Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Nov. 01, 2019 | |
Document and Entity Information [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2019 | |
Document Transition Report | false | |
Entity File Number | 001-31720 | |
Entity Registrant Name | PIPER JAFFRAY COMPANIES | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 30-0168701 | |
Entity Address, Address Line One | 800 Nicollet Mall, Suite 1000 | |
Entity Address, City or Town | Minneapolis | |
Entity Address, State or Province | MN | |
Entity Address, Postal Zip Code | 55402 | |
City Area Code | (612) | |
Local Phone Number | 303-6000 | |
Title of Each Class | Common Stock, par value $0.01 per share | |
Trading Symbol | PJC | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 14,357,301 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0001230245 | |
Current Fiscal Year End Date | --12-31 |
Consolidated Statements of Fina
Consolidated Statements of Financial Condition - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Assets | ||
Cash and cash equivalents | $ 24,005 | $ 50,364 |
Receivables from brokers, dealers and clearing organizations | 175,352 | 235,278 |
Financial instruments and other inventory positions owned | 308,937 | 479,795 |
Financial instruments and other inventory positions owned and pledged as collateral | 361,428 | 147,427 |
Total financial instruments and other inventory positions owned | 670,365 | 627,222 |
Fixed assets (net of accumulated depreciation and amortization of $65,606 and $58,927, respectively) | 30,619 | 32,300 |
Goodwill | 88,215 | 81,855 |
Intangible assets (net of accumulated amortization of $39,301 and $36,566, respectively) | 16,749 | 4,284 |
Investments | 155,548 | 151,886 |
Net deferred income tax assets | 61,361 | 72,996 |
Right-of-use lease asset | 41,687 | 0 |
Other assets | 79,936 | 46,443 |
Assets held for sale | 0 | 42,641 |
Total assets | 1,343,837 | 1,345,269 |
Liabilities and Shareholders’ Equity | ||
Short-term financing | 49,962 | 49,953 |
Payables to brokers, dealers and clearing organizations | 4,857 | 8,657 |
Financial instruments and other inventory positions sold, but not yet purchased | 214,090 | 177,427 |
Accrued compensation | 196,033 | 323,588 |
Accrued lease liability | 59,162 | 0 |
Other liabilities and accrued expenses | 57,629 | 45,016 |
Liabilities held for sale | 0 | 10,212 |
Total liabilities | 581,733 | 614,853 |
Shareholders’ equity: | ||
Common stock, $0.01 par value: Shares authorized: 100,000,000 at September 30, 2019 and December 31, 2018; Shares issued: 19,525,582 at September 30, 2019 and 19,518,044 at December 31, 2018; Shares outstanding: 13,710,508 at September 30, 2019 and 12,995,397 at December 31, 2018 | 195 | 195 |
Additional paid-in capital | 757,384 | 796,363 |
Retained earnings | 225,203 | 182,552 |
Less common stock held in treasury, at cost: 5,815,074 shares at September 30, 2019 and 6,522,647 shares at December 31, 2018 | (284,578) | (300,268) |
Accumulated other comprehensive loss | (1,463) | (1,398) |
Total common shareholders’ equity | 696,741 | 677,444 |
Noncontrolling interests | 65,363 | 52,972 |
Total shareholders’ equity | 762,104 | 730,416 |
Total liabilities and shareholders’ equity | $ 1,343,837 | $ 1,345,269 |
Consolidated Statements of Fi_2
Consolidated Statements of Financial Condition (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Accumulated depreciation and amortization on fixed assets | $ 65,606 | $ 58,927 |
Accumulated amortization on intangible assets | $ 39,301 | $ 36,566 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 19,525,582 | 19,518,044 |
Common stock, shares outstanding | 13,710,508 | 12,995,397 |
Common stock held in treasury, shares | 5,815,074 | 6,522,647 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Revenues: | ||||
Investment banking | $ 151,192 | $ 166,458 | $ 410,992 | $ 411,203 |
Institutional brokerage | 46,814 | 31,746 | 113,983 | 92,575 |
Interest | 6,481 | 6,592 | 20,911 | 25,183 |
Investment income/(loss) | (1,575) | 4,860 | 17,622 | 11,355 |
Total revenues | 202,912 | 209,656 | 563,508 | 540,316 |
Interest expense | 2,177 | 3,705 | 7,813 | 14,142 |
Net revenues | 200,735 | 205,951 | 555,695 | 526,174 |
Non-interest expenses: | ||||
Compensation and benefits | 126,868 | 133,337 | 346,471 | 350,960 |
Outside services | 7,842 | 8,668 | 24,864 | 26,370 |
Occupancy and equipment | 9,594 | 8,595 | 26,368 | 25,357 |
Communications | 7,885 | 6,839 | 22,599 | 21,879 |
Marketing and business development | 6,528 | 6,260 | 21,355 | 19,676 |
Deal-related expenses | 6,387 | 7,671 | 17,840 | 18,888 |
Trade execution and clearance | 3,770 | 2,049 | 6,593 | 6,240 |
Restructuring and integration costs | 6,143 | 0 | 12,538 | 3,498 |
Intangible asset amortization | 1,229 | 1,214 | 2,735 | 3,643 |
Other operating expenses | 3,454 | 3,532 | 9,235 | 8,868 |
Total non-interest expenses | 179,700 | 178,165 | 490,598 | 485,379 |
Income from continuing operations before income tax expense | 21,035 | 27,786 | 65,097 | 40,795 |
Income tax expense | 6,717 | 6,902 | 10,729 | 4,949 |
Income from continuing operations | 14,318 | 20,884 | 54,368 | 35,846 |
Income from discontinued operations, net of tax | 26,077 | 1,386 | 23,772 | 1,735 |
Net income | 40,395 | 22,270 | 78,140 | 37,581 |
Net income/(loss) applicable to noncontrolling interests | (2,847) | 247 | 5,087 | (1,271) |
Net income applicable to Piper Jaffray Companies | 43,242 | 22,023 | 73,053 | 38,852 |
Net income applicable to Piper Jaffray Companies' common shareholders | 42,442 | 19,377 | 69,529 | 33,650 |
Amounts applicable to Piper Jaffray Companies | ||||
Net income from continuing operations | 17,165 | 20,637 | 49,281 | 37,117 |
Net income from discontinued operations | 26,077 | 1,386 | 23,772 | 1,735 |
Net income applicable to Piper Jaffray Companies | $ 43,242 | $ 22,023 | $ 73,053 | $ 38,852 |
Earnings per basic common share | ||||
Income from continuing operations | $ 1.23 | $ 1.36 | $ 3.46 | $ 2.41 |
Income from discontinued operations | 1.87 | 0.09 | 1.69 | 0.13 |
Earnings per basic common share | 3.09 | 1.45 | 5.15 | 2.54 |
Earnings per diluted common share | ||||
Income from continuing operations | 1.20 | 1.34 | 3.37 | 2.37 |
Income from discontinued operations | 1.82 | 0.09 | 1.64 | 0.13 |
Earnings per diluted common share | 3.01 | 1.43 | 5.01 | 2.50 |
Dividends declared per common share | $ 0.38 | $ 0.38 | $ 2.14 | $ 2.75 |
Weighted average number of common shares outstanding | ||||
Basic | 13,708 | 13,343 | 13,502 | 13,248 |
Diluted | 14,085 | 13,508 | 13,882 | 13,444 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 40,395 | $ 22,270 | $ 78,140 | $ 37,581 |
Other comprehensive income/(loss), net of tax: | ||||
Foreign currency translation adjustment | (179) | (102) | (65) | 30 |
Comprehensive income | 40,216 | 22,168 | 78,075 | 37,611 |
Comprehensive income/(loss) applicable to noncontrolling interests | (2,847) | 247 | 5,087 | (1,271) |
Comprehensive income applicable to Piper Jaffray Companies | $ 43,063 | $ 21,921 | $ 72,988 | $ 38,882 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Retained Earnings | Treasury Stock | Accumulated Other Comprehensive Loss | Total Common Shareholders' Equity | Noncontrolling Interests |
Common Shares Outstanding at beginning of period at Dec. 31, 2017 | 12,911,149 | |||||||
Total Shareholders' Equity at beginning of period at Dec. 31, 2017 | $ 741,235 | $ 195 | $ 791,970 | $ 176,270 | $ (273,824) | $ (1,279) | $ 693,332 | $ 47,903 |
Net Income (Loss) Attributable to Parent | 10,603 | 10,603 | ||||||
Net Income (Loss) Attributable to Noncontrolling Interest | 16 | |||||||
Net income/(loss) | 10,619 | |||||||
Dividends | (30,575) | (30,575) | (30,575) | |||||
Amortization/issuance of restricted stock | 34,416 | 34,416 | 34,416 | |||||
Issuance of treasury shares for restricted stock vestings (in shares) | 574,594 | |||||||
Issuance of treasury shares for restricted stock vestings | 0 | (23,901) | 23,901 | 0 | ||||
Repurchase of common stock from employees (in shares) | (187,860) | |||||||
Repurchase of common stock from employees | (16,797) | (16,797) | (16,797) | |||||
Shares reserved/issued for director compensation (in shares) | 942 | |||||||
Shares reserved/issued for director compensation | 81 | 81 | 81 | |||||
Other comprehensive income/(loss) | 529 | 529 | 529 | |||||
Cumulative effect upon adoption of new accounting standard, net of tax | (3,597) | (3,597) | (3,597) | |||||
Fund capital distributions, net | (904) | 0 | (904) | |||||
Common Shares Outstanding at period end at Mar. 31, 2018 | 13,298,825 | |||||||
Total Shareholders' Equity at period end at Mar. 31, 2018 | 735,007 | $ 195 | 802,566 | 152,701 | (266,720) | (750) | 687,992 | 47,015 |
Common Shares Outstanding at beginning of period at Dec. 31, 2017 | 12,911,149 | |||||||
Total Shareholders' Equity at beginning of period at Dec. 31, 2017 | 741,235 | $ 195 | 791,970 | 176,270 | (273,824) | (1,279) | 693,332 | 47,903 |
Net Income (Loss) Attributable to Parent | 38,852 | |||||||
Net Income (Loss) Attributable to Noncontrolling Interest | (1,271) | |||||||
Net income/(loss) | $ 37,581 | |||||||
Repurchase of common stock from employees (in shares) | (264,254) | |||||||
Common Shares Outstanding at period end at Sep. 30, 2018 | 13,366,703 | |||||||
Total Shareholders' Equity at period end at Sep. 30, 2018 | $ 747,415 | $ 195 | 801,417 | 169,894 | (270,046) | (1,249) | 700,211 | 47,204 |
Common Shares Outstanding at beginning of period at Mar. 31, 2018 | 13,298,825 | |||||||
Total Shareholders' Equity at beginning of period at Mar. 31, 2018 | 735,007 | $ 195 | 802,566 | 152,701 | (266,720) | (750) | 687,992 | 47,015 |
Net Income (Loss) Attributable to Parent | 6,226 | 6,226 | ||||||
Net Income (Loss) Attributable to Noncontrolling Interest | (1,534) | |||||||
Net income/(loss) | 4,692 | |||||||
Dividends | (5,520) | (5,520) | (5,520) | |||||
Amortization/issuance of restricted stock | 5,127 | 5,127 | 5,127 | |||||
Repurchase of common stock through share repurchase program (in shares) | (56,714) | |||||||
Repurchase of common stock through share repurchase program | (3,938) | (3,938) | (3,938) | |||||
Issuance of treasury shares for restricted stock vestings (in shares) | 143,907 | |||||||
Issuance of treasury shares for restricted stock vestings | 0 | (6,224) | 6,224 | 0 | ||||
Repurchase of common stock from employees (in shares) | (54,346) | |||||||
Repurchase of common stock from employees | (4,179) | (4,179) | (4,179) | |||||
Shares reserved/issued for director compensation (in shares) | 2,717 | |||||||
Shares reserved/issued for director compensation | 213 | 213 | 213 | |||||
Other comprehensive income/(loss) | (397) | (397) | (397) | |||||
Fund capital distributions, net | 6,195 | 0 | 6,195 | |||||
Common Shares Outstanding at period end at Jun. 30, 2018 | 13,334,389 | |||||||
Total Shareholders' Equity at period end at Jun. 30, 2018 | 737,200 | $ 195 | 801,682 | 153,407 | (268,613) | (1,147) | 685,524 | 51,676 |
Net Income (Loss) Attributable to Parent | 22,023 | 22,023 | 22,023 | |||||
Net Income (Loss) Attributable to Noncontrolling Interest | 247 | 247 | ||||||
Net income/(loss) | 22,270 | |||||||
Dividends | (5,536) | (5,536) | (5,536) | |||||
Amortization/issuance of restricted stock | 4,998 | 4,998 | 4,998 | |||||
Repurchase of common stock through share repurchase program (in shares) | (67,892) | |||||||
Repurchase of common stock through share repurchase program | (5,066) | (5,066) | (5,066) | |||||
Issuance of treasury shares for restricted stock vestings (in shares) | 121,542 | |||||||
Issuance of treasury shares for restricted stock vestings | 0 | (5,317) | 5,317 | 0 | ||||
Repurchase of common stock from employees (in shares) | (22,048) | |||||||
Repurchase of common stock from employees | (1,684) | (1,684) | (1,684) | |||||
Shares reserved/issued for director compensation (in shares) | 712 | |||||||
Shares reserved/issued for director compensation | 54 | 54 | 54 | |||||
Other comprehensive income/(loss) | (102) | (102) | (102) | |||||
Fund capital distributions, net | (4,719) | 0 | (4,719) | |||||
Common Shares Outstanding at period end at Sep. 30, 2018 | 13,366,703 | |||||||
Total Shareholders' Equity at period end at Sep. 30, 2018 | 747,415 | $ 195 | 801,417 | 169,894 | (270,046) | (1,249) | 700,211 | 47,204 |
Common Shares Outstanding at beginning of period at Dec. 31, 2018 | 12,995,397 | |||||||
Total Shareholders' Equity at beginning of period at Dec. 31, 2018 | 730,416 | $ 195 | 796,363 | 182,552 | (300,268) | (1,398) | 677,444 | 52,972 |
Net Income (Loss) Attributable to Parent | 19,422 | 19,422 | ||||||
Net Income (Loss) Attributable to Noncontrolling Interest | (616) | |||||||
Net income/(loss) | 18,806 | |||||||
Dividends | (19,947) | (19,947) | (19,947) | |||||
Amortization/issuance of restricted stock | 23,826 | 23,826 | 23,826 | |||||
Repurchase of common stock through share repurchase program (in shares) | (501) | |||||||
Repurchase of common stock through share repurchase program | (32) | (32) | (32) | |||||
Issuance of treasury shares for restricted stock vestings (in shares) | 1,035,360 | |||||||
Issuance of treasury shares for restricted stock vestings | 0 | (48,092) | 48,092 | 0 | ||||
Repurchase of common stock from employees (in shares) | (563,284) | |||||||
Repurchase of common stock from employees | (39,695) | (39,695) | (39,695) | |||||
Shares reserved/issued for director compensation (in shares) | 1,263 | |||||||
Shares reserved/issued for director compensation | 87 | 87 | 87 | |||||
Other comprehensive income/(loss) | 215 | 215 | 215 | |||||
Fund capital distributions, net | (5) | 0 | (5) | |||||
Common Shares Outstanding at period end at Mar. 31, 2019 | 13,468,235 | |||||||
Total Shareholders' Equity at period end at Mar. 31, 2019 | 713,671 | $ 195 | 772,184 | 182,027 | (291,903) | (1,183) | 661,320 | 52,351 |
Common Shares Outstanding at beginning of period at Dec. 31, 2018 | 12,995,397 | |||||||
Total Shareholders' Equity at beginning of period at Dec. 31, 2018 | 730,416 | $ 195 | 796,363 | 182,552 | (300,268) | (1,398) | 677,444 | 52,972 |
Net Income (Loss) Attributable to Parent | 73,053 | |||||||
Net Income (Loss) Attributable to Noncontrolling Interest | 5,087 | |||||||
Net income/(loss) | $ 78,140 | |||||||
Repurchase of common stock from employees (in shares) | (698,065) | |||||||
Common Shares Outstanding at period end at Sep. 30, 2019 | 13,710,508 | |||||||
Total Shareholders' Equity at period end at Sep. 30, 2019 | $ 762,104 | $ 195 | 757,384 | 225,203 | (284,578) | (1,463) | 696,741 | 65,363 |
Common Shares Outstanding at beginning of period at Mar. 31, 2019 | 13,468,235 | |||||||
Total Shareholders' Equity at beginning of period at Mar. 31, 2019 | 713,671 | $ 195 | 772,184 | 182,027 | (291,903) | (1,183) | 661,320 | 52,351 |
Net Income (Loss) Attributable to Parent | 10,389 | 10,389 | ||||||
Net Income (Loss) Attributable to Noncontrolling Interest | 8,550 | |||||||
Net income/(loss) | 18,939 | |||||||
Dividends | (5,234) | (5,234) | (5,234) | |||||
Amortization/issuance of restricted stock | 1,448 | 1,448 | 1,448 | |||||
Issuance of treasury shares for restricted stock vestings (in shares) | 365,908 | |||||||
Issuance of treasury shares for restricted stock vestings | 0 | (17,703) | 17,703 | 0 | ||||
Repurchase of common stock from employees (in shares) | (133,127) | |||||||
Repurchase of common stock from employees | (10,499) | (10,499) | (10,499) | |||||
Shares reserved/issued for director compensation (in shares) | 4,299 | |||||||
Shares reserved/issued for director compensation | 334 | 334 | 334 | |||||
Other comprehensive income/(loss) | (101) | (101) | (101) | |||||
Fund capital distributions, net | 7,227 | 0 | 7,227 | |||||
Common Shares Outstanding at period end at Jun. 30, 2019 | 13,705,315 | |||||||
Total Shareholders' Equity at period end at Jun. 30, 2019 | 725,785 | $ 195 | 756,263 | 187,182 | (284,699) | (1,284) | 657,657 | 68,128 |
Net Income (Loss) Attributable to Parent | 43,242 | 43,242 | 43,242 | |||||
Net Income (Loss) Attributable to Noncontrolling Interest | (2,847) | (2,847) | ||||||
Net income/(loss) | 40,395 | |||||||
Dividends | (5,221) | (5,221) | (5,221) | |||||
Amortization/issuance of restricted stock | 1,208 | 1,208 | 1,208 | |||||
Issuance of treasury shares for restricted stock vestings (in shares) | 4,871 | |||||||
Issuance of treasury shares for restricted stock vestings | 0 | (238) | 238 | 0 | ||||
Repurchase of common stock from employees (in shares) | (1,654) | |||||||
Repurchase of common stock from employees | (117) | (117) | (117) | |||||
Shares reserved/issued for director compensation (in shares) | 1,976 | |||||||
Shares reserved/issued for director compensation | 151 | 151 | 151 | |||||
Other comprehensive income/(loss) | (179) | (179) | (179) | |||||
Fund capital distributions, net | 82 | 0 | 82 | |||||
Common Shares Outstanding at period end at Sep. 30, 2019 | 13,710,508 | |||||||
Total Shareholders' Equity at period end at Sep. 30, 2019 | $ 762,104 | $ 195 | $ 757,384 | $ 225,203 | $ (284,578) | $ (1,463) | $ 696,741 | $ 65,363 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Operating Activities: | ||
Net income | $ 78,140 | $ 37,581 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization of fixed assets | 7,011 | 6,199 |
Deferred income taxes | 17,997 | (2,082) |
Gain on sale of Advisory Research, Inc. (ARI), net of tax | (33,026) | 0 |
Stock-based compensation | 18,964 | 32,046 |
Amortization of intangible assets | 8,200 | 7,845 |
Amortization of forgivable loans | 3,322 | 3,789 |
Decrease/(increase) in operating assets: | ||
Receivables from brokers, dealers and clearing organizations | 61,567 | (28,671) |
Net financial instruments and other inventory positions owned | (6,480) | 440,615 |
Investments | (3,662) | 23,705 |
Other assets | (38,715) | (18,033) |
Increase/(decrease) in operating liabilities: | ||
Payables to brokers, dealers and clearing organizations | (3,800) | (13,021) |
Accrued compensation | (121,148) | (130,887) |
Other liabilities and accrued expenses | 16,830 | 3,981 |
Decrease in assets held for sale | 20,901 | 675 |
Decrease in liabilities held for sale | (7,915) | (3,386) |
Net cash provided by operating activities | 18,186 | 360,356 |
Investing Activities: | ||
Business acquisitions, net of cash acquired | (18,617) | 0 |
Sale of ARI | 52,881 | 0 |
Purchases of fixed assets, net | (4,990) | (12,283) |
Net cash provided by/(used in) investing activities | 29,274 | (12,283) |
Financing Activities: | ||
Increase/(decrease) in short-term financing | 9 | (239,980) |
Payment of cash dividend | (30,402) | (41,631) |
Increase in noncontrolling interests | 7,304 | 572 |
Repurchase of common stock | (50,343) | (31,664) |
Net cash used in financing activities | (73,432) | (312,703) |
Currency adjustment: | ||
Effect of exchange rate changes on cash | (387) | (389) |
Net increase/(decrease) in cash and cash equivalents | (26,359) | 34,981 |
Cash and cash equivalents at beginning of period | 50,364 | 33,793 |
Cash and cash equivalents at end of period | 24,005 | 68,774 |
Supplemental disclosure of cash flow information: | ||
Interest | 8,046 | 14,586 |
Income taxes | $ 8,463 | $ 16,638 |
Organization and Basis of Prese
Organization and Basis of Presentation | 9 Months Ended |
Sep. 30, 2019 | |
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; Piper Jaffray Finance LLC, which facilitates corporate debt underwriting in conjunction with affiliated credit vehicles; Piper Jaffray Investment Group Inc. and PJC Capital Management LLC, which consist 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. Piper Jaffray Companies and its subsidiaries (collectively, the "Company") operate in one reporting segment providing investment banking and institutional securities services (collectively, "Capital Markets"). The Company's Capital Markets business provides investment banking services and institutional sales, trading and research services. Investment banking services include financial advisory services, management of and participation in underwritings 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 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. As discussed in Note 3 , Advisory Research, Inc. ("ARI") was sold in the third quarter of 2019. ARI's results were previously reported in the Company's Asset Management segment, which provided traditional asset management services with product offerings in master limited partnerships and equity securities. 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, 2018 . 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, 2019 | |
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, 2018 for a full description of the Company's significant accounting policies. Changes to the Company's significant accounting policies are described below. Leases A lease is a contract, or part of a contract, that conveys the right to control the use of identified property or equipment for a period of time in exchange for consideration. In making this determination, the Company considers if it obtains substantially all of the economic benefits from the use of the underlying asset and directs how and for what purpose the asset is used during the term of the contract. The Company leases its corporate headquarters and other offices under various non-cancelable leases, all of which are operating leases. In addition to rent, the leases require payment of real estate taxes, insurance and common area maintenance. The original terms of the Company's lease agreements generally range up to 12 years. Some of the leases contain renewal and/or termination options, escalation clauses, rent-free holidays and operating cost adjustments. The Company recognizes a right-of-use ("ROU") lease asset and lease liability on the consolidated statements of financial condition for all leases with a term greater than 12 months. The lease liability represents the Company’s obligation to make future lease payments and is recorded at an amount equal to the present value of the remaining lease payments due over the lease term. The ROU lease asset, which represents the right to use the underlying asset during the lease term, is measured based on the carrying value of the lease liability, adjusted for other items, such as lease incentives and uneven rent payments. The discount rate used to determine the present value of the remaining lease payments reflects the Company’s incremental borrowing rate, which is the rate the Company would have to pay to borrow on a collateralized basis over a similar term in a similar economic environment. In calculating its discount rates, the Company took into consideration a current financing arrangement that is on a secured (i.e., collateralized) basis, as well as market interest rates and spreads, other reference points, and the respective tenors of the Company’s designated lease term ranges. The Company applied the portfolio approach in determining the discount rates for its leases. The weighted-average discount rate was 4.0 percent at September 30, 2019 . For leases that contain escalation clauses or rent-free holidays, the Company recognizes the related rent expense on a straight-line basis from the date the Company takes possession of the property to the end of the initial lease term. The Company records any difference between the straight-line rent expense and amounts paid under the leases as part of the amortization of the ROU lease asset. Cash or lease incentives received upon entering into certain leases are recognized on a straight-line basis as a reduction of rent expense from the date the Company takes possession of the property or receives the cash to the end of the initial lease term. Lease incentives, which initially reduce the ROU lease asset, are a component of the amortization of the ROU lease asset. Rent expense for leases with a term of 12 months or less is recorded on a straight-line basis over the lease term in the consolidated statements of operations. Adoption of New Accounting Standards Leases In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-02, "Leases (Topic 842)" ("ASU 2016-02"). ASU 2016-02 requires lessees to recognize a ROU lease asset and lease liability on the consolidated statements of financial condition for all leases with a term longer than 12 months 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 previous U.S. GAAP. The Company adopted ASU 2016-02 as of January 1, 2019 using the modified retrospective approach and applied the package of practical expedients in transitioning to the new guidance. Electing the package of practical expedients allowed the Company to carry forward its prior conclusions on lease definition, lease classification and initial direct costs related to the existing leases as of the adoption date. Also, the Company has elected the practical expedient to not separate lease components from nonlease components. Both at transition and for new leases thereafter, ROU lease assets and lease liabilities are initially recognized based on the present value of future minimum lease payments over the lease term, including nonlease components such as fixed common area maintenance costs and other fixed costs (e.g., real estate taxes and insurance). Upon adoption, the Company recognized a ROU lease asset of approximately $44.0 million and a lease liability of approximately $59.0 million . The difference between the ROU lease asset and the lease liability is due to lease incentives. There were no changes to the recognition of rent expense in the Company’s consolidated statements of operations upon adoption of ASU 2016-02. In addition, the new guidance has not impacted Piper Jaffray's net capital position. Future Adoption of New Applicable Accounting Standards 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. The Company does not expect the adoption of ASU 2016-13 to have a material impact on its consolidated financial statements. |
Discontinued Operations
Discontinued Operations | 9 Months Ended |
Sep. 30, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Disposal Groups, Including Discontinued Operations, Disclosure [Text Block] | Discontinued Operations In the third quarter of 2019, the Company completed the sale of its traditional asset management business, which was conducted through its wholly-owned subsidiary ARI. On September 20, 2019 , the Company completed the sale of the master limited partnerships ("MLP") and energy infrastructure strategies business to Tortoise Capital Advisors. Additionally, on September 27, 2019 , the Company completed the sale of its remaining equity strategies business to an existing management team. The transactions generated cash proceeds of $52.9 million and include the potential for the Company to receive additional cash consideration payments based on prospective revenues. The Company is eligible to receive an additional payment of up to $35.7 million contingent upon contractually defined MLP revenue exceeding a revenue threshold in the one -year period following the close of the transaction. The Company may also receive an additional payment based upon a multiple of aggregate revenue with respect to certain sub-advised accounts as of December 31, 2020 . The Company will record a gain upon receipt of the earnout payments, if any. In addition, the Company is eligible to receive additional payments up to a total of $10.0 million based on the revenues of the equity strategies business during each of the four annual periods from January 1, 2020 to December 31, 2023 . The Company estimated the fair value of this earnout to be $2.2 million upon the close of the transaction, which will be reevaluated at each reporting date. ARI's results, previously reported in the Asset Management segment, have been presented as discontinued operations for all periods presented and the related assets and liabilities were classified as held for sale. As of December 31, 2018 , the disposal group consisted of: December 31, (Dollars in thousands) 2018 Net deferred income tax assets $ 28,861 Fee receivables 4,128 Intangible assets 8,090 Other assets 1,562 Total assets held for sale $ 42,641 December 31, (Dollars in thousands) 2018 Accrued compensation $ 9,934 Other liabilities 278 Total liabilities held for sale $ 10,212 The components of discontinued operations were as follows: Three Months Ended Nine Months Ended September 30, September 30, (Dollars in thousands) 2019 2018 2019 2018 Net revenues $ 7,939 $ 11,576 $ 26,546 $ 33,896 Operating expenses 7,068 8,327 22,589 27,286 Intangible asset amortization and impairment (1) — 1,401 5,465 4,202 Restructuring costs 9,572 — 10,268 272 Total non-interest expenses 16,640 9,728 38,322 31,760 Income/(loss) from discontinued operations before income tax expense/(benefit) (8,701 ) 1,848 (11,776 ) 2,136 Income tax expense/(benefit) (1,752 ) 462 (2,522 ) 401 Net income/(loss) from discontinued operations before gain on sales (6,949 ) 1,386 (9,254 ) 1,735 Gain on sales, net of tax 33,026 — 33,026 — Income from discontinued operations, net of tax $ 26,077 $ 1,386 $ 23,772 $ 1,735 (1) Includes $2.9 million of intangible asset impairment related to the ARI trade name for the nine months ended September 30, 2019 . |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2019 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions Weeden & Co. L.P. ("Weeden & Co.") On August 2, 2019 , the Company completed the acquisition of Weeden & Co., a broker dealer specializing in equity security sales and trading. The economic value of the acquisition was approximately $42.0 million and was completed pursuant to a securities purchase agreement dated February 24, 2019 , as amended. The transaction added enhanced trade execution capabilities and scale to the Company's equities institutional sales and trading business. The Company acquired net assets with a fair value of $23.0 million as described below. As part of the purchase price, the Company granted $10.3 million in restricted cash as consideration on the acquisition date. The Company also entered into acquisition-related compensation arrangements with certain employees of $7.3 million in restricted stock for retention purposes. Both the restricted cash and restricted stock are subject to graded vesting, beginning on the third anniversary of the acquisition date, so long as the applicable employee remains continuously employed by the Company for such period. Compensation expense will be amortized on a straight-line basis over the requisite service period of four years . Additional cash compensation of up to $31.5 million may be earned if a net revenue target is achieved during the period from January 1, 2020 to June 30, 2021 . Weeden & Co.'s equity holders, a portion of which are now employees of the Company, are eligible to receive the additional payment. Employees must fulfill service requirements in exchange for the rights to the additional payment. Amounts estimated to be payable to employees, if any, will be recorded as compensation expense on the consolidated statements of operations over the requisite performance period. The Company recorded a liability as of the acquisition date for the fair value related to non-employee equity holders. If earned, the amount will be paid by September 30, 2021 . This 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. The Company recorded $6.4 million of goodwill on the consolidated statements of financial condition, all of which is expected to be deductible for income tax purposes. The final goodwill recorded on the Company's consolidated statements of financial condition may differ from that reflected herein as a result of measurement period adjustments. In management's opinion, the goodwill represents the reputation and operating expertise of Weeden & Co. Identifiable intangible assets purchased by the Company consisted of customer relationships and internally developed software with acquisition-date fair values of $10.6 million and $4.6 million , respectively. The Company anticipates finalizing the fair value of Weeden & Co. intangible assets in the fourth quarter of 2019. Transaction costs of $1.0 million and $1.7 million were incurred for the three and nine months ended September 30, 2019 , respectively, and are included in restructuring and integration costs on the consolidated statements of operations. The following table summarizes the estimated fair values of assets acquired and liabilities assumed at the date of the acquisition: (Dollars in thousands) Assets: Cash and cash equivalents $ 4,351 Receivables from brokers, dealers and clearing organizations 1,641 Fixed assets 289 Goodwill 6,360 Intangible assets 15,200 Right-of-use lease asset 6,811 Other assets 6,753 Total assets acquired 41,405 Liabilities: Accrued compensation 2,114 Accrued lease liability 6,811 Other liabilities and accrued expenses 9,512 Total liabilities assumed 18,437 Net assets acquired $ 22,968 Weeden & Co.'s 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 that the acquisition had occurred at the beginning of the comparable prior period presented. Pro forma results have been prepared by adjusting the Company's historical results to include Weeden & Co.'s 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 the restricted cash issued as part of the purchase price and the restricted stock issued for retention purposes; and the income tax effect of applying the Company's statutory tax rates to Weeden & Co.'s results of operations. The Company's consolidated unaudited pro forma information presented does not necessarily reflect the results of operations that would have resulted had the acquisition been completed at the beginning of the applicable periods presented, does not contemplate client account overlap and anticipated operational efficiencies of the combined entities, nor does it indicate the results of operations in future periods. Three Months Ended Nine Months Ended September 30, September 30, (Dollars in thousands) 2019 2018 2019 2018 Net revenues $ 205,230 $ 222,890 $ 591,654 $ 580,446 Net income from continuing operations applicable to Piper Jaffray Companies 16,431 20,144 44,904 36,121 Definitive Agreement to Acquire Sandler O'Neill On July 9, 2019 , the Company signed a definitive agreement to acquire SOP Holdings, LLC and its subsidiaries, including Sandler O'Neill & Partners, L.P. (collectively, "Sandler O'Neill"). Sandler O'Neill is a full-service investment banking firm and broker dealer focused on the financial services industry. The Company will acquire 100 percent of the equity and partnership interests in Sandler O’Neill. The total consideration of $485.0 million , which includes $100.0 million of tangible book value, consists of $350.0 million in cash and $135.0 million in restricted consideration, primarily in restricted stock. In addition, the Company agreed to provide restricted award agreements of $115.0 million |
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, 2019 | |
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 | 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) 2019 2018 Financial instruments and other inventory positions owned: Corporate securities: Equity securities $ 13,756 $ 1,458 Convertible securities 119,962 92,485 Fixed income securities 60,312 31,906 Municipal securities: Taxable securities 22,822 38,711 Tax-exempt securities 191,324 268,804 Short-term securities 106,175 52,472 Mortgage-backed securities 13 15 U.S. government agency securities 130,503 123,384 U.S. government securities 3,526 954 Derivative contracts 21,972 17,033 Total financial instruments and other inventory positions owned $ 670,365 $ 627,222 Financial instruments and other inventory positions sold, but not yet purchased: Corporate securities: Equity securities $ 68,464 $ 82,082 Fixed income securities 23,593 20,180 U.S. government agency securities 21,993 10,257 U.S. government securities 92,968 60,365 Derivative contracts 7,072 4,543 Total financial instruments and other inventory positions sold, but not yet purchased $ 214,090 $ 177,427 At September 30, 2019 and December 31, 2018 , financial instruments and other inventory positions owned in the amount of $361.4 million and $147.4 million , respectively, had been pledged as collateral for short-term financings. 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, and U.S. treasury bond futures and options. Derivative Contract Financial Instruments The Company uses interest rate swaps, interest rate locks, and U.S. treasury bond futures and options 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 and options to hedge interest rate and market value risks associated with its fixed income securities. These instruments use interest rates based upon the Municipal Market Data ("MMD") index, LIBOR or the SIFMA index. 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, 2019 December 31, 2018 (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 $ 237,342 $ 226,088 $ 2,262,912 $ 181,199 $ 169,950 $ 2,532,966 Trading securities 482 5,365 216,375 408 4,202 262,275 $ 237,824 $ 231,453 $ 2,479,287 $ 181,607 $ 174,152 $ 2,795,241 (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 2019 2018 2019 2018 Interest rate derivative contract Investment banking $ (203 ) $ (301 ) $ (634 ) $ (1,567 ) Interest rate derivative contract Institutional brokerage (5 ) 980 (450 ) 5,212 $ (208 ) $ 679 $ (1,084 ) $ 3,645 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, 2019 , the Company had $22.0 million of uncollateralized credit exposure with these counterparties (notional contract amount of $175.1 million ), including $18.5 million of uncollateralized credit exposure with one counterparty. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2019 | |
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, and therefore are generally 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. 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 (e.g., 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. To the extent we hold, these mortgage-backed securities are categorized as Level II. 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 on spreads over U.S. treasury securities, or models based upon prepayment expectations. 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. Derivative contracts – Derivative contracts include interest rate swaps, interest rate locks and U.S. treasury bond futures and options. These instruments derive their value from underlying assets, reference rates, indices or a combination of these factors. 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 and investments in registered mutual funds. Investments in registered mutual funds are valued based on quoted prices on active markets and classified as Level I. 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 $2.2 million and $3.0 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, 2019 and December 31, 2018 , respectively. The realized and unrealized net impact from fair value changes included in earnings as a result of electing to apply the fair value option to certain financial assets were losses of $0.5 million and gains of $0.9 million for the nine months ended September 30, 2019 and 2018 , 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, 2019 : Valuation Weighted Technique Unobservable Input Range Average (1) Assets: Financial instruments and other inventory positions owned: Derivative contracts: Interest rate locks Discounted cash flow Premium over the MMD curve in basis points ("bps") (2) 4 - 11 bps 6.7 bps Investments at fair value: Equity securities in private companies Market approach Revenue multiple (2) 3 - 6 times 4.5 times EBITDA multiple (2) 11 - 20 times 15.5 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 in bps (3) 4 - 11 bps 8.2 bps Uncertainty of fair value measurements: (1) Unobservable inputs were weighted by the relative fair value of the financial instruments. (2) Significant increase/(decrease) in the unobservable input in isolation would have resulted in a significantly higher/(lower) fair value measurement. (3) Significant increase/(decrease) in the unobservable input in isolation would have resulted in a significantly lower/(higher) fair value measurement. 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, 2019 : 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 $ 44 $ 13,712 $ — $ — $ 13,756 Convertible securities — 119,962 — — 119,962 Fixed income securities — 60,312 — — 60,312 Municipal securities: Taxable securities — 22,822 — — 22,822 Tax-exempt securities — 191,324 — — 191,324 Short-term securities — 106,175 — — 106,175 Mortgage-backed securities — — 13 — 13 U.S. government agency securities — 130,503 — — 130,503 U.S. government securities 3,526 — — — 3,526 Derivative contracts — 237,342 482 (215,852 ) 21,972 Total financial instruments and other inventory positions owned 3,570 882,152 495 (215,852 ) 670,365 Cash equivalents 909 — — — 909 Investments at fair value 15,723 892 131,822 (2) — 148,437 Total assets $ 20,202 $ 883,044 $ 132,317 $ (215,852 ) $ 819,711 Liabilities: Financial instruments and other inventory positions sold, but not yet purchased: Corporate securities: Equity securities $ 56,220 $ 12,244 $ — $ — $ 68,464 Fixed income securities — 23,593 — — 23,593 U.S. government agency securities — 21,993 — — 21,993 U.S. government securities 92,968 — — — 92,968 Derivative contracts — 226,548 4,905 (224,381 ) 7,072 Total financial instruments and other inventory positions sold, but not yet purchased $ 149,188 $ 284,378 $ 4,905 $ (224,381 ) $ 214,090 (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 $65.4 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, 2018 : 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 $ 331 $ 1,127 $ — $ — $ 1,458 Convertible securities — 92,485 — — 92,485 Fixed income securities — 31,906 — — 31,906 Municipal securities: Taxable securities — 38,711 — — 38,711 Tax-exempt securities — 268,804 — — 268,804 Short-term securities — 52,472 — — 52,472 Mortgage-backed securities — — 15 — 15 U.S. government agency securities — 123,384 — — 123,384 U.S. government securities 954 — — — 954 Derivative contracts — 181,378 229 (164,574 ) 17,033 Total financial instruments and other inventory positions owned 1,285 790,267 244 (164,574 ) 627,222 Cash equivalents 20,581 — — — 20,581 Investments at fair value 33,587 2,649 107,792 (2) — 144,028 Total assets $ 55,453 $ 792,916 $ 108,036 $ (164,574 ) $ 791,831 Liabilities: Financial instruments and other inventory positions sold, but not yet purchased: Corporate securities: Equity securities $ 81,575 $ 507 $ — $ — $ 82,082 Fixed income securities — 20,180 — — 20,180 U.S. government agency securities — 10,257 — — 10,257 U.S. government securities 60,365 — — — 60,365 Derivative contracts — 169,950 4,202 (169,609 ) 4,543 Total financial instruments and other inventory positions sold, but not yet purchased $ 141,940 $ 200,894 $ 4,202 $ (169,609 ) $ 177,427 (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 $53.0 million are attributable to third party ownership in consolidated merchant banking and senior living funds. The Company's Level III assets were $132.3 million and $108.0 million , or 16.1 percent and 13.6 percent of financial instruments measured at fair value at September 30, 2019 and December 31, 2018 , respectively. There were no significant transfers between levels for the nine months ended September 30, 2019 . 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 gains/ gains/ September 30, September 30, (Dollars in thousands) 2019 Purchases Sales out (losses) (losses) 2019 2019 Assets: Financial instruments and other inventory positions owned: Mortgage-backed securities $ 13 $ — $ — $ — $ — $ — $ 13 $ — Derivative contracts — — — — — 482 482 482 Total financial instruments and other inventory positions owned 13 — — — — 482 495 482 Investments at fair value 132,556 15,623 (12,772 ) — 2,901 (6,486 ) 131,822 (3,585 ) Total assets $ 132,569 $ 15,623 $ (12,772 ) $ — $ 2,901 $ (6,004 ) $ 132,317 $ (3,103 ) Liabilities: Financial instruments and other inventory positions sold, but not yet purchased: Derivative contracts $ 4,418 $ (3,576 ) $ — $ — $ 3,576 $ 487 $ 4,905 $ 1,860 Total financial instruments and other inventory positions sold, but not yet purchased $ 4,418 $ (3,576 ) $ — $ — $ 3,576 $ 487 $ 4,905 $ 1,860 Unrealized gains/ (losses) for assets/ Balance at Realized Unrealized Balance at liabilities held at June 30, Transfers gains/ gains/ September 30, September 30, (Dollars in thousands) 2018 Purchases Sales out (losses) (losses) 2018 2018 Assets: Financial instruments and other inventory positions owned: Municipal securities: Short-term securities $ 45 $ — $ — $ — $ — $ — $ 45 $ — Mortgage-backed securities 18 — — — — (2 ) 16 (2 ) Derivative contracts 930 — (90 ) — 90 343 1,273 441 Total financial instruments and other inventory positions owned 993 — (90 ) — 90 341 1,334 439 Investments at fair value 108,121 10,000 (14,199 ) (357 ) 4,949 (4,229 ) 104,285 (4,229 ) Total assets $ 109,114 $ 10,000 $ (14,289 ) $ (357 ) $ 5,039 $ (3,888 ) $ 105,619 $ (3,790 ) Liabilities: Financial instruments and other inventory positions sold, but not yet purchased: Derivative contracts $ 1,005 $ (210 ) $ 40 $ — $ 169 $ (636 ) $ 368 $ (464 ) Total financial instruments and other inventory positions sold, but not yet purchased $ 1,005 $ (210 ) $ 40 $ — $ 169 $ (636 ) $ 368 $ (464 ) Unrealized gains/ (losses) for assets/ Balance at Realized Unrealized Balance at liabilities held at December 31, Transfers gains/ gains/ September 30, September 30, (Dollars in thousands) 2018 Purchases Sales out (losses) (losses) 2019 2019 Assets: Financial instruments and other inventory positions owned: Mortgage-backed securities $ 15 $ — $ (6 ) $ — $ (23 ) $ 27 $ 13 $ — Derivative contracts 229 — (336 ) — 336 253 482 482 Total financial instruments and other inventory positions owned 244 — (342 ) — 313 280 495 482 Investments at fair value 107,792 23,623 (12,772 ) (783 ) 2,901 11,061 131,822 13,473 Total assets $ 108,036 $ 23,623 $ (13,114 ) $ (783 ) $ 3,214 $ 11,341 $ 132,317 $ 13,955 Liabilities: Financial instruments and other inventory positions sold, but not yet purchased: Derivative contracts $ 4,202 $ (12,398 ) $ — $ — $ 12,398 $ 703 $ 4,905 $ 4,905 Total financial instruments and other inventory positions sold, but not yet purchased $ 4,202 $ (12,398 ) $ — $ — $ 12,398 $ 703 $ 4,905 $ 4,905 Unrealized gains/ (losses) for assets/ Balance at Realized Unrealized Balance at liabilities held at December 31, Transfers gains/ gains/ September 30, September 30, (Dollars in thousands) 2017 Purchases Sales out (losses) (losses) 2018 2018 Assets: Financial instruments and other inventory positions owned: Municipal securities: Tax-exempt securities $ 700 $ — $ — $ (700 ) $ — $ — $ — $ — Short-term securities 714 — (725 ) — 51 5 45 — Mortgage-backed securities 481 — (5 ) — — (460 ) 16 (93 ) Derivative contracts 126 4 (2,965 ) — 2,961 1,147 1,273 1,273 Total financial instruments and other inventory positions owned 2,021 4 (3,695 ) (700 ) 3,012 692 1,334 1,180 Investments at fair value 126,060 11,708 (29,139 ) (502 ) 14,015 (17,857 ) 104,285 (8,307 ) Total assets $ 128,081 $ 11,712 $ (32,834 ) $ (1,202 ) $ 17,027 $ (17,165 ) $ 105,619 $ (7,127 ) Liabilities: Financial instruments and other inventory positions sold, but not yet purchased: Derivative contracts $ 4,433 $ (1,600 ) $ 3,266 $ — $ (1,666 ) $ (4,065 ) $ 368 $ 368 Total financial instruments and other inventory positions sold, but not yet purchased $ 4,433 $ (1,600 ) $ 3,266 $ — $ (1,666 ) $ (4,065 ) $ 368 $ 368 Realized and unrealized gains/(losses) related to financial instruments, with the exception of customer matched-book derivatives, are reported in institutional brokerage on the consolidated statements of operations. Realized and unrealized gains/(losses) related to customer matched-book derivatives are reported in investment banking. Realized and unrealized gains/(losses) related to investments are reported in investment banking revenues or investment income on the consolidated statements of operations. The carrying values of the Company's cash, receivables and payables either from or to brokers, dealers and clearing organizations and short-term financings approximate fair value due to their liquid or short-term nature. |
Variable Interest Entities
Variable Interest Entities | 9 Months Ended |
Sep. 30, 2019 | |
Variable Interest Entity, Consolidated, Carrying Amount, Assets and Liabilities, Net [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, 2019 included 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, 2019 . 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. One of these VIEs has $25.0 million of bank line financing available with an interest rate based on prime plus an applicable margin. 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: Investments $ 128,708 Other assets 438 Total assets $ 129,146 Liabilities: Other liabilities and accrued expenses $ 12,674 Total liabilities $ 12,674 The Company has investments in a grantor trust which was established as part of a nonqualified deferred compensation plan. The Company is the primary beneficiary of the grantor trust. Accordingly, the assets and liabilities of the grantor trust are consolidated by the Company on the consolidated statements of financial condition. See Note 17 for additional information on the nonqualified deferred compensation plan. Nonconsolidated VIEs The Company determined it is not the primary beneficiary of certain VIEs and accordingly does not consolidate them. These VIEs had net assets approximating $0.3 billion at September 30, 2019 and December 31, 2018 . The Company's exposure to loss from these VIEs is $6.0 million , which is the carrying value of its capital contributions recorded in investments on the consolidated statements of financial condition at September 30, 2019 . The Company had no liabilities related to these VIEs at September 30, 2019 and December 31, 2018 . 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, 2019 . |
Receivables from and Payables t
Receivables from and Payables to Brokers, Dealers and Clearing Organizations | 9 Months Ended |
Sep. 30, 2019 | |
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) 2019 2018 Receivable from clearing organizations $ 151,876 $ 223,987 Receivable from brokers and dealers 16,028 7,700 Other 7,448 3,591 Total receivables from brokers, dealers and clearing organizations $ 175,352 $ 235,278 September 30, December 31, (Dollars in thousands) 2019 2018 Payable to clearing organizations $ — $ 4,734 Payable to brokers and dealers 4,857 3,923 Total payables to brokers, dealers and clearing organizations $ 4,857 $ 8,657 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 LLC ("Pershing"). The Company has also established an arrangement to obtain financing from Pershing related to the majority of its trading activities. 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 . |
Investments
Investments | 9 Months Ended |
Sep. 30, 2019 | |
Investments, All Other Investments [Abstract] | |
Investments | Investments The Company's investments include investments in private companies and partnerships and registered mutual funds. September 30, December 31, (Dollars in thousands) 2019 2018 Investments at fair value $ 148,437 $ 144,028 Investments at cost 1,084 1,512 Investments accounted for under the equity method 6,027 6,346 Total investments 155,548 151,886 Less investments attributable to noncontrolling interests (1) (65,363 ) (52,972 ) $ 90,185 $ 98,914 (1) Noncontrolling interests are attributable to third party ownership in consolidated merchant banking and senior living funds. At September 30, 2019 , investments carried on a cost basis had an estimated fair market value of $1.1 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, 2019 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Assets | Other Assets September 30, December 31, (Dollars in thousands) 2019 2018 Fee receivables $ 22,717 $ 18,990 Income tax receivables 25,320 — Accrued interest receivables 2,829 4,240 Forgivable loans, net 6,658 7,152 Prepaid expenses 10,349 8,763 Other 12,063 7,298 Total other assets $ 79,936 $ 46,443 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets (Dollars in thousands) Goodwill Balance at December 31, 2018 $ 81,855 Goodwill acquired 6,360 Balance at September 30, 2019 $ 88,215 Intangible assets Balance at December 31, 2018 $ 4,284 Intangible assets acquired 15,200 Amortization of intangible assets (2,735 ) Balance at September 30, 2019 $ 16,749 The addition of goodwill and intangible assets during the nine months ended September 30, 2019 related to the acquisition of Weeden & Co., as discussed in Note 4 . Management identified $15.2 million of intangible assets, consisting of $10.6 million of customer relationships and $4.6 million of internally developed software, which will be amortized over a weighted average life of 8.4 years and 3.6 years , respectively. The following table summarizes the future aggregate amortization expense of the Company's intangible assets with determinable lives: (Dollars in thousands) Remainder of 2019 $ 1,468 2020 4,020 2021 3,050 2022 2,217 2023 1,510 Thereafter 4,484 Total $ 16,749 |
Short-Term Financing
Short-Term Financing | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Short-Term Financing | Short-Term Financing 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. As of September 30, 2019 , the weighted average maturity of outstanding CP Notes was nine days . 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 covenant that requires the Company's U.S. broker dealer subsidiary to maintain excess net capital of $100 million . The Company had CP Notes of $50.0 million outstanding at September 30, 2019 and December 31, 2018 with weighted average interest rates of 3.04% and 3.38% , respectively. The Company's committed short-term bank line financing at September 30, 2019 consisted of a one-year $175 million committed revolving credit facility with U.S. Bank, N.A., which was renewed in December 2018. The Company uses this credit facility in the ordinary course of business to fund a portion of its daily operations and the amount borrowed under this credit facility varies daily based on the Company's funding needs. 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 13, 2019 . The Company pays a nonrefundable commitment fee on the unused portion of the facility on a quarterly basis. At September 30, 2019 , the Company had no advances against this line of credit. |
Legal Contingencies
Legal Contingencies | 9 Months Ended |
Sep. 30, 2019 | |
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, 2019 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. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Leases | Leases The Company leases office space throughout the United States and in a limited number of foreign countries where the Company's international operations reside. Aggregate minimum lease commitments on an undiscounted basis for the Company’s operating leases (including short-term leases) as of September 30, 2019 were as follows: (Dollars in thousands) Remainder of 2019 $ 4,207 2020 16,599 2021 12,262 2022 10,895 2023 7,943 Thereafter 17,131 Total $ 69,037 The weighted-average remaining lease term was 5.4 years at September 30, 2019 . For the three and nine months ended September 30, 2019 , the Company’s operating lease cost from continuing operations was $3.2 million and $8.9 million , respectively, of which $0.2 million and $0.5 million , respectively, related to short-term leases. The Company recorded sublease income from continuing operations of $0.4 million and $1.3 million , respectively, for the three and nine months ended September 30, 2019 . |
Restructuring and Integration C
Restructuring and Integration Costs | 9 Months Ended |
Sep. 30, 2019 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | Restructuring and Integration Costs The Company incurred restructuring costs from continuing operations for the three and nine months ended September 30, 2019 , primarily in conjunction with its acquisition of Weeden & Co. The Company incurred restructuring costs from continuing operations for the nine months ended September 30, 2018 , primarily related to headcount reductions in the second quarter of 2018. The Company incurred integration costs from continuing operations for the three and nine months ended September 30, 2019 , related to the acquisition of Weeden & Co. and the pending acquisition of Sandler O'Neill. Three Months Ended Nine Months Ended September 30, September 30, (Dollars in thousands) 2019 2018 2019 2018 Severance, benefits and outplacement costs $ 1,829 $ — $ 2,938 $ 3,183 Contract termination costs — — 2,798 185 Vacated leased office space 1,726 — 1,726 130 Total restructuring costs 3,555 — 7,462 3,498 Integration costs 2,588 — 5,076 — Total restructuring and integration costs $ 6,143 $ — $ 12,538 $ 3,498 |
Shareholders' Equity
Shareholders' Equity | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Shareholders' Equity | Shareholders' Equity Share Repurchases Effective September 30, 2017, the Company's board of directors authorized the repurchase of up to $150.0 million in common shares, which expired on September 30, 2019 . During the nine months ended September 30, 2019 , the Company repurchased 501 shares at an average price of $64.80 per share related to this authorization. During the nine months ended September 30, 2018 , the Company repurchased 124,606 shares at an average price of $72.26 per share for an aggregate purchase price of $9.0 million related to this authorization. The Company also purchases shares of common stock from restricted stock award recipients upon the award vesting or as recipients sell shares to meet their employment tax obligations. The Company purchased 698,065 shares and 264,254 shares, or $50.3 million and $22.7 million of the Company's common stock for these purposes during the nine months ended September 30, 2019 and 2018 , respectively. Issuance of Shares The Company issues common shares out of treasury stock as a result of employee restricted share vesting and exercise transactions as discussed in Note 17 . During the nine months ended September 30, 2019 and 2018 , the Company issued 1,406,139 shares and 840,043 shares, respectively, related to these obligations. Dividends The Company's dividend policy includes both a quarterly and an annual special cash dividend. The annual special cash dividend is payable in the first quarter of each year, with the intention of returning a metric based on the Company's net income from the previous fiscal year. During the nine months ended September 30, 2019 , the Company declared and paid quarterly cash dividends on its common stock, aggregating $1.125 per share, and an annual special cash dividend on its common stock of $1.01 per share, totaling $30.4 million . On October 30, 2019 , the board of directors declared a cash dividend of $0.375 per share to be paid on December 13, 2019 , to shareholders of record as of the close of business on November 22, 2019 . 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 $62.7 million and a senior living fund of $2.7 million as of September 30, 2019 . As of December 31, 2018 , noncontrolling interests included the minority equity holders' proportionate share of the equity in merchant banking funds of $50.2 million and a senior living fund of $2.8 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, 2019 and 2018 |
Compensation Plans
Compensation Plans | 9 Months Ended |
Sep. 30, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Compensation Plans | Compensation Plans Stock-Based Compensation Plans The Company has two outstanding stock-based compensation plans: the Piper Jaffray Companies Amended and Restated 2003 Annual and Long-Term Incentive Plan (the "Incentive Plan") and the 2019 Employment Inducement Plan ("Weeden & Co. 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, 2019 : Incentive Plan Restricted Stock Annual grants 475,309 Sign-on grants 119,732 595,041 Weeden & Co. Inducement Plan Restricted Stock 97,752 Total restricted stock outstanding 692,793 Incentive Plan Restricted Stock Units Leadership grants 114,315 Incentive Plan Stock Options 81,667 Incentive Plan The Incentive Plan permits the grant of equity awards, including restricted stock, restricted stock units and non-qualified stock options, to the Company's employees and directors for up to 8.2 million shares of common stock ( 0.7 million shares remained available for future issuance under the Incentive Plan as of September 30, 2019 ). 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 FASB Accounting Standards Codification Topic 718, "Compensation — Stock Compensation." 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 2018 for its February 2019 Annual Grant ("2019 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 three 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"). Leadership Grants Subsequent to 2016 Restricted stock units granted in each of the years subsequent to 2016 will vest and convert to shares of common stock at the end of each 36 -month performance period only if the Company satisfies predetermined performance and/or market conditions over the performance period. Under the terms of these awards, 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 each performance period. The maximum payout leverage under these grants 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 agreements. 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 restricted stock units upon termination of employment with a corresponding reversal of compensation expense. As of September 30, 2019 , the Company has determined that the probability of achieving the performance condition for each award is as follows: Probability of Achieving Grant Year Performance Condition 2019 68% 2018 50% 2017 75% 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 awards 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 restricted stock units upon termination of employment with a corresponding reversal of compensation expense. For this portion of the awards, 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 2019 2.50% 31.9% 2018 2.40% 34.8% 2017 1.62% 35.9% Because the market condition portion of the awards vesting depend on the Company's total shareholder return relative to a peer group, the valuation modeled the performance of the peer group as well as the correlation between the Company and the peer group. The expected stock price volatility assumptions were determined using historical volatility, as correlation coefficients can only be developed through historical volatility. The risk-free interest rates were determined based on three-year U.S. Treasury bond yields. The compensation committee of the Company's board of directors included defined retirement provisions in its Leadership Grants, beginning with the February 2018 grant. Certain grantees meeting defined age and service requirements will be fully vested in the awards as long as performance and post-termination obligations are met throughout the performance period. These retirement-eligible grants are expensed in the period in which those awards are deemed to be earned, which is the calendar year preceding the February grant date. For example, the Company recognized compensation expense for retirement-eligible grantees in fiscal 2018 for its February 2019 Leadership Grant. 2016 Leadership Grant Restricted stock units granted in 2016 contain market condition criteria and convert to shares of common stock at the end of the 36 -month performance period only if the Company's stock performance satisfies predetermined market conditions over the performance period. Under the terms of the award, the number of units that vested and converted to shares was based on the Company's stock performance achieving specified targets during the performance period. All units vested in full. Compensation expense was recognized over the 36 -month performance period which ended in May 2019. Up to 50 percent of the award was earned based on the Company's total shareholder return relative to members of a predetermined peer group and up to 50 percent of the award was earned based on the Company's total shareholder return. The fair value of the award on the grant date was determined using a Monte Carlo simulation with the following assumptions pursuant to the methodology above: Risk-free Expected Stock Grant Year Interest Rate Price Volatility 2016 0.98% 34.9% Stock Options On February 15, 2018, the Company granted options to certain executive officers. These options are expensed on a straight-line basis over the required service period of five years , based on the estimated fair value of the award on the date of grant. The exercise price per share is equal to the closing price on the date of grant plus ten percent . These options are subject to graded vesting, beginning on the third anniversary of the grant date, so long as the employee remains continuously employed by the Company. The maximum term of these stock options is ten years . The fair value of this stock option award was estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions: Risk-free interest rate 2.82% Dividend yield 3.22% Expected stock price volatility 37.20% Expected life of options (in years) 7.0 Fair value of options granted (per share) $24.49 The risk-free interest rate assumption was based on the U.S. Treasury bond yield with a maturity equal to the expected life of the options. The dividend yield assumption was based on the assumed dividend payout over the expected life of the options. The expected stock price volatility assumption was determined using historical volatility, as correlation coefficients can only be developed through historical volatility. Inducement Plans The Company established the Simmons Inducement Plan in conjunction with the acquisition of Simmons & Company International ("Simmons"). The Company granted $11.6 million ( 286,776 shares) in restricted stock under the Simmons Inducement Plan on May 16, 2016 . Simmons Inducement Plan awards were amortized as compensation expense on a straight-line basis over the vesting period. All outstanding shares cliff vested on May 16, 2019. The Company terminated the Simmons Inducement Plan in July 2019. On August 2, 2019, the Company established the Weeden & Co. Inducement Plan in conjunction with its acquisition of Weeden & Co. and granted $7.3 million ( 97,752 shares) in restricted stock. These restricted shares are subject to graded vesting, generally beginning on the third anniversary of the grant date through August 2, 2023. Weeden & Co. Inducement Plan awards are amortized as compensation expense on a straight-line basis over the vesting period. Employees forfeit unvested shares upon termination of employment and a reversal of compensation expense is recorded. Stock-Based Compensation Activity The following table summarizes the Company's stock-based compensation activity within continuing operations: Three Months Ended Nine Months Ended September 30, September 30, (Dollars in millions) 2019 2018 2019 2018 Stock-based compensation expense $ 7.9 $ 12.7 $ 17.9 $ 31.0 Forfeitures 0.3 0.2 1.5 0.7 Tax benefit related to stock-based compensation expense 1.6 2.3 3.1 5.0 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, 2018 1,569,795 $ 53.80 Granted 435,796 73.92 Vested (1,297,836 ) 47.12 Canceled (14,962 ) 78.46 September 30, 2019 692,793 $ 78.44 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, 2018 194,251 $ 48.97 Granted 39,758 75.78 Vested (103,707 ) 19.93 Canceled (15,987 ) 45.79 September 30, 2019 114,315 $ 85.09 As of September 30, 2019 , there was $14.5 million of total unrecognized compensation cost related to restricted stock and restricted stock units expected to be recognized over a weighted average period of 3.3 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, 2018 81,667 $ 99.00 9.1 $ — Granted — — Exercised — — Canceled — — September 30, 2019 81,667 $ 99.00 8.4 $ — As of September 30, 2019 , there was $1.4 million of unrecognized compensation cost related to stock options expected to be recognized over a weighted average period of 3.4 years. There were no options exercised during the nine months ended September 30, 2019 . Acquisition-related Compensation Arrangements The Company entered into acquisition-related compensation arrangements with certain employees for retention and incentive purposes. Additional cash compensation was available to certain employees subject to exceeding an investment banking revenue threshold during the three year Simmons post-acquisition period, which ended on February 26, 2019. The Company accrued $40.1 million related to this performance award plan, which was paid in August 2019. Amounts payable related to this performance award plan were recorded as compensation expense from continuing operations on the consolidated statements of operations over the requisite performance period of three years . The Company recorded $0.4 million and $7.2 million as compensation expense from continuing operations for the nine months ended September 30, 2019 and 2018 , respectively. Deferred Compensation Plans The Company maintains various deferred compensation arrangements for employees. The Piper Jaffray Companies Mutual Fund Restricted Share Investment Plan is a fully funded deferred compensation plan which allows eligible employees to receive a portion of their incentive compensation 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 nonqualified deferred compensation plan is an unfunded plan which allows certain highly compensated employees, at their election, to defer a portion of their compensation. In 2017, this plan was closed to future deferral elections by participants for performance periods beginning after December 31, 2017. 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 $15.7 million and $31.2 million as of September 30, 2019 and December 31, 2018 , respectively, and are included in investments on the consolidated statements of financial condition. The compensation deferred by the employees was expensed in the period earned. The deferred compensation liability was $16.1 million and $31.4 million as of September 30, 2019 and December 31, 2018 |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share ("EPS") The Company calculates earnings per share using the two-class method. Basic earnings per common share is computed by dividing net income applicable to Piper Jaffray Companies' common shareholders by the weighted average number of common shares outstanding for the period. Net income applicable to Piper Jaffray Companies' common shareholders represents net income 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, or for periods in which cash dividends exceed net income resulting in an undistributed loss. Distributed earnings (e.g., dividends) are allocated to participating securities. Prior to the 2019 Annual Grant, all of the Company's unvested restricted shares are deemed to be participating securities as they are eligible to share in the profits (e.g., receive dividends) of the Company. The Company's unvested restricted stock units, as well as the 2019 Annual Grant, 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, restricted stock units and non-participating restricted shares. 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) 2019 2018 2019 2018 Net income from continuing operations applicable to Piper Jaffray Companies $ 17,165 $ 20,637 $ 49,281 $ 37,117 Net income from discontinued operations 26,077 1,386 23,772 1,735 Net income applicable to Piper Jaffray Companies 43,242 22,023 73,053 38,852 Earnings allocated to participating securities (1) (800 ) (2,646 ) (3,524 ) (5,202 ) Net income applicable to Piper Jaffray Companies' common shareholders (2) $ 42,442 $ 19,377 $ 69,529 $ 33,650 Shares for basic and diluted calculations: Average shares used in basic computation 13,708 13,343 13,502 13,248 Restricted stock units 131 165 175 196 Non-participating restricted shares 246 — 205 — Average shares used in diluted computation (3) 14,085 13,508 13,882 13,444 Earnings per basic common share: Income from continuing operations $ 1.23 $ 1.36 $ 3.46 $ 2.41 Income from discontinued operations 1.87 0.09 1.69 0.13 Earnings per basic common share $ 3.09 $ 1.45 $ 5.15 $ 2.54 Earnings per diluted common share: Income from continuing operations $ 1.20 $ 1.34 $ 3.37 $ 2.37 Income from discontinued operations 1.82 0.09 1.64 0.13 Earnings per diluted common share (3) $ 3.01 $ 1.43 $ 5.01 $ 2.50 (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, or for periods in which cash dividends exceed net income resulting in an undistributed loss. Distributed earnings (e.g., dividends) are allocated to participating securities. Participating securities include the Company's unvested restricted shares issued prior to the 2019 Annual Grant. The weighted average participating shares outstanding were 272,170 and 1,842,036 for the three months ended September 30, 2019 and 2018 , respectively, and 598,894 and 1,944,946 for the nine months ended September 30, 2019 and 2018 , respectively. (2) Net income 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, restricted stock units and non-participating restricted shares 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, or for periods in which cash dividends exceed net income resulting in an undistributed loss. Common shares of 1,754,634 were excluded from diluted EPS for the nine months ended September 30, 2018 , as the Company had an undistributed loss for this period. The average shares used in the diluted computation excluded anti-dilutive stock options and non-participating restricted shares of 0.3 million and 0.1 million for the three and nine months ended September 30, 2019 , respectively. The anti-dilutive effects from stock options, restricted stock units and non-participating restricted shares were immaterial for the nine months ended September 30, 2018 . |
Revenues and Business Informati
Revenues and Business Information | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Segment Reporting | Revenues and Business Information The Company's activities as an investment bank and institutional securities firm constitute a single business segment. The substantial majority of the Company's net revenues and long-lived assets are located in the U.S. Segment pre-tax operating income and segment pre-tax operating margin exclude the results of discontinued operations. Reportable segment financial results from continuing operations are as follows: Three Months Ended Nine Months Ended September 30, September 30, (Dollars in thousands) 2019 2018 2019 2018 Capital Markets Investment banking Advisory services $ 106,769 $ 113,540 $ 296,886 $ 266,083 Equity financing 21,837 32,188 61,148 99,868 Debt financing 22,963 20,936 54,249 45,473 Total investment banking 151,569 166,664 412,283 411,424 Institutional sales and trading Equities 25,120 17,804 56,609 54,951 Fixed income 25,769 18,170 69,531 53,093 Total institutional sales and trading 50,889 35,974 126,140 108,044 Investment income/(loss) (1,375 ) 5,045 18,325 12,057 Other financing expenses (348 ) (1,732 ) (1,053 ) (5,351 ) Net revenues 200,735 205,951 555,695 526,174 Operating expenses (1) 179,700 178,165 490,598 485,379 Segment pre-tax operating income $ 21,035 $ 27,786 $ 65,097 $ 40,795 Segment pre-tax operating margin 10.5 % 13.5 % 11.7 % 7.8 % (1) Operating expenses include intangible asset amortization of $1.2 million for the three months ended September 30, 2019 and 2018 ; and $2.7 million and $3.6 million for the nine months ended September 30, 2019 and 2018 , respectively. |
Net Capital Requirements and Ot
Net Capital Requirements and Other Regulatory Matters | 9 Months Ended |
Sep. 30, 2019 | |
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, 2019 , net capital calculated under the SEC rule was $179.9 million , and exceeded the minimum net capital required under the SEC rule by $178.9 million . The Company's committed short-term credit facility includes a covenant 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, 2019 , 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, 2019 , Piper Jaffray Hong Kong Limited was in compliance with the liquid capital requirements of the Hong Kong Securities and Futures Commission. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company recorded income tax expense from continuing operations of $10.7 million and $4.9 million for the nine months ended September 30, 2019 and 2018 , respectively. Income tax expense from continuing operations was reduced by a tax benefit of $5.1 million and $6.8 million for the nine months ended September 30, 2019 and 2018 , respectively, related to stock-based compensation awards vesting at values greater than the grant price. |
Subsequent Event
Subsequent Event | 9 Months Ended |
Sep. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent Event On October 15, 2019 , the Company entered into a note purchase agreement ("Note Purchase Agreement") under which the Company issued unsecured fixed rate senior notes ("Notes") in the amount of $175 million . The initial holders of the Notes are certain entities advised by Pacific Investment Management Company ("PIMCO"). The Notes consist of two classes, Class A Notes and Class B Notes, with principal amounts of $50 million and $125 million , respectively. The Class A Notes bear interest at an annual fixed rate of 4.74 percent and mature on October 15, 2021 . The Class B Notes bear interest at an annual fixed rate of 5.20 percent and mature on October 15, 2023 . Interest on the Notes is payable semi-annually. The unpaid principal amounts are due in full on the respective maturity dates and may not be prepaid by the Company. The Note Purchase Agreement includes customary events of default and covenants that, among other things, require the Company's U.S. broker dealer subsidiary to maintain a minimum 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. |
Accounting Policies and Prono_2
Accounting Policies and Pronouncements (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Leases | Leases A lease is a contract, or part of a contract, that conveys the right to control the use of identified property or equipment for a period of time in exchange for consideration. In making this determination, the Company considers if it obtains substantially all of the economic benefits from the use of the underlying asset and directs how and for what purpose the asset is used during the term of the contract. The Company leases its corporate headquarters and other offices under various non-cancelable leases, all of which are operating leases. In addition to rent, the leases require payment of real estate taxes, insurance and common area maintenance. The original terms of the Company's lease agreements generally range up to 12 years. Some of the leases contain renewal and/or termination options, escalation clauses, rent-free holidays and operating cost adjustments. The Company recognizes a right-of-use ("ROU") lease asset and lease liability on the consolidated statements of financial condition for all leases with a term greater than 12 months. The lease liability represents the Company’s obligation to make future lease payments and is recorded at an amount equal to the present value of the remaining lease payments due over the lease term. The ROU lease asset, which represents the right to use the underlying asset during the lease term, is measured based on the carrying value of the lease liability, adjusted for other items, such as lease incentives and uneven rent payments. The discount rate used to determine the present value of the remaining lease payments reflects the Company’s incremental borrowing rate, which is the rate the Company would have to pay to borrow on a collateralized basis over a similar term in a similar economic environment. In calculating its discount rates, the Company took into consideration a current financing arrangement that is on a secured (i.e., collateralized) basis, as well as market interest rates and spreads, other reference points, and the respective tenors of the Company’s designated lease term ranges. The Company applied the portfolio approach in determining the discount rates for its leases. The weighted-average discount rate was 4.0 percent at September 30, 2019 . For leases that contain escalation clauses or rent-free holidays, the Company recognizes the related rent expense on a straight-line basis from the date the Company takes possession of the property to the end of the initial lease term. The Company records any difference between the straight-line rent expense and amounts paid under the leases as part of the amortization of the ROU lease asset. Cash or lease incentives received upon entering into certain leases are recognized on a straight-line basis as a reduction of rent expense from the date the Company takes possession of the property or receives the cash to the end of the initial lease term. Lease incentives, which initially reduce the ROU lease asset, are a component of the amortization of the ROU lease asset. Rent expense for leases with a term of 12 months or less is recorded on a straight-line basis over the lease term in the consolidated statements of operations. |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of disposal group and components of discontinued operations | ARI's results, previously reported in the Asset Management segment, have been presented as discontinued operations for all periods presented and the related assets and liabilities were classified as held for sale. As of December 31, 2018 , the disposal group consisted of: December 31, (Dollars in thousands) 2018 Net deferred income tax assets $ 28,861 Fee receivables 4,128 Intangible assets 8,090 Other assets 1,562 Total assets held for sale $ 42,641 December 31, (Dollars in thousands) 2018 Accrued compensation $ 9,934 Other liabilities 278 Total liabilities held for sale $ 10,212 The components of discontinued operations were as follows: Three Months Ended Nine Months Ended September 30, September 30, (Dollars in thousands) 2019 2018 2019 2018 Net revenues $ 7,939 $ 11,576 $ 26,546 $ 33,896 Operating expenses 7,068 8,327 22,589 27,286 Intangible asset amortization and impairment (1) — 1,401 5,465 4,202 Restructuring costs 9,572 — 10,268 272 Total non-interest expenses 16,640 9,728 38,322 31,760 Income/(loss) from discontinued operations before income tax expense/(benefit) (8,701 ) 1,848 (11,776 ) 2,136 Income tax expense/(benefit) (1,752 ) 462 (2,522 ) 401 Net income/(loss) from discontinued operations before gain on sales (6,949 ) 1,386 (9,254 ) 1,735 Gain on sales, net of tax 33,026 — 33,026 — Income from discontinued operations, net of tax $ 26,077 $ 1,386 $ 23,772 $ 1,735 (1) Includes $2.9 million of intangible asset impairment related to the ARI trade name for the nine months ended September 30, 2019 . |
Acquisitions (Tables)
Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Business Combinations [Abstract] | |
Estimated faiv values of assets acquired and liabilities assumed | The following table summarizes the estimated fair values of assets acquired and liabilities assumed at the date of the acquisition: (Dollars in thousands) Assets: Cash and cash equivalents $ 4,351 Receivables from brokers, dealers and clearing organizations 1,641 Fixed assets 289 Goodwill 6,360 Intangible assets 15,200 Right-of-use lease asset 6,811 Other assets 6,753 Total assets acquired 41,405 Liabilities: Accrued compensation 2,114 Accrued lease liability 6,811 Other liabilities and accrued expenses 9,512 Total liabilities assumed 18,437 Net assets acquired $ 22,968 |
Unaudited pro forma information | Weeden & Co.'s 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 that the acquisition had occurred at the beginning of the comparable prior period presented. Pro forma results have been prepared by adjusting the Company's historical results to include Weeden & Co.'s 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 the restricted cash issued as part of the purchase price and the restricted stock issued for retention purposes; and the income tax effect of applying the Company's statutory tax rates to Weeden & Co.'s results of operations. The Company's consolidated unaudited pro forma information presented does not necessarily reflect the results of operations that would have resulted had the acquisition been completed at the beginning of the applicable periods presented, does not contemplate client account overlap and anticipated operational efficiencies of the combined entities, nor does it indicate the results of operations in future periods. Three Months Ended Nine Months Ended September 30, September 30, (Dollars in thousands) 2019 2018 2019 2018 Net revenues $ 205,230 $ 222,890 $ 591,654 $ 580,446 Net income from continuing operations applicable to Piper Jaffray Companies 16,431 20,144 44,904 36,121 |
Financial Instruments and Oth_2
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, 2019 | |
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 by Type | September 30, December 31, (Dollars in thousands) 2019 2018 Financial instruments and other inventory positions owned: Corporate securities: Equity securities $ 13,756 $ 1,458 Convertible securities 119,962 92,485 Fixed income securities 60,312 31,906 Municipal securities: Taxable securities 22,822 38,711 Tax-exempt securities 191,324 268,804 Short-term securities 106,175 52,472 Mortgage-backed securities 13 15 U.S. government agency securities 130,503 123,384 U.S. government securities 3,526 954 Derivative contracts 21,972 17,033 Total financial instruments and other inventory positions owned $ 670,365 $ 627,222 Financial instruments and other inventory positions sold, but not yet purchased: Corporate securities: Equity securities $ 68,464 $ 82,082 Fixed income securities 23,593 20,180 U.S. government agency securities 21,993 10,257 U.S. government securities 92,968 60,365 Derivative contracts 7,072 4,543 Total financial instruments and other inventory positions sold, but not yet purchased $ 214,090 $ 177,427 |
Schedule of Gross Fair Market Value and 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, 2019 December 31, 2018 (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 $ 237,342 $ 226,088 $ 2,262,912 $ 181,199 $ 169,950 $ 2,532,966 Trading securities 482 5,365 216,375 408 4,202 262,275 $ 237,824 $ 231,453 $ 2,479,287 $ 181,607 $ 174,152 $ 2,795,241 (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 2019 2018 2019 2018 Interest rate derivative contract Investment banking $ (203 ) $ (301 ) $ (634 ) $ (1,567 ) Interest rate derivative contract Institutional brokerage (5 ) 980 (450 ) 5,212 $ (208 ) $ 679 $ (1,084 ) $ 3,645 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
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, 2019 : Valuation Weighted Technique Unobservable Input Range Average (1) Assets: Financial instruments and other inventory positions owned: Derivative contracts: Interest rate locks Discounted cash flow Premium over the MMD curve in basis points ("bps") (2) 4 - 11 bps 6.7 bps Investments at fair value: Equity securities in private companies Market approach Revenue multiple (2) 3 - 6 times 4.5 times EBITDA multiple (2) 11 - 20 times 15.5 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 in bps (3) 4 - 11 bps 8.2 bps Uncertainty of fair value measurements: (1) Unobservable inputs were weighted by the relative fair value of the financial instruments. (2) Significant increase/(decrease) in the unobservable input in isolation would have resulted in a significantly higher/(lower) fair value measurement. (3) Significant increase/(decrease) in the unobservable input in isolation would have resulted in a significantly lower/(higher) fair value measurement. |
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, 2019 : 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 $ 44 $ 13,712 $ — $ — $ 13,756 Convertible securities — 119,962 — — 119,962 Fixed income securities — 60,312 — — 60,312 Municipal securities: Taxable securities — 22,822 — — 22,822 Tax-exempt securities — 191,324 — — 191,324 Short-term securities — 106,175 — — 106,175 Mortgage-backed securities — — 13 — 13 U.S. government agency securities — 130,503 — — 130,503 U.S. government securities 3,526 — — — 3,526 Derivative contracts — 237,342 482 (215,852 ) 21,972 Total financial instruments and other inventory positions owned 3,570 882,152 495 (215,852 ) 670,365 Cash equivalents 909 — — — 909 Investments at fair value 15,723 892 131,822 (2) — 148,437 Total assets $ 20,202 $ 883,044 $ 132,317 $ (215,852 ) $ 819,711 Liabilities: Financial instruments and other inventory positions sold, but not yet purchased: Corporate securities: Equity securities $ 56,220 $ 12,244 $ — $ — $ 68,464 Fixed income securities — 23,593 — — 23,593 U.S. government agency securities — 21,993 — — 21,993 U.S. government securities 92,968 — — — 92,968 Derivative contracts — 226,548 4,905 (224,381 ) 7,072 Total financial instruments and other inventory positions sold, but not yet purchased $ 149,188 $ 284,378 $ 4,905 $ (224,381 ) $ 214,090 (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 $65.4 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, 2018 : 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 $ 331 $ 1,127 $ — $ — $ 1,458 Convertible securities — 92,485 — — 92,485 Fixed income securities — 31,906 — — 31,906 Municipal securities: Taxable securities — 38,711 — — 38,711 Tax-exempt securities — 268,804 — — 268,804 Short-term securities — 52,472 — — 52,472 Mortgage-backed securities — — 15 — 15 U.S. government agency securities — 123,384 — — 123,384 U.S. government securities 954 — — — 954 Derivative contracts — 181,378 229 (164,574 ) 17,033 Total financial instruments and other inventory positions owned 1,285 790,267 244 (164,574 ) 627,222 Cash equivalents 20,581 — — — 20,581 Investments at fair value 33,587 2,649 107,792 (2) — 144,028 Total assets $ 55,453 $ 792,916 $ 108,036 $ (164,574 ) $ 791,831 Liabilities: Financial instruments and other inventory positions sold, but not yet purchased: Corporate securities: Equity securities $ 81,575 $ 507 $ — $ — $ 82,082 Fixed income securities — 20,180 — — 20,180 U.S. government agency securities — 10,257 — — 10,257 U.S. government securities 60,365 — — — 60,365 Derivative contracts — 169,950 4,202 (169,609 ) 4,543 Total financial instruments and other inventory positions sold, but not yet purchased $ 141,940 $ 200,894 $ 4,202 $ (169,609 ) $ 177,427 (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 $53.0 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 gains/ gains/ September 30, September 30, (Dollars in thousands) 2019 Purchases Sales out (losses) (losses) 2019 2019 Assets: Financial instruments and other inventory positions owned: Mortgage-backed securities $ 13 $ — $ — $ — $ — $ — $ 13 $ — Derivative contracts — — — — — 482 482 482 Total financial instruments and other inventory positions owned 13 — — — — 482 495 482 Investments at fair value 132,556 15,623 (12,772 ) — 2,901 (6,486 ) 131,822 (3,585 ) Total assets $ 132,569 $ 15,623 $ (12,772 ) $ — $ 2,901 $ (6,004 ) $ 132,317 $ (3,103 ) Liabilities: Financial instruments and other inventory positions sold, but not yet purchased: Derivative contracts $ 4,418 $ (3,576 ) $ — $ — $ 3,576 $ 487 $ 4,905 $ 1,860 Total financial instruments and other inventory positions sold, but not yet purchased $ 4,418 $ (3,576 ) $ — $ — $ 3,576 $ 487 $ 4,905 $ 1,860 Unrealized gains/ (losses) for assets/ Balance at Realized Unrealized Balance at liabilities held at June 30, Transfers gains/ gains/ September 30, September 30, (Dollars in thousands) 2018 Purchases Sales out (losses) (losses) 2018 2018 Assets: Financial instruments and other inventory positions owned: Municipal securities: Short-term securities $ 45 $ — $ — $ — $ — $ — $ 45 $ — Mortgage-backed securities 18 — — — — (2 ) 16 (2 ) Derivative contracts 930 — (90 ) — 90 343 1,273 441 Total financial instruments and other inventory positions owned 993 — (90 ) — 90 341 1,334 439 Investments at fair value 108,121 10,000 (14,199 ) (357 ) 4,949 (4,229 ) 104,285 (4,229 ) Total assets $ 109,114 $ 10,000 $ (14,289 ) $ (357 ) $ 5,039 $ (3,888 ) $ 105,619 $ (3,790 ) Liabilities: Financial instruments and other inventory positions sold, but not yet purchased: Derivative contracts $ 1,005 $ (210 ) $ 40 $ — $ 169 $ (636 ) $ 368 $ (464 ) Total financial instruments and other inventory positions sold, but not yet purchased $ 1,005 $ (210 ) $ 40 $ — $ 169 $ (636 ) $ 368 $ (464 ) Unrealized gains/ (losses) for assets/ Balance at Realized Unrealized Balance at liabilities held at December 31, Transfers gains/ gains/ September 30, September 30, (Dollars in thousands) 2018 Purchases Sales out (losses) (losses) 2019 2019 Assets: Financial instruments and other inventory positions owned: Mortgage-backed securities $ 15 $ — $ (6 ) $ — $ (23 ) $ 27 $ 13 $ — Derivative contracts 229 — (336 ) — 336 253 482 482 Total financial instruments and other inventory positions owned 244 — (342 ) — 313 280 495 482 Investments at fair value 107,792 23,623 (12,772 ) (783 ) 2,901 11,061 131,822 13,473 Total assets $ 108,036 $ 23,623 $ (13,114 ) $ (783 ) $ 3,214 $ 11,341 $ 132,317 $ 13,955 Liabilities: Financial instruments and other inventory positions sold, but not yet purchased: Derivative contracts $ 4,202 $ (12,398 ) $ — $ — $ 12,398 $ 703 $ 4,905 $ 4,905 Total financial instruments and other inventory positions sold, but not yet purchased $ 4,202 $ (12,398 ) $ — $ — $ 12,398 $ 703 $ 4,905 $ 4,905 Unrealized gains/ (losses) for assets/ Balance at Realized Unrealized Balance at liabilities held at December 31, Transfers gains/ gains/ September 30, September 30, (Dollars in thousands) 2017 Purchases Sales out (losses) (losses) 2018 2018 Assets: Financial instruments and other inventory positions owned: Municipal securities: Tax-exempt securities $ 700 $ — $ — $ (700 ) $ — $ — $ — $ — Short-term securities 714 — (725 ) — 51 5 45 — Mortgage-backed securities 481 — (5 ) — — (460 ) 16 (93 ) Derivative contracts 126 4 (2,965 ) — 2,961 1,147 1,273 1,273 Total financial instruments and other inventory positions owned 2,021 4 (3,695 ) (700 ) 3,012 692 1,334 1,180 Investments at fair value 126,060 11,708 (29,139 ) (502 ) 14,015 (17,857 ) 104,285 (8,307 ) Total assets $ 128,081 $ 11,712 $ (32,834 ) $ (1,202 ) $ 17,027 $ (17,165 ) $ 105,619 $ (7,127 ) Liabilities: Financial instruments and other inventory positions sold, but not yet purchased: Derivative contracts $ 4,433 $ (1,600 ) $ 3,266 $ — $ (1,666 ) $ (4,065 ) $ 368 $ 368 Total financial instruments and other inventory positions sold, but not yet purchased $ 4,433 $ (1,600 ) $ 3,266 $ — $ (1,666 ) $ (4,065 ) $ 368 $ 368 |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Variable Interest Entity, Consolidated, Carrying Amount, Assets and Liabilities, Net [Abstract] | |
Schedule of Consolidated 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, 2019 . 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. One of these VIEs has $25.0 million of bank line financing available with an interest rate based on prime plus an applicable margin. 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: Investments $ 128,708 Other assets 438 Total assets $ 129,146 Liabilities: Other liabilities and accrued expenses $ 12,674 Total liabilities $ 12,674 |
Receivables from and Payables_2
Receivables from and Payables to Brokers, Dealers and Clearing Organizations (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Brokers and Dealers [Abstract] | |
Schedule of Receivables from and Payables to Brokers, Dealers and Clearing Organizations | September 30, December 31, (Dollars in thousands) 2019 2018 Receivable from clearing organizations $ 151,876 $ 223,987 Receivable from brokers and dealers 16,028 7,700 Other 7,448 3,591 Total receivables from brokers, dealers and clearing organizations $ 175,352 $ 235,278 September 30, December 31, (Dollars in thousands) 2019 2018 Payable to clearing organizations $ — $ 4,734 Payable to brokers and dealers 4,857 3,923 Total payables to brokers, dealers and clearing organizations $ 4,857 $ 8,657 |
Investments (Tables)
Investments (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Investments, All Other Investments [Abstract] | |
Schedule of Investments | September 30, December 31, (Dollars in thousands) 2019 2018 Investments at fair value $ 148,437 $ 144,028 Investments at cost 1,084 1,512 Investments accounted for under the equity method 6,027 6,346 Total investments 155,548 151,886 Less investments attributable to noncontrolling interests (1) (65,363 ) (52,972 ) $ 90,185 $ 98,914 (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, 2019 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Other Assets | September 30, December 31, (Dollars in thousands) 2019 2018 Fee receivables $ 22,717 $ 18,990 Income tax receivables 25,320 — Accrued interest receivables 2,829 4,240 Forgivable loans, net 6,658 7,152 Prepaid expenses 10,349 8,763 Other 12,063 7,298 Total other assets $ 79,936 $ 46,443 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Changes in Carrying Value of Goodwill and Intangible Assets | (Dollars in thousands) Goodwill Balance at December 31, 2018 $ 81,855 Goodwill acquired 6,360 Balance at September 30, 2019 $ 88,215 Intangible assets Balance at December 31, 2018 $ 4,284 Intangible assets acquired 15,200 Amortization of intangible assets (2,735 ) Balance at September 30, 2019 $ 16,749 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | The following table summarizes the future aggregate amortization expense of the Company's intangible assets with determinable lives: (Dollars in thousands) Remainder of 2019 $ 1,468 2020 4,020 2021 3,050 2022 2,217 2023 1,510 Thereafter 4,484 Total $ 16,749 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Schedule of Aggregate Minimum Lease Commitments for Operating Leases | Aggregate minimum lease commitments on an undiscounted basis for the Company’s operating leases (including short-term leases) as of September 30, 2019 were as follows: (Dollars in thousands) Remainder of 2019 $ 4,207 2020 16,599 2021 12,262 2022 10,895 2023 7,943 Thereafter 17,131 Total $ 69,037 |
Restructuring and Integration_2
Restructuring and Integration Costs (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Pre-tax Restructuring Costs | The Company incurred restructuring costs from continuing operations for the nine months ended September 30, 2018 , primarily related to headcount reductions in the second quarter of 2018. The Company incurred integration costs from continuing operations for the three and nine months ended September 30, 2019 , related to the acquisition of Weeden & Co. and the pending acquisition of Sandler O'Neill. Three Months Ended Nine Months Ended September 30, September 30, (Dollars in thousands) 2019 2018 2019 2018 Severance, benefits and outplacement costs $ 1,829 $ — $ 2,938 $ 3,183 Contract termination costs — — 2,798 185 Vacated leased office space 1,726 — 1,726 130 Total restructuring costs 3,555 — 7,462 3,498 Integration costs 2,588 — 5,076 — Total restructuring and integration costs $ 6,143 $ — $ 12,538 $ 3,498 |
Compensation Plans (Tables)
Compensation Plans (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
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, 2019 : Incentive Plan Restricted Stock Annual grants 475,309 Sign-on grants 119,732 595,041 Weeden & Co. Inducement Plan Restricted Stock 97,752 Total restricted stock outstanding 692,793 Incentive Plan Restricted Stock Units Leadership grants 114,315 Incentive Plan Stock Options 81,667 |
Schedule of RSU Performance Condition Probability | As of September 30, 2019 , the Company has determined that the probability of achieving the performance condition for each award is as follows: Probability of Achieving Grant Year Performance Condition 2019 68% 2018 50% 2017 75% |
Schedule of RSU Valuation Assumptions | For this portion of the awards, 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 2019 2.50% 31.9% 2018 2.40% 34.8% 2017 1.62% 35.9% Risk-free Expected Stock Grant Year Interest Rate Price Volatility 2016 0.98% 34.9% |
Schedule of Stock Options Valuation Assumptions | The fair value of this stock option award was estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions: Risk-free interest rate 2.82% Dividend yield 3.22% Expected stock price volatility 37.20% Expected life of options (in years) 7.0 Fair value of options granted (per share) $24.49 |
Schedule of Stock-Based Compensation Expense | The following table summarizes the Company's stock-based compensation activity within continuing operations: Three Months Ended Nine Months Ended September 30, September 30, (Dollars in millions) 2019 2018 2019 2018 Stock-based compensation expense $ 7.9 $ 12.7 $ 17.9 $ 31.0 Forfeitures 0.3 0.2 1.5 0.7 Tax benefit related to stock-based compensation expense 1.6 2.3 3.1 5.0 |
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, 2018 1,569,795 $ 53.80 Granted 435,796 73.92 Vested (1,297,836 ) 47.12 Canceled (14,962 ) 78.46 September 30, 2019 692,793 $ 78.44 |
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, 2018 194,251 $ 48.97 Granted 39,758 75.78 Vested (103,707 ) 19.93 Canceled (15,987 ) 45.79 September 30, 2019 114,315 $ 85.09 |
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, 2018 81,667 $ 99.00 9.1 $ — Granted — — Exercised — — Canceled — — September 30, 2019 81,667 $ 99.00 8.4 $ — |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
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) 2019 2018 2019 2018 Net income from continuing operations applicable to Piper Jaffray Companies $ 17,165 $ 20,637 $ 49,281 $ 37,117 Net income from discontinued operations 26,077 1,386 23,772 1,735 Net income applicable to Piper Jaffray Companies 43,242 22,023 73,053 38,852 Earnings allocated to participating securities (1) (800 ) (2,646 ) (3,524 ) (5,202 ) Net income applicable to Piper Jaffray Companies' common shareholders (2) $ 42,442 $ 19,377 $ 69,529 $ 33,650 Shares for basic and diluted calculations: Average shares used in basic computation 13,708 13,343 13,502 13,248 Restricted stock units 131 165 175 196 Non-participating restricted shares 246 — 205 — Average shares used in diluted computation (3) 14,085 13,508 13,882 13,444 Earnings per basic common share: Income from continuing operations $ 1.23 $ 1.36 $ 3.46 $ 2.41 Income from discontinued operations 1.87 0.09 1.69 0.13 Earnings per basic common share $ 3.09 $ 1.45 $ 5.15 $ 2.54 Earnings per diluted common share: Income from continuing operations $ 1.20 $ 1.34 $ 3.37 $ 2.37 Income from discontinued operations 1.82 0.09 1.64 0.13 Earnings per diluted common share (3) $ 3.01 $ 1.43 $ 5.01 $ 2.50 (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, or for periods in which cash dividends exceed net income resulting in an undistributed loss. Distributed earnings (e.g., dividends) are allocated to participating securities. Participating securities include the Company's unvested restricted shares issued prior to the 2019 Annual Grant. The weighted average participating shares outstanding were 272,170 and 1,842,036 for the three months ended September 30, 2019 and 2018 , respectively, and 598,894 and 1,944,946 for the nine months ended September 30, 2019 and 2018 , respectively. (2) Net income 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, restricted stock units and non-participating restricted shares 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, or for periods in which cash dividends exceed net income resulting in an undistributed loss. Common shares of 1,754,634 were excluded from diluted EPS for the nine months ended September 30, 2018 , as the Company had an undistributed loss for this period. |
Revenues and Business Informa_2
Revenues and Business Information (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Reportable Segment Financial Results | Reportable segment financial results from continuing operations are as follows: Three Months Ended Nine Months Ended September 30, September 30, (Dollars in thousands) 2019 2018 2019 2018 Capital Markets Investment banking Advisory services $ 106,769 $ 113,540 $ 296,886 $ 266,083 Equity financing 21,837 32,188 61,148 99,868 Debt financing 22,963 20,936 54,249 45,473 Total investment banking 151,569 166,664 412,283 411,424 Institutional sales and trading Equities 25,120 17,804 56,609 54,951 Fixed income 25,769 18,170 69,531 53,093 Total institutional sales and trading 50,889 35,974 126,140 108,044 Investment income/(loss) (1,375 ) 5,045 18,325 12,057 Other financing expenses (348 ) (1,732 ) (1,053 ) (5,351 ) Net revenues 200,735 205,951 555,695 526,174 Operating expenses (1) 179,700 178,165 490,598 485,379 Segment pre-tax operating income $ 21,035 $ 27,786 $ 65,097 $ 40,795 Segment pre-tax operating margin 10.5 % 13.5 % 11.7 % 7.8 % (1) Operating expenses include intangible asset amortization of $1.2 million for the three months ended September 30, 2019 and 2018 ; and $2.7 million and $3.6 million for the nine months ended September 30, 2019 and 2018 , respectively. |
Organization and Basis of Pre_2
Organization and Basis of Presentation - Additional Information (Details) | 9 Months Ended |
Sep. 30, 2019segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of reportable segments | 1 |
Accounting Policies and Prono_3
Accounting Policies and Pronouncements - Additional Information (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
ROU lease asset | $ 41,687 | $ 44,000 | $ 0 |
Accrued lease liability | $ 59,162 | $ 59,000 | $ 0 |
Maximum | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Original terms of lease agreements | 12 years | ||
Minimum | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Original terms of lease agreements | 12 months | ||
Weighted Average | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Weighted-average discount rate | 4.00% |
Discontinued Operations - Addit
Discontinued Operations - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | 48 Months Ended | ||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 20, 2020 | Dec. 31, 2023 | Sep. 27, 2019 | Dec. 31, 2018 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Cash proceeds | $ 52,881 | $ 0 | ||||||
Liabilities classified as held for sale | ||||||||
Total liabilities held for sale | $ 0 | 0 | $ 10,212 | |||||
Components of discontinued operations | ||||||||
Gain on sales, net of tax | 33,026 | 0 | ||||||
Advisory Research (ARI) | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Cash proceeds | 52,900 | |||||||
Assets classified as held for sale | ||||||||
Net deferred income tax assets | 28,861 | |||||||
Fee receivables | 4,128 | |||||||
Intangible assets | 8,090 | |||||||
Other assets | 1,562 | |||||||
Total assets held for sale | 42,641 | |||||||
Liabilities classified as held for sale | ||||||||
Accrued compensation | 9,934 | |||||||
Other liabilities | 278 | |||||||
Total liabilities held for sale | $ 10,212 | |||||||
Components of discontinued operations | ||||||||
Net revenues | 7,939 | $ 11,576 | 26,546 | 33,896 | ||||
Operating expenses | 7,068 | 8,327 | 22,589 | 27,286 | ||||
Intangible asset amortization and impairment | 0 | 1,401 | 5,465 | 4,202 | ||||
Restructuring costs | 9,572 | 0 | 10,268 | 272 | ||||
Total non-interest expenses | 16,640 | 9,728 | 38,322 | 31,760 | ||||
Income/(loss) from discontinued operations before income tax expense/(benefit) | (8,701) | 1,848 | (11,776) | 2,136 | ||||
Income tax expense/(benefit) | (1,752) | 462 | (2,522) | 401 | ||||
Net income/(loss) from discontinued operations before gain on sales | (6,949) | 1,386 | (9,254) | 1,735 | ||||
Gain on sales, net of tax | 33,026 | 0 | 33,026 | 0 | ||||
Net income/(loss) from discontinued operations before gain on sales | $ 26,077 | $ 1,386 | 23,772 | $ 1,735 | ||||
Advisory Research (ARI) | Trade Names | ||||||||
Components of discontinued operations | ||||||||
Intangible asset amortization and impairment | $ 2,900 | |||||||
Advisory Research (ARI) | Earnout based on equity strategies revenue | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Fair value of earnout recorded | $ 2,200 | |||||||
Scenario, Forecast | Advisory Research (ARI) | Earnout based on MLP revenue | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Earnout performance period | 1 year | |||||||
Scenario, Forecast | Advisory Research (ARI) | Earnout based on MLP revenue | Maximum | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Cash proceeds | $ 35,700 | |||||||
Scenario, Forecast | Advisory Research (ARI) | Earnout based on equity strategies revenue | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Earnout performance period | 4 years | |||||||
Scenario, Forecast | Advisory Research (ARI) | Earnout based on equity strategies revenue | Maximum | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Cash proceeds | $ 10,000 |
Acquisitions - Acquisition of W
Acquisitions - Acquisition of Weeden & Co. (Details) - USD ($) $ in Thousands | Aug. 02, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 |
Business Combination, Description [Abstract] | |||||
Transaction costs | $ 2,588 | $ 0 | $ 5,076 | $ 0 | |
Weeden & Co. | |||||
Business Combination, Description [Abstract] | |||||
Economic value | $ 42,000 | ||||
Fair value of net assets acquired | 22,968 | ||||
Restricted cash portion of purchase price | 10,300 | ||||
Goodwill recorded | 6,400 | 6,360 | |||
Intangible assets acquired | 15,200 | ||||
Transaction costs | $ 1,000 | 1,700 | |||
Weeden & Co. | Customer relationships | |||||
Business Combination, Description [Abstract] | |||||
Intangible assets acquired | 10,600 | 10,600 | |||
Weeden & Co. | Internally developed software | |||||
Business Combination, Description [Abstract] | |||||
Intangible assets acquired | 4,600 | $ 4,600 | |||
Weeden & Co. | Net revenue target | |||||
Business Combination, Description [Abstract] | |||||
Additional cash consideration, maximum amount | 31,500 | ||||
Weeden & Co. | Restricted Stock | |||||
Business Combination, Description [Abstract] | |||||
Retention award restricted stock | $ 7,300 | ||||
Requisite service period | 4 years |
Acquisitions - Weeden & Co. Est
Acquisitions - Weeden & Co. Estimated Fair Values of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Aug. 02, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
Assets | ||||
Goodwill | $ 88,215 | $ 81,855 | ||
Liabilities | ||||
Accrued lease liability | $ 59,162 | $ 59,000 | $ 0 | |
Weeden & Co. | ||||
Assets | ||||
Cash and cash equivalents | $ 4,351 | |||
Receivables from brokers, dealers and clearing organizations | 1,641 | |||
Fixed assets | 289 | |||
Goodwill | 6,360 | |||
Intangible assets | 15,200 | |||
Right-of-use lease asset | 6,811 | |||
Other assets | 6,753 | |||
Total assets acquired | 41,405 | |||
Liabilities | ||||
Accrued compensation | 2,114 | |||
Accrued lease liability | 6,811 | |||
Other liabilities and accrued expenses | 9,512 | |||
Total liabilities assumed | 18,437 | |||
Net assets acquired | $ 22,968 |
Acquisitions - Weeden & Co. Una
Acquisitions - Weeden & Co. Unaudited Pro Forma Information (Details) - Weeden & Co. - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||||
Net revenues | $ 205,230 | $ 222,890 | $ 591,654 | $ 580,446 |
Net income from continuing operations applicable to Piper Jaffray Companies | $ 16,431 | $ 20,144 | $ 44,904 | $ 36,121 |
Acquisitions - Definitive Agree
Acquisitions - Definitive Agreement to Acquire Sandler O'Neill (Details) - Sandler O'Neill - Scenario, Forecast - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Jan. 01, 2020 | |
Business Acquisition [Line Items] | ||
Percent of equity and partnership interest acquired | 100.00% | |
Total consideration | $ 485 | |
Tangible book value | $ 100 | |
Restricted Stock | ||
Business Acquisition [Line Items] | ||
Retention award restricted stock | 115 | |
Cash | ||
Business Acquisition [Line Items] | ||
Total consideration | 350 | |
Restricted Stock | ||
Business Acquisition [Line Items] | ||
Total consideration | $ 135 |
Financial Instruments and Oth_3
Financial Instruments and Other Inventory Positions Owned and Financial Instruments and Other Inventory Positions Sold, but Not Yet Purchased - Schedule of Financial Instruments Owned and Financial Instruments Sold, but Not Yet Purchased by Type (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Financial instruments and other inventory positions owned: | ||
Equity securities | $ 13,756 | $ 1,458 |
Convertible securities | 119,962 | 92,485 |
Fixed income securities | 60,312 | 31,906 |
Taxable securities | 22,822 | 38,711 |
Tax-exempt securities | 191,324 | 268,804 |
Short-term securities | 106,175 | 52,472 |
Mortgage-backed securities | 13 | 15 |
U.S. government agency securities | 130,503 | 123,384 |
U.S. government securities | 3,526 | 954 |
Derivative contracts | 21,972 | 17,033 |
Total financial instruments and other inventory positions owned | 670,365 | 627,222 |
Financial instruments and other inventory positions sold, but not yet purchased: | ||
Equity securities | 68,464 | 82,082 |
Fixed income securities | 23,593 | 20,180 |
U.S. government agency securities | 21,993 | 10,257 |
U.S. government securities | 92,968 | 60,365 |
Derivative contracts | 7,072 | 4,543 |
Total financial instruments and other inventory positions sold, but not yet purchased | 214,090 | 177,427 |
Financial instruments and other inventory positions owned and pledged as collateral | $ 361,428 | $ 147,427 |
Financial Instruments and Oth_4
Financial Instruments and Other Inventory Positions Owned and Financial Instruments and Other Inventory Positions Sold, but Not Yet Purchased - Schedule of Gross Fair Market Value and Total Absolute Notional Contract Amount (Details) - Not Designated as Hedging Instrument - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Derivative [Line Items] | ||
Notional Amount | $ 2,479,287 | $ 2,795,241 |
Financial instruments and other inventory positions owned | ||
Derivative [Line Items] | ||
Derivative Assets | 237,824 | 181,607 |
Financial instruments and other inventory positions sold, but not yet purchased | ||
Derivative [Line Items] | ||
Derivative Liabilities | 231,453 | 174,152 |
Customer matched-book | Interest rate | ||
Derivative [Line Items] | ||
Notional Amount | 2,262,912 | 2,532,966 |
Customer matched-book | Interest rate | Financial instruments and other inventory positions owned | ||
Derivative [Line Items] | ||
Derivative Assets | 237,342 | 181,199 |
Customer matched-book | Interest rate | Financial instruments and other inventory positions sold, but not yet purchased | ||
Derivative [Line Items] | ||
Derivative Liabilities | 226,088 | 169,950 |
Trading securities | Interest rate | ||
Derivative [Line Items] | ||
Notional Amount | 216,375 | 262,275 |
Trading securities | Interest rate | Financial instruments and other inventory positions owned | ||
Derivative [Line Items] | ||
Derivative Assets | 482 | 408 |
Trading securities | Interest rate | Financial instruments and other inventory positions sold, but not yet purchased | ||
Derivative [Line Items] | ||
Derivative Liabilities | $ 5,365 | $ 4,202 |
Financial Instruments and Oth_5
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, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Unrealized gains/(losses) on derivative instruments | $ (208) | $ 679 | $ (1,084) | $ 3,645 |
Interest rate derivative contract | Investment banking | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Unrealized gains/(losses) on derivative instruments | (203) | (301) | (634) | (1,567) |
Interest rate derivative contract | Institutional brokerage | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Unrealized gains/(losses) on derivative instruments | $ (5) | $ 980 | $ (450) | $ 5,212 |
Financial Instruments and Oth_6
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, 2019USD ($) |
Counterparties not required to post collateral | |
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | |
Uncollateralized credit exposure | $ 22 |
Notional contract amount | 175.1 |
One unnamed financial institutional not required to post collateral | |
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items] | |
Uncollateralized credit exposure | $ 18.5 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Fair Value Option (Details) - Merchant Banking Investments - Level III - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Fair Value, Option, Quantitative Disclosures [Line Items] | |||
Investments at fair value | $ 2.2 | $ 3 | |
Gains (losses) from changes in fair value | $ (0.5) | $ 0.9 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Information about Significant Unobservable Inputs used in Fair Value Measurement (Details) - Level III | Sep. 30, 2019basis_points |
Premium over the MMD curve | Interest rate locks | Financial instruments and other inventory positions sold, but not yet purchased | Minimum | Discounted cash flow | |
Fair Value Inputs Assets and Liabilities Quantitative Information [Line Items] | |
Derivative liability contracts | 4 |
Premium over the MMD curve | Interest rate locks | Financial instruments and other inventory positions sold, but not yet purchased | Maximum | Discounted cash flow | |
Fair Value Inputs Assets and Liabilities Quantitative Information [Line Items] | |
Derivative liability contracts | 11 |
Premium over the MMD curve | Interest rate locks | Financial instruments and other inventory positions sold, but not yet purchased | Weighted Average | Discounted cash flow | |
Fair Value Inputs Assets and Liabilities Quantitative Information [Line Items] | |
Derivative liability contracts | 8.2 |
Premium over the MMD curve | Interest rate locks | Financial instruments and other inventory positions owned | Minimum | Discounted cash flow | |
Fair Value Inputs Assets and Liabilities Quantitative Information [Line Items] | |
Derivative asset contracts | 4 |
Premium over the MMD curve | Interest rate locks | Financial instruments and other inventory positions owned | Maximum | Discounted cash flow | |
Fair Value Inputs Assets and Liabilities Quantitative Information [Line Items] | |
Derivative asset contracts | 11 |
Premium over the MMD curve | Interest rate locks | Financial instruments and other inventory positions owned | Weighted Average | Discounted cash flow | |
Fair Value Inputs Assets and Liabilities Quantitative Information [Line Items] | |
Derivative asset contracts | 6.7 |
Revenue multiple | Equity investment in private company | Investments | Minimum | Market approach | |
Fair Value Inputs Assets and Liabilities Quantitative Information [Line Items] | |
Investments at fair value | 3 |
Revenue multiple | Equity investment in private company | Investments | Maximum | Market approach | |
Fair Value Inputs Assets and Liabilities Quantitative Information [Line Items] | |
Investments at fair value | 6 |
Revenue multiple | Equity investment in private company | Investments | Weighted Average | Market approach | |
Fair Value Inputs Assets and Liabilities Quantitative Information [Line Items] | |
Investments at fair value | 4.5 |
EBITDA multiple | Equity investment in private company | Investments | Minimum | Market approach | |
Fair Value Inputs Assets and Liabilities Quantitative Information [Line Items] | |
Investments at fair value | 11 |
EBITDA multiple | Equity investment in private company | Investments | Maximum | Market approach | |
Fair Value Inputs Assets and Liabilities Quantitative Information [Line Items] | |
Investments at fair value | 20 |
EBITDA multiple | Equity investment in private company | Investments | Weighted Average | Market approach | |
Fair Value Inputs Assets and Liabilities Quantitative Information [Line Items] | |
Investments at fair value | 15.5 |
Fair Value of Financial Instr_5
Fair Value of Financial Instruments - Valuation of Financial Instruments by Pricing Observability Levels (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Assets: | ||
Equity securities | $ 13,756,000 | $ 1,458,000 |
Convertible securities | 119,962,000 | 92,485,000 |
Fixed income securities | 60,312,000 | 31,906,000 |
Taxable securities | 22,822,000 | 38,711,000 |
Tax-exempt securities | 191,324,000 | 268,804,000 |
Short-term securities | 106,175,000 | 52,472,000 |
Mortgage-backed securities | 13,000 | 15,000 |
U.S. government agency securities | 130,503,000 | 123,384,000 |
U.S. government securities | 3,526,000 | 954,000 |
Derivative contracts | 21,972,000 | 17,033,000 |
Total financial instruments and other inventory positions owned | 670,365,000 | 627,222,000 |
Liabilities | ||
Equity securities | 68,464,000 | 82,082,000 |
Fixed income securities | 23,593,000 | 20,180,000 |
U.S. government agency securities | 21,993,000 | 10,257,000 |
U.S. government securities | 92,968,000 | 60,365,000 |
Derivative contracts | 7,072,000 | 4,543,000 |
Total financial instruments and other inventory positions sold, but not yet purchased | 214,090,000 | 177,427,000 |
Securities posted as collateral | 0 | 0 |
Level III | ||
Assets: | ||
Total assets | 132,300,000 | 108,000,000 |
Measured on a recurring basis | ||
Assets: | ||
Equity securities | 13,756,000 | 1,458,000 |
Convertible securities | 119,962,000 | 92,485,000 |
Fixed income securities | 60,312,000 | 31,906,000 |
Taxable securities | 22,822,000 | 38,711,000 |
Tax-exempt securities | 191,324,000 | 268,804,000 |
Short-term securities | 106,175,000 | 52,472,000 |
Mortgage-backed securities | 13,000 | 15,000 |
U.S. government agency securities | 130,503,000 | 123,384,000 |
U.S. government securities | 3,526,000 | 954,000 |
Derivative contracts | 21,972,000 | 17,033,000 |
Derivative contracts - counterparty and collateral netting | (215,852,000) | (164,574,000) |
Total financial instruments and other inventory positions owned | 670,365,000 | 627,222,000 |
Cash equivalents | 909,000 | 20,581,000 |
Investments at fair value | 148,437,000 | 144,028,000 |
Total assets | 819,711,000 | 791,831,000 |
Liabilities | ||
Equity securities | 68,464,000 | 82,082,000 |
Fixed income securities | 23,593,000 | 20,180,000 |
U.S. government agency securities | 21,993,000 | 10,257,000 |
U.S. government securities | 92,968,000 | 60,365,000 |
Derivative contracts | 7,072,000 | 4,543,000 |
Derivative contracts - counterparty and collateral netting | (224,381,000) | (169,609,000) |
Total financial instruments and other inventory positions sold, but not yet purchased | 214,090,000 | 177,427,000 |
Measured on a recurring basis | Level I | ||
Assets: | ||
Equity securities | 44,000 | 331,000 |
U.S. government securities | 3,526,000 | 954,000 |
Total financial instruments and other inventory positions owned | 3,570,000 | 1,285,000 |
Cash equivalents | 909,000 | 20,581,000 |
Investments at fair value | 15,723,000 | 33,587,000 |
Total assets | 20,202,000 | 55,453,000 |
Liabilities | ||
Equity securities | 56,220,000 | 81,575,000 |
U.S. government securities | 92,968,000 | 60,365,000 |
Total financial instruments and other inventory positions sold, but not yet purchased | 149,188,000 | 141,940,000 |
Measured on a recurring basis | Level II | ||
Assets: | ||
Equity securities | 13,712,000 | 1,127,000 |
Convertible securities | 119,962,000 | 92,485,000 |
Fixed income securities | 60,312,000 | 31,906,000 |
Taxable securities | 22,822,000 | 38,711,000 |
Tax-exempt securities | 191,324,000 | 268,804,000 |
Short-term securities | 106,175,000 | 52,472,000 |
U.S. government agency securities | 130,503,000 | 123,384,000 |
Derivative contracts | 237,342,000 | 181,378,000 |
Total financial instruments and other inventory positions owned | 882,152,000 | 790,267,000 |
Investments at fair value | 892,000 | 2,649,000 |
Total assets | 883,044,000 | 792,916,000 |
Liabilities | ||
Equity securities | 12,244,000 | 507,000 |
Fixed income securities | 23,593,000 | 20,180,000 |
U.S. government agency securities | 21,993,000 | 10,257,000 |
Derivative contracts | 226,548,000 | 169,950,000 |
Total financial instruments and other inventory positions sold, but not yet purchased | 284,378,000 | 200,894,000 |
Measured on a recurring basis | Level III | ||
Assets: | ||
Mortgage-backed securities | 13,000 | 15,000 |
Derivative contracts | 482,000 | 229,000 |
Total financial instruments and other inventory positions owned | 495,000 | 244,000 |
Investments at fair value | 131,822,000 | 107,792,000 |
Total assets | 132,317,000 | 108,036,000 |
Liabilities | ||
Derivative contracts | 4,905,000 | 4,202,000 |
Total financial instruments and other inventory positions sold, but not yet purchased | 4,905,000 | 4,202,000 |
Measured on a recurring basis | Level III | Investments attributable to noncontrolling interests | ||
Assets: | ||
Investments at fair value | $ 65,400,000 | $ 53,000,000 |
Fair Value of Financial Instr_6
Fair Value of Financial Instruments - Additional Information (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Transfers between fair value levels | $ 0 | |
Level III | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Total assets | $ 132,300,000 | $ 108,000,000 |
Percentage of Level III assets to financial instruments measured at fair value | 16.10% | 13.60% |
Fair Value of Financial Instr_7
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, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning balance | $ 132,569 | $ 109,114 | $ 108,036 | $ 128,081 |
Purchases | 15,623 | 10,000 | 23,623 | 11,712 |
Sales | (12,772) | (14,289) | (13,114) | (32,834) |
Transfers out | 0 | (357) | (783) | (1,202) |
Realized gains/(losses) | 2,901 | 5,039 | 3,214 | 17,027 |
Unrealized gains/(losses) | (6,004) | (3,888) | 11,341 | (17,165) |
Ending balance | 132,317 | 105,619 | 132,317 | 105,619 |
Unrealized gains/ (losses) for assets held at period end | (3,103) | (3,790) | 13,955 | (7,127) |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning balance | 4,418 | 1,005 | 4,202 | 4,433 |
Purchases | (3,576) | (210) | (12,398) | (1,600) |
Sales | 0 | 40 | 0 | 3,266 |
Transfers out | 0 | 0 | 0 | 0 |
Realized gains/(losses) | 3,576 | 169 | 12,398 | (1,666) |
Unrealized gains/(losses) | 487 | (636) | 703 | (4,065) |
Ending balance | 4,905 | 368 | 4,905 | 368 |
Unrealized gains/(losses) for liabilities held at period end | 1,860 | (464) | 4,905 | 368 |
Financial instruments and other inventory positions owned | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning balance | 13 | 993 | 244 | 2,021 |
Purchases | 0 | 4 | ||
Sales | (90) | (342) | (3,695) | |
Transfers out | 0 | 0 | 0 | (700) |
Realized gains/(losses) | 0 | 90 | 313 | 3,012 |
Unrealized gains/(losses) | 482 | 341 | 280 | 692 |
Ending balance | 495 | 1,334 | 495 | 1,334 |
Unrealized gains/ (losses) for assets held at period end | 482 | 439 | 482 | 1,180 |
Investments | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning balance | 132,556 | 108,121 | 107,792 | 126,060 |
Purchases | 15,623 | 10,000 | 23,623 | 11,708 |
Sales | (12,772) | (14,199) | (12,772) | (29,139) |
Transfers out | 0 | (357) | (783) | (502) |
Realized gains/(losses) | 2,901 | 4,949 | 2,901 | 14,015 |
Unrealized gains/(losses) | (6,486) | (4,229) | 11,061 | (17,857) |
Ending balance | 131,822 | 104,285 | 131,822 | 104,285 |
Unrealized gains/ (losses) for assets held at period end | (3,585) | (4,229) | 13,473 | (8,307) |
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 | 4,418 | 1,005 | 4,202 | 4,433 |
Purchases | (3,576) | (210) | (12,398) | (1,600) |
Sales | 0 | 40 | 0 | 3,266 |
Transfers out | 0 | 0 | 0 | 0 |
Realized gains/(losses) | 3,576 | 169 | 12,398 | (1,666) |
Unrealized gains/(losses) | 487 | (636) | 703 | (4,065) |
Ending balance | 4,905 | 368 | 4,905 | 368 |
Unrealized gains/(losses) for liabilities held at period end | 1,860 | (464) | 4,905 | 368 |
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 | 13 | 18 | 15 | 481 |
Purchases | 0 | 0 | 0 | 0 |
Sales | 0 | 0 | (6) | (5) |
Transfers out | 0 | 0 | 0 | 0 |
Realized gains/(losses) | 0 | 0 | (23) | 0 |
Unrealized gains/(losses) | 0 | (2) | 27 | (460) |
Ending balance | 13 | 16 | 13 | 16 |
Unrealized gains/ (losses) for assets held at period end | 0 | (2) | 0 | (93) |
Derivative contracts | Financial instruments and other inventory positions owned | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning balance | 930 | 229 | 126 | |
Purchases | 0 | 4 | ||
Sales | 0 | (90) | (336) | (2,965) |
Transfers out | 0 | 0 | 0 | 0 |
Realized gains/(losses) | 0 | 90 | 336 | 2,961 |
Unrealized gains/(losses) | 482 | 343 | 253 | 1,147 |
Ending balance | 482 | 1,273 | 482 | 1,273 |
Unrealized gains/ (losses) for assets held at period end | $ 482 | 441 | $ 482 | 1,273 |
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 | 45 | 714 | ||
Purchases | 0 | 0 | ||
Sales | 0 | (725) | ||
Transfers out | 0 | 0 | ||
Realized gains/(losses) | 0 | 51 | ||
Unrealized gains/(losses) | 0 | 5 | ||
Ending balance | 45 | 45 | ||
Unrealized gains/ (losses) for assets held at period end | $ 0 | 0 | ||
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 | 700 | |||
Purchases | 0 | |||
Sales | 0 | |||
Transfers out | (700) | |||
Realized gains/(losses) | 0 | |||
Unrealized gains/(losses) | 0 | |||
Unrealized gains/ (losses) for assets held at period end | $ 0 |
Variable Interest Entities - Sc
Variable Interest Entities - Schedule of Consolidated Variable Interest Entities (Details) - Variable Interest Entity, Primary Beneficiary $ in Thousands | Sep. 30, 2019USD ($) |
Variable Interest Entity [Line Items] | |
Consolidated VIE assets | $ 129,146 |
Consolidated VIE liabilities | 12,674 |
Investments | |
Variable Interest Entity [Line Items] | |
Consolidated VIE assets | 128,708 |
Other assets | |
Variable Interest Entity [Line Items] | |
Consolidated VIE assets | 438 |
Other liabilities and accrued expenses | |
Variable Interest Entity [Line Items] | |
Consolidated VIE liabilities | $ 12,674 |
Variable Interest Entities - Ad
Variable Interest Entities - Additional Information (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Variable Interest Entity, Primary Beneficiary | ||
Variable Interest Entity [Line Items] | ||
Available bank line financing | $ 25,000,000 | |
Variable Interest Entity, Not Primary Beneficiary, Aggregated Disclosure | ||
Variable Interest Entity [Line Items] | ||
Variable interest entities, nonconsolidated net assets | 300,000,000 | $ 300,000,000 |
Variable interest entities, exposure to loss | 6,000,000 | |
Variable interest entity, nonconsolidated liabilities | $ 0 | $ 0 |
Receivables from and Payables_3
Receivables from and Payables to Brokers, Dealers and Clearing Organizations - Schedule of Receivables from and Payables to Brokers, Dealers and Clearing Organizations (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Receivables from Brokers-Dealers and Clearing Organizations [Abstract] | ||
Receivable from clearing organizations | $ 151,876 | $ 223,987 |
Receivable from brokers and dealers | 16,028 | 7,700 |
Other | 7,448 | 3,591 |
Total receivables from brokers, dealers and clearing organizations | 175,352 | 235,278 |
Payables to Broker-Dealers and Clearing Organizations [Abstract] | ||
Payable to clearing organizations | 0 | 4,734 |
Payable to brokers and dealers | 4,857 | 3,923 |
Total payables to brokers, dealers and clearing organizations | $ 4,857 | $ 8,657 |
Receivables from and Payables_4
Receivables from and Payables to Brokers, Dealers and Clearing Organizations - Additional Information (Details) | Sep. 30, 2019USD ($) |
Pershing clearing arrangement | |
Schedule Of Compliance With Regulatory Capital Requirements For Broker Dealer [Line Items] | |
Excess net capital required | $ 120,000,000 |
Investments - Schedule of Inves
Investments - Schedule of Investments (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Schedule of Investments [Line Items] | ||
Investments at fair value | $ 148,437 | $ 144,028 |
Investments at cost | 1,084 | 1,512 |
Investments accounted for under the equity method | 6,027 | 6,346 |
Investments | 155,548 | 151,886 |
Estimated fair market value of investments carried at cost | 1,100 | |
Investments attributable to noncontrolling interests | ||
Schedule of Investments [Line Items] | ||
Investments | 65,363 | 52,972 |
Investments attributable to parent | ||
Schedule of Investments [Line Items] | ||
Investments | $ 90,185 | $ 98,914 |
Other Assets - Schedule of Othe
Other Assets - Schedule of Other Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Fee receivables | $ 22,717 | $ 18,990 |
Income tax receivables | 25,320 | 0 |
Accrued interest receivables | 2,829 | 4,240 |
Forgivable loans, net | 6,658 | 7,152 |
Prepaid expenses | 10,349 | 8,763 |
Other | 12,063 | 7,298 |
Total other assets | $ 79,936 | $ 46,443 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Changes in Carrying Value of Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands | Aug. 02, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 |
Goodwill | |||||
Goodwill beginning balance | $ 81,855 | ||||
Goodwill ending balance | $ 88,215 | 88,215 | |||
Intangible assets | |||||
Intangible assets beginning balance | 4,284 | ||||
Amortization of intangible assets | (1,229) | $ (1,214) | (2,735) | $ (3,643) | |
Intangible assets ending balance | $ 16,749 | 16,749 | |||
Weeden & Co. | |||||
Goodwill | |||||
Goodwill, Acquired During Period | $ 6,400 | 6,360 | |||
Goodwill ending balance | 6,360 | ||||
Intangible assets | |||||
Intangible assets acquired | 15,200 | ||||
Weeden & Co. | Customer relationships | |||||
Intangible assets | |||||
Intangible assets acquired | 10,600 | $ 10,600 | |||
Weighted average life | 8 years 4 months 24 days | ||||
Weeden & Co. | Internally developed software | |||||
Intangible assets | |||||
Intangible assets acquired | $ 4,600 | $ 4,600 | |||
Weighted average life | 3 years 7 months 6 days |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets Goodwill and Intangible Assets - Aggregate Future Intangible Asset Amortization Expense (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | |
Remainder of 2019 | $ 1,468 |
2020 | 4,020 |
2021 | 3,050 |
2022 | 2,217 |
2023 | 1,510 |
Thereafter | 4,484 |
Total | $ 16,749 |
Short-Term Financing - Addition
Short-Term Financing - Additional Information (Details) | 9 Months Ended | |
Sep. 30, 2019USD ($)program | Dec. 31, 2018USD ($) | |
Short-term Debt [Line Items] | ||
Short-term financing | $ 49,962,000 | $ 49,953,000 |
Commercial paper (secured) | ||
Short-term Debt [Line Items] | ||
Number of commercial paper programs | program | 2 | |
Short-term financing | $ 50,000,000 | $ 50,000,000 |
Weighted average interest rate | 3.04% | 3.38% |
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) | Weighted Average | ||
Short-term Debt [Line Items] | ||
Debt term | 9 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 | |
Short-term financing | $ 0 | |
Line of credity, maximum borrowing capacity | 175,000,000 | |
Minimum net capital required | $ 120,000,000 |
Leases - Schedule of Aggregate
Leases - Schedule of Aggregate Minimum Lease Commitments for Operating Leases (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Leases [Abstract] | |
Remainder of 2019 | $ 4,207 |
2020 | 16,599 |
2021 | 12,262 |
2022 | 10,895 |
2023 | 7,943 |
Thereafter | 17,131 |
Total | $ 69,037 |
Leases - Additional Information
Leases - Additional Information (Details) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019USD ($) | Sep. 30, 2019USD ($) | |
Leases [Abstract] | ||
Weighted average remaining lease term | 5 years 4 months 24 days | 5 years 4 months 24 days |
Operating lease cost | $ 3.2 | $ 8.9 |
Cost related to short-term leases | 0.2 | 0.5 |
Sublease Income | $ 0.4 | $ 1.3 |
Restructuring and Integration_3
Restructuring and Integration Costs - Schedule of Pre-tax Restructuring Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | $ 0 | $ 3,498 | ||
Integration costs | $ 2,588 | 0 | $ 5,076 | 0 |
Restructuring and integration costs | 6,143 | 0 | 12,538 | 3,498 |
Severance, benefits and outplacement costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | 0 | 3,183 | ||
Contract termination costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | 0 | 185 | ||
Vacated leased office space | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | $ 0 | $ 130 | ||
Weeden & Co. | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | 3,555 | 7,462 | ||
Integration costs | 1,000 | 1,700 | ||
Weeden & Co. | Severance, benefits and outplacement costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | 1,829 | 2,938 | ||
Weeden & Co. | Contract termination costs | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | 0 | 2,798 | ||
Weeden & Co. | Vacated leased office space | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring costs | $ 1,726 | $ 1,726 |
Shareholders' Equity - Addition
Shareholders' Equity - Additional Information (Details) - USD ($) | Oct. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Sep. 30, 2017 |
Equity, Class of Treasury Stock [Line Items] | |||||||
Shares of common stock purchased from restricted stock award related to recipients' employment tax obligations | 698,065 | 264,254 | |||||
Repurchase of common stock for employee tax withholding | $ 50,300,000 | $ 22,700,000 | |||||
Reissuance of treasury shares as a result of employee vesting | 1,406,139 | 840,043 | |||||
Cash dividends paid | $ 30,400,000 | ||||||
Dividends declared per common share | $ 0.38 | $ 0.38 | $ 2.14 | $ 2.75 | |||
Noncontrolling interests proportionate share of equity | $ 65,363,000 | $ 65,363,000 | $ 52,972,000 | ||||
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 | 62,700,000 | 62,700,000 | 50,200,000 | ||||
Senior living fund | |||||||
Equity, Class of Treasury Stock [Line Items] | |||||||
Noncontrolling interests proportionate share of equity | $ 2,700,000 | $ 2,700,000 | $ 2,800,000 | ||||
Subsequent Event | |||||||
Equity, Class of Treasury Stock [Line Items] | |||||||
Dividends declared per common share | $ 0.375 | ||||||
Quarterly dividend | |||||||
Equity, Class of Treasury Stock [Line Items] | |||||||
Cash dividends paid (amount per share) | $ 1.125 | ||||||
Annual special cash dividend | |||||||
Equity, Class of Treasury Stock [Line Items] | |||||||
Cash dividends paid (amount per share) | $ 1.01 | ||||||
Share repurchase program, authorized 2017 | |||||||
Equity, Class of Treasury Stock [Line Items] | |||||||
Repurchase of common stock, authorized amount | $ 150,000,000 | ||||||
Shares repurchased | 501 | 124,606 | |||||
Average price of repurchases | $ 64.80 | $ 72.26 | |||||
Stock Repurchased During Period, Value | $ 9,000,000 |
Compensation Plans - Summary of
Compensation Plans - Summary of Outstanding Equity Awards (Details) - shares | Sep. 30, 2019 | Dec. 31, 2018 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock Options | 81,667 | 81,667 |
Restricted Stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted stock outstanding | 692,793 | 1,569,795 |
Restricted stock units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted stock outstanding | 114,315 | 194,251 |
Incentive Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock Options | 81,667 | |
Incentive Plan | Restricted stock units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted stock outstanding | 114,315 | |
Total restricted stock outstanding | Restricted Stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted stock outstanding | 692,793 | |
Total restricted stock outstanding | Incentive Plan | Restricted Stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted stock outstanding | 595,041 | |
Total restricted stock outstanding | Incentive Plan | Annual grants | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted stock outstanding | 475,309 | |
Total restricted stock outstanding | Incentive Plan | Sign-on grants | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted stock outstanding | 119,732 | |
Total restricted stock outstanding | Weeden & Co. Inducement Plan | Restricted Stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Restricted stock outstanding | 97,752 |
Compensation Plans - Schedule o
Compensation Plans - Schedule of RSU Performance Condition Probability (Details) - Restricted stock units - Average adjusted return on equity targets - Probability of achieving performance condition | 9 Months Ended |
Sep. 30, 2019 | |
2019 | |
Schedule of Share-based Payment Awards, Equity Instruments Other Than Options, Performance Condition [Line Items] | |
Award vesting percentage | 68.00% |
2018 | |
Schedule of Share-based Payment Awards, Equity Instruments Other Than Options, Performance Condition [Line Items] | |
Award vesting percentage | 50.00% |
2017 | |
Schedule of Share-based Payment Awards, Equity Instruments Other Than Options, Performance Condition [Line Items] | |
Award vesting percentage | 75.00% |
Compensation Plans - Schedule_2
Compensation Plans - Schedule of RSU Valuation Assumptions (Details) - Restricted stock units | 9 Months Ended |
Sep. 30, 2019 | |
2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk-free Interest Rate | 2.50% |
Expected Stock Price Volatility | 31.90% |
2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk-free Interest Rate | 2.40% |
Expected Stock Price Volatility | 34.80% |
2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk-free Interest Rate | 1.62% |
Expected Stock Price Volatility | 35.90% |
2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk-free Interest Rate | 0.98% |
Expected Stock Price Volatility | 34.90% |
Compensation Plans - Schedule_3
Compensation Plans - Schedule of Stock Options Valuation Assumptions (Details) - Stock options | 9 Months Ended |
Sep. 30, 2019$ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk-free interest rate | 2.82% |
Dividend yield | 3.22% |
Expected stock price volatility | 37.20% |
Expected life of options (in years) | 7 years |
Fair value of options granted (per share) | $ 24.49 |
Compensation Plans - Schedule_4
Compensation Plans - Schedule of Stock-Based Compensation Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||
Stock-based compensation expense | $ 7.9 | $ 12.7 | $ 17.9 | $ 31 |
Forfeitures | 0.3 | 0.2 | 1.5 | 0.7 |
Tax benefit related to stock-based compensation expense | $ 1.6 | $ 2.3 | $ 3.1 | $ 5 |
Compensation Plans - Changes in
Compensation Plans - Changes in Unvested Restricted Stock (Details) - Restricted Stock | 9 Months Ended |
Sep. 30, 2019$ / sharesshares | |
Unvested Restricted Stock or Stock Units | |
Beginning Balance | shares | 1,569,795 |
Granted | shares | 435,796 |
Vested | shares | (1,297,836) |
Canceled | shares | (14,962) |
Ending Balance | shares | 692,793 |
Weighted Average Grant Date Fair Value (in dollars per share) | |
Beginning Balance | $ / shares | $ 53.80 |
Granted | $ / shares | 73.92 |
Vested | $ / shares | 47.12 |
Canceled | $ / shares | 78.46 |
Ending Balance | $ / shares | $ 78.44 |
Compensation Plans - Changes _2
Compensation Plans - Changes in Unvested Restricted Stock Units (Details) - Restricted stock units | 9 Months Ended |
Sep. 30, 2019$ / sharesshares | |
Unvested Restricted Stock or Stock Units | |
Beginning Balance | shares | 194,251 |
Granted | shares | 39,758 |
Vested | shares | (103,707) |
Canceled | shares | (15,987) |
Ending Balance | shares | 114,315 |
Weighted Average Grant Date Fair Value (in dollars per share) | |
Beginning Balance | $ / shares | $ 48.97 |
Granted | $ / shares | 75.78 |
Vested | $ / shares | 19.93 |
Canceled | $ / shares | 45.79 |
Ending Balance | $ / shares | $ 85.09 |
Compensation Plans - Changes _3
Compensation Plans - Changes in Outstanding Stock Options (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Options Outstanding | ||
Beginning Balance | 81,667 | |
Granted | 0 | |
Exercised | 0 | |
Cancelled | 0 | |
Ending Balance | 81,667 | 81,667 |
Weighted Average Exercise Price (in dollars per share) | ||
Beginning Balance | $ 99 | |
Granted | 0 | |
Exercised | 0 | |
Cancelled | 0 | |
Ending Balance | $ 99 | $ 99 |
Weighted Average Remaining Contractual Term (in Years) | ||
Weighted Average Remaining Contractual Term (in Years) | 8 years 4 months 24 days | 9 years 1 month 6 days |
Aggregate Intrinsic Value | ||
Aggregate Intrinsic Value | $ 0 | $ 0 |
Compensation Plans - Additional
Compensation Plans - Additional Information (Details) $ in Millions | Aug. 02, 2019USD ($)shares | May 16, 2016USD ($)shares | Sep. 30, 2019USD ($)planshares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of stock-based compensation plans | plan | 2 | ||
Exercises during the period | 0 | ||
Restricted Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares granted | 435,796 | ||
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 | 3 years | ||
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 | 39,758 | ||
Restricted stock and restricted stock units (RSUs) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unrecognized compensation cost related to equity awards | $ | $ 14.5 | ||
Weighted average period over which equity award expense expected to be recognized | 3 years 3 months 18 days | ||
Stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Grant requisite service period | 5 years | ||
Share based compensation option exercise price | 10.00% | ||
Unrecognized compensation cost related to equity awards | $ | $ 1.4 | ||
Weighted average period over which equity award expense expected to be recognized | 3 years 4 months 24 days | ||
Stock options | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Term of stock options | 10 years | ||
Incentive Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Equity award grants authorized | 8,200,000 | ||
Shares available for future issuance | 700,000 | ||
Leadership Grants Subsequent to 2016 | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting percentage | 150.00% | ||
Average adjusted return on equity targets | Leadership Grants Subsequent to 2016 | Restricted stock units | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting percentage | 75.00% | ||
Average adjusted return on equity targets | 2016 Leadership Grant | Restricted stock units | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting percentage | 50.00% | ||
Total shareholder return relative to members of a predetermined peer group | Leadership Grants Subsequent to 2016 | Restricted stock units | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting percentage | 75.00% | ||
Total shareholder return | 2016 Leadership Grant | Restricted stock units | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting percentage | 50.00% | ||
Simmons & Company International | 2016 Employment Inducement Award Plan | Restricted Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Value of restricted stock granted | $ | $ 11.6 | ||
Number of shares granted | 286,776 | ||
Weeden & Co. LP | Weeden & Co. Inducement Plan | Restricted Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Value of restricted stock granted | $ | $ 7.3 | ||
Number of shares granted | 97,752 |
Compensation Plans - Acquisitio
Compensation Plans - Acquisition-related Compensation Arrangements (Details) - Simmons - Performance award plan - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Jun. 30, 2019 | |
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | |||
Performance award plan accrual | $ 40.1 | ||
Contingent consideration performance period | 3 years | ||
Share based compensation expense period | $ 0.4 | $ 7.2 |
Compensation Plans - Deferred C
Compensation Plans - Deferred Compensation Plans (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | |
Mutual Fund Restricted Shares | ||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||
Award Vesting Period | 3 years | |
Nonqualified Deferred Compensation Plan | ||
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | ||
Plan Assets | $ 15.7 | $ 31.2 |
Plan Liabilities | $ 16.1 | $ 31.4 |
Earnings Per Share - Computatio
Earnings Per Share - Computation of Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Net income from continuing operations applicable to Piper Jaffray Companies | $ 17,165 | $ 20,637 | $ 49,281 | $ 37,117 |
Net income from discontinued operations | 26,077 | 1,386 | 23,772 | 1,735 |
Net income applicable to Piper Jaffray Companies | 43,242 | 22,023 | 73,053 | 38,852 |
Earnings allocated to participating securities | (800) | (2,646) | (3,524) | (5,202) |
Net income applicable to Piper Jaffray Companies' common shareholders | $ 42,442 | $ 19,377 | $ 69,529 | $ 33,650 |
Shares for basic and diluted calculations | ||||
Average shares used in basic computation | 13,708,000 | 13,343,000 | 13,502,000 | 13,248,000 |
Average shares used in diluted computation | 14,085,000 | 13,508,000 | 13,882,000 | 13,444,000 |
Earnings per common share | ||||
Income from continuing operations | $ 1.23 | $ 1.36 | $ 3.46 | $ 2.41 |
Income from discontinued operations | 1.87 | 0.09 | 1.69 | 0.13 |
Earnings per basic common share | 3.09 | 1.45 | 5.15 | 2.54 |
Income from continuing operations | 1.20 | 1.34 | 3.37 | 2.37 |
Income from discontinued operations | 1.82 | 0.09 | 1.64 | 0.13 |
Earnings per diluted common share | $ 3.01 | $ 1.43 | $ 5.01 | $ 2.50 |
Weighted average participating shares outstanding | 272,170 | 1,842,036 | 598,894 | 1,944,946 |
Restricted stock units | ||||
Shares for basic and diluted calculations | ||||
Dilutive impact of securities | 131,000 | 165,000 | 175,000 | 196,000 |
Non-participating restricted shares | ||||
Shares for basic and diluted calculations | ||||
Dilutive impact of securities | 246,000 | 0 | 205,000 | 0 |
Common shares | ||||
Earnings per common share | ||||
Shares excluded from diluted EPS | 1,754,634 | |||
Stock options and restricted shares | ||||
Earnings per common share | ||||
Shares excluded from diluted EPS | 300,000 | 100,000 |
Revenues and Business Informa_3
Revenues and Business Information - Revenues and Business Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Segment Reporting Information [Line Items] | ||||
Investment banking | $ 151,192 | $ 166,458 | $ 410,992 | $ 411,203 |
Institutional sales and trading | 46,814 | 31,746 | 113,983 | 92,575 |
Investment income/(loss) | (1,575) | 4,860 | 17,622 | 11,355 |
Net revenues | 200,735 | 205,951 | 555,695 | 526,174 |
Operating expenses | 179,700 | 178,165 | 490,598 | 485,379 |
Segment pre-tax operating income/(loss) | 21,035 | 27,786 | 65,097 | 40,795 |
Intangible asset amortization | 1,229 | 1,214 | 2,735 | 3,643 |
Capital Markets | ||||
Segment Reporting Information [Line Items] | ||||
Investment banking | 151,569 | 166,664 | 412,283 | 411,424 |
Institutional sales and trading | 50,889 | 35,974 | 126,140 | 108,044 |
Investment income/(loss) | (1,375) | 5,045 | 18,325 | 12,057 |
Other financing expenses | (348) | (1,732) | (1,053) | (5,351) |
Net revenues | 200,735 | 205,951 | 555,695 | 526,174 |
Operating expenses | 179,700 | 178,165 | 490,598 | 485,379 |
Segment pre-tax operating income/(loss) | $ 21,035 | $ 27,786 | $ 65,097 | $ 40,795 |
Segment pre-tax operating margin | 10.50% | 13.50% | 11.70% | 7.80% |
Intangible asset amortization | $ 1,200 | $ 1,200 | $ 2,700 | $ 3,600 |
Capital Markets | Advisory services | ||||
Segment Reporting Information [Line Items] | ||||
Investment banking | 106,769 | 113,540 | 296,886 | 266,083 |
Capital Markets | Equities financing | ||||
Segment Reporting Information [Line Items] | ||||
Investment banking | 21,837 | 32,188 | 61,148 | 99,868 |
Capital Markets | Debt financing | ||||
Segment Reporting Information [Line Items] | ||||
Investment banking | 22,963 | 20,936 | 54,249 | 45,473 |
Capital Markets | Equities | ||||
Segment Reporting Information [Line Items] | ||||
Institutional sales and trading | 25,120 | 17,804 | 56,609 | 54,951 |
Capital Markets | Fixed income | ||||
Segment Reporting Information [Line Items] | ||||
Institutional sales and trading | $ 25,769 | $ 18,170 | $ 69,531 | $ 53,093 |
Net Capital Requirements and _2
Net Capital Requirements and Other Regulatory Matters - Additional Information (Details) | Sep. 30, 2019USD ($) |
Schedule Of Compliance With Regulatory Capital Requirements For Broker Dealer [Line Items] | |
Minimum net capital requirement | $ 1,000,000 |
Net capital | 179,900,000 |
Excess net capital | 178,900,000 |
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 | |
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 - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense/(benefit) | $ 6,717 | $ 6,902 | $ 10,729 | $ 4,949 |
Tax benefit for stock-based compensation awards vesting during the period | $ 5,100 | $ 6,800 |
Subsequent Event - Additional I
Subsequent Event - Additional Information (Details) - Scenario, Forecast - Subsequent Event $ in Millions | Oct. 15, 2019USD ($) |
Debt Instrument [Line Items] | |
Senior notes | $ 175 |
Class A Fixed Rate Senior Notes Due October 2021 | |
Debt Instrument [Line Items] | |
Senior notes | $ 50 |
Annual fixed rate | 4.74% |
Class B Fixed Rate Senior Notes Due October 2023 | |
Debt Instrument [Line Items] | |
Senior notes | $ 125 |
Annual fixed rate | 5.20% |