) $ — $ — $ 11,776 $ (6,577 ) $ 132,677 $ 3,641 Liabilities: Financial instruments and other inventory positions sold, but not yet purchased: Derivative contracts $ 14,785 $ (5,922 ) $ 171 $ — $ — $ 5,751 $ (7,497 ) $ 7,288 $ (1,263 ) Total financial instruments and other inventory positions sold, but not yet purchased $ 14,785 $ (5,922 ) $ 171 $ — $ — $ 5,751 $ (7,497 ) $ 7,288 $ (1,263 ) (1) Realized and unrealized gains/(losses) related to financial instruments, with the exception of customer matched-book derivatives, are reported in institutional brokerage on the consolidated statements of operations. Realized and unrealized gains/(losses) related to customer matched-book derivatives are reported in investment banking. Realized and unrealized gains/(losses) related to investments are reported in investment banking revenues or investment income/(loss) on the consolidated statements of operations. Unrealized gains/ (losses) for assets/ Balance at Realized Unrealized Balance at liabilities held at December 31, Transfers Transfers gains/ gains/ September 30, September 30, (Dollars in thousands) 2016 Purchases Sales in out (losses) (1) (losses) (1) 2017 2017 (1) Assets: Financial instruments and other inventory positions owned: Municipal securities: Taxable securities $ 2,686 $ — $ (2,703 ) $ — $ — $ 716 $ (699 ) $ — $ — Tax-exempt securities 1,077 — (267 ) — — — (60 ) 750 (60 ) Short-term securities 744 — (25 ) — — 2 (16 ) 705 (16 ) Mortgage-backed securities 5,365 997 (1,854 ) — — 296 (483 ) 4,321 (90 ) Derivative contracts 13,952 350 (11,978 ) — — 11,628 (13,266 ) 686 686 Total financial instruments and other inventory positions owned 23,824 1,347 (16,827 ) — — 12,642 (14,524 ) 6,462 520 Investments at fair value 123,319 25,444 (25,211 ) — (601 ) 9,399 (2,190 ) 130,160 7,704 Total assets $ 147,143 $ 26,791 $ (42,038 ) $ — $ (601 ) $ 22,041 $ (16,714 ) $ 136,622 $ 8,224 Liabilities: Financial instruments and other inventory positions sold, but not yet purchased: Derivative contracts $ 1,487 $ (719 ) $ 11,219 $ — $ — $ (10,500 ) $ 2,763 $ 4,250 $ 4,125 Total financial instruments and other inventory positions sold, but not yet purchased $ 1,487 $ (719 ) $ 11,219 $ — $ — $ (10,500 ) $ 2,763 $ 4,250 $ 4,125 (1) Realized and unrealized gains/(losses) related to financial instruments, with the exception of customer matched-book derivatives, are reported in institutional brokerage on the consolidated statements of operations. Realized and unrealized gains/(losses) related to customer matched-book derivatives are reported in investment banking. Realized and unrealized gains/(losses) related to investments are reported in investment banking revenues or investment income/(loss) on the consolidated statements of operations. Unrealized gains/ (losses) for assets/ Balance at Realized Unrealized Balance at liabilities held at December 31, Transfers Transfers gains/ gains/ September 30, September 30, (Dollars in thousands) 2015 Purchases Sales in out (losses) (1) (losses) (1) 2016 2016 (1) Assets: Financial instruments and other inventory positions owned: Municipal securities: Taxable securities $ 5,816 $ — $ (611 ) $ — $ (5,216 ) $ 11 $ — $ — $ — Tax-exempt securities 1,177 — — — — — — 1,177 — Short-term securities 720 — — — — — 28 748 28 Mortgage-backed securities 121,124 26,519 (133,913 ) — — 3,285 (3,338 ) 13,677 241 Derivative contracts — 246 — — — (246 ) 960 960 960 Total financial instruments and other inventory positions owned 128,837 26,765 (134,524 ) — (5,216 ) 3,050 (2,350 ) 16,562 1,229 Investments at fair value 109,444 27,683 (21,309 ) — (9,088 ) 10,336 (951 ) 116,115 (1,223 ) Total assets $ 238,281 $ 54,448 $ (155,833 ) $ — $ (14,304 ) $ 13,386 $ (3,301 ) $ 132,677 $ 6 Liabilities: Financial instruments and other inventory positions sold, but not yet purchased: Derivative contracts $ 7,148 $ (23,700 ) $ 171 $ — $ — $ 23,529 $ 140 $ 7,288 $ 7,288 Total financial instruments and other inventory positions sold, but not yet purchased $ 7,148 $ (23,700 ) $ 171 $ — $ — $ 23,529 $ 140 $ 7,288 $ 7,288 (1) Realized and unrealized gains/(losses) related to financial instruments, with the exception of customer matched-book derivatives, are reported in institutional brokerage on the consolidated statements of operations. Realized and unrealized gains/(losses) related to customer matched-book derivatives are reported in investment banking. Realized and unrealized gains/(losses) related to investments are reported in investment banking revenues or investment income/(loss) on the consolidated statements of operations. |
Variable Interest Entities Vari
Variable Interest Entities Variable Interest Entities (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Variable Interest Entity, Consolidated, Carrying Amount, Assets and Liabilities, Net [Abstract] | |
Schedule of Variable Interest Entities | The following table presents information about the carrying value of the assets and liabilities of the VIEs which are consolidated by the Company and included on the consolidated statements of financial condition at September 30, 2017 . The assets can only be used to settle the liabilities of the respective VIE, and the creditors of the VIEs do not have recourse to the general credit of the Company. The assets and liabilities are presented prior to consolidation, and thus a portion of these assets and liabilities are eliminated in consolidation. Alternative Asset (Dollars in thousands) Management Funds Assets: Receivables from brokers, dealers and clearing organizations $ 15,765 Financial instruments and other inventory positions owned and pledged as collateral 149,632 Investments 112,834 Other assets 4,621 Total assets $ 282,852 Liabilities: Short-term financing $ 76,797 Payables to brokers, dealers and clearing organizations 46,627 Financial instruments and other inventory positions sold, but not yet purchased 21,813 Other liabilities and accrued expenses 18,344 Total liabilities $ 163,581 |
Receivables from and Payables33
Receivables from and Payables to Brokers, Dealers and Clearing Organizations (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Brokers and Dealers [Abstract] | |
Brokers, Dealers and Clearing Organizations | September 30, December 31, (Dollars in thousands) 2017 2016 Receivable arising from unsettled securities transactions $ 15,765 $ 132,724 Deposits paid for securities borrowed — 27,573 Receivable from clearing organizations 36,891 3,293 Deposits with clearing organizations 12,409 35,713 Securities failed to deliver — 975 Other 15,815 12,452 Total receivables from brokers, dealers and clearing organizations $ 80,880 $ 212,730 September 30, December 31, (Dollars in thousands) 2017 2016 Payable arising from unsettled securities transactions $ 49,160 $ 13,948 Payable to clearing organizations — 15,893 Securities failed to receive — 3,043 Other 5,105 7,958 Total payables to brokers, dealers and clearing organizations $ 54,265 $ 40,842 |
Investments (Tables)
Investments (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Investments, All Other Investments [Abstract] | |
Schedule of Investments | The Company’s investments include investments in private companies and partnerships, registered mutual funds, warrants of public and private companies and private company debt. September 30, December 31, (Dollars in thousands) 2017 2016 Investments at fair value $ 167,938 $ 156,102 Investments at cost 3,068 2,755 Investments accounted for under the equity method 8,521 9,200 Total investments 179,527 168,057 Less investments attributable to noncontrolling interests (1) (44,932 ) (45,123 ) $ 134,595 $ 122,934 (1) Noncontrolling interests are attributable to third party ownership in consolidated merchant banking and senior living funds. |
Other Assets (Tables)
Other Assets (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Assets | September 30, December 31, (Dollars in thousands) 2017 2016 Fee receivables $ 21,968 $ 22,840 Accrued interest receivables 7,612 9,259 Forgivable loans, net 8,422 9,307 Prepaid expenses 5,122 6,363 Secured loan receivables 2,975 6,236 Other 9,344 13,124 Total other assets $ 55,443 $ 67,129 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes in Carrying Value of Goodwill and Intangible Assets | Capital Asset (Dollars in thousands) Markets Management Total Goodwill Balance at December 31, 2016 $ 81,855 $ 114,363 $ 196,218 Impairment charge — (114,363 ) (114,363 ) Balance at September 30, 2017 $ 81,855 $ — $ 81,855 Intangible assets Balance at December 31, 2016 $ 19,320 $ 17,914 $ 37,234 Amortization of intangible assets (7,633 ) (3,833 ) (11,466 ) Balance at September 30, 2017 $ 11,687 $ 14,081 $ 25,768 |
Short-Term Financing (Tables)
Short-Term Financing (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Summary of Short-Term Financing and Weighted Average Interest Rate on Borrowings | Outstanding Balance Weighted Average Interest Rate September 30, December 31, September 30, December 31, (Dollars in thousands) 2017 2016 2017 2016 Commercial paper (secured) $ — $ 147,021 N/A 2.12 % Prime broker arrangements 76,797 271,811 1.98 % 1.49 % Total short-term financing $ 76,797 $ 418,832 |
Senior Notes Senior Notes (Tabl
Senior Notes Senior Notes (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Senior Notes [Abstract] | |
