Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Nov. 05, 2018 | |
Document And Entity Information | ||
Entity Registrant Name | B. Riley Financial, Inc. | |
Entity Central Index Key | 1,464,790 | |
Document Type | 10-Q | |
Trading Symbol | RILY | |
Document Period End Date | Sep. 30, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity's Reporting Status Current | Yes | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Ex Transition Period | false | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 26,554,205 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,018 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 | |
Assets | |||
Cash and cash equivalents | $ 233,918 | $ 132,823 | |
Restricted cash | 468 | 19,711 | |
Due from clearing brokers | 54,891 | 31,479 | |
Securities and other investments owned, at fair value | 222,521 | 145,360 | |
Securities borrowed | 1,042,295 | [1] | 807,089 |
Accounts receivable, net | 38,958 | 20,015 | |
Due from related parties | 9,921 | 5,689 | |
Advances against customer contracts | 21,405 | 5,208 | |
Loans receivable | 37,147 | ||
Prepaid expenses and other assets | 50,193 | 22,605 | |
Property and equipment, net | 11,143 | 11,977 | |
Goodwill | 120,129 | 98,771 | |
Other intangible assets, net | 51,011 | 56,948 | |
Deferred income taxes | 26,901 | 29,229 | |
Total assets | 1,920,901 | 1,386,904 | |
Liabilities | |||
Accounts payable | 2,278 | 2,650 | |
Accrued expenses and other liabilities | 87,901 | 71,685 | |
Deferred revenue | 3,205 | 3,141 | |
Due to partners | 1,428 | 1,578 | |
Securities sold not yet purchased | 59,672 | 28,291 | |
Securities loaned | 1,035,408 | [1] | 803,371 |
Mandatorily redeemable noncontrolling interests | 4,409 | 4,478 | |
Notes payable | 1,671 | 2,243 | |
Senior notes payable | 455,783 | 203,621 | |
Total liabilities | 1,651,755 | 1,121,058 | |
Commitments and contingencies | |||
B. Riley Financial, Inc. stockholders' equity: | |||
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued | |||
Common stock, $0.0001 par value; 100,000,000 shares authorized; 26,526,445 and 26,569,462 issued and outstanding as of September 30, 2018 and December 31, 2017, respectively | 2 | 2 | |
Additional paid-in capital | 255,236 | 259,980 | |
Retained earnings | 14,842 | 6,582 | |
Accumulated other comprehensive loss | (1,696) | (534) | |
Total B. Riley Financial, Inc. stockholders' equity | 268,384 | 266,030 | |
Noncontrolling interests | 762 | (184) | |
Total equity | 269,146 | 265,846 | |
Total liabilities and equity | $ 1,920,901 | $ 1,386,904 | |
[1] | Includes financial instruments subject to enforceable master netting provisions that are permitted to be offset to the extent an event of default has occurred. |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, authorized | 1,000,000 | 1,000,000 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, authorized | 100,000,000 | 100,000,000 |
Common stock, issued | 26,526,445 | 26,569,462 |
Common stock, outstanding | 26,526,445 | 26,569,462 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenues: | ||||
Total revenues | $ 99,681 | $ 92,426 | $ 320,960 | $ 211,999 |
Operating expenses: | ||||
Direct cost of services | 8,156 | 10,138 | 33,733 | 46,224 |
Cost of goods sold | 52 | 124 | 142 | 313 |
Selling, general and administrative expenses | 71,782 | 70,962 | 216,603 | 132,836 |
Restructuring charge | 428 | 4,896 | 2,247 | 11,484 |
Interest expense - Securities lending | 6,425 | 4,950 | 16,317 | 6,515 |
Total operating expenses | 86,843 | 91,070 | 269,042 | 197,372 |
Operating income | 12,838 | 1,356 | 51,918 | 14,627 |
Other income (expense): | ||||
Interest income | 442 | 76 | 736 | 358 |
Income (loss) from equity investments | 828 | (157) | 5,049 | (157) |
Interest expense | (9,340) | (2,510) | (23,926) | (5,195) |
Income (loss) before income taxes | 4,768 | (1,235) | 33,777 | 9,633 |
(Provision for) benefit from income taxes | (2,046) | 1,357 | (8,412) | 7,753 |
Net income | 2,722 | 122 | 25,365 | 17,386 |
Net (loss) income attributable to noncontrolling interests | (92) | (246) | 1,051 | (283) |
Net income attributable to B. Riley Financial, Inc. | $ 2,814 | $ 368 | $ 24,314 | $ 17,669 |
Basic income per share | $ 0.11 | $ 0.01 | $ 0.94 | $ 0.8 |
Diluted income per share | 0.1 | 0.01 | 0.91 | 0.76 |
Cash dividends per share | $ 0.3 | $ 0.13 | $ 0.58 | $ 0.55 |
Weighted average basic shares outstanding | 25,968,997 | 26,059,490 | 25,856,339 | 22,180,808 |
Weighted average diluted shares outstanding | 26,854,261 | 27,639,862 | 26,776,133 | 23,385,014 |
Services And Fees [Member] | ||||
Revenues: | ||||
Total revenues | $ 90,655 | $ 85,450 | $ 297,986 | $ 202,663 |
Interest Income - Securities lending [Member] | ||||
Revenues: | ||||
Total revenues | 8,954 | 6,897 | 22,836 | 9,115 |
Sale Of Goods [Member] | ||||
Revenues: | ||||
Total revenues | $ 72 | $ 79 | $ 138 | $ 221 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 2,722 | $ 122 | $ 25,365 | $ 17,386 |
Other comprehensive (loss) income: | ||||
Change in cumulative translation adjustment | (77) | 345 | (1,162) | 1,391 |
Other comprehensive (loss) income, net of tax | (77) | 345 | (1,162) | 1,391 |
Total comprehensive income | 2,645 | 467 | 24,203 | 18,777 |
Comprehensive (loss) income attributable to noncontrolling interests | (92) | (246) | 1,051 | (283) |
Comprehensive income attributable to B. Riley Financial, Inc. | $ 2,737 | $ 713 | $ 23,152 | $ 19,060 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Equity (Unaudited) - USD ($) $ in Thousands | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Loss [Member] | Noncontrolling Interests [Member] | Total |
Balance at Beginning at Dec. 31, 2016 | $ 2 | $ 141,170 | $ 9,887 | $ (1,712) | $ 1,045 | $ 150,392 | |
Balance at Beginning (in shares) at Dec. 31, 2016 | 19,140,342 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of common stock for acquisition of MK Capital, LLC - contingent equity consideration on February 2, 2017 | 1,151 | 1,151 | |||||
Issuance of common stock for acquisition of MK Capital, LLC - contingent equity consideration on February 2, 2017 (in shares) | 166,666 | ||||||
Issuance of common stock for acquisition of Dialectic general partner interests on April 13, 2017 | 1,952 | 1,952 | |||||
Issuance of common stock for acquisition of Dialectic general partner interests on April 13, 2017 (in shares) | 158,484 | ||||||
Issuance of common stock for acquisition of FBR & Co. on June 1, 2017 | $ 73,472 | $ 73,472 | |||||
Issuance of common stock for acquisition of FBR & Co. on June 1, 2017 (in shares) | 4,779,354 | ||||||
Issuance of common stock and common stock warrants for acquisition of Wunderlich on July 3, 2017 | 36,306 | 36,306 | |||||
Issuance of common stock and common stock warrants for acquisition of Wunderlich on July 3, 2017 (in shares) | $ 1,974,812 | ||||||
Vesting of restricted stock, net of shares withheld for employer taxes | $ (2,683) | $ (2,683) | |||||
Vesting of restricted stock, net of shares withheld for employer taxes (in shares) | 241,910 | ||||||
Common shares cancelled - resolution of escrow claim | |||||||
Common shares cancelled - resolution of escrow claim (in shares) | |||||||
Stock repurchased and retired | |||||||
Stock repurchased and retired (in shares) | |||||||
Share based payments | 7,679 | 7,679 | |||||
Dividends on common stock | (11,600) | (11,600) | |||||
Net income | 17,669 | (170) | 17,386 | ||||
Distribution to noncontrolling interest | (922) | (922) | |||||
Foreign currency translation adjustment | 1,391 | 1,391 | |||||
Balance at End at Sep. 30, 2017 | $ 2 | 259,047 | 15,956 | (321) | (47) | 274,637 | |
Balance at End (in shares) at Sep. 30, 2017 | 26,461,568 | ||||||
Balance at Beginning at Dec. 31, 2017 | $ 2 | 259,980 | 6,582 | (534) | (184) | 265,846 | |
Balance at Beginning (in shares) at Dec. 31, 2017 | 26,569,462 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of common stock for acquisition of MK Capital, LLC - contingent equity consideration on February 2, 2017 | |||||||
Issuance of common stock for acquisition of Dialectic general partner interests on April 13, 2017 | |||||||
Issuance of common stock for acquisition of Dialectic general partner interests on April 13, 2017 (in shares) | |||||||
Issuance of common stock for acquisition of FBR & Co. on June 1, 2017 | |||||||
Issuance of common stock for acquisition of FBR & Co. on June 1, 2017 (in shares) | |||||||
Issuance of common stock and common stock warrants for acquisition of Wunderlich on July 3, 2017 | |||||||
Issuance of common stock and common stock warrants for acquisition of Wunderlich on July 3, 2017 (in shares) | |||||||
Issuance of common stock for acquisition of GlassRatner Advisory & Capital Group LLC | $ 8,050 | $ 8,050 | |||||
Issuance of common stock for acquisition of GlassRatner Advisory & Capital Group LLC (in shares) | 405,817 | ||||||
Vesting of restricted stock, net of shares withheld for employer taxes | (4,106) | (4,106) | |||||
Vesting of restricted stock, net of shares withheld for employer taxes (in shares) | 522,399 | ||||||
Common shares cancelled - resolution of escrow claim | |||||||
Common shares cancelled - resolution of escrow claim (in shares) | (21,233) | ||||||
Stock repurchased and retired | (17,338) | (17,338) | |||||
Stock repurchased and retired (in shares) | (950,000) | ||||||
Share based payments | 8,650 | 8,650 | |||||
Dividends on common stock | (16,054) | (16,054) | |||||
Net income | 24,314 | 946 | 25,365 | ||||
Foreign currency translation adjustment | (1,162) | (1,162) | |||||
Balance at End at Sep. 30, 2018 | $ 2 | $ 255,236 | $ 14,842 | $ (1,696) | $ 762 | $ 269,146 | |
Balance at End (in shares) at Sep. 30, 2018 | 26,526,445 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Cash flows from operating activities: | |||||
Net income | $ 2,722 | $ 122 | $ 25,365 | $ 17,386 | |
Adjustments to reconcile net income to net cash used in operating activities: | |||||
Depreciation and amortization | 9,768 | 7,705 | |||
Provision for doubtful accounts | 343 | 379 | 840 | 827 | |
Share-based compensation | 8,650 | 7,679 | |||
Recovery of key man life insurance | (6,000) | ||||
Non-cash interest and other | 1,384 | 319 | |||
Effect of foreign currency on operations | (352) | (1,022) | |||
(Income) loss from equity investments | (828) | 157 | (5,049) | 157 | |
Deferred income taxes | 7 | (24,560) | |||
Impairment of leaseholds, lease loss accrual and loss on disposal of fixed assets | 1,718 | 2,838 | |||
Income allocated and fair value adjustment for mandatorily redeemable noncontrolling interests | 847 | 10,766 | |||
Change in operating assets and liabilities: | |||||
Due from clearing brokers | (23,412) | 13,258 | |||
Securities and other investments owned | (77,161) | (41,350) | |||
Securities borrowed | (235,206) | 129,998 | |||
Accounts receivable and advances against customer contracts | (35,982) | 1,635 | |||
Prepaid expenses and other assets | (19,418) | 15,522 | |||
Accounts payable, accrued payroll and related expenses, accrued value added tax payable and other accrued expenses | 10,111 | (38,597) | |||
Amounts due to/from related parties and partners | (4,487) | (12,313) | |||
Securities sold, not yet purchased | 31,381 | 7,700 | |||
Deferred revenue | 64 | (1,302) | |||
Securities loaned | 232,037 | (139,425) | |||
Net cash used in operating activities | (78,895) | (48,779) | |||
Cash flows from investing activities: | |||||
Purchases of loans receivable | (35,111) | ||||
Acquisition of Wunderlich, net of cash acquired $4,259 | (25,478) | ||||
Cash acquired from acquisition of FBR & Co. | 15,738 | ||||
Acquisition of other businesses | (4,000) | (2,052) | |||
Acquisition consideration payable -United Online | (10,381) | ||||
Purchases of property and equipment and intangible assets | (2,314) | (550) | |||
Proceeds from key man life insurance | 6,000 | ||||
Proceeds from sale of property and equipment and intangible assets | 37 | 619 | |||
Equity investments | (6,856) | (1,015) | |||
Dividends from equity investment | 1,695 | ||||
Net cash used in investing activities | (46,549) | (17,119) | |||
Cash flows from financing activities: | |||||
Proceeds from asset based credit facility | 300,000 | 65,987 | |||
Repayment of asset based credit facility | (300,000) | (65,987) | |||
Payment of contingent consideration | (1,250) | ||||
Proceeds from notes payable | 51,020 | ||||
Repayment of notes payable | (51,591) | (8,214) | |||
Proceeds from issuance of senior notes | 255,290 | 89,330 | |||
Payment of debt issuance costs | (6,356) | (2,093) | |||
Payment of employment taxes on vesting of restricted stock | (4,106) | (2,683) | |||
Dividends paid | (17,912) | (13,493) | |||
Repurchase of common stock | (17,338) | ||||
Distribution to noncontrolling interests | (915) | (2,878) | |||
Net cash provided by financing activities | 208,092 | 58,719 | |||
Increase (decrease) in cash, cash equivalents and restricted cash | 82,648 | (7,179) | |||
Effect of foreign currency on cash, cash equivalents and restricted cash | (796) | 3,458 | |||
Net increase (decrease) in cash, cash equivalents and restricted cash | 81,852 | (3,721) | |||
Cash, cash equivalents and restricted cash, beginning of year | 152,534 | 115,399 | $ 115,399 | ||
Cash, cash equivalents and restricted cash, end of period | $ 234,386 | $ 111,678 | 234,386 | 111,678 | $ 152,534 |
Supplemental disclosures: | |||||
Interest paid | 35,289 | 11,513 | |||
Taxes paid | $ 2,455 | $ 11,668 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Statement of Cash Flows [Abstract] | ||
Net of cash acquired | $ 4,259 |
ORGANIZATION, BUSINESS OPERATIO