Schedule of senior notes | The Company has entered into variable and fixed rate senior notes with certain entities advised by Pacific Investment Management Company ("PIMCO"). The following table presents the outstanding balance by note class: Outstanding Balance September 30, December 31, (Dollars in thousands) 2017 2016 Class A Notes $ — $ 50,000 Class C Notes 125,000 125,000 Total senior notes $ 125,000 $ 175,000 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net [Table Text Block] | Ownership interests in entities held by parties other than the Company’s common shareholders are presented as noncontrolling interests within shareholders’ equity, separate from the Company’s own equity. Revenues, expenses and net income or loss are reported on the consolidated statements of operations on a consolidated basis, which includes amounts attributable to both the Company’s common shareholders and noncontrolling interests. Net income or loss is then allocated between the Company and noncontrolling interests based upon their relative ownership interests. Net income applicable to noncontrolling interests is deducted from consolidated net income to determine net income applicable to the Company. There was no other comprehensive income or loss attributed to noncontrolling interests for the nine months ended September 30, 2017 and 2016 , respectively. The following table presents the changes in shareholders' equity for the nine months ended September 30, 2017 : Common Common Total Shares Shareholders’ Noncontrolling Shareholders’ (Amounts in thousands, except share amounts) Outstanding Equity Interests Equity Balance at December 31, 2016 12,391,970 $ 759,250 $ 57,016 $ 816,266 Net income/(loss) — (15,865 ) 3,217 (12,648 ) Dividends — (14,228 ) — (14,228 ) Amortization/issuance of restricted stock (1) — 31,163 — 31,163 Issuance of treasury shares for options exercised 26,149 1,703 — 1,703 Issuance of treasury shares for restricted stock vestings 824,776 — — — Repurchase of common stock through share repurchase program (36,936 ) (2,497 ) — (2,497 ) Repurchase of common stock for employee tax withholding (308,801 ) (22,568 ) — (22,568 ) Shares reserved/issued for director compensation 2,744 171 — 171 Other comprehensive income — 1,137 — 1,137 Fund capital distributions, net — — (11,714 ) (11,714 ) Balance at September 30, 2017 12,899,902 $ 738,266 $ 48,519 $ 786,785 (1) Includes amortization of restricted stock as part of deal consideration for the acquisition of Simmons. See Note 3 for further discussion. |
Compensation Plans (Tables)
Compensation Plans (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of Outstanding Equity Awards | The following table provides a summary of the Company’s outstanding equity awards (in shares or units) as of September 30, 2017 : Incentive Plan Restricted Stock Annual grants 906,347 Sign-on grants 247,341 1,153,688 Inducement Plan Restricted Stock 260,231 Total restricted stock related to compensation 1,413,919 Simmons Deal Consideration (1) 821,141 Total restricted stock outstanding 2,235,060 Incentive Plan Restricted Stock Units Leadership grants 273,574 (1) The Company issued restricted stock with service conditions as part of deal consideration for the acquisition of Simmons. See Note 3 for further discussion. |
Schedule of Valuation Assumptions | The fair value of the awards on the grant date was determined using a Monte Carlo simulation with the following assumptions: Risk-free Expected Stock Grant Year Interest Rate Price Volatility 2016 0.98% 34.9% 2015 0.90% 29.8% 2014 0.82% 41.3% For this portion of the award, the fair value on the grant date was determined using a Monte Carlo simulation with the following assumptions: Risk-free Expected Stock Grant Year Interest Rate Price Volatility 2017 1.62% 35.9% |
Changes in Unvested Restricted Stock | The following table summarizes the changes in the Company’s unvested restricted stock: Unvested Weighted Average Restricted Stock Grant Date (in Shares) Fair Value December 31, 2016 2,874,117 $ 43.12 Granted 241,691 77.95 Vested (701,380 ) 44.85 Canceled (179,368 ) 42.68 September 30, 2017 2,235,060 $ 46.38 |
Changes in Unvested Restricted Stock Units | The following table summarizes the changes in the Company’s unvested restricted stock units: Unvested Weighted Average Restricted Grant Date Stock Units Fair Value December 31, 2016 374,460 $ 21.63 Granted 35,981 84.10 Vested (115,290 ) 23.42 Canceled (21,577 ) 27.81 September 30, 2017 273,574 $ 28.61 |
Changes in Outstanding Stock Options | The following table summarizes the changes in the Company’s outstanding stock options: Weighted Average Weighted Remaining Options Average Contractual Term Aggregate Outstanding Exercise Price (in Years) Intrinsic Value December 31, 2016 30,613 $ 65.86 0.3 $ 203,291 Granted — — Exercised (26,149 ) 65.13 Canceled — — Expired (4,464 ) 70.13 September 30, 2017 — $ — 0.0 $ — |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
Computation of Earnings per Share | The computation of earnings per share is as follows: Three Months Ended Nine Months Ended September 30, September 30, (Amounts in thousands, except per share data) 2017 2016 2017 2016 Net income/(loss) applicable to Piper Jaffray Companies $ (49,713 ) $ 10,658 $ (15,865 ) $ 15,033 Earnings allocated to participating securities (1) (702 ) (2,076 ) (2,241 ) (2,557 ) Net income/(loss) applicable to Piper Jaffray Companies’ common shareholders (2) $ (50,415 ) $ 8,582 $ (18,106 ) $ 12,476 Shares for basic and diluted calculations: Average shares used in basic computation 12,898 12,282 12,774 12,787 Stock options — 16 — 14 Restricted stock units 77 — 171 — Average shares used in diluted computation 12,975 (3) 12,298 12,945 (3) 12,801 Earnings/(loss) per common share: Basic $ (3.91 ) $ 0.70 $ (1.42 ) $ 0.98 Diluted $ (3.91 ) (3) $ 0.70 $ (1.42 ) (3) $ 0.97 (1) Represents the allocation of distributed and undistributed earnings to participating securities. No allocation of undistributed earnings is made for periods in which a loss is incurred. Distributed earnings (e.g., dividends) are allocated to participating securities. Participating securities include all of the Company’s unvested restricted shares. The weighted average participating shares outstanding were 2,246,663 and 2,974,676 for the three months ended September 30, 2017 and 2016 , respectively, and 2,389,755 and 2,623,095 for the nine months ended September 30, 2017 and 2016 , respectively. (2) Net income/(loss) applicable to Piper Jaffray Companies’ common shareholders for diluted and basic EPS may differ under the two-class method as a result of adding the effect of the assumed exercise of stock options and restricted stock units to dilutive shares outstanding, which alters the ratio used to allocate earnings to Piper Jaffray Companies’ common shareholders and participating securities for purposes of calculating diluted and basic EPS. (3) Earnings per diluted common share is calculated using the basic weighted average number of common shares outstanding for periods in which a loss is incurred. Common shares of 2,235,060 were excluded from diluted EPS at September 30, 2017, as the Company had a net loss for these periods. |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Segment Reporting [Abstract] | |
Reportable segment financial results | Reportable segment financial results are as follows: Three Months Ended Nine Months Ended September 30, September 30, (Dollars in thousands) 2017 2016 2017 2016 Capital Markets Investment banking Financing Equities $ 22,117 $ 30,479 $ 70,229 $ 53,831 Debt 21,687 30,898 60,066 80,195 Advisory services 146,816 75,230 332,205 204,971 Total investment banking 190,620 136,607 462,500 338,997 Institutional sales and trading Equities 18,410 20,492 59,085 62,773 Fixed income 20,676 25,812 63,137 71,818 Total institutional sales and trading 39,086 46,304 122,222 134,591 Management and performance fees 678 1,353 4,172 4,112 Investment income/(loss) (660 ) 4,472 15,155 14,009 Long-term financing expenses (1,736 ) (2,253 ) (6,003 ) (6,838 ) Net revenues 227,988 186,483 598,046 484,871 Operating expenses (1) 196,409 169,745 524,702 460,628 Segment pre-tax operating income $ 31,579 $ 16,738 $ 73,344 $ 24,243 Segment pre-tax operating margin 13.9 % 9.0 % 12.3 % 5.0 % Continued on next page Three Months Ended Nine Months Ended September 30, September 30, (Dollars in thousands) 2017 2016 2017 2016 Asset Management Management and performance fees Management fees $ 12,140 $ 13,903 $ 39,839 $ 39,587 Performance fees — — — — Total management and performance fees 12,140 13,903 39,839 39,587 Investment income 439 461 956 428 Net revenues 12,579 14,364 40,795 40,015 Operating expenses (1) 126,394 12,651 153,699 35,856 Segment pre-tax operating income/(loss) $ (113,815 ) $ 1,713 $ (112,904 ) $ 4,159 Segment pre-tax operating margin (904.8 )% 11.9 % (276.8 )% 10.4 % Total Net revenues $ 240,567 $ 200,847 $ 638,841 $ 524,886 Operating expenses (1) 322,803 182,396 678,401 496,484 Pre-tax operating income/(loss) $ (82,236 ) $ 18,451 $ (39,560 ) $ 28,402 Pre-tax operating margin (34.2 )% 9.2 % (6.2 )% 5.4 % (1) Operating expenses include a $114.4 million goodwill impairment charge for the Asset Management segment, as well as intangible asset amortization as set forth in the table below: Three Months Ended Nine Months Ended September 30, September 30, (Dollars in thousands) 2017 2016 2017 2016 Capital Markets $ 2,544 $ 6,623 $ 7,633 $ 11,239 Asset Management 1,278 1,387 3,833 4,161 Total intangible asset amortization $ 3,822 $ 8,010 $ 11,466 $ 15,400 |
Schedule of intangible asset amortization | (1) Operating expenses include a $114.4 million goodwill impairment charge for the Asset Management segment, as well as intangible asset amortization as set forth in the table below: Three Months Ended Nine Months Ended September 30, September 30, (Dollars in thousands) 2017 2016 2017 2016 Capital Markets $ 2,544 $ 6,623 $ 7,633 $ 11,239 Asset Management 1,278 1,387 3,833 4,161 Total intangible asset amortization $ 3,822 $ 8,010 $ 11,466 $ 15,400 |
Reportable segment assets | Reportable segment assets are as follows: September 30, December 31, (Dollars in thousands) 2017 2016 Capital Markets $ 1,627,722 $ 1,934,528 Asset Management 112,114 190,975 Total assets $ 1,739,836 $ 2,125,503 |
Organization and Basis of Pre43
Organization and Basis of Presentation - Additional Information (Detail) | 9 Months Ended |
Sep. 30, 2017segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of reportable segments | 2 |
Accounting Policies and Prono44
Accounting Policies and Pronouncements Accounting Policies and Pronouncments (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017USD ($) | Sep. 30, 2017USD ($) | Jan. 01, 2017USD ($) | Dec. 31, 2016USD ($) | |
ASU 2016-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Tax benefit for stock awards vesting during the period | $ 300,000 | $ 9,100,000 | ||
Previously reported | ASU 2016-02 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Number of operating leases | 65 | |||
Aggregate minimum lease commitments | $ 78,400,000 | |||
Retained earnings | No impact | ASU 2016-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Impact on retained earnings | $ 0 | |||
Retained earnings | Estimated adjustment | ASU 2014-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Impact on retained earnings | $ 2,000,000 | $ 2,000,000 |
Acquisition of Simmons & Comp45
Acquisition of Simmons & Company International - Additional Information(Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Mar. 31, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Feb. 26, 2016 | |
Business Acquisition [Line Items] | |||||
Goodwill | $ 81,855 | $ 196,218 | |||
Simmons & Company International | |||||
Business Acquisition [Line Items] | |||||
Economic value | $ 140,000 | ||||
Fair value of net assets acquired | $ 119,300 | ||||
Acquisition related compensation arrangements | 20,600 | ||||
Goodwill | 60,700 | ||||
Goodwill amount expected to be deducted for income tax purposes | 59,400 | ||||
Simmons & Company International | Restricted Stock | |||||
Business Acquisition [Line Items] | |||||
Number of restricted common shares issued as part of the purchase price | 1,149,340 | ||||
Value of equity consideration on the acquisition date | 48,200 | ||||
Acquisition related compensation arrangements | 11,600 | ||||
Simmons & Company International | Restricted Stock | Minimum | |||||
Business Acquisition [Line Items] | |||||
Acquisition related compensation arrangement requisite service period | 1 year | ||||
Simmons & Company International | Restricted Stock | Maximum | |||||
Business Acquisition [Line Items] | |||||
Acquisition related compensation arrangement requisite service period | 3 years | ||||
Simmons & Company International | Restricted Stock | Weighted Average | |||||
Business Acquisition [Line Items] | |||||
Acquisition related compensation arrangement requisite service period | 2 years 8 months 19 days | ||||
Cash | Simmons & Company International | |||||
Business Acquisition [Line Items] | |||||
Acquisition related compensation arrangements | $ 9,000 | ||||
Cash | Simmons & Company International | Restricted Stock | |||||
Business Acquisition [Line Items] | |||||
Requisite service period for acquisition related compensation arrangements | 3 years | ||||
Performance award plan | Cash | Simmons & Company International | |||||
Business Acquisition [Line Items] | |||||
Requisite service period for performance award plan | 3 years | ||||
Compensation expense related to this performance award plan | 14,400 | ||||
Capital Markets | |||||
Business Acquisition [Line Items] | |||||
Goodwill | $ 81,855 | $ 81,855 | |||
Capital Markets | Simmons & Company International | |||||
Business Acquisition [Line Items] | |||||
Business Combination, Acquisition Related Costs | $ 900 | ||||
Capital Markets | Simmons & Company International | Customer relationships | |||||
Business Acquisition [Line Items] | |||||
Intangible assets acquired | 17,500 | ||||
Capital Markets | Simmons & Company International | Simmons trade name | |||||
Business Acquisition [Line Items] | |||||
Intangible assets acquired | $ 9,100 |
Acquisition of Simmons & Comp46
Acquisition of Simmons & Company International - Unaudited Pro Forma Information (Details) - Simmons & Company International $ in Thousands | 9 Months Ended |
Sep. 30, 2016USD ($) | |
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | |
Net revenues | $ 532,683 |
Net income applicable to Piper Jaffray Companies | $ 15,642 |
Financial Instruments and Oth47
Financial Instruments and Other Inventory Positions Owned and Financial Instruments and Other Inventory Positions Sold, but Not Yet Purchased (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Security Owned and Sold, Not yet Purchased, at Fair Value [Line Items] | ||
Equity securities | $ 66,904 | $ 6,363 |
Convertible securities | 70,900 | 103,486 |
Fixed income securities | 27,480 | 21,018 |
Taxable securities | 37,073 | 63,090 |
Tax-exempt securities | 374,348 | 559,329 |
Short-term securities | 177,873 | 35,175 |
Mortgage-backed securities | 4,321 | 5,638 |
U.S. government agency securities | 300,832 | 205,685 |
U.S. government securities | 17,205 | 29,970 |
Derivative contracts | 22,392 | 29,217 |
Total financial instruments and other inventory positions owned | 1,099,328 | 1,058,971 |
Equity securities | 100,403 | 89,453 |
Fixed income securities | 21,149 | 17,324 |
U.S. government agency securities | 26,703 | 6,723 |
U.S. government securities | 203,995 | 180,650 |
Derivative contracts | 5,485 | 5,207 |
Financial instruments and other inventory positions sold, but not yet purchased | 357,735 | 299,357 |
Financial instruments and other inventory positions owned and pledged as collateral | 335,382 | 594,361 |
Municipal Bond Fund | ||
Security Owned and Sold, Not yet Purchased, at Fair Value [Line Items] | ||
Taxable securities | 1,300 | |
Tax-exempt securities | 55,200 | |
Derivative contracts | 1,200 | |
Total financial instruments and other inventory positions owned | 0 | 57,700 |
Financial instruments and other inventory positions sold, but not yet purchased | 0 | 631 |
Parent Company | ||
Security Owned and Sold, Not yet Purchased, at Fair Value [Line Items] | ||
Total financial instruments and other inventory positions owned | 1,099,328 | 1,001,271 |
Financial instruments and other inventory positions sold, but not yet purchased | $ 357,735 | $ 298,726 |
Financial Instruments and Oth48
Financial Instruments and Other Inventory Positions Owned and Financial Instruments and Other Inventory Positions Sold, but Not Yet Purchased - Total Absolute Notional Contract Amount (Details) - Not Designated as Hedging Instrument - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Derivative [Line Items] | ||
Derivative Assets (1) | $ 270,835 | $ 302,907 |
Derivative Liabilities (2) | 259,558 | 274,653 |
Notional Amount | 3,524,575 | 3,761,227 |
Customer matched-book | Interest rate | ||
Derivative [Line Items] | ||
Notional Amount | 3,178,725 | 3,330,207 |
Customer matched-book | Interest rate | Financial instruments and other inventory positions owned | ||
Derivative [Line Items] | ||
Derivative Assets (1) | 270,149 | 288,955 |
Customer matched-book | Interest rate | Financial instruments and other inventory positions sold, but not yet purchased | ||
Derivative [Line Items] | ||
Derivative Liabilities (2) | 255,102 | 272,819 |
Trading securities | Interest rate | ||
Derivative [Line Items] | ||
Notional Amount | 345,850 | 423,550 |
Trading securities | Interest rate | Financial instruments and other inventory positions owned | ||
Derivative [Line Items] | ||
Derivative Assets (1) | 686 | 13,952 |
Trading securities | Interest rate | Financial instruments and other inventory positions sold, but not yet purchased | ||
Derivative [Line Items] | ||
Derivative Liabilities (2) | 4,456 | 1,707 |
Trading securities | Credit default swap index | ||
Derivative [Line Items] | ||
Notional Amount | 0 | 7,470 |
Trading securities | Credit default swap index | Financial instruments and other inventory positions owned | ||
Derivative [Line Items] | ||
Derivative Assets (1) | 0 | 0 |
Trading securities | Credit default swap index | Financial instruments and other inventory positions sold, but not yet purchased | ||
Derivative [Line Items] | ||
Derivative Liabilities (2) | $ 0 | $ 127 |
Financial Instruments and Oth49
Financial Instruments and Other Inventory Positions Owned and Financial Instruments and Other Inventory Positions Sold, but Not Yet Purchased - Unrealized Gains/(Losses) on Derivative Instruments (Details) - Not Designated as Hedging Instrument - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Unrealized Gain (Loss) on Derivatives Instruments | $ 5,631 | $ 6,718 | $ (12,622) | $ 1,079 |
Interest rate derivative contract | Investment banking | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Unrealized Gain (Loss) on Derivatives Instruments | (300) | (1,901) | (1,076) | (3,953) |
Interest rate derivative contract | Institutional brokerage | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Unrealized Gain (Loss) on Derivatives Instruments | 1,627 | 8,438 | (16,028) | 819 |
Credit default swap index contract | Institutional brokerage | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Unrealized Gain (Loss) on Derivatives Instruments | 4,304 | 74 | 4,482 | 3,958 |
Futures and equity option derivative contracts | Institutional brokerage | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Unrealized Gain (Loss) on Derivatives Instruments | $ 0 | $ 107 | $ 0 | $ 255 |
Financial Instruments and Oth50
Financial Instruments and Other Inventory Positions Owned and Financial Instruments and Other Inventory Positions Sold, but Not Yet Purchased - Additional Information (Details) - Maximum risk of loss $ in Millions | Sep. 30, 2017USD ($) |
Counterparties not required to post collateral | |
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | |
Uncollateralized credit exposure | $ 20.8 |
Notional contract amount | 181.8 |
One unnamed financial institutional not required to post collateral | |
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | |
Uncollateralized credit exposure | $ 15.4 |
Fair Value of Financial Instr51
Fair Value of Financial Instruments Fair Value of Financial Instruments - Fair Value Option (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Fair Value, Option, Quantitative Disclosures [Line Items] | |||||
Goodwill impairment | $ 114,363 | $ 0 | $ 114,363 | $ 0 | |
Merchant Banking Investments | Level III | |||||
Fair Value, Option, Quantitative Disclosures [Line Items] | |||||
Investments at fair value | $ 13,900 | 13,900 | $ 19,700 | ||
Gains from changes in fair value | $ 1,400 | $ 1,000 |
Fair Value of Financial Instr52
Fair Value of Financial Instruments - Information about Significant Unobservable Inputs used in Fair Value Measurement (Details) | 9 Months Ended |
Sep. 30, 2017 | |
Taxable securities | Financial instruments and other inventory positions owned | Weighted Average | Discounted cash flow | Level III | |
Fair Value Inputs Assets and Liabilities Quantitative Information [Line Items] | |
Expected recovery rate (% of par) | 0.00% |
Tax-exempt securities | Financial instruments and other inventory positions owned | Minimum | Discounted cash flow | Level III | |
Fair Value Inputs Assets and Liabilities Quantitative Information [Line Items] | |
Expected recovery rate (% of par) | 5.00% |
Tax-exempt securities | Financial instruments and other inventory positions owned | Maximum | Discounted cash flow | Level III | |
Fair Value Inputs Assets and Liabilities Quantitative Information [Line Items] | |
Expected recovery rate (% of par) | 60.00% |
Tax-exempt securities | Financial instruments and other inventory positions owned | Weighted Average | Discounted cash flow | Level III | |
Fair Value Inputs Assets and Liabilities Quantitative Information [Line Items] | |
Expected recovery rate (% of par) | 19.40% |
Short-term securities | Financial instruments and other inventory positions owned | Minimum | Discounted cash flow | Level III | |
Fair Value Inputs Assets and Liabilities Quantitative Information [Line Items] | |
Expected recovery rate (% of par) | 66.00% |
Short-term securities | Financial instruments and other inventory positions owned | Maximum | Discounted cash flow | Level III | |
Fair Value Inputs Assets and Liabilities Quantitative Information [Line Items] | |
Expected recovery rate (% of par) | 94.00% |
Short-term securities | Financial instruments and other inventory positions owned | Weighted Average | Discounted cash flow | Level III | |
Fair Value Inputs Assets and Liabilities Quantitative Information [Line Items] | |
Expected recovery rate (% of par) | 91.00% |
Collateralized by residential mortgages | Financial instruments and other inventory positions owned | Minimum | Discounted cash flow | Level III | |
Fair Value Inputs Assets and Liabilities Quantitative Information [Line Items] | |
Credit default rate | 1.00% |
Prepayment rates | 2.00% |
Loss severity | 5.00% |
Valuation yields | 5.00% |
Collateralized by residential mortgages | Financial instruments and other inventory positions owned | Maximum | Discounted cash flow | Level III | |
Fair Value Inputs Assets and Liabilities Quantitative Information [Line Items] | |
Credit default rate | 10.00% |
Prepayment rates | 18.00% |
Loss severity | 50.00% |
Valuation yields | 6.00% |
Collateralized by residential mortgages | Financial instruments and other inventory positions owned | Weighted Average | Discounted cash flow | Level III | |
Fair Value Inputs Assets and Liabilities Quantitative Information [Line Items] | |
Credit default rate | 2.70% |
Prepayment rates | 10.00% |
Loss severity | 32.60% |
Valuation yields | 5.30% |
Interest rate locks | Financial instruments and other inventory positions owned | Minimum | Discounted cash flow | Level III | |
Fair Value Inputs Assets and Liabilities Quantitative Information [Line Items] | |
Unamortized premium over the MMD curve | 400.00% |
Interest rate locks | Financial instruments and other inventory positions owned | Maximum | Discounted cash flow | Level III | |
Fair Value Inputs Assets and Liabilities Quantitative Information [Line Items] | |
Unamortized premium over the MMD curve | 2000.00% |
Interest rate locks | Financial instruments and other inventory positions owned | Weighted Average | Discounted cash flow | Level III | |
Fair Value Inputs Assets and Liabilities Quantitative Information [Line Items] | |
Unamortized premium over the MMD curve | 1130.00% |
U.S. government agency securities | Minimum | Level II | |
Fair Value Inputs Assets and Liabilities Quantitative Information [Line Items] | |
Market yields basis points spreads to treasury securities (as a percent) | 2.05% |
Prepayment expectations based on CPR (as a percent) | 0.00% |
U.S. government agency securities | Maximum | Level II | |
Fair Value Inputs Assets and Liabilities Quantitative Information [Line Items] | |
Market yields basis points spreads to treasury securities (as a percent) | 8.53% |
Prepayment expectations based on CPR (as a percent) | 18.30% |
Equity investment in private company | Investments | Minimum | Market approach | Level III | |
Fair Value Inputs Assets and Liabilities Quantitative Information [Line Items] | |
Revenue multiple | 2 |
EBITDA multiple | 10 |
Equity investment in private company | Investments | Maximum | Market approach | Level III | |
Fair Value Inputs Assets and Liabilities Quantitative Information [Line Items] | |
Revenue multiple | 6 |
EBITDA multiple | 15 |
Equity investment in private company | Investments | Weighted Average | Market approach | Level III | |
Fair Value Inputs Assets and Liabilities Quantitative Information [Line Items] | |
Revenue multiple | 4.8 |
EBITDA multiple | 12.2 |
Interest rate locks | Financial instruments and other inventory positions sold, but not yet purchased | Minimum | Discounted cash flow | Level III | |
Fair Value Inputs Assets and Liabilities Quantitative Information [Line Items] | |
Unamortized premium over the MMD curve | 100.00% |
Interest rate locks | Financial instruments and other inventory positions sold, but not yet purchased | Maximum | Discounted cash flow | Level III | |
Fair Value Inputs Assets and Liabilities Quantitative Information [Line Items] | |
Unamortized premium over the MMD curve | 2100.00% |
Interest rate locks | Financial instruments and other inventory positions sold, but not yet purchased | Weighted Average | Discounted cash flow | Level III | |
Fair Value Inputs Assets and Liabilities Quantitative Information [Line Items] | |
Unamortized premium over the MMD curve | 1090.00% |
Fair Value of Financial Instr53
Fair Value of Financial Instruments - Additional Information (Detail) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Investments at fair value attributable to third party ownership | $ 167,938 | $ 156,102 | |
Transfers out of Level 3 | (601) | $ (14,304) | |
Transfers between fair value levels | 0 | ||
Level II | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Total assets | 1,321,638 | 1,278,785 | |
Level III | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Total assets | $ 136,622 | $ 147,143 | |
Percentage of Level III assets to financial instruments measured at fair value | 10.70% | 12.10% | |
U.S. government agency securities | Minimum | Level II | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Market yields basis points spreads to treasury securities (as a percent) | 2.05% | ||
U.S. government agency securities | Maximum | Level II | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Market yields basis points spreads to treasury securities (as a percent) | 8.53% | ||
Investments | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Transfers out of Level 3 | $ (601) | (9,088) | |
Financial instruments and other inventory positions owned | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Transfers out of Level 3 | (5,216) | ||
Financial instruments and other inventory positions owned | Taxable municipal securities | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Transfers out of Level 3 | $ (5,216) | ||
Noncontrolling interests in a consolidated merchant banking fund | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Investments at fair value attributable to third party ownership | $ 44,932 | $ 45,123 |
Fair Value of Financial Instr54
Fair Value of Financial Instruments - Valuation of Financial Instruments by Pricing Observability Levels (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Equity securities | $ 66,904 | $ 6,363 |
Convertible securities | 70,900 | 103,486 |
Fixed income securities | 27,480 | 21,018 |
Taxable securities | 37,073 | 63,090 |
Tax-exempt securities | 374,348 | 559,329 |
Short-term securities | 177,873 | 35,175 |
Mortgage-backed securities | 4,321 | 5,638 |
U.S. government agency securities | 300,832 | 205,685 |
U.S. government securities | 17,205 | 29,970 |
Derivative contracts | 22,392 | 29,217 |
Derivative contracts | (248,443) | (273,690) |
Total financial instruments and other inventory positions owned | 1,099,328 | 1,058,971 |
Equity securities | 100,403 | 89,453 |
Fixed income securities | 21,149 | 17,324 |
U.S. government agency securities | 26,703 | 6,723 |
U.S. government securities | 203,995 | 180,650 |
Derivative contracts | 5,485 | 5,207 |
Derivative contracts | (254,073) | (269,446) |
Total financial instruments and other inventory positions sold, but not yet purchased | 357,735 | 299,357 |
Securities posted as collateral to its counterparties | 0 | |
Level I | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Equity securities | 2,466 | 82 |
U.S. government securities | 17,205 | 29,970 |
Total financial instruments and other inventory positions owned | 19,671 | 30,052 |
Cash equivalents | 4,112 | 768 |
Investments at fair value | 37,778 | 32,783 |
Total assets | 61,561 | 63,603 |
Equity securities | 100,181 | 89,453 |
U.S. government securities | 164,084 | 180,650 |
Total financial instruments and other inventory positions sold, but not yet purchased | 264,265 | 270,103 |
Level II | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Equity securities | 64,438 | 6,281 |
Convertible securities | 70,900 | 103,486 |
Fixed income securities | 27,480 | 21,018 |
Taxable securities | 37,073 | 60,404 |
Tax-exempt securities | 373,598 | 558,252 |
Short-term securities | 177,168 | 34,431 |
Mortgage-backed securities | 273 | |
U.S. government agency securities | 300,832 | 205,685 |
Derivative contracts | 270,149 | 288,955 |
Total financial instruments and other inventory positions owned | 1,321,638 | 1,278,785 |
Total assets | 1,321,638 | 1,278,785 |
Equity securities | 222 | |
Fixed income securities | 21,149 | 17,324 |
U.S. government agency securities | 26,703 | 6,723 |
U.S. government securities | 39,911 | |
Derivative contracts | 255,308 | 273,166 |
Total financial instruments and other inventory positions sold, but not yet purchased | 343,293 | 297,213 |
Level III | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Taxable securities | 2,686 | |
Tax-exempt securities | 750 | 1,077 |
Short-term securities | 705 | 744 |
Mortgage-backed securities | 4,321 | 5,365 |
Derivative contracts | 686 | 13,952 |
Total financial instruments and other inventory positions owned | 6,462 | 23,824 |
Investments at fair value | 130,160 | 123,319 |
Total assets | 136,622 | 147,143 |
Derivative contracts | 4,250 | 1,487 |
Total financial instruments and other inventory positions sold, but not yet purchased | 4,250 | 1,487 |
Measured on a recurring basis | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Equity securities | 66,904 | 6,363 |
Convertible securities | 70,900 | 103,486 |
Fixed income securities | 27,480 | 21,018 |
Taxable securities | 37,073 | 63,090 |
Tax-exempt securities | 374,348 | 559,329 |
Short-term securities | 177,873 | 35,175 |
Mortgage-backed securities | 4,321 | 5,638 |
U.S. government agency securities | 300,832 | 205,685 |
U.S. government securities | 17,205 | 29,970 |
Derivative contracts | 22,392 | 29,217 |
Total financial instruments and other inventory positions owned | 1,099,328 | 1,058,971 |
Cash equivalents | 4,112 | 768 |
Investments at fair value | 167,938 | 156,102 |
Total assets | 1,271,378 | 1,215,841 |
Equity securities | 100,403 | 89,453 |
Fixed income securities | 21,149 | 17,324 |
U.S. government agency securities | 26,703 | 6,723 |
U.S. government securities | 203,995 | 180,650 |
Derivative contracts | 5,485 | 5,207 |
Total financial instruments and other inventory positions sold, but not yet purchased | $ 357,735 | $ 299,357 |
Fair Value of Financial Instr55
Fair Value of Financial Instruments - Changes in Fair Value Associated with Level III Financial Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning balance | $ 120,357 | $ 180,782 | $ 147,143 | $ 238,281 |
Purchases | 18,355 | 12,011 | 26,791 | 54,448 |
Sales | (267) | (65,315) | (42,038) | (155,833) |
Transfers in | 0 | 0 | 0 | 0 |
Transfers out | (601) | (14,304) | ||
Realized gains/ (losses) | (105) | 11,776 | 22,041 | 13,386 |
Unrealized gains/ (losses) | (1,718) | (6,577) | (16,714) | (3,301) |
Ending balance | 136,622 | 132,677 | 136,622 | 132,677 |
Unrealized gains/ (losses) for assets held at period end | (1,335) | 3,641 | 8,224 | 6 |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning balance | 5,573 | 14,785 | 1,487 | 7,148 |
Purchases | 0 | (5,922) | (719) | (23,700) |
Sales | 3,461 | 171 | 11,219 | 171 |
Transfers in | 0 | 0 | 0 | 0 |
Realized gains/(losses) | (3,461) | 5,751 | (10,500) | 23,529 |
Unrealized gains/ (losses) | (1,323) | (7,497) | 2,763 | 140 |
Ending balance | 4,250 | 7,288 | 4,250 | 7,288 |
Unrealized gains/ (losses) for liabilities held at period end | 1,430 | (1,263) | 4,125 | 7,288 |
Financial instruments and other inventory positions owned | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning balance | 6,472 | 57,996 | 23,824 | 128,837 |
Purchases | 105 | 1,347 | 26,765 | |
Sales | (267) | (44,006) | (16,827) | (134,524) |
Transfers in | 0 | 0 | 0 | 0 |
Transfers out | (5,216) | |||
Realized gains/ (losses) | (105) | 1,440 | 12,642 | 3,050 |
Unrealized gains/ (losses) | 257 | 1,132 | (14,524) | (2,350) |
Ending balance | 6,462 | 16,562 | 6,462 | 16,562 |
Unrealized gains/ (losses) for assets held at period end | 640 | 1,071 | 520 | 1,229 |
Investments | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning balance | 113,885 | 122,786 | 123,319 | 109,444 |
Purchases | 18,250 | 12,011 | 25,444 | 27,683 |
Sales | 0 | (21,309) | (25,211) | (21,309) |
Transfers in | 0 | 0 | 0 | 0 |
Transfers out | (601) | (9,088) | ||
Realized gains/ (losses) | 0 | 10,336 | 9,399 | 10,336 |
Unrealized gains/ (losses) | (1,975) | (7,709) | (2,190) | (951) |
Ending balance | 130,160 | 116,115 | 130,160 | 116,115 |
Unrealized gains/ (losses) for assets held at period end | (1,975) | 2,570 | 7,704 | (1,223) |
Taxable securities | Financial instruments and other inventory positions owned | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning balance | 2,686 | 5,816 | ||
Sales | (2,703) | (611) | ||
Transfers in | 0 | 0 | ||
Transfers out | (5,216) | |||
Realized gains/ (losses) | 716 | 11 | ||
Unrealized gains/ (losses) | (699) | |||
Tax-exempt securities | Financial instruments and other inventory positions owned | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning balance | 1,117 | 1,177 | 1,077 | 1,177 |
Sales | (267) | (267) | ||
Transfers in | 0 | 0 | 0 | 0 |
Unrealized gains/ (losses) | (100) | (60) | ||
Ending balance | 750 | 1,177 | 750 | 1,177 |
Unrealized gains/ (losses) for assets held at period end | (100) | (60) | ||
Short-term securities | Financial instruments and other inventory positions owned | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning balance | 721 | 748 | 744 | 720 |
Sales | (25) | |||
Transfers in | 0 | 0 | 0 | 0 |
Realized gains/ (losses) | 2 | |||
Unrealized gains/ (losses) | (16) | 0 | (16) | 28 |
Ending balance | 705 | 748 | 705 | 748 |
Unrealized gains/ (losses) for assets held at period end | (16) | (16) | 28 | |
Mortgage-backed securities | Financial instruments and other inventory positions owned | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning balance | 4,251 | 56,053 | 5,365 | 121,124 |
Purchases | 997 | 26,519 | ||
Sales | (44,006) | (1,854) | (133,913) | |
Transfers in | 0 | 0 | 0 | 0 |
Realized gains/ (losses) | 1,440 | 296 | 3,285 | |
Unrealized gains/ (losses) | 70 | 190 | (483) | (3,338) |
Ending balance | 4,321 | 13,677 | 4,321 | 13,677 |
Unrealized gains/ (losses) for assets held at period end | 70 | 111 | (90) | 241 |
Derivative contracts | Financial instruments and other inventory positions owned | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning balance | 383 | 18 | 13,952 | |
Purchases | 105 | 350 | 246 | |
Sales | (11,978) | |||
Transfers in | 0 | 0 | 0 | 0 |
Realized gains/ (losses) | (105) | 11,628 | (246) | |
Unrealized gains/ (losses) | 303 | 942 | (13,266) | 960 |
Ending balance | 686 | 960 | 686 | 960 |
Unrealized gains/ (losses) for assets held at period end | 686 | 960 | 686 | 960 |
Derivative contracts | Financial instruments and other inventory positions sold, but not yet purchased | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning balance | 5,573 | 14,785 | 1,487 | 7,148 |
Purchases | (5,922) | (719) | (23,700) | |
Sales | 3,461 | 171 | 11,219 | 171 |
Transfers in | 0 | 0 | 0 | 0 |
Transfers out | 0 | 0 | 0 | 0 |
Realized gains/(losses) | (3,461) | 5,751 | (10,500) | 23,529 |
Unrealized gains/ (losses) | (1,323) | (7,497) | 2,763 | 140 |
Ending balance | 4,250 | 7,288 | 4,250 | 7,288 |
Unrealized gains/ (losses) for liabilities held at period end | $ 1,430 | $ (1,263) | $ 4,125 | $ 7,288 |
Variable Interest Entities Va56
Variable Interest Entities Variable Interest Entities (Details) - Variable Interest Entity, Primary Beneficiary $ in Thousands | Sep. 30, 2017USD ($) |
Variable Interest Entity [Line Items] | |
Consolidated VIE assets | $ 282,852 |
Consolidated VIE liabilities | 163,581 |
Receivables from brokers, dealers and clearing organizations | |
Variable Interest Entity [Line Items] | |
Consolidated VIE assets | 15,765 |
Financial instruments and other inventory positions owned and pledged as collateral | |
Variable Interest Entity [Line Items] | |
Consolidated VIE assets | 149,632 |
Investments | |
Variable Interest Entity [Line Items] | |
Consolidated VIE assets | 112,834 |
Other assets | |
Variable Interest Entity [Line Items] | |
Consolidated VIE assets | 4,621 |
Short-term financing | |
Variable Interest Entity [Line Items] | |
Consolidated VIE liabilities | 76,797 |
Payables to brokers, dealer and clearing organizations | |
Variable Interest Entity [Line Items] | |
Consolidated VIE liabilities | 46,627 |
Financial instruments and other inventory positions sold, but not yet purchased | |
Variable Interest Entity [Line Items] | |
Consolidated VIE liabilities | 21,813 |
Other liabilities and accrued expenses | |
Variable Interest Entity [Line Items] | |
Consolidated VIE liabilities | $ 18,344 |
Variable Interest Entities - Ad
Variable Interest Entities - Additional Information (Details) - Variable Interest Entity, Not Primary Beneficiary, Aggregated Disclosure [Member] - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Variable Interest Entity [Line Items] | ||
Nonconsolidated assets related to VIEs | $ 600,000,000 | $ 800,000,000 |
Maximum exposure to loss for nonconsolidated VIEs | 6,400,000 | |
Nonconsolidated liabilities related to VIEs | $ 0 | $ 0 |
Receivables from and Payables58
Receivables from and Payables to Brokers, Dealers and Clearing Organizations - Amounts Receivable from Brokers, Dealers and Clearing Organizations (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Brokers and Dealers [Abstract] | ||
Receivable arising from unsettled securities transactions | $ 15,765 | $ 132,724 |
Deposits paid for securities borrowed | 0 | 27,573 |
Receivable from clearing organizations | 36,891 | 3,293 |
Deposits with clearing organizations | 12,409 | 35,713 |
Securities failed to deliver | 0 | 975 |
Other | 15,815 | 12,452 |
Total brokers, dealers and clearing organizations | $ 80,880 | $ 212,730 |
Receivables from and Payables59
Receivables from and Payables to Brokers, Dealers and Clearing Organizations - Amounts Payable to Brokers, Dealers and Clearing Organizations (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Brokers and Dealers [Abstract] | ||
Payable arising from unsettled securities transactions | $ 49,160 | $ 13,948 |
Payable to clearing organizations | 0 | 15,893 |
Securities failed to receive | 0 | 3,043 |
Other | 5,105 | 7,958 |
Total brokers, dealers and clearing organizations | $ 54,265 | $ 40,842 |
Receivables from and Payables60
Receivables from and Payables to Brokers, Dealers and Clearing Organizations Receivables from and Payables to Brokers, Dealers and Clearing Organizations (Details) | Sep. 30, 2017USD ($) |
Pershing clearing arrangement | |
Schedule Of Compliance With Regulatory Capital Requirements For Broker Dealer [Line Items] | |
Excess net capital required | $ 120,000,000 |
Collateralized Securities Tra61
Collateralized Securities Transactions - Additional Information (Detail) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Disclosure of Repurchase Agreements [Abstract] | ||
Securities purchased under agreements to resell, securities borrowed and margin agreements on terms that permit to repledge or resell the securities to others | $ 192,200,000 | |
Securities either pledged or otherwise transferred to others in connection with financing activities or to satisfy commitments under financial instruments and other inventory positions sold, but not yet purchased | 185,200,000 | |
Securities loaned | $ 0 | $ 0 |
Investments (Details)
Investments (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Schedule of Investments [Line Items] | ||
Investments at fair value | $ 167,938 | $ 156,102 |
Investments at cost | 3,068 | 2,755 |
Investments accounted for under the equity method | 8,521 | 9,200 |
Total investments | 179,527 | 168,057 |
Less investments attributable to noncontrolling interests (1) | ||
Schedule of Investments [Line Items] | ||
Investments at fair value | 44,932 | 45,123 |
Parent Company | ||
Schedule of Investments [Line Items] | ||
Total investments | $ 134,595 | $ 122,934 |
Investments - Additional Inform
Investments - Additional Information (Details) $ in Millions | Sep. 30, 2017USD ($) |
Investments, All Other Investments [Abstract] | |
Estimated fair market value of investments carried at cost | $ 4.6 |
Other Assets (Details)
Other Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Fee receivables | $ 21,968 | $ 22,840 |
Accrued interest receivables | 7,612 | 9,259 |
Forgivable loans, net | 8,422 | 9,307 |
Prepaid expenses | 5,122 | 6,363 |
Secured loan receivables | 2,975 | 6,236 |
Other | 9,344 | 13,124 |
Total other assets | $ 55,443 | $ 67,129 |
Goodwill and Intangible Asset65
Goodwill and Intangible Assets - Changes in Carrying Value of Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Goodwill | ||||
Goodwill beginning balance | $ 196,218 | |||
Impairment charge | $ 114,363 | $ 0 | 114,363 | $ 0 |
Goodwill ending balance | 81,855 | 81,855 | ||
Intangible assets | ||||
Intangible assets beginning balance | 37,234 | |||
Amortization of intangible assets | (3,822) | (8,010) | (11,466) | (15,400) |
Intangible assets ending balance | 25,768 | 25,768 | ||
Capital Markets | ||||
Goodwill | ||||
Goodwill beginning balance | 81,855 | |||
Goodwill ending balance | 81,855 | 81,855 | ||
Intangible assets | ||||
Intangible assets beginning balance | 19,320 | |||
Amortization of intangible assets | (2,544) | (6,623) | (7,633) | (11,239) |
Intangible assets ending balance | 11,687 | 11,687 | ||
Asset Management | ||||
Goodwill | ||||
Goodwill beginning balance | 114,363 | |||
Impairment charge | 114,363 | |||
Goodwill ending balance | 0 | 0 | ||
Intangible assets | ||||
Intangible assets beginning balance | 17,914 | |||
Amortization of intangible assets | (1,278) | $ (1,387) | (3,833) | $ (4,161) |
Intangible assets ending balance | $ 14,081 | $ 14,081 |
Goodwill and Intangible Asset66
Goodwill and Intangible Assets Goodwill and Intangible Assets - Additional Details (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)unit | Sep. 30, 2016USD ($) | |
Goodwill And Intangible Assets Disclosure [Line Items] | ||||
Number of reporting units | unit | 2 | |||
Goodwill impairment | $ 114,363 | $ 0 | $ 114,363 | $ 0 |
Asset Management | ||||
Goodwill And Intangible Assets Disclosure [Line Items] | ||||
Goodwill impairment | 114,363 | |||
Impairment of intangible assets | $ 0 |
Short-Term Financing - Summary
Short-Term Financing - Summary of Short Term Financing and Weighted Average Interest Rate on Borrowings (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Short-term Debt [Line Items] | ||
Oustanding Balance | $ 76,797 | $ 418,832 |
Commercial paper (secured) | ||
Short-term Debt [Line Items] | ||
Oustanding Balance | 0 | $ 147,021 |
Weighted Average Interest Rate | 2.12% | |
Prime broker arrangements | ||
Short-term Debt [Line Items] | ||
Oustanding Balance | $ 76,797 | $ 271,811 |
Weighted Average Interest Rate | 1.98% | 1.49% |
Short-Term Financing - Addition
Short-Term Financing - Additional Information (Detail) | 9 Months Ended | |
Sep. 30, 2017USD ($)program | Dec. 31, 2016USD ($) | |
Short-term Debt [Line Items] | ||
Short-term financing | $ 76,797,000 | $ 418,832,000 |
Commercial paper (secured) | ||
Short-term Debt [Line Items] | ||
Number of commercial paper programs | program | 2 | |
Short-term financing | $ 0 | $ 147,021,000 |
Commercial paper (secured) | Minimum | ||
Short-term Debt [Line Items] | ||
Debt term | 27 days | |
Commercial paper (secured) | Maximum | ||
Short-term Debt [Line Items] | ||
Debt term | 270 days | |
Commercial paper (secured) | CP Series II A | ||
Short-term Debt [Line Items] | ||
Excess net capital required | $ 100,000,000 | |
Bank lines (secured) | Committed Credit Facility | ||
Short-term Debt [Line Items] | ||
Debt term | 1 year | |
Line of credity, maximum borrowing capacity | $ 200,000,000 | |
Minimum net capital required | 120,000,000 | |
Short-term financing | 0 | |
Bank lines (secured) | Uncommitted Credit Facility | ||
Short-term Debt [Line Items] | ||
Line of credity, maximum borrowing capacity | 85,000,000 | |
Short-term financing | $ 0 |
Senior Notes Senior Notes (Deta
Senior Notes Senior Notes (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||
Senior Notes | $ 125,000 | $ 175,000 |
Senior Notes | Class A Variable Rate Senior Notes Due May 2017 | ||
Debt Instrument [Line Items] | ||
Senior Notes | 0 | 50,000 |
Senior Notes | Class C Fixed Rate Senior Notes Due October 2018 | ||
Debt Instrument [Line Items] | ||
Senior Notes | $ 125,000 | $ 125,000 |
Senior Notes - Additional Infor
Senior Notes - Additional Information (Details) - Senior Notes - Class C Fixed Rate Senior Notes Due October 2018 - USD ($) | Sep. 30, 2017 | Oct. 08, 2015 |
Debt Instrument [Line Items] | ||
Face amount | $ 125,000,000 | |
Annual fixed rate | 5.06% | |
Fair value disclosure | $ 125,700,000 |
Shareholders' Equity - Addition
Shareholders' Equity - Additional Information (Detail) - USD ($) | Oct. 26, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Aug. 10, 2017 | Dec. 31, 2016 | Aug. 14, 2015 |
Equity, Class of Treasury Stock [Line Items] | ||||||||
Aggregate purchase price | $ 25,065,000 | $ 70,428,000 | ||||||
Shares of common stock purchased from restricted stock award related to recipients' employment tax obligations | 308,801 | 255,164 | ||||||
Repurchase of common stock for employee tax withholding | $ 22,600,000 | $ 10,700,000 | ||||||
Reissuance of treasury shares as a result of employee vesting | 850,925 | 731,758 | ||||||
Cash dividends paid | $ 14,200,000 | |||||||
Cash dividends declared | $ 0.31 | $ 0 | $ 0.9375 | $ 0 | ||||
Noncontrolling interests proportionate share of equity | $ 48,519,000 | $ 48,519,000 | $ 57,016,000 | |||||
Other comprehensive income or loss attributed to noncontrolling interests | 0 | $ 0 | ||||||
Merchant banking funds | ||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||
Noncontrolling interests proportionate share of equity | 35,100,000 | 35,100,000 | 35,000,000 | |||||
Municipal bond fund with employee investors | ||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||
Noncontrolling interests proportionate share of equity | 9,200,000 | |||||||
Senior living fund | ||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||
Noncontrolling interests proportionate share of equity | $ 13,400,000 | $ 13,400,000 | $ 12,800,000 | |||||
Share Repurchase Program Authorized 2015 | ||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||
Repurchase of common stock, authorized amount | $ 150,000,000 | |||||||
Shares repurchased | 36,936 | 1,536,226 | ||||||
Average share price | $ 67.62 | $ 38.89 | ||||||
Aggregate purchase price | $ 2,500,000 | $ 59,700,000 | ||||||
Share Repurchase Program Authorized 2017 | ||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||
Repurchase of common stock, authorized amount | $ 150,000,000 | |||||||
Cash dividends declared | ||||||||
Equity, Class of Treasury Stock [Line Items] | ||||||||
Cash dividends declared | $ 0.3125 |
Shareholders' Equity - Rollforw
Shareholders' Equity - Rollforward (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Common Shareholders' Equity at beginning of period | $ 759,250 | |||
Noncontrolling interests at beginning of period | 57,016 | |||
Total Shareholders' Equity at beginning of period | 816,266 | |||
Common Shareholders' Equity, Net income | $ (49,713) | $ 10,658 | (15,865) | $ 15,033 |
Noncontrolling Interests, Net income | (1,100) | 1,278 | 3,217 | 4,602 |
Total Shareholders' Equity, Net income | (50,813) | $ 11,936 | (12,648) | $ 19,635 |
Dividends | (14,228) | |||
Amortization/issuance of restricted stock | 31,163 | |||
Issuance of treasury shares for options exercised | 1,703 | |||
Repurchased of common stock through share repurchase program | $ (2,497) | |||
Repurchase of common stock for employee tax withholding | (308,801) | (255,164) | ||
Repurchase of common stock for employee tax withholding | $ (22,568) | |||
Shares reserved/issued for director compensation | 171 | |||
Other comprehensive loss | 1,137 | |||
Fund capital distributions, net | (11,714) | |||
Common Shareholders' Equity at period end | 738,266 | 738,266 | ||
Noncontrolling Interest at period end | 48,519 | 48,519 | ||
Total Shareholders' Equity at period end | $ 786,785 | $ 786,785 | ||
Common Shares Outstanding | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Common Shares Outstanding at beginning of period | 12,391,970 | |||
Issuance of treasury shares for options exercised | 26,149 | |||
Issuance of treasury shares for restricted stock vestings | 824,776 | |||
Repurchase of common stock through share repurchase program | (36,936) | |||
Repurchase of common stock for employee tax withholding | (308,801) | |||
Shares reserved/issued for director compensation | 2,744 | |||
Common Shares Outstanding at period end | 12,899,902 | 12,899,902 | ||
Common Shareholders' Equity | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Common Shareholders' Equity at beginning of period | $ 759,250 | |||
Dividends | (14,228) | |||
Amortization/issuance of restricted stock | 31,163 | |||
Issuance of treasury shares for options exercised | 1,703 | |||
Repurchased of common stock through share repurchase program | (2,497) | |||
Repurchase of common stock for employee tax withholding | (22,568) | |||
Shares reserved/issued for director compensation | 171 | |||
Other comprehensive loss | 1,137 | |||
Fund capital distributions, net | 0 | |||
Common Shareholders' Equity at period end | $ 738,266 | 738,266 | ||
Noncontrolling Interests | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Noncontrolling interests at beginning of period | 57,016 | |||
Noncontrolling Interest, Decrease from Distributions to Noncontrolling Interest Holders | 0 | |||
Amortization/issuance of restricted stock | 0 | |||
Issuance of treasury shares for options exercised | 0 | |||
Repurchased of common stock through share repurchase program | 0 | |||
Repurchase of common stock for employee tax withholding | 0 | |||
Shares reserved/issued for director compensation | 0 | |||
Other comprehensive loss | 0 | |||
Fund capital distributions, net | (11,714) | |||
Noncontrolling Interest at period end | $ 48,519 | $ 48,519 |
Compensation Plans - Summary of
Compensation Plans - Summary of Outstanding Equity Awards (Details) - shares | Sep. 30, 2017 | Dec. 31, 2016 |
Restricted Stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted stock outstanding | 2,235,060 | 2,874,117 |
Leadership grants | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted stock outstanding | 273,574 | 374,460 |
Amended And Restated 2003 Annual And Long-Term Incentive Plan | Leadership grants | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted stock outstanding | 273,574 | |
Total restricted stock related to compensation | Restricted Stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted stock outstanding | 1,413,919 | |
Total restricted stock related to compensation | Amended And Restated 2003 Annual And Long-Term Incentive Plan | Restricted Stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted stock outstanding | 1,153,688 | |
Total restricted stock related to compensation | Amended And Restated 2003 Annual And Long-Term Incentive Plan | Annual grants | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted stock outstanding | 906,347 | |
Total restricted stock related to compensation | Amended And Restated 2003 Annual And Long-Term Incentive Plan | Sign-on grants | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted stock outstanding | 247,341 | |
Total restricted stock related to compensation | 2016 Employment Inducement Award Plan | Restricted Stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted stock outstanding | 260,231 | |
Simmons Deal Consideration (1) | Restricted Stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted stock outstanding | 821,141 |
Compensation Plans - RSU Valuat
Compensation Plans - RSU Valuation Assumptions (Details) - Restricted stock units | 9 Months Ended |
Sep. 30, 2017 | |
2,017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk-free Interest Rate | 1.62% |
Expected Stock Price Volatility | 35.90% |
2,016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk-free Interest Rate | 0.98% |
Expected Stock Price Volatility | 34.90% |
2,015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk-free Interest Rate | 0.90% |
Expected Stock Price Volatility | 29.80% |
2,014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk-free Interest Rate | 0.82% |
Expected Stock Price Volatility | 41.30% |
Compensation Plans - Unvested R
Compensation Plans - Unvested Restricted Stock (Details) - Restricted Stock | 9 Months Ended |
Sep. 30, 2017$ / sharesshares | |
Unvested Restricted Stock or Stock Units | |
Beginning Balance | shares | 2,874,117 |
Granted | shares | 241,691 |
Vested | shares | (701,380) |
Cancelled | shares | (179,368) |
Ending Balance | shares | 2,235,060 |
Weighted Average Grant Date Fair Value (in dollars per share) | |
Beginning Balance | $ / shares | $ 43.12 |
Granted | $ / shares | 77.95 |
Vested | $ / shares | 44.85 |
Cancelled | $ / shares | 42.68 |
Ending Balance | $ / shares | $ 46.38 |
Compensation Plans - Unvested76
Compensation Plans - Unvested Restricted Stock Units (Details) - Restricted stock units | 9 Months Ended |
Sep. 30, 2017$ / sharesshares | |
Unvested Restricted Stock or Stock Units | |
Beginning Balance | shares | 374,460 |
Granted | shares | 35,981 |
Vested | shares | (115,290) |
Cancelled | shares | (21,577) |
Ending Balance | shares | 273,574 |
Weighted Average Grant Date Fair Value (in dollars per share) | |
Beginning Balance | $ / shares | $ 21.63 |
Granted | $ / shares | 84.10 |
Vested | $ / shares | 23.42 |
Cancelled | $ / shares | 27.81 |
Ending Balance | $ / shares | $ 28.61 |
Compensation Plans - Stock Opti
Compensation Plans - Stock Options (Details) - USD ($) | 3 Months Ended | 9 Months Ended |
Dec. 31, 2016 | Sep. 30, 2017 | |
Options Outstanding | ||
Beginning Balance | 30,613 | |
Granted | 0 | |
Exercised | (26,149) | |
Cancelled | 0 | |
Expired | (4,464) | |
Ending Balance | 30,613 | 0 |
Weighted Average Exercise Price (in dollars per share) | ||
Beginning Balance | $ 65.86 | |
Granted | 0 | |
Exercised | 65.13 | |
Cancelled | 0 | |
Expired | 70.13 | |
Ending Balance | $ 65.86 | $ 0 |
Weighted Average Remaining Contractual Term (in Years) | ||
Weighted Average Remaining Contractual Term (in Years) | 4 months | 0 days |
Aggregate Intrinsic Value | ||
Aggregate Intrinsic Value | $ 203,291 | $ 0 |
Compensation Plans - Additional
Compensation Plans - Additional Information (Detail) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017USD ($)planshares | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)planshares | Sep. 30, 2016USD ($)shares | Mar. 31, 2017shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of stock-based compensation plans | plan | 2 | 2 | |||
Remaining outstanding options | shares | 0 | ||||
Compensation expense related to employee restricted stock awards | $ 13,500,000 | $ 17,900,000 | $ 25,800,000 | $ 42,000,000 | |
Forfeitures recorded as a result of violating the post-termination restrictions | 700,000 | 500,000 | 3,000,000 | 600,000 | |
Tax benefit related to compensation costs for stock-based compensation arrangements | 4,500,000 | $ 5,200,000 | 16,200,000 | $ 11,800,000 | |
Intrinsic value of options exercised | 300,000 | ||||
Tax benefit realized from exercise of options | $ 100,000 | ||||
Exercises during the period | shares | 26,149 | ||||
Restricted Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares granted | shares | 241,691 | ||||
Annual grants | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting period in years | 3 years | ||||
Annual grant expense period | 1 year | ||||
Sign-on grants | Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Grant requisite service period | 1 year | ||||
Sign-on grants | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Grant requisite service period | 5 years | ||||
Restricted stock units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Performance period for restricted stock units | 36 months | ||||
Number of years risk free interest rate | 3 years | ||||
Number of shares granted | shares | 35,981 | ||||
Restricted stock and restricted stock units (RSUs) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Unrecognized compensation cost related to restricted stock | 29,400,000 | $ 29,400,000 | |||
Weighted average period over which restricted stock expense expected to be recognized | 1 year 7 months | ||||
Stock options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Unrecognized compensation cost related to restricted stock | $ 0 | $ 0 | |||
Stock options | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Term of stock options | 10 years | ||||
Amended And Restated 2003 Annual And Long-Term Incentive Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Equity award grants authorized | shares | 8,200,000 | 8,200,000 | |||
Shares available for future issuance | shares | 1,000,000 | 1,000,000 | |||
2016 Employment Inducement Award Plan | Restricted Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting period in years | 3 years | ||||
Value of restricted stock granted | $ 11,600,000 | ||||
Number of shares granted | shares | 286,776 | ||||
2017 | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting percentage | 150.00% | ||||
Average adjusted return on equity targets | 2017 | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting percentage | 75.00% | ||||
Total shareholder return relative to members of a predetermined peer group | 2017 | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting percentage | 75.00% | ||||
Total shareholder return relative to members of a predetermined peer group | Prior to 2017 | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting percentage | 50.00% | ||||
Total shareholder return | Prior to 2017 | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting percentage | 50.00% | ||||
Probable | Average adjusted return on equity targets | 2017 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting percentage | 50.00% |
Compensation Plans Compensation
Compensation Plans Compensation Plans - Deferred Compensation Plans (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | |
Nonqualified Deferred Compensation Plan | ||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||
Plan Assets | $ 29.9 | $ 24.4 |
Plan Liabilities | $ 30 | $ 24.5 |
Mutual Fund Restricted Shares | ||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||
Award Vesting Period | 3 years | |
New Employees | Mutual Fund Restricted Shares | Minimum | ||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||
Requisite service period | 2 years | |
New Employees | Mutual Fund Restricted Shares | Maximum | ||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||
Requisite service period | 5 years |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Net income/(loss) applicable to Piper Jaffray Companies | $ (49,713) | $ 10,658 | $ (15,865) | $ 15,033 |
Earnings allocated to participating securities (1) | (702) | (2,076) | (2,241) | (2,557) |
Net income/(loss) applicable to Piper Jaffray Companies’ common shareholders (2) | $ (50,415) | $ 8,582 | $ (18,106) | $ 12,476 |
Shares for basic and diluted calculations: | ||||
Average shares used in basic computation | 12,898,000 | 12,282,000 | 12,774,000 | 12,787,000 |
Average shares used in diluted computation | 12,975,000 | 12,298,000 | 12,945,000 | 12,801,000 |
Earnings/(loss) per common share | ||||
Basic | $ (3.91) | $ 0.70 | $ (1.42) | $ 0.98 |
Diluted | $ (3.91) | $ 0.70 | $ (1.42) | $ 0.97 |
Weighted average participating shares outstanding | 2,246,663 | 2,974,676 | 2,389,755 | 2,623,095 |
Common shares excluded from diluted EPS | 2,235,060 | |||
Stock options | ||||
Shares for basic and diluted calculations: | ||||
Dilutive impact of securities | 0 | 16,000 | 0 | 14,000 |
Restricted stock units | ||||
Shares for basic and diluted calculations: | ||||
Dilutive impact of securities | 77,000 | 0 | 171,000 | 0 |
Segment Reporting - Reportable
Segment Reporting - Reportable Segment Financial Results (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Segment Reporting Information [Line Items] | ||||
Investment banking | $ 190,482 | $ 136,682 | $ 461,260 | $ 338,034 |
Institutional sales and trading | 34,873 | 42,189 | 111,083 | 122,423 |
Management and performance fees | 12,818 | 15,256 | 44,011 | 43,699 |
Investment income/(loss) | (422) | 4,806 | 15,406 | 14,019 |
Net revenues | 240,567 | 200,847 | 638,841 | 524,886 |
Operating expenses (1) | 322,803 | 182,396 | 678,401 | 496,484 |
Segment pre-tax operating income/(loss) | $ (82,236) | $ 18,451 | $ (39,560) | $ 28,402 |
Segment pre-tax operating margin | (34.20%) | 9.20% | (6.20%) | 5.40% |
Goodwill impairment | $ 114,363 | $ 0 | $ 114,363 | $ 0 |
Intangible asset amortization | 3,822 | 8,010 | 11,466 | 15,400 |
Capital Markets | ||||
Segment Reporting Information [Line Items] | ||||
Investment banking | 190,620 | 136,607 | 462,500 | 338,997 |
Institutional sales and trading | 39,086 | 46,304 | 122,222 | 134,591 |
Management and performance fees | 678 | 1,353 | 4,172 | 4,112 |
Investment income/(loss) | (660) | 4,472 | 15,155 | 14,009 |
Long-term financing expenses | (1,736) | (2,253) | (6,003) | (6,838) |
Net revenues | 227,988 | 186,483 | 598,046 | 484,871 |
Operating expenses (1) | 196,409 | 169,745 | 524,702 | 460,628 |
Segment pre-tax operating income/(loss) | $ 31,579 | $ 16,738 | $ 73,344 | $ 24,243 |
Segment pre-tax operating margin | 13.90% | 9.00% | 12.30% | 5.00% |
Intangible asset amortization | $ 2,544 | $ 6,623 | $ 7,633 | $ 11,239 |
Capital Markets | Equities financing | ||||
Segment Reporting Information [Line Items] | ||||
Investment banking | 22,117 | 30,479 | 70,229 | 53,831 |
Capital Markets | Debt financing | ||||
Segment Reporting Information [Line Items] | ||||
Investment banking | 21,687 | 30,898 | 60,066 | 80,195 |
Capital Markets | Advisory services | ||||
Segment Reporting Information [Line Items] | ||||
Investment banking | 146,816 | 75,230 | 332,205 | 204,971 |
Capital Markets | Equities | ||||
Segment Reporting Information [Line Items] | ||||
Institutional sales and trading | 18,410 | 20,492 | 59,085 | 62,773 |
Capital Markets | Fixed income | ||||
Segment Reporting Information [Line Items] | ||||
Institutional sales and trading | 20,676 | 25,812 | 63,137 | 71,818 |
Asset Management | ||||
Segment Reporting Information [Line Items] | ||||
Management fees | 12,140 | 13,903 | 39,839 | 39,587 |
Performance fees | 0 | 0 | 0 | 0 |
Management and performance fees | 12,140 | 13,903 | 39,839 | 39,587 |
Investment income/(loss) | (439) | 461 | 956 | 428 |
Net revenues | 12,579 | 14,364 | 40,795 | 40,015 |
Operating expenses (1) | 126,394 | 12,651 | 153,699 | 35,856 |
Segment pre-tax operating income/(loss) | $ (113,815) | $ 1,713 | $ (112,904) | $ 4,159 |
Segment pre-tax operating margin | (904.80%) | 11.90% | (276.80%) | 10.40% |
Goodwill impairment | $ 114,363 | |||
Intangible asset amortization | $ 1,278 | $ 1,387 | $ 3,833 | $ 4,161 |
Segment Reporting Segment Repor
Segment Reporting Segment Reporting - Reportable Segment Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Reportable segment assets | $ 1,739,836 | $ 2,125,503 |
Capital Markets | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Reportable segment assets | 1,627,722 | 1,934,528 |
Asset Management | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Reportable segment assets | $ 112,114 | $ 190,975 |
Net Capital Requirements and 83
Net Capital Requirements and Other Regulatory Matters - Additional Information (Detail) | Sep. 30, 2017USD ($) |
Schedule Of Compliance With Regulatory Capital Requirements For Broker Dealer [Line Items] | |
Minimum net capital requirement | $ 1,000,000 |
Net capital | 215,500,000 |
Excess net capital | 214,500,000 |
Pershing clearing arrangement | |
Schedule Of Compliance With Regulatory Capital Requirements For Broker Dealer [Line Items] | |
Excess net capital required | 120,000,000 |
Committed credit facility | Senior Notes | |
Schedule Of Compliance With Regulatory Capital Requirements For Broker Dealer [Line Items] | |
Minimum net capital required | 120,000,000 |
Commercial paper | CP Series II A | |
Schedule Of Compliance With Regulatory Capital Requirements For Broker Dealer [Line Items] | |
Excess net capital required | $ 100,000,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Goodwill impairment | $ 114,363 | $ 0 | $ 114,363 | $ 0 |
Income tax benefit | (31,423) | $ 6,515 | $ (26,912) | $ 8,767 |
Effective income tax rate, excluding noncontrolling interests | 62.90% | 36.80% | ||
ASU 2016-09 | ||||
Tax benefit for stock awards vesting during the period | 300 | $ 9,100 | ||
Asset Management | ||||
Goodwill impairment | 114,363 | |||
Deferred income tax asset | $ 44,200 | $ 44,200 |