ORGANIZATION, BUSINESS OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION, BUSINESS OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES | NOTE 1—ORGANIZATION AND NATURE OF BUSINESS OPERATIONS B. Riley Financial, Inc. and its subsidiaries (collectively the “Company”) provide investment banking and financial services to corporate, institutional and high net worth clients, and asset disposition, valuation and appraisal and capital advisory services to a wide range of retail, wholesale and industrial clients, as well as lenders, capital providers, private equity investors and professional services firms throughout the United States, Australia, Canada, and Europe, and with the acquisition of United Online, Inc. (“UOL”) on July 1, 2016, provide consumer Internet access and related subscription services. The Company operates in four operating segments: (i) Capital Markets, through which the Company provides investment banking, corporate finance, securities lending, restructuring, consulting, research, sales and trading and wealth management services to corporate, institutional and high net worth clients; (ii) Auction and Liquidation, through which the Company provides auction and liquidation services to help clients dispose of assets that include multi-location retail inventory, wholesale inventory, trade fixtures, machinery and equipment, intellectual property and real property; (iii) Valuation and Appraisal, through which the Company provides valuation and appraisal services to clients with independent appraisals in connection with asset based loans, acquisitions, divestitures and other business needs; and (iv) Principal Investments - United Online, through which the Company provides consumer Internet access and related subscription services. On November 9, 2017, the Company entered into an Agreement and Plan of Merger with B. R. Acquisition Ltd., an Israeli corporation and wholly-owned subsidiary of the Company (“Merger Sub”), and magicJack VocalTec Ltd., an Israeli corporation (“magicJack”), pursuant to which Merger Sub will merge with and into magicJack, with magicJack continuing as the surviving corporation and as an indirect subsidiary of the Company. Subject to the terms and conditions of the Agreement and Plan of Merger, each outstanding share of magicJack will be converted into the right to receive $8.71 in cash without interest, representing approximately $143,500 in aggregate merger consideration. The closing of the transaction is subject to the receipt of certain regulatory approvals and the satisfaction of other closing conditions. It is anticipated that the acquisition of magicJack will close in the fourth quarter of 2018. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) Principles of Consolidation and Basis of Presentation The condensed consolidated financial statements include the accounts of B. Riley Financial, Inc. and its wholly-owned and majority-owned subsidiaries. The condensed consolidated financial statements also include the accounts of (a) Great American Global Partners, LLC which is controlled by the Company as a result of its ownership of a 50% member interest, appointment of two of the three executive officers and significant influence over the funding of operations, and (b) GA Retail Investments, L.P. which is controlled by the Company as a result of its ownership of a 50% partnership interest, appointment of executive officers and significant influence over the operations. The condensed consolidated financial statements have been prepared by the Company, without audit, pursuant to interim financial reporting guidelines and the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted pursuant to such rules and regulations. In the opinion of the Company’s management, all adjustments, consisting of only normal and recurring adjustments, necessary for a fair presentation of the financial position and the results of operations for the periods presented have been included. These condensed consolidated financial statements and the accompanying notes should be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, filed with the SEC on March 14, 2018. The results of operations for the nine months ended September 30, 2018 are not necessarily indicative of the operating results to be expected for the full fiscal year or any future periods. (b) Use of Estimates The preparation of the condensed consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the condensed consolidated financial statements and reported amounts of revenue and expense during the reporting period. Estimates are used when accounting for certain items such as valuation of securities, reserves for accounts receivable and slow moving goods held for sale or auction, the carrying value of intangible assets and goodwill, the fair value of mandatorily redeemable noncontrolling interests, fair value of share-based arrangements, fair value of contingent consideration in business combinations and accounting for income tax valuation allowances. Estimates are based on historical experience, where applicable, and assumptions that management believes are reasonable under the circumstances. Due to the inherent uncertainty involved with estimates, actual results may differ. (c) Revenue Recognition On January 1, 2018, we adopted Accounting Standards Codification (“ASC”) 606 – Revenue from Contracts with Customers Revenues are recognized when control of the promised goods or performance obligations for services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for the goods or services. Revenues from contracts with customers in the Capital Markets segment, Auction and Liquidation segment, Valuation and Appraisal segment, and Principal Investments – United Online segment are primarily comprised of the following: Capital Markets Segment Fees from wealth and asset management services consist primarily of investment management fees that are recognized over the period the performance obligation for the services are provided. Investment management fees are primarily comprised of fees for investment management services and are generally based on the dollar amount of the assets being managed. Revenues from sales and trading are recognized when the performance obligation is satisfied and include commissions resulting from equity securities transactions executed as agent or principal and are recorded on a trade date basis and fees paid for equity research. Auction and Liquidation Segment Revenues earned from auction and liquidation services contracts where the Company guarantees a minimum recovery value for goods being sold at auction or liquidation are recognized over time when the performance obligation is satisfied. We generally use the cost-to-cost measure of progress for our contracts because it best depicts the transfer of services to the customer which occurs as we incur costs on our contracts. Under the cost-to-cost measure of progress, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation. Revenues, including estimated fees or profits, are recorded proportionally as costs are incurred. Costs to fulfill the contract include labor and other direct costs related to the contract. Due to the nature of the guarantees and performance obligations under these contracts, the estimation of revenue that is ultimately earned is complex and subject to many variables and requires significant judgment. It is common for these contracts to contain provisions that can either increase or decrease the transaction price upon completion of our performance obligations under the contract. Estimated amounts are included in the transaction price at the most likely amount it is probable that a significant reversal of revenue will not occur. Our estimates of variable consideration and determination of whether or not to include estimated amounts in the transaction price are based on an assessment of our anticipated performance under the contract taking into consideration all historical, current and forecasted information that is reasonably available to us. Costs that directly relate to the contract and expected to be recoverable are capitalized as an asset and included in advances against customer contracts in the accompanying condensed consolidated balance sheets. These costs are amortized as the services are transferred to the customer over the contract period, which generally does not exceed six months, and the expense is recognized a component of direct cost of services. If, during the auction or liquidation sale, the Company determines that the total costs to be incurred on a performance obligation under a contract exceeds the total estimated revenues to be earned, a provision for the entire loss on the performance obligation is recognized in the period the loss is determined. Valuation and Appraisal Segment Principal Investments – United Online Segment Advertising revenues consist primarily of amounts from the Company’s Internet search partner that are generated as a result of users utilizing the partner’s Internet search services and amounts generated from display advertisements. The Company recognizes such advertising revenues in the period in which the advertisement is displayed or, for performance-based arrangements, when the related performance criteria are met. In determining whether an arrangement exists, the Company ensures that a written contract is in place, such as a standard insertion order or a customer-specific agreement. The Company assesses whether performance criteria have been met and whether the transaction price is determinable based on a reconciliation of the performance criteria and the payment terms associated with the transaction. The reconciliation of the performance criteria generally includes a comparison of customer-provided performance data to the contractual performance obligation and to internal or third-party performance data in circumstances where that data is available. Sale of product revenues are derived primarily from the sale of mobile broadband service devices to customers and includes the related shipping and handling fees. Revenues from other sources in the Capital Markets segment is primarily comprised of (i) interest income from loans receivable and securities lending activities, (ii) related net trading gains and losses from market making activities, the commitment of capital to facilitate customer orders, (iii) trading activities from our principal investments in equity and other securities for the Company’s account, and (iv) other income. Interest income from securities lending activities consists of interest income from equity and fixed income securities that are borrowed from one party and loaned to another. The Company maintains relationships with a broad group of banks and broker-dealers to facilitate the sourcing, borrowing and lending of equity and fixed income securities in a “matched book” to limit the Company’s exposure to fluctuations in the market value or securities borrowed and securities loaned. Other revenues includes (i) net trading gains and losses from market making activities in our fixed income group, (ii) carried interest from our asset management recognized as earnings from financial assets within the scope of ASC 323 - Investments - Equity Method and Joint Ventures Revenue from Contracts with Customers Investments - Equity Method and Joint Ventures (d) Direct Cost of Services Direct cost of services relate to service and fee revenues. The costs consist of employee compensation and related payroll benefits, travel expenses, the cost of consultants assigned to revenue-generating activities and direct expenses billable to clients in the Valuation and Appraisal segment. Direct costs of services include participation in profits under collaborative arrangements in which the Company is a majority participant. Direct costs of services also include the cost of consultants and other direct expenses related to auction and liquidation contracts pursuant to commission and fee based arrangements in the Auction and Liquidation segment. Direct cost of services in the Principal Investments - United Online segment include cost of telecommunications and data center costs, personnel and overhead-related costs associated with operating the Company’s networks and data centers, depreciation of network computers and equipment, third party advertising sales commissions, license fees, costs related to providing customer support, costs related to customer billing and processing of customer credit cards and associated bank fees. Direct cost of services does not include an allocation of the Company’s overhead costs. (e) Interest Expense - Securities Lending Activities Interest expense from securities lending activities is included in operating expenses related to operations in the Capital Markets segment. Interest expense from securities lending activities is incurred from equity and fixed income securities that are loaned to the Company. (f) Concentration of Risk Revenues in the Capital Markets, Valuation and Appraisal and Principal Investments – United Online segments are currently primarily generated in the United States. Revenues in the Auction and Liquidation segment are primarily generated in the United States, Australia, Canada and Europe. The Company’s activities in the Auction and Liquidation segment are executed frequently with, and on behalf of, distressed customers and secured creditors. Concentrations of credit risk can be affected by changes in economic, industry, or geographical factors. The Company seeks to control its credit risk and potential risk concentration through risk management activities that limit the Company’s exposure to losses on any one specific liquidation services contract or concentration within any one specific industry. To mitigate the exposure to losses on any one specific liquidation services contract, the Company sometimes conducts operations with third parties through collaborative arrangements. The Company maintains cash in various federally insured banking institutions. The account balances at each institution periodically exceed the Federal Deposit Insurance Corporation’s (“FDIC”) insurance coverage, and as a result, there is a concentration of credit risk related to amounts in excess of FDIC insurance coverage. The Company has not experienced any losses in such accounts. The Company also has substantial cash balances from proceeds received from auctions and liquidation engagements that are distributed to parties in accordance with the collaborative arrangements. (g) Advertising Expenses The Company expenses advertising costs, which consist primarily of costs for printed materials, as incurred. Advertising costs totaled $371 and $183 for the three months ended September 30, 2018 and 2017, respectively, and $1,656 and $1,227 for the nine months ended September 30, 2018 and 2017, respectively. Advertising expense is included as a component of selling, general and administrative expenses in the accompanying condensed consolidated statements of income. (h) Share-Based Compensation The Company’s share-based payment awards principally consist of grants of restricted stock, restricted stock units and costs associated with the Company’s employee stock purchase plan. In accordance with the applicable accounting guidance, share-based payment awards are classified as either equity or liabilities. For equity-classified awards, the Company measures compensation cost for the grant of membership interests at fair value on the date of grant and recognizes compensation expense in the condensed consolidated statements of income over the requisite service or performance period the award is expected to vest. The fair value of the liability-classified award will be subsequently remeasured at each reporting date through the settlement date. Change in fair value during the requisite service period will be recognized as compensation cost over that period. (i) Restructuring Charge The Company recorded a restructuring charge in the amount of $428 and $4,896 for the three months ended September 30, 2018 and 2017, respectively, and $2,247 and $11,484, for the nine months ended September 30, 2018 and 2017, respectively. The restructuring charge of $428 and $2,247 during the three and nine months ended September 30, 2018, respectively, was primarily related to severance costs and lease loss accruals for the planned consolidation of office space related to operations in the Capital Markets segment. The restructuring charge of $4,896 and $11,484 during the three and nine months ended September 30, 2017, respectively, was primarily related to costs savings measures taking into account the planned synergies as a result of the acquisitions of FBR & Co. (“FBR”) and Wunderlich Investment Company, Inc. (“Wunderlich”), which included a reduction in workforce for some of the corporate executives of FBR and Wunderlich and a restructuring to integrate FBR’s and Wunderlich’s operations with the Company’s operations in the Capital Markets segment. The following table summarizes the changes in accrued restructuring charge during the three and nine months ended September 30, 2018 and 2017: Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Balance, beginning of period $ 1,827 3,287 2,600 694 Restructuring charge 428 4,896 2,247 11,484 Cash paid (504 ) (3,092 ) (2,954 ) (4,880 ) Non-cash items (1 ) (1,732 ) (143 ) (3,939 ) Balance, end of period $ 1,750 $ 3,359 $ 1,750 $ 3,359 The following table summarizes the restructuring activities during the three months ended September 30, 2018 and 2017: Three Months Ended September 30, 2018 2017 Principal Principal Investments - Investments - Capital United Capital United Markets Online Corporate Total Markets Online Corporate Total Restructuring charge: Employee termination costs $ 76 — — $ 76 $ 2,285 $ 150 $ 1,102 $ 3,537 Facility closure and consolidation charge 352 — — 352 1,037 — 322 1,359 Total restructuring charge $ 428 $ — $ — $ 428 $ 3,322 $ 150 $ 1,424 $ 4,896 The following table summarizes the restructuring activities during the nine months ended September 30, 2018 and 2017: Nine Months Ended September 30, 2018 2017 Principal Principal Investments - Investments - Capital United Capital United Markets Online Corporate Total Markets Online Corporate Total Restructuring charge: Employee termination costs $ 729 — — $ 729 $ 4,819 $ 633 $ 3,284 $ 8,736 Facility closure and consolidation charge (recovery) 1,728 — (210 ) 1,518 2,426 — 322 2,748 Total restructuring charge $ 2,457 $ — $ (210 ) $ 2,247 $ 7,245 $ 633 $ 3,606 $ 11,484 (j) Income Taxes The Company recognizes deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the condensed consolidated financial statements or tax returns. Deferred tax liabilities and assets are determined based on the difference between the financial statement basis and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company estimates the degree to which tax assets and credit carryforwards will result in a benefit based on expected profitability by tax jurisdiction. A valuation allowance for such tax assets and loss carryforwards is provided when it is determined to be more likely than not that the benefit of such deferred tax asset will not be realized in future periods. Tax benefits of operating loss carryforwards are evaluated on an ongoing basis, including a review of historical and projected future operating results, the eligible carryforward period, and other circumstances. If it becomes more likely than not that a tax asset will be used, the related valuation allowance on such assets would be reduced. The Company recognizes tax benefits from uncertain tax positions only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. Once this threshold has been met, the Company’s measurement of its expected tax benefits is recognized in its financial statements. The Company accrues interest on unrecognized tax benefits as a component of income tax expense. Penalties, if incurred, would be recognized as a component of income tax expense. The Tax Cuts and Jobs Act (the “Tax Reform Act”) was enacted on December 22, 2017. The Tax Reform Act reduces the U.S. federal corporate tax rate from 35% to 21%, requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred, provides an exemption from U.S. federal tax for dividends received from foreign subsidiaries, and creates new taxes on certain foreign sourced earnings. As of the completion of these financial statements and related disclosures, we have not completed our accounting for the tax effects of the Tax Reform Act; however, as described below, we have made a reasonable estimate of such effects and recorded a provisional tax expense of $13,052, which is included as a component of income tax expense in the fourth quarter of 2017. This provisional tax expense incorporates assumptions made based upon the Company’s current interpretation of the Tax Reform Act, and may change as we receive additional clarification and implementation guidance and as the interpretation of the Tax Reform Act evolves. In accordance with SEC Staff Accounting Bulletin No. 118, the Company will finalize the accounting for the effects of the Tax Reform Act no later than the fourth quarter of 2018. Future adjustments made to the provisional effects will be reported as a component of income tax expense from continuing operations in the reporting period in which any such adjustments are determined. (k) Cash and Cash Equivalents The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. (l) Restricted Cash As of September 30, 2018, restricted cash balance of $468 is cash collateral for one of our telecommunication suppliers. As of December 31, 2017, restricted cash balance of $19,711 included $19,197 of cash collateral related to a retail liquidation engagement and $514 cash segregated in a special bank account for the benefit of customers related to our broker dealer subsidiary and collateral for one of our telecommunication suppliers. (m) Securities Borrowed and Securities Loaned Securities borrowed and securities loaned are recorded based upon the amount of cash advanced or received. Securities borrowed transactions facilitate the settlement process and require the Company to deposit cash or other collateral with the lender. With respect to securities loaned, the Company receives collateral in the form of cash. The amount of collateral required to be deposited for securities borrowed, or received for securities loaned, is an amount generally in excess of the market value of the applicable securities borrowed or loaned. The Company monitors the market value of the securities borrowed and loaned on a daily basis, with additional collateral obtained, or excess collateral recalled, when deemed appropriate. The Company accounts for securities lending transactions in accordance with ASC “Topic 210: Balance Sheet,” (n) Due from/to Brokers, Dealers, and Clearing Organizations The Company clears all of its proprietary and customer transactions through other broker-dealers on a fully disclosed basis. The amount receivable from or payable to the clearing brokers represents the net of proceeds from unsettled securities sold, the Company’s clearing deposit and amounts receivable for commissions less amounts payable for unsettled securities purchased by the Company and amounts payable for clearing costs and other settlement charges. This amount also includes the cash collateral received for securities loaned less cash collateral for securities borrowed. Any amounts payable would be fully collateralized by all of the securities owned by the Company and held on deposit at the clearing broker. (o) Accounts Receivable Accounts receivable represents amounts due from the Company’s Auction and Liquidation, Valuation and Appraisal, Capital Markets and Principal Investments - United Online segment customers. The Company maintains an allowance for doubtful accounts for estimated losses inherent in its accounts receivable portfolio. In establishing the required allowance, management utilizes a specific customer identification methodology. Management also considers historical losses adjusted for current market conditions and the customers’ financial condition and the current receivables aging and current payment patterns. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company does not have any off-balance sheet credit exposure related to its customers. Bad debt expense and changes in the allowance for doubtful accounts for the three and nine months ended September 30, 2018 and 2017 are included in Note 5. (p) Advances Against Customer Contracts Advances against customer contracts represent advances of contractually reimbursable funds incurred prior to, and during the term of the auction and liquidation services contract. On April 18, 2018, the Company entered into an agency agreement to participate in the right to liquidate certain assets of The Bon-Ton Stores, Inc. (the “Agency Agreement”). There are three parties to the Agency Agreement which were granted the right to act as the exclusive agent to conduct the sale of substantially all of the assets of The Bon-Ton Stores, Inc. (the “Bon-Ton Transaction”). The Company initially advanced $407,426 in connection with Agency Agreement. As of September 30, 2018, $21,405 remained outstanding and is included in the advances against customer contracts. Management expects the outstanding advance continue to be repaid from proceeds generated from the liquidation of the assets related to the Bon-Ton Transaction. (q) Loans Receivable Loans are measured at historical cost and reported at their outstanding principal balances net of any unearned income, charge-offs, unamortized deferred fees and costs on originated loans, and for purchased loans, net of any unamortized premiums or discounts. Loan origination fees and certain direct origination costs are deferred and recognized as adjustments to interest income over the lives of the related loans. Unearned income, discounts and premiums are amortized to interest income using a level yield methodology. Loans receivable at September 30, 2018, consists of one loan in the amount of $15,000 that was fully repaid in October 2018 and the other loan in the amount of $22,147 which is due in May 2020. (r) Property and Equipment Property and equipment are stated at cost. Depreciation and amortization is computed using the straight-line method over the estimated useful lives of the assets. Property and equipment held under capital leases are amortized on a straight-line basis over the shorter of the lease term or estimated useful life of the asset. Depreciation and amortization expense on property and equipment was $1,005 and $1,243 for the three months ended September 30, 2018 and 2017, respectively, and $3,369 and $2,458 for the nine months ended September 30, 2018 and 2017, respectively. (s) Securities Owned and Securities Sold Not Yet Purchased Securities owned consist of marketable securities and investments in partnership interests and other securities recorded at fair value. Securities sold, but not yet purchased represents obligations of the Company to deliver the specified security at the contracted price and thereby create a liability to purchase the security in the market at prevailing prices. Changes in the value of these securities are reflected currently in the results of operations. As of September 30, 2018 and December 31, 2017, the Company’s securities and other investments owned and securities sold not yet purchased measured at fair value consisted of the following securities and investments: September 30, December 31, 2018 2017 Securities and other investments owned: Common stocks and warrants $ 106,317 $ 67,306 Corporate bonds 18,909 6,539 Fixed income securities 4,467 2,329 Loans receivable 36,587 33,713 Partnership interests and other 56,241 35,473 $ 222,521 $ 145,360 Securities sold not yet purchased: Common stocks $ 47,929 $ 19,145 Corporate bonds 6,381 1,175 Fixed income securities 598 699 Partnership interests and other 4,764 7,272 $ 59,672 $ 28,291 (t) Fair Value Measurements The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market. In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) for identical instruments that are highly liquid, observable and actively traded in over-the-counter markets. Fair values determined by Level 2 inputs utilize inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-derived valuations whose inputs are observable and can be corroborated by market data. Level 3 inputs are unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability. The Company’s securities and other investments owned and securities sold and not yet purchased are comprised of common and preferred stocks and warrants, corporate bonds, loans receivable and investments in partnerships. Investments in common stocks that are based on quoted prices in active markets are included in Level 1 of the fair value hierarchy. The Company also holds nonpublic common and preferred stocks and warrants for which there is little or no public market and fair value is determined by management on a consistent basis. For investments where little or no public market exists, management’s determination of fair value is based on the best available information which may incorporate management’s own assumptions and involves a significant degree of judgment, taking into consideration various factors including earnings history, financial condition, recent sales prices of the issuer’s securities and liquidity risks. These investments are included in Level 3 of the fair value hierarchy. Investments in partnership interests include investments in private equity partnerships that primarily invest in equity securities, bonds, and direct lending funds. The Company’s partnership interests are valued based on the Company’s proportionate share of the net assets of the partnership which is derived from the most recent statements received from the general partner which are included in Level 3 of the fair value hierarchy. The Company also invests in certain proprietary investment funds that are valued at net asset value (“NAV”) determined by the fund administrator. The underlying securities held by these investment companies are primarily corporate and asset-backed fixed income securities and restrictions exist on the redemption of amounts invested by the Company. As a practical expedient, the Company relies on the NAV of these investments as their fair value. The NAVs that have been provided by the fund administrators are derived from the fair values of the underlying investments as of the reporting date. In accordance with ASC “Topic 820: Fair Value Measurements,” The fair value of mandatorily redeemable noncontrolling interests is determined based on the issuance of similar interests for cash, references to industry comparables, and relied, in part, on information obtained from appraisal reports and internal valuation models. The following tables present information on the financial assets and liabilities measured and recorded at fair value on a recurring basis as of September 30, 2018 and December 31, 2017: Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis at September 30, 2018 Using Quoted prices in Other Significant Fair value at active markets for observable unobservable September 30, identical assets inputs inputs 2018 (Level 1) (Level 2) (Level 3) Assets: Securities and other investments owned: Common stocks and warrants $ 106,317 $ 72,153 $ 25,207 $ 8,957 Corporate bonds 18,909 — 18,909 — Fixed income securities 4,467 — 4,467 — Loans receivable 36,587 — — 36,587 Partnership interests and other 54,114 1,280 10 52,824 Total assets measured at fair value $ 220,394 $ 73,433 $ 48,593 $ 98,368 Liabilities: Securities sold not yet purchased: Common stocks $ 47,929 $ 47,929 $ — $ — Corporate bonds 6,381 — 6,381 Fixed income securities 598 — 598 — Partnership interests and other 4,764 4,764 — — Total securities sold not yet purchased 59,672 52,693 6,979 — Mandatorily redeemable noncontrolling interests issued after November 5, 2003 4,409 — — 4,409 Total liabilities measured at fair value $ 64,081 $ 52,693 $ 6,979 $ 4,409 Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis at December 31, 2017 Using Quoted prices in Other Significant Fair value at active markets for observable unobservable December 31, identical assets inputs inputs 2017 (Level 1) (Level 2) (Level 3) Assets: Securities and other investments owned: Common stocks and warrants $ 67,306 $ 38,960 $ — $ 28,346 Corporate bonds 6,539 — 6,539 — Fixed income securities 2,329 — 2,329 — Loans receivable 33,713 — — 33,713 Partnership i |
ACQUISITIONS
ACQUISITIONS | 9 Months Ended |
Sep. 30, 2018 | |
Business Combinations [Abstract] | |
ACQUISITIONS | NOTE 3— ACQUISITIONS Acquisition of Wunderlich Investment Company, Inc. On May 17, 2017, the Company entered into a Merger Agreement (the “Wunderlich Merger Agreement”) with Wunderlich. Pursuant to the Wunderlich Merger Agreement, customary closing conditions were satisfied and the acquisition was completed on July 3, 2017. The total consideration of $65,118 paid to Wunderlich shareholders in connection with the Wunderlich acquisition was comprised of (a) cash in the amount of $29,737; (b) 1,974,812 newly issued shares of the Company’s common stock at closing which were valued at $31,495 for accounting purposes determined based on the closing market price of the Company’s shares of common stock on the acquisition date on July 3, 2017, less a 13.0% discount for lack of marketability as the shares issued are subject to certain escrow provisions and restrictions that limit their trade or transfer; and (c) 821,816 newly issued common stock warrants with an estimated fair value of $3,886. The common stock and common stock warrants issued includes 387,365 common shares and 167,352 common stock warrants that are held in escrow and subject to forfeiture to indemnify the Company for certain representations and warranties in connection with the acquisition. The Company believes that the acquisition of Wunderlich will allow the Company to benefit from wealth management, investment banking, corporate finance, and sales and trading services provided by Wunderlich. The acquisition of Wunderlich is accounted for using the purchase method of accounting. The Company also entered into a registration rights agreement with certain shareholders of Wunderlich (the “Registration Rights Agreement”) on July 3, 2017 for the shares issued in connection with the Wunderlich Merger Agreement. The Registration Rights Agreement provides the Wunderlich shareholders with the right to notice of and, subject to certain conditions, the right to register shares of the Company’s common stock in certain future registered offerings of shares of the Company’s common stock. The assets and liabilities of Wunderlich, both tangible and intangible, were recorded at their estimated fair values as of the July 3, 2017 acquisition date for Wunderlich. The application of the purchase method of accounting resulted in goodwill of $37,200 which represents the benefits from synergies with our existing business and acquired workforce. For the nine months ended September 30, 2018, acquisition related costs, such as legal, accounting, valuation and other professional fees related to the acquisition of Wunderlich, were charged against earnings in the amount of $12 are included in selling, general and administrative expenses in the condensed consolidated statements of income. The purchase accounting for the acquisition has been accounted for as a stock purchase with all of the recognized goodwill is expected to be non-deductible for tax purposes. The purchase price allocation was as follows: Consideration paid by B. Riley: Cash paid $ 29,737 Fair value of 1,974,812 B. Riley common shares issued 31,495 Fair value of 821,816 B. Riley common stock warrants issued 3,886 Total consideration $ 65,118 The assets acquired and assumed was as follows: Tangible assets acquired and assumed: Cash and cash equivalents $ 4,259 Securities owned 1,413 Accounts receivable 3,193 Due from clearing broker 15,133 Prepaid expenses and other assets 10,103 Property and equipment 2,315 Deferred taxes 5,456 Accounts payable (1,718 ) Accrued payroll and related expenses (6,387 ) Accrued expenses and other liabilities (10,223 ) Securities sold, not yet purchased (1,707 ) Notes payable (10,579 ) Customer relationships 15,320 Trademarks 1,340 Goodwill 37,200 Total $ 65,118 The revenue and earnings of Wunderlich included in our condensed consolidated financial statements for the three months ended September 30, 2018 were $17,239 and $276, respectively. During the nine months ended September 30, 2018, revenue and loss of Wunderlich included in our condensed consolidated financial statements were $60,578 and $844, respectively. The earnings (loss) from Wunderlich of $276 and ($844) for the three and nine months ended September 30, 2018, respectively, included restructuring charges in the amount of $317 and $1,083, respectively, related primarily to severance costs and lease loss accruals for the planned consolidation of office space related to operations in the Capital Markets segment. The revenue and loss of Wunderlich included in our condensed consolidated financial statements for the period from July 3, 2017 (the date of acquisition) through September 30, 2017 were $20,412 and $1,928, respectively. The loss from Wunderlich of $1,928 included a restructuring charge in the amount of $1,387 related primarily to severance costs and lease loss accruals for the planned consolidation of office space related to operations in the Capital Markets segment. Acquisition of FBR & Co. On February 17, 2017, the Company entered into an Agreement and Plan of Merger (the “FBR Merger Agreement”) with FBR, pursuant to which FBR was to merge with and into the Company (or a subsidiary of the Company), with the Company (or its subsidiary) as the surviving corporation (the “Merger”). On May 1, 2017, the Company and FBR filed a registration statement for the planned Merger. The stockholders of the Company and FBR approved the acquisition on June 1, 2017, customary closing conditions were satisfied and the acquisition was completed on June 1, 2017. Subject to the terms and conditions of the FBR Merger Agreement, each outstanding share of FBR common stock (“FBR Common Stock”) was converted into the right to receive 0.671 of a share of the Company’s common stock as summarized below. The Company believes that the acquisition of FBR will allow the Company to benefit from investment banking, corporate finance, securities lending, research, and sales and trading services provided by FBR and planned synergies from the elimination of duplicate corporate overhead and management functions with the Company. The acquisition of FBR is accounted for using the purchase method of accounting. The assets and liabilities of FBR, both tangible and intangible, were recorded at their estimated fair values as of the June 1, 2017 acquisition date for FBR. The application of the purchase method of accounting resulted in goodwill of $11,336 which represents expected overhead synergies and acquired workforce. The purchase accounting for the acquisition has been accounted for as a stock purchase with all of the recognized goodwill is expected to be non-deductible for tax purposes. The purchase price allocation was as follows: Consideration paid by B. Riley: Number of FBR Common Shares outstanding at June 1, 2017 7,099,511 Stock merger exchange ratio 0.671 Number of B. Riley common shares 4,763,772 Number of B. Riley common shares to be issued from acceleration of vesting for outstanding FBR stock options, restricted stock and RSU awards 67,861 Total number of B. Riley common shares to be issued 4,831,633 Closing market price of B. Riley common shares on December 31, 2016 $ 14.70 Total value of B. Riley common shares 71,025 Fair value of RSU’s attributable to service period prior to June 1, 2017 (a) 2,446 Total consideration $ 73,471 (a) Outstanding FBR restricted stock awards at June 1, 2017, the date of the acquisition, were adjusted in accordance with the FBR Merger Agreement with the right to receive 0.671 shares of the Company’s common stock for each outstanding FBR stock award unit. The fair value of the FBR restricted stock awards at June 1, 2017 was determined based on the closing price of the Company’s common stock of $14.70 on June 1, 2017. The fair value of the FBR restricted stock awards were apportioned as purchase consideration based on service provided to FBR as of June 1, 2017 with the remaining fair value of the FBR restricted stock awards to be recognized prospectively over the restricted stock and FBR restricted stock awards remaining vesting period. The assets acquired and assumed was as follows: Tangible assets acquired and assumed: Cash and cash equivalents $ 15,738 Securities owned 11,188 Securities borrowed 861,197 Accounts receivable 4,341 Due from clearing broker 29,169 Prepaid expenses and other assets 5,486 Property and equipment 8,663 Deferred taxes 17,706 Accounts payable (1,524 ) Accrued payroll and related expenses (7,182 ) Accrued expenses and other liabilities (22,411 ) Securities loaned (867,626 ) Customer relationships 5,600 Tradename and other intangibles 1,790 Goodwill 11,336 Total $ 73,471 The revenue and loss of FBR included in our condensed consolidated financial statements for the period from June 1, 2017 (the date of acquisition) through September 30, 2017 were $37,745 and $12,706, respectively. The loss from FBR of $12,706 includes transaction costs of $3,551 related to an employment agreement with the former Chief Executive Officer of FBR and restructuring charges in the amount of $9,096 related primarily to severance costs and lease loss accruals for the planned consolidation of office space related to operations in the Capital Markets segment. Pro Forma Financial Information The unaudited financial information in the table below summarizes the combined results of operations of the Company, Wunderlich and FBR, as though the acquisitions had occurred as of January 1 of the respective periods presented. The pro forma financial information presented includes the effects of adjustments related to the amortization charges from the acquired intangible assets and the elimination of certain activities excluded from the transaction and transaction related costs. The pro forma financial information as presented below is for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of the earliest period presented, nor does it intend to be a projection of future results. Pro Forma (Unaudited) Three Months Ended September 30, 2017 Nine Months Ended September 30, 2017 Revenues $ 92,461 $ 320,546 Net (loss) income attributable to B. Riley Financial, Inc. $ (42 ) $ 11,785 Basic (loss) earnings per share $ (0.00 ) $ 0.46 Diluted (loss) earnings per share $ (0.00 ) $ 0.43 Weighted average basic shares outstanding 26,094,000 25,888,446 Weighted average diluted shares outstanding 26,094,000 27,137,419 |
SECURITIES LENDING
SECURITIES LENDING | 9 Months Ended |
Sep. 30, 2018 | |
Securities Lending | |
SECURITIES LENDING | <font style="font: 10pt Times New Roman, Times, Serif"><b>NOTE 4— SECURITIES LENDING</b></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"><font style="font: 10pt Times New Roman, Times, Serif">As a result of the acquisition of FBR, the Company has an active securities borrowed and loaned business in which it borrows securities from one party and lends them to another. Securities borrowed and securities loaned are recorded based upon the amount of cash advanced or received. Securities borrowed transactions facilitate the settlement process and require the Company to deposit cash or other collateral with the lender. With respect to securities loaned, the Company receives collateral in the form of cash. The amount of collateral required to be deposited for securities borrowed, or received for securities loaned, is an amount generally in excess of the market value of the applicable securities borrowed or loaned. The Company monitors the market value of the securities borrowed and loaned on a daily basis, with additional collateral obtained, or excess collateral recalled, when deemed appropriate.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"><font style="font: 10pt Times New Roman, Times, Serif">The following table presents the contractual gross and net securities borrowing and lending balances and the related offsetting amount as of September 30, 2018 and December 31, 2017:</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p> <table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="text-align: center; padding-left: 8.65pt; text-indent: -8.65pt"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Amounts not</b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center; padding-left: 8.65pt; text-indent: -8.65pt"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>offset in the</b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center; padding-left: 8.65pt; text-indent: -8.65pt"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>consolidated balance</b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center; padding-left: 8.65pt; text-indent: -8.65pt"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Gross amounts</b></font></td> <td style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Net amounts</b></font></td> <td style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>sheets but eligible</b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center; padding-left: 8.65pt; text-indent: -8.65pt"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>offset in the</b></font></td> <td style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold; text-align: center; white-space: nowrap"><font style="font: 10pt Times New Roman, Times, Serif"><b>included in the</b></font></td> <td style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>for offsetting</b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center; padding-left: 8.65pt; text-indent: -8.65pt"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Gross amounts</b></font></td> <td style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>consolidated</b></font></td> <td style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>consolidated</b></font></td> <td style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>upon counterparty</b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td></tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1pt; text-align: center; padding-left: 8.65pt; text-indent: -8.65pt"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold; padding-bottom: 1pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="border-bottom: black 1pt solid; font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>recognized</b></font></td> <td style="font-weight: bold; padding-bottom: 1pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold; padding-bottom: 1pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="border-bottom: black 1pt solid; font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>balance sheets <sup>(1)</sup></b></font></td> <td style="font-weight: bold; padding-bottom: 1pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold; padding-bottom: 1pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="border-bottom: black 1pt solid; font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>balance sheets</b></font></td> <td style="font-weight: bold; padding-bottom: 1pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="border-bottom: black 1pt solid; font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>default<sup>(2)</sup></b></font></td> <td style="font-weight: bold; padding-bottom: 1pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="border-bottom: black 1pt solid; font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Net amounts</b></font></td> <td style="font-weight: bold; padding-bottom: 1pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-weight: bold; padding-left: 8.65pt; text-indent: -8.65pt"><font style="font: 10pt Times New Roman, Times, Serif"><b>As of September 30, 2018</b></font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="width: 32%; text-align: left; padding-left: 0.25in; text-indent: -8.65pt"><font style="font: 10pt Times New Roman, Times, Serif">Securities borrowed</font></td> <td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 10%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">1,042,295</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 12%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 10%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">1,042,295</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 13%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">1,042,295</font></td> <td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 10%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-left: 0.25in; text-indent: -8.65pt"><font style="font: 10pt Times New Roman, Times, Serif">Securities loaned</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">1,035,408</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">1,035,408</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">1,035,408</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: left; padding-left: 8.65pt; text-indent: -8.65pt"><font style="font: 10pt Times New Roman, Times, Serif"><b>As of December 31, 2017</b></font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-left: 0.25in; text-indent: -8.65pt"><font style="font: 10pt Times New Roman, Times, Serif">Securities borrowed</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">807,089</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">807,089</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">807,089</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: left; padding-left: 0.25in; text-indent: -8.65pt"><font style="font: 10pt Times New Roman, Times, Serif">Securities loaned</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">803,371</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">803,371</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">803,371</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> </table> <p style="margin-top: 0; margin-bottom: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p> <p style="margin-top: 0; margin-bottom: 0"></p> <table cellspacing="0" cellpadding="0" style="font-size: 11pt; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom; background-color: white"> <td style="font-family: Times Roman; width: 5%; white-space: nowrap; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><sup>(1)</sup></font></td> <td style="font-family: Times Roman; width: 95%; white-space: nowrap"><font style="font: 10pt Times New Roman, Times, Serif">Includes financial instruments subject to enforceable master netting provisions that are permitted to be offset to the extent an event of default has occurred.</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="font-family: Times Roman; whi" id="sjs-B4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><b>NOTE 4— SECURITIES LENDING</b></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"><font style="font: 10pt Times New Roman, Times, Serif">As a result of the acquisition of FBR, the Company has an active securities borrowed and loaned business in which it borrows securities from one party and lends them to another. Securities borrowed and securities loaned are recorded based upon the amount of cash advanced or received. Securities borrowed transactions facilitate the settlement process and require the Company to deposit cash or other collateral with the lender. With respect to securities loaned, the Company receives collateral in the form of cash. The amount of collateral required to be deposited for securities borrowed, or received for securities loaned, is an amount generally in excess of the market value of the applicable securities borrowed or loaned. The Company monitors the market value of the securities borrowed and loaned on a daily basis, with additional collateral obtained, or excess collateral recalled, when deemed appropriate.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"><font style="font: 10pt Times New Roman, Times, Serif">The following table presents the contractual gross and net securities borrowing and lending balances and the related offsetting amount as of September 30, 2018 and December 31, 2017:</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p> <table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="text-align: center; padding-left: 8.65pt; text-indent: -8.65pt"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Amounts not</b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center; padding-left: 8.65pt; text-indent: -8.65pt"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>offset in the</b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center; padding-left: 8.65pt; text-indent: -8.65pt"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>consolidated balance</b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center; padding-left: 8.65pt; text-indent: -8.65pt"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Gross amounts</b></font></td> <td style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Net amounts</b></font></td> <td style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>sheets but eligible</b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center; padding-left: 8.65pt; text-indent: -8.65pt"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>offset in the</b></font></td> <td style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold; text-align: center; white-space: nowrap"><font style="font: 10pt Times New Roman, Times, Serif"><b>included in the</b></font></td> <td style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>for offsetting</b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center; padding-left: 8.65pt; text-indent: -8.65pt"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Gross amounts</b></font></td> <td style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>consolidated</b></font></td> <td style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>consolidated</b></font></td> <td style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>upon counterparty</b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td></tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1pt; text-align: center; padding-left: 8.65pt; text-indent: -8.65pt"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold; padding-bottom: 1pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="border-bottom: black 1pt solid; font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>recognized</b></font></td> <td style="font-weight: bold; padding-bottom: 1pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold; padding-bottom: 1pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="border-bottom: black 1pt solid; font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>balance sheets <sup>(1)</sup></b></font></td> <td style="font-weight: bold; padding-bottom: 1pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold; padding-bottom: 1pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="border-bottom: black 1pt solid; font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>balance sheets</b></font></td> <td style="font-weight: bold; padding-bottom: 1pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="border-bottom: black 1pt solid; font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>default<sup>(2)</sup></b></font></td> <td style="font-weight: bold; padding-bottom: 1pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="border-bottom: black 1pt solid; font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Net amounts</b></font></td> <td style="font-weight: bold; padding-bottom: 1pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-weight: bold; padding-left: 8.65pt; text-indent: -8.65pt"><font style="font: 10pt Times New Roman, Times, Serif"><b>As of September 30, 2018</b></font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="width: 32%; text-align: left; padding-left: 0.25in; text-indent: -8.65pt"><font style="font: 10pt Times New Roman, Times, Serif">Securities borrowed</font></td> <td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 10%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">1,042,295</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 12%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 10%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">1,042,295</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 13%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">1,042,295</font></td> <td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 10%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-left: 0.25in; text-indent: -8.65pt"><font style="font: 10pt Times New Roman, Times, Serif">Securities loaned</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">1,035,408</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">1,035,408</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">1,035,408</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: left; padding-left: 8.65pt; text-indent: -8.65pt"><font style="font: 10pt Times New Roman, Times, Serif"><b>As of December 31, 2017</b></font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-left: 0.25in; text-indent: -8.65pt"><font style="font: 10pt Times New Roman, Times, Serif">Securities borrowed</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">807,089</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">807,089</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">807,089</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: left; padding-left: 0.25in; text-indent: -8.65pt"><font style="font: 10pt Times New Roman, Times, Serif">Securities loaned</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">803,371</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">803,371</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">803,371</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> </table> <p style="margin-top: 0; margin-bottom: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p> <p style="margin-top: 0; margin-bottom: 0"></p> <table cellspacing="0" cellpadding="0" style="font-size: 11pt; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom; background-color: white"> <td style="font-family: Times Roman; width: 5%; white-space: nowrap; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><sup>(1)</sup></font></td> <td style="font-family: Times Roman; width: 95%; white-space: nowrap"><font style="font: 10pt Times New Roman, Times, Serif">Includes financial instruments subject to enforceable master netting provisions that are permitted to be offset to the extent an event of default has occurred.</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="font-family: Times Roman; whi |
ACCOUNTS RECEIVABLE
ACCOUNTS RECEIVABLE | 9 Months Ended |
Sep. 30, 2018 | |
Receivables [Abstract] | |
ACCOUNTS RECEIVABLE | NOTE 5— ACCOUNTS RECEIVABLE The components of accounts receivable, net, include the following: September 30, December 31, 2018 2017 Accounts receivable $ 22,597 $ 15,593 Investment banking fees, commissions and other receivables 16,219 4,199 Unbilled receivables 966 1,023 Total accounts receivable 39,782 20,815 Allowance for doubtful accounts (824 ) (800 ) Accounts receivable, net $ 38,958 $ 20,015 Additions and changes to the allowance for doubtful accounts consist of the following: Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Balance, beginning of period $ 796 $ 599 $ 800 $ 255 Add: Additions to reserve 192 123 840 827 Less: Write-offs (164 ) (94 ) (816 ) (262 ) Less: Recoveries — — — (192 ) Balance, end of period $ 824 $ 628 $ 824 $ 628 Unbilled receivables represent the amount of contractual reimbursable costs and fees for services performed in connection with fee and service based auction and liquidation contracts. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLE ASSETS | NOTE 6— GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill was $120,129 and $98,771 at September 30, 2018 and December 31, 2017, respectively. The increase in goodwill of $21,358 is due to $2,562 from the finalization of the purchase price accounting for Wunderlich and $18,796 from the acquisition of a business consulting firm in the third quarter of 2018. At September 30, 2018, goodwill is comprised of $98,714 in the Capital Markets segment, $1,975 in the Auction and Liquidation segment, $3,713 in the Valuation and Appraisal segment and $15,727 in the Principal Investments - United Online segment. At December 31, 2017, goodwill is comprised of $77,356 in the Capital Markets segment, $1,975 in the Auction and Liquidation segment, $3,713 in the Valuation and Appraisal segment and $15,727 in the Principal Investments - United Online segment. Intangible assets consisted of the following: As of September 30, 2018 As of December 31, 2017 Gross Gross Carrying Accumulated Intangibles Carrying Accumulated Intangibles Useful Life Value Amortization Net Value Amortization Net Amortizable assets: Customer relationships 4 to 16 Years $ 58,330 $ 14,440 $ 43,890 $ 58,330 $ 9,100 $ 49,230 Domain names 7 Years 237 75 162 287 61 226 Advertising relationships 8 Years 100 28 72 100 19 81 Internally developed software and other intangibles 0.5 to 4 Years 3,373 2,035 1,338 3,373 1,445 1,928 Trademarks 7 to 8 Years 4,190 881 3,309 4,190 447 3,743 Total 66,230 17,459 48,771 66,280 11,072 55,208 Non-amortizable assets: Tradenames 2,240 — 2,240 1,740 — 1,740 Total intangible assets $ 68,470 $ 17,459 $ 51,011 $ 68,020 $ 11,072 $ 56,948 Amortization expense was $2,093 and $2,172 for the three months ended September 30, 2018 and 2017, respectively, and $6,399 and $5,248 for the nine months ended September 30, 2018 and 2017, respectively. At September 30, 2018, estimated future amortization expense is $2,093, $8,369, $7,987, $7,605 and $7,585 for the years ended December 31, 2018 (remaining three months), 2019, 2020, 2021 and 2022, respectively. The estimated future amortization expense after December 31, 2022 is $15,132. |
CREDIT FACILITIES
CREDIT FACILITIES | 9 Months Ended |
Sep. 30, 2018 | |
Line of Credit Facility [Abstract] | |
CREDIT FACILITIES | NOTE 7— CREDIT FACILITIES Credit facilities consist of the following arrangements: (a) $200,000 Asset Based Credit Facility On April 21, 2017, the Company amended its credit agreement (as amended, the “Credit Agreement”) governing its asset based credit facility with Wells Fargo Bank, National Association (“Wells Fargo Bank”) to increase the maximum borrowing limit from $100,000 to $200,000. Such amendment, among other things, also extended the expiration date of the credit facility from July 15, 2018 to April 21, 2022. On April 19, 2018, the Company entered into an amended and restated consent to the Credit Agreement, pursuant to which Wells Fargo Bank increased the maximum borrowing limit solely for the purposes of the Bon-Ton Transaction from $200,000 to $300,000, and reverts back to $200,000 upon repayment of the amounts borrowed in connection with the Bon-Ton Transaction. The amounts borrowed in connection with the Bon-Ton Transaction were fully repaid as of September 30, 2018 and the maximum borrowing limit under the Credit Agreement reverted back to $200,000. The Credit Agreement continues to allow for borrowings under the separate credit agreement (a “UK Credit Agreement”) which was dated March 19, 2015 with an affiliate of Wells Fargo Bank which provides for the financing of transactions in the United Kingdom. Such facility allows the Company to borrow up to 50 million British Pounds. Any borrowings on the UK Credit Agreement reduce the availability on the asset based $200,000 credit facility. The UK Credit Agreement is cross collateralized and integrated in certain respects with the Credit Agreement. Cash advances and the issuance of letters of credit under the credit facility are made at the lender’s discretion. The letters of credit issued under this facility are furnished by the lender to third parties for the principal purpose of securing minimum guarantees under liquidation services contracts more fully described in Note 2(c). All outstanding loans, letters of credit, and interest are due on the expiration date which is generally within 180 days of funding. The credit facility is secured by the proceeds received for services rendered in connection with liquidation service contracts pursuant to which any outstanding loan or letters of credit are issued and the assets that are sold at liquidation related to such contract. The Company paid Wells Fargo Bank a closing fee in the amount of $500 in connection with the April 2017 amendment to the Credit Agreement. The interest rate for each revolving credit advance under the Credit Agreement is, subject to certain terms and conditions, equal to the LIBOR plus a margin of 2.25% to 3.25% depending on the type of advance and the percentage such advance represents of the related transaction for which such advance is provided. The credit facility also provides for success fees in the amount of 2.5% to 17.5% of the net profits, if any, earned on the liquidation engagements funded under the Credit Agreement as set forth therein. Interest expense totaled $809 and $168 for the three months ended September 30, 2018 and 2017, respectively, and for the nine months ended September 30, 2018 and 2017, $4,138 and $863, respectively. At December 31, 2017, there was $18,505 of letters of credit outstanding under the credit facility. The Credit Agreement governing the credit facility contains certain covenants, including covenants that limit or restrict the Company’s ability to incur liens, incur indebtedness, make investments, dispose of assets, make certain restricted payments, merge or consolidate and enter into certain transactions with affiliates. Upon the occurrence of an event of default under the Credit Agreement, the lender may cease making loans, terminate the Credit Agreement and declare all amounts outstanding under the Credit Agreement to be immediately due and payable. The Credit Agreement specifies a number of events of default (some of which are subject to applicable grace or cure periods), including, among other things, nonpayment defaults, covenant defaults, cross-defaults to other material indebtedness, bankruptcy and insolvency defaults, and material judgment defaults. (b) $20,000 UOL Line of Credit On April 13, 2017, UOL, in the capacity as borrower, entered into a credit agreement (the “UOL Credit Agreement”) with Banc of California, N.A. in the capacity as agent and lender. The UOL Credit Agreement provides for a revolving credit facility under which UOL may borrow (or request the issuance of letters of credit) up to $20,000 which amount is reduced by $1,500 commencing on June 30, 2017 and on the last day of each calendar quarter thereafter. The final maturity date is April 13, 2020. The proceeds of the UOL Credit Agreement can be used (a) for working capital and general corporate purposes and/or (b) to pay dividends or permitted tax distributions to its parent company, subject to the terms of the UOL Credit Agreement. Borrowings under the UOL Credit Agreement will bear interest at a rate equal to (a) (i) the base rate (the greater of the federal funds rate plus one half of one percent (0.5%), or the prime rate) for U.S. dollar loans or (ii) at UOL’s option, the LIBOR Rate for Eurodollar loans, plus (b) the applicable margin rate, which ranges from two percent (2%) to three and one-half percent (3.5%) per annum, based upon UOL’s ratio of funded indebtedness to adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) for the preceding four (4) fiscal quarters. Interest payments are to be made each one, three or six months for Eurodollar loans, and quarterly for U.S. dollar loans. UOL paid a commitment fee equal to 1.00% of the aggregate commitments upon the closing of the UOL Credit Agreement. The UOL Credit Agreement also provides for an unused line fee payable quarterly, in arrears, in an amount equal to: (a) 0.50% per annum times the amount of the unused revolving commitment that is less than or equal to the amount of the cash maintained in accounts with the agent (as depositary bank); plus (b) 1.00% per annum times the amount of the unused revolving commitment that is greater than the amount of the cash maintained in accounts with the agent (as depositary bank). Any amounts outstanding under the UOL Credit Facility are due at maturity. Interest expense for the three and nine months ended September 30, 2018, totaled $62 (including amortization of deferred loan fees of $34) and $228 (including amortization of deferred loan fees of $102) respectively. At September 30, 2018 and December 31, 2017, there was no outstanding balances under the UOL Credit Agreement. Each of UOL’s U.S. subsidiaries is a guarantor of all obligations under the UOL Credit Agreement and are parties to the UOL Credit Agreement in such capacity (collectively, the “Secured Guarantors”). In addition, the Company and B. Riley Principal Investments, LLC, the parent corporation of UOL and a subsidiary of the Company, are guarantors of the obligations under the UOL Credit Agreement pursuant to standalone guaranty agreements pursuant to which the shares of outstanding capital stock of UOL are pledged as collateral. The obligations under the UOL Credit Agreement are secured by first-priority liens on, and a first-priority security interest in, substantially all of the assets of UOL and the Secured Guarantors, including a pledge of (a) 100% of the equity interests of the Secured Guarantors and (b) 65% of the equity interests in United Online Software Development (India) Private Limited, a private limited company organized under the laws of India. Such security interests are evidenced by pledge, security and other related agreements. The UOL Credit Agreement contains certain negative covenants, including those limiting UOL’s and its subsidiaries’ ability to incur indebtedness, incur liens, sell or acquire assets or businesses, change the nature of their businesses, engage in transactions with related parties, make certain investments or pay dividends. In addition, the UOL Credit Agreement requires UOL and its subsidiaries to maintain certain financial ratios. We are in compliance with all covenants in the UOL Credit Agreement at September 30, 2018. |
NOTES PAYABLE
NOTES PAYABLE | 9 Months Ended |
Sep. 30, 2018 | |
Notes Payable [Abstract] | |
NOTES PAYABLE | NOTE 8—NOTES PAYABLE Senior Notes Payable Senior notes payable, net, is comprised of the following as of September 30, 2018 and December 31, 2017: September 30, December 31, 2018 2017 7.50% Senior notes due October 31, 2021 $ 46,407 $ 35,231 7.50% Senior notes due May 31, 2027 107,429 92,490 7.25% Senior notes due December 31, 2027 100,441 80,500 7.375% Senior notes due May 31, 2023 109,183 — 6.875% Senior notes due September 30, 2023 100,050 — 463,510 208,221 Less: Unamortized debt issuance costs (7,727 ) (4,600 ) $ 455,783 $ 203,621 (a) $46,407 Senior Notes Payable due October 31, 2021 At September 30, 2018, the Company had $46,407 of Senior Notes Payable (“2021 Notes”) due in 2021, interest payable quarterly at 7.50%. On November 2, 2016, the Company issued $28,750 of the 2021 Notes and during the second half of 2017, the Company issued an additional $6,481 of the 2021 Notes pursuant to the At the Market Issuance Sales Agreement (the “Sales Agreement”) as further discussed below. During the nine months ended September 30, 2018, the Company issued an additional $11,176 of the 2021 Notes. The 2021 Notes are unsecured and due and payable in full on October 31, 2021. In connection with the issuance of the 2021 Notes, the Company received net proceeds of $45,502 (after underwriting commissions, fees and other issuance costs of $905). The outstanding balance of the 2021 Notes was $45,885 (net of unamortized debt issue costs and premiums of $522) and $34,483 (net of unamortized debt issue costs and premiums of $748) at September 30, 2018 and December 31, 2017, respectively. Interest expense on the 2021 Notes totaled $898 and $643 for the three months ended September 30, 2018 and 2017, respectively, and $2,380 and $1,829 for the nine months ended September 30, 2018 and 2017, respectively. (b) $107,429 Senior Notes Payable due May 31, 2027 At September 30, 2018, the Company had $107,429 of Senior Notes Payable (“2027 Notes”) due in 2027, interest payable quarterly at 7.50%. On May 31, 2017, the Company issued $60,375 of the 7.5% 2027 Notes and during the second half of 2017, the Company issued an additional $32,115 of the 7.50% 2027 Notes pursuant to the Sales Agreement. During the nine months ended September 30, 2018, the Company issued an additional $14,939 of the 7.50% 2027 Notes. The 2027 Notes are unsecured and due and payable in full on May 31, 2027. In connection with the issuance of the 7.50% 2027 Notes, the Company received net proceeds of $105,621 (after underwriting commissions, fees and other issuance costs of $1,808). The outstanding balance of the 7.50% 2027 Notes at September 30, 2018 and December 31, 2017 was $105,860 (net of unamortized debt issue costs and premium of $1,569) and $90,904 (net of unamortized debt issuance costs and premium of $1,586), respectively. Interest expense on the 2027 Notes totaled $2,034 and $1,407 for the three months ended September 30, 2018 and 2017, respectively, and $5,672 and $1,810 for the nine months ended September 30, 2018 and 2017, respectively. (c) $100,441 Senior Notes Payable due December 31, 2027 At September 30, 2018, the Company had $100,441 of Senior Notes Payable (“7.25% 2027 Notes”) due in December 2027, interest payable quarterly at 7.25%. In December 2017, the Company issued $80,500 of the 7.25% 2027 Notes and during the nine months ended September 30, 2018, the Company issued an additional $19,941 of the 7.25% 2027 Notes pursuant to the Sales Agreement. The 7.25% 2027 Notes are unsecured and due and payable in full on December 31, 2027. In connection with the issuance of the 7.25% 2027 Notes, the Company received net proceeds of $97,825 (after underwriting commissions, fees and other issuance costs of $2,616). The outstanding balance of the 7.25% 2027 Notes was $98,023 (net of unamortized debt issue costs and premium of $2,418) and $78,234 (net of unamortized debt issue costs of $2,266) at September 30, 2018 and December 31, 2017, respectively. Interest expense on the 7.25% 2027 Notes totaled $1,871 and $5,155 for the three and nine months ended September 30, 2018, respectively. (d) $109,183 Senior Notes Payable due May 31, 2023 At September 30, 2018, the Company had $109,183 of Senior Notes Payable (“May 2023 Notes”) due in May 2023, interest payable quarterly at 7.375%. In May 2018, the Company issued $100,050 of the May 2023 Notes and during the second and third quarter of 2018, the Company issued an additional $9,133 of the May 2023 Notes pursuant to the Sales Agreement. The May 2023 Notes are unsecured and due and payable in full on May 31, 2023. In connection with the issuance of the May 2023 Notes, the Company received net proceeds of $107,248 (after underwriting commissions, fees and other issuance costs of $1,935). The outstanding balance of the May 2023 Notes was $107,396 (net of unamortized debt issue costs and premium of $1,787) at September 30, 2018. Interest expense on the May 2023 Notes totaled $2,047 and $3,023 for the three and nine months ended September 30, 2018, respectively. (e) $100,050 Senior Notes Payable due September 30, 2023 At September 30, 2018, the Company had $100,050 of Senior Notes Payable (“September 2023 Notes”) due in September 2023, interest payable quarterly at 6.875%. The September 2023 notes were issued in September 2018. The September 2023 Notes are unsecured and due and payable in full on September 30, 2023. In connection with the issuance of the September 2023 Notes, the Company received net proceeds of $98,603 (after underwriting commissions, fees and other issuance costs of $1,447). The outstanding balance of the September 2023 Notes was $98,619 (net of unamortized debt issue costs of $1,431) at September 30, 2018. Interest expense on the September 2023 Notes totaled $398 for the three and nine months ended September 30, 2018. (f) At Market Issuance Sales Agreement to Issue Up to Aggregate of $50,000 of 2021 Notes, 7.50% 2027 Notes, 7.25% 2027 Notes or May 2023 Notes On June 5, 2018, the Company filed a prospectus supplement pursuant to which the Company may sell from time to time, at the Company’s option up to an aggregate of $50,000, including notes offered pursuant to the prior prospectus supplement, of the 2021 Notes, the 7.50% 2027 Notes, the 7.25% 2027 Notes and the May 2023 Notes. On December 19, 2017, the Company previously entered into an At Market Issuance Sales Agreement (the “Sales Agreement”) with B. Riley FBR, Inc., pursuant to which the Company may offer to sell, from time to time, the 2021 Notes, the 7.50% 2027 Notes and the 7.25% 2027 Notes. As of June 5, 2018, the Company sold Notes having an aggregate offering price of $6,343 under the prior prospectus supplement dated April 25, 2018, leaving up to $43,657 available for offer and sale pursuant to the June 5, 2018 prospectus. The Notes sold pursuant to the Sales Agreement on or following June 5, 2018 will be issued pursuant to a prospectus dated April 6, 2018, as supplemented by a prospectus supplement dated June 5, 2018, in each case filed with the SEC pursuant to the Company’s effective Registration Statement on Form S-3 (File No. 333-223789), which was declared effective by the SEC on April 6, 2018. As of September 30, 2018, the Company sold Notes pursuant to the June 5, 2018 prospectus having an aggregate offering price of $36,903 (inclusive of the $6,300 sold under the April 25, 2018 prospectus supplement), leaving up to $13,097 available for offer and sale pursuant to the June 5, 2018 prospectus. The Notes will be issued pursuant to the Indenture, dated as of November 2, 2016, as supplemented by a First Supplemental Indenture, dated as of November 2, 2016, the Second Supplemental Indenture, dated as of May 31, 2017, and the Third Supplemental Indenture, dated as of December 13, 2017 and the Fourth Supplemental Indenture, dated as of May 17, 2018, each between the Company and U.S. Bank, National Association, as trustee. Future sales of the 2021 Notes, 7.50% 2027 Notes, 7.25% 2027 Notes and May 2023 Notes pursuant to the Sales Agreement will depend on a variety of factors including, but not limited to, market conditions, the trading price of the notes and the Company’s capital needs. At September 30, 2018, the Company had an additional $12,997 of Notes, 7.50% 2027 Notes, 7.25% 2027 Notes or May 2023 Notes that may be sold pursuant to the Sales Agreement. There can be no assurance that the Company will be successful in consummating future sales based on prevailing market conditions or in the quantities or at the prices that the Company may deem appropriate. Notes Payable Notes payable include notes payable to a clearing organization for one of the Company’s broker dealers. The notes payable accrue interest at rates set at each anniversary date, ranging from prime rate plus 0.25% to 2.0% (5.25% to 6.50% at September 30, 2018). Interest is payable annually. The principal payments on the notes payable are due annually in the amount of $357 on January 31, $214 on September 30, and $121 on October 31. The notes payable mature at various dates from September 30, 2018 through January 31, 2022. At September 30, 2018 and December 31, 2017, the outstanding balance for the notes payable was $1,671 and $2,243, respectively. Interest expense was $29 and $86 for the three and nine months ended September 30, 2018. Interest expense was $34 during the period from July 3, 2017 (date of acquisition) to September 30, 2017. On April 19, 2018, the Company borrowed $51,020 from GACP II, L.P., a direct lending fund managed by Great American Capital Partners, LLC, a wholly owned subsidiary of the Company. In accordance with the note payable, the Company was advanced $50,000 and the note payable included an origination fee of $1,020 that increased the face value of the note payable to $51,020. Interest accrued at the three-month LIBOR rate plus 9%. The note payable was due in September 2018 and was fully repaid in August 2018. The note was collateralized by the proceeds generated from the joint venture liquidation of inventory and real estate related to a retail liquidation agreement. Interest expense was $1,103 (including amortization of deferred loan fees of $620) and $2,721 (including amortization of deferred loan fees of $1,110) for three and nine months ended September 30, 2018, respectively. |
REVENUE FROM CONTRACTS WITH CUS
REVENUE FROM CONTRACTS WITH CUSTOMERS | 9 Months Ended |
Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE FROM CONTRACTS WITH CUSTOMERS | NOTE 9— REVENUE FROM CONTRACTS WITH CUSTOMERS Revenue from contracts with customers by reportable segment for the three months ended September 30, 2018 is as follows: Three Months Ended September 30, 2018 Reportable Segment Principal Auction and Valuation and Investments - Capital Markets Liquidation Appraisal United Online Total Revenues from contracts with customers: Corporate finance, consulting and investment banking fees $ 35,902 $ — $ — $ — $ 35,902 Wealth and asset management fees 19,171 — — — 19,171 Commissions, fees and reimbursed expenses 10,533 2,399 9,404 — 22,336 Subscription services — — — 9,151 9,151 Service contract revenues — 108 — — 108 Advertising and other — — — 2,276 2,276 Total revenues from contracts with customers 65,606 2,507 9,404 11,427 88,944 Other sources of revenue: Interest income - Securities lending 8,954 — — — 8,954 Trading loss on investments (3,462 ) — — — (3,462 ) Other 5,245 — — — 5,245 Total revenues $ 76,343 $ 2,507 $ 9,404 $ 11,427 $ 99,681 Revenue from contracts with customers by reportable segment for the nine months ended September 30, 2018 is as follows: Nine Months Ended September 30, 2018 Reportable Segment Principal Auction and Valuation and Investments - Capital Markets Liquidation Appraisal United Online Total Revenues from contracts with customers: Corporate finance, consulting and investment banking fees $ 84,927 $ — $ — $ — $ 84,927 Wealth and asset management fees 56,928 — — — 56,928 Commissions, fees and reimbursed expenses 31,546 33,212 27,383 — 92,141 Subscription services — — — 27,335 27,335 Service contract revenues — 11,648 — — 11,648 Advertising and other — — — 6,925 6,925 Total revenues from contracts with customers 173,401 44,860 27,383 34,260 279,904 Other sources of revenue: Interest income - Securities lending 22,836 — — — 22,836 Trading gain on investments 1,449 — — — 1,449 Other 16,771 — — — 16,771 Total revenues $ 214,457 $ 44,860 $ 27,383 $ 34,260 $ 320,960 Revenues are recognized when control of the promised goods or performance obligations for services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for the goods or services. A performance obligation may be satisfied over time or at a point in time. Revenue from a performance obligation satisfied over time is recognized by measuring our progress in satisfying the performance obligation in a manner that depicts the transfer of the goods or services to the customer. Revenue from a performance obligation satisfied at a point in time is recognized at the point in time that we determine the customer obtains control over the promised good or service. The amount of revenue recognized reflects the consideration we expect to be entitled to in exchange for those promised goods or services (i.e., the “transaction price”). In determining the transaction price, we consider multiple factors, including the effects of variable consideration. Variable consideration is included in the transaction price only to the extent it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainties with respect to the amount are resolved. In determining when to include variable consideration in the transaction price, we consider the range of possible outcomes, the predictive value of our past experiences, the time period of when uncertainties expect to be resolved and the amount of consideration that is susceptible to factors outside of our influence, such as market volatility or the judgment and actions of third parties. Revenues by geographic region by segment is included in Note 16 – Business Segments. The following provides detailed information on the recognition of our revenues from contracts with customers: Corporate finance and investment banking fees Wealth and asset management fees Commissions, fees and reimbursed expenses Subscription services Service contract revenues Advertising and other Information on Remaining Performance Obligations and Revenue Recognized from Past Performance We do not disclose information about remaining performance obligations pertaining to contracts that have an original expected duration of one year or less. The transaction price allocated to remaining unsatisfied or partially unsatisfied performance obligations with an original expected duration exceeding one year was not material at September 30, 2018. Corporate finance and investment banking fees and retail liquidation engagement fees that are contingent upon completion of a specific milestone and fees associated with certain distribution services are also excluded as the fees are considered variable and not included in the transaction price at September 30, 2018. Contract Balances The timing of our revenue recognition may differ from the timing of payment by our customers. We record a receivable when revenue is recognized prior to payment and we have an unconditional right to payment. Alternatively, when payment precedes the provision of the related services, we record deferred revenue until the performance obligations are satisfied. Receivables related to revenues from contracts with customers totaled $38,958 and $20,015 at September 30, 2018 and December 31, 2017, respectively. We had no significant impairments related to these receivables during the three and nine months ended September 30, 2018. Our deferred revenue primarily relates to retainer and milestone fees received from corporate finance and investment banking advisory engagements, asset management agreements, valuation and appraisal engagements and subscription services where the performance obligation has not yet been satisfied. Deferred revenue at September 30, 2018 and December 31, 2017 was $3,205 and $3,141, respectively. During the three and nine months ended September 30, 2018, we recognized revenue of $5,423 and $9,889, respectively, that was recorded as deferred revenue at the beginning of the period. Contract Costs Contract costs include: (1) costs to fulfill contracts associated with corporate finance and investment banking engagements are capitalized where the revenue is recognized at a point in time and the costs are determined to be recoverable and (2) costs to fulfill auction and liquidation services contracts where the Company guarantees a minimum recovery value for goods being sold at auction or liquidation where the revenue is recognized over time when the performance obligation is satisfied. At September 30, 2018, capitalized costs to fulfill a contract were $2,387, which is recorded in prepaid expenses and other assets in the condensed consolidated balance sheet. For the three and nine months ended September 30, 2018, we recognized expenses and related capitalized costs to fulfill a contract of $0 and $602, respectively. There were no significant impairment charges recognized in relation to these capitalized costs during the three and nine months ended September 30, 2018. |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 10— INCOME TAXES The Tax Reform Act was enacted on December 22, 2017. The Tax Reform Act reduces the U.S. federal corporate tax rate from 35% to 21%, requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred, provides an exemption from U.S. federal tax for dividends received from foreign subsidiaries, and creates new taxes on certain foreign sourced earnings. As of the completion of these financial statements and related disclosures, we have not completed our accounting for the tax effects of the Tax Reform Act; however, we have made a reasonable estimate of such effects and recorded a provisional tax expense of $13,052, which is included as a component of income tax expense in the fourth quarter of 2017 and is comprised of (a) $12,954 related to the remeasurement of deferred tax assets and liabilities in the United States and (b) $98 related to the transition tax on foreign earnings. This provisional tax expense incorporates assumptions made based upon the Company’s current interpretation of the Tax Reform Act, and may change as we receive additional clarification and implementation guidance and as the interpretation of the Tax Reform Act evolves. In accordance with SEC Staff Accounting Bulletin No. 118, the Company will finalize the accounting for the effects of the Tax Reform Act no later than the fourth quarter of 2018. Future adjustments made to the provisional effects will be reported as a component of income tax expense in the reporting period in which any such adjustments are determined. The Company’s effective income tax rate was a provision of 24.9% and a benefit of 80.5% for the nine months ended September 30, 2018 and 2017, respectively. During the nine months ended September 30, 2017, the Company elected to treat the acquisition of UOL as a taxable business combination for income tax purposes in accordance with Internal Revenue Code Section 338(g) (“IRS Code Section 338(g)”). This resulted in the Company foregoing the income tax attributes of UOL that existed at the acquisition date which included net operating loss carryforwards, capital loss carryforwards and foreign tax credits. The income tax election in accordance with IRS Code Section 338(g) provides the Company with a tax step-up in the basis of the intangible assets and goodwill acquired for tax purposes. In accordance with ASC 740, the impact of the election in accordance with IRS Code Section 338(g) on deferred income taxes resulted in the recording of a tax benefit in the amount of $8,389 during the nine months ended September 30, 2017. The Company establishes a valuation allowance if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Tax benefits of operating loss, capital loss and tax credit carryforwards are evaluated on an ongoing basis, including a review of historical and projected future operating results, the eligible carryforward period, and other circumstances. The Company’s net operating losses are subject to annual limitations in accordance with Internal Revenue Code Section 382. Accordingly, the Company is limited to the amount of net operating loss that may be utilized in future taxable years depending on the Company’s actual taxable income. As of September 30, 2018, the Company believes that the existing net operating loss carryforwards will be utilized in future tax periods before the loss carryforwards expire and it is more-likely-than-not that future taxable earnings will be sufficient to realize its deferred tax assets and has not provided a valuation allowance. The Company believes that it is more likely than not that the Company will not be able to utilize the benefits related to certain state net operating loss and capital loss carryforwards and has provided a full valuation allowance in the amount of $4,694 against these deferred tax assets. The Company files income tax returns in the U.S., various state and local jurisdictions, and certain other foreign jurisdictions. The Company is currently under audit by certain federal, state and local, and foreign tax authorities. The audits are in varying stages of completion. The Company evaluates its tax positions and establishes liabilities for uncertain tax positions that may be challenged by tax authorities. Uncertain tax positions are reviewed on an ongoing basis and are adjusted in light of changing facts and circumstances, including progress of tax audits, case law developments and closing of statutes of limitations. Such adjustments are reflected in the provision for income taxes, as appropriate. The Company is currently open to audit under the statute of limitations by the Internal Revenue Service for the calendar years ended December 31, 2014 to 2017. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | NOTE 11— EARNINGS PER SHARE Basic earnings per share is calculated by dividing net income by the weighted-average number of shares outstanding during the period. Diluted earnings per share is calculated by dividing net income by the weighted-average number of common shares outstanding, after giving effect to all dilutive potential common shares outstanding during the period. Basic common shares outstanding exclude 387,365 common shares in 2018 and 453,365 common shares in 2017 that are held in escrow and subject to forfeiture. The common shares held in escrow includes 387,365 common shares that are subject to forfeiture to indemnify the Company for certain representations and warranties in connection with the acquisition of Wunderlich. and in 2017 excluded The shares that remain in escrow Basic and diluted earnings per share was calculated as follows: Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Net income attributable to B. Riley Financial, Inc. $ 2,814 $ 368 $ 24,314 $ 17,669 Weighted average shares outstanding: Basic 25,968,997 26,059,490 25,856,339 22,180,808 Effect of dilutive potential common shares: Restricted stock units and warrants 705,557 1,193,007 740,087 816,841 Contingently issuable shares 179,707 387,365 179,707 387,365 Diluted 26,854,261 27,639,862 26,776,133 23,385,014 Basic income per share $ 0.11 $ 0.01 $ 0.94 $ 0.80 Diluted income per share $ 0.10 $ 0.01 $ 0.91 $ 0.76 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 12— COMMITMENTS AND CONTINGENCIES Legal Matters The Company is subject to certain legal and other claims that arise in the ordinary course of its business. In particular, the Company and its subsidiaries are named in and subject to various proceedings and claims arising primarily from our securities business activities, including lawsuits, arbitration claims, class actions, and regulatory matters. Some of these claims seek substantial compensatory, punitive, or indeterminate damages. The Company and its subsidiaries are also involved in other reviews, investigations, and proceedings by governmental and self-regulatory organizations regarding our business, which may result in adverse judgments, settlements, fines, penalties, injunctions, and other relief. In view of the number and diversity of claims against our company, the number of jurisdictions in which litigation is pending, and the inherent difficulty of predicting the outcome of litigation and other claims, we cannot state with certainty what the eventual outcome of pending litigation or other claims will be. Notwithstanding this uncertainty, the Company does not believe that the results of these claims are likely to have a material effect on its financial position or results of operations. On January 5, 2017, complaints filed in November 2015 and May 2016 naming MLV & Co. (“MLV”), a broker-dealer subsidiary of FBR, as a defendant in putative class action lawsuits alleging claims under the Securities Act, in connection with the offerings of Miller Energy Resources, Inc. (“Miller”) have been consolidated. The Master Consolidated Complaint, styled Gaynor v. Miller et al., is pending in the United States District Court for the Eastern District of Tennessee, and, like its predecessor complaints, continues to allege claims under Sections 11 and 12 of the Securities Act against nine underwriters for alleged material misrepresentations and omissions in the registration statement and prospectuses issued in connection with six offerings (February 13, 2013; May 8, 2013; June 28, 2013; September 26, 2013; October 17, 2013 (as to MLV only) and August 21, 2014) with an alleged aggregate offering price of approximately $151,000. The plaintiffs seek unspecified compensatory damages and reimbursement of certain costs and expenses. In August 2017, the Court granted Defendant’s Motion to Dismiss on Section 12 claims and found that the plaintiffs had not sufficiently alleged a corrective disclosure prior to August 6, 2015, when an SEC civil action was announced. Defendants’ answer was filed on September 25, 2017. Plaintiffs have filed motions for class certification and to remand the case to state court following a positive ruling in an unrelated case by the U.S. Supreme Court. Although MLV is contractually entitled to be indemnified by Miller in connection with this lawsuit, Miller filed for bankruptcy in October 2015 and this likely will decrease or eliminate the value of the indemnity that MLV receives from Miller. In February 2017, certain former employees filed an arbitration claim with FINRA against WSI alleging misrepresentations in the recruitment of claimants to join WSI. Claimants also allege that WSI failed to support their mortgage trading business resulting in the loss of opportunities during their employment with WSI. Claimants are seeking $10,000 in damages. WSI has counterclaimed alleging that claimants misrepresented their process for doing business, particularly their capital needs, resulting in substantial losses to WSI. WSI believes the claims are meritless and intends to vigorously defend the action. In March 2017, United Online, Inc. received a letter from PeopleConnect, Inc. (formerly, Classmates, Inc.) (“Classmates”) regarding a notice of investigation received from the Consumer Protection Divisions of the District Attorneys’ offices of four California counties (“California DAs”). These entities suggest that Classmates may be in violation of California codes relating to unfair competition, false or deceptive advertising, and auto-renewal practices. Classmates asserts that these claims are indemnifiable claims under the purchase agreement between United Online, Inc. and the buyer of Classmates. A tolling agreement with certain California District Attorneys has been signed and informal discovery and production is in process. At the present time, the financial impact to the Company, if any, cannot be estimated. In July 2017, an arbitration claim was filed with FINRA by Dominick & Dickerman LLC and Michael Campbell against WSI and Gary Wunderlich with respect to the acquisition by Wunderlich Investment Company, Inc. (“WIC”) (the parent corporation of WSI) of certain assets of Dominick & Dominick LLC in 2015. The Claimants allege that respondents overvalued WIC so that the purchase price paid to the Claimants in shares of WIC stock was artificially inflated. The Statement of Claim includes claims for common law fraud, negligent misrepresentation, and breach of contract. Claimants are seeking damages of approximately $8,000 plus unspecified punitive damages. Respondents believe the claims are meritless and intend to vigorously defend the action. In September 2017, Frontier State Bank (“Frontier”) filed a lawsuit against Wunderlich Loan Capital Corp., a subsidiary of WIC (“WLCC”), seeking rescission of the purchase a residential mortgage in the amount of $1,300. Vanguard Funding, LLC (“Vanguard”) sold the mortgage to WLCC who then assigned its rights to Frontier. Shortly after closing, Frontier was advised that the mortgage had been previously pledged to another lender. In the lawsuit against WLCC, it is alleged that WLCC did not deliver the mortgage to Frontier with clear title. In September 2018, the matter was settled and general releases were exchanged. |
SHARE-BASED PAYMENTS
SHARE-BASED PAYMENTS | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
SHARE-BASED PAYMENTS | NOTE 13— SHARE-BASED PAYMENTS (a) Amended and Restated 2009 Stock Incentive Plan During the nine months ended September 30, 2018, the Company granted restricted stock units representing 424,235 shares of common stock with a total fair value of $8,855 to certain employees of the and directors Company under the Company’s Amended and Restated 2009 Stock Incentive Plan (the “Plan”). During the year ended December 31, 2017, the Company granted restricted stock units representing 486,049 shares of common stock with a total fair value of $7,732 to certain employees and directors of the Company under the Plan. Share-based compensation expense for such restricted stock units was $1,714 and $1,410 for the three months ended September 30, 2018 and 2017, respectively, and $4,085 and $3,624 for nine months ended September 30, 2018 and 2017, respectively. The restricted stock units generally vest over a period of one to three years based on continued service. In determining the fair value of restricted stock units on the grant date, the fair value is adjusted for (a) estimated forfeitures, (b) expected dividends based on historical patterns and the Company’s anticipated dividend payments over the expected holding period and (c) the risk-free interest rate based on U.S. Treasuries for a maturity matching the expected holding period. As of September 30, 2018, the expected remaining unrecognized share-based compensation expense of $12,661 will be expensed over a weighted average period of 2.2 years. A summary of equity incentive award activity under the Plan for the nine months ended September 30, 2018 was as follows: Weighted Average Shares Fair Value Nonvested at January 1, 2018 792,264 $ 13.30 Granted 424,235 20.87 Vested (304,599 ) 13.17 Forfeited (9,057 ) 12.49 Nonvested at September 30, 2018 902,843 $ 16.91 The per-share weighted average grant-date fair value of restricted stock units was $20.87 during the nine months ended September 30, 2018. There were 304,599 restricted stock units with a fair value of $4,012 that vested during the nine months ended September 30, 2018 under the Plan. (b) Amended and Restated FBR & Co. 2006 Long-Term Stock Incentive Plan In connection with the acquisition of FBR on June 1, 2017, the equity awards previously granted or available for issuance under the FBR & Co. 2006 Long-Term Stock Incentive Plan (the “FBR Stock Plan”) may be issued under the Plan. During the nine months ended September 30, 2018, the Company granted restricted stock units representing 186,662 shares of common stock with a total grant date fair value of $3,869 under the FBR Stock Plan. During the year ended December 31, 2017, the Company granted restricted stock units representing 871,317 shares of common stock with a total fair value of $14,577 to certain employees under the FBR Stock Plan. Share-based compensation expense was $1,321 and $4,509 for the three and nine months ended September 30, 2018, respectively. Share-based compensation was $1,383 and $1,687 for the three and nine months ended September 30, 2017, respectively. As of September 30, 2018, the expected remaining unrecognized share-based compensation expense of $9,468 will be expensed over a weighted average period of 2.3 years. A summary of equity incentive award activity under the Plan for the nine months ended September 30, 2018 was as follows: Weighted Average Shares Fair Value Nonvested at January 1, 2018 1,066,133 $ 16.15 Granted 186,662 20.73 Vested (347,265 ) 15.33 Forfeited (84,238 ) 15.85 Nonvested at September 30, 2018 821,292 $ 17.57 The per-share weighted average grant-date fair value of restricted stock units was $20.73 during the nine months ended September 30, 2018. There were 347,265 restricted stock units with a fair value of $5,324 that vested during the nine months ended September 30, 2018 under the FBR Stock Plan. |
NET CAPITAL REQUIREMENTS
NET CAPITAL REQUIREMENTS | 9 Months Ended |
Sep. 30, 2018 | |
Brokers and Dealers [Abstract] | |
NET CAPITAL REQUIREMENTS | NOTE 14— NET CAPITAL REQUIREMENTS B. Riley & Co., LLC (“BRC”), B. Riley FBR, MLV and B. Riley Wealth Management (“BRWM”), the Company’s broker-dealer subsidiaries, are registered with the SEC as broker-dealers and are members of the Financial Industry Regulatory Authority, Inc. (“FINRA”). The Company’s broker-dealer subsidiaries are subject to SEC Uniform Net Capital Rule (Rule 15c3-1) which requires the subsidiaries to maintain minimum net capital and that the ratio of aggregate indebtedness to net capital, both as defined, shall not exceed 15 to 1. As such, they are subject to the minimum net capital requirements promulgated by the SEC. As of September 30, 2018, BRC had net capital of $350, which was $100 in excess of its required net capital of $250 (net capital ratio of 3.50 to 1); B. Riley FBR had net capital of $76,053, which was $74,059 in excess of its required net capital of $1,994 (net capital ratio of 1.03 to 1); MLV had net capital of $657, which was $557 in excess of its required net capital of $100 (net capital ratio of 1.18 to 1), and BRWM had net capital of $4,128, which was $3,514 in excess of its required net capital of $614 (net capital ratio of 1.17 to 1). |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 9 Months Ended |
Sep. 30, 2018 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 15— RELATED PARTY TRANSACTIONS At September 30, 2018, amounts due from related parties include $6,807 from GACP I, L.P. (“GACP I”) and $1,943 from GACP II, L.P. (“GACP II”) for management fees, incentive fees and other operating expenses and $1,171 due from CA Global Partners (“CA Global”) for operating expenses related to wholesale and industrial liquidation engagements managed by CA Global on behalf of GA Global Ptrs. At December 31, 2017, amounts due from related parties include $5,585 from GACP I, $52 from GACP II, and $52 from CA Global for management fees, incentive fees and other operating expenses. On April 19, 2018, the Company borrowed $51,020 from GACP II, L.P., a direct lending fund managed by Great American Capital Partners, LLC, a wholly owned subsidiary of the Company. The note was fully repaid as of September 30, 2018. Interest expense was $1,103 (including amortization of deferred loan fees of $620) and $2,721 (including amortization of deferred loan fees $1,110) for three and nine months ended September 30, 2018, respectively. See Note 8 for additional information. |
BUSINESS SEGMENTS
BUSINESS SEGMENTS | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
BUSINESS SEGMENTS | NOTE 16— BUSINESS SEGMENTS The Company’s operating segments reflect the manner in which the business is managed and how the Company allocates resources and assesses performance internally. The Company has several operating subsidiaries through which it delivers specific services. The Company provides investment banking, corporate finance, securities lending, restructuring, consulting, research, sales and trading and wealth management services to corporate, institutional and high net worth clients. The Company also provides auction and liquidation services to help clients dispose of assets that include multi-location retail inventory, wholesale inventory, trade fixtures, machinery and equipment, intellectual property and real property and valuation and appraisal services to clients with independent appraisals in connection with asset based loans, acquisitions, divestitures and other business needs. As a result of the acquisition of UOL on July 1, 2016, the Company provides consumer services and products over the Internet. The Company’s business is classified into the Capital Markets segment, Auction and Liquidation segment, Valuation and Appraisal segment and Principal Investments - United Online segment. These reportable segments are all distinct businesses, each with a different marketing strategy and management structure. The following is a summary of certain financial data for each of the Company’s reportable segments: Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Capital Markets reportable segment: Revenues - Services and fees $ 67,389 $ 56,782 $ 191,621 $ 96,181 Interest income - Securities lending 8,954 6,897 22,836 9,115 Total revenues 76,343 63,679 214,457 105,296 Selling, general, and administrative expenses (57,207 ) (53,955 ) (168,559 ) (87,753 ) Restructuring charge (428 ) (3,322 ) (2,457 ) (7,245 ) Interest expense - Securities lending (6,425 ) (4,950 ) (16,317 ) (6,515 ) Depreciation and amortization (1,309 ) (1,636 ) (4,428 ) (2,167 ) Segment income (loss) 10,974 (184 ) 22,696 1,616 Auction and Liquidation reportable segment: Revenues - Services and fees 2,459 7,376 44,812 43,179 Revenues - Sale of goods 48 1 48 1 Total revenues 2,507 7,377 44,860 43,180 Direct cost of services (838 ) (3,385 ) (12,263 ) (25,482 ) Cost of goods sold (24 ) (2 ) (41 ) (2 ) Selling, general, and administrative expenses (1,289 ) (1,963 ) (7,787 ) (6,562 ) Depreciation and amortization (7 ) (5 ) (23 ) (15 ) Segment income 349 2,022 24,746 11,119 Valuation and Appraisal reportable segment: Revenues - Services and fees 9,404 9,043 27,383 24,799 Direct cost of services (4,067 ) (3,778 ) (12,388 ) (11,031 ) Selling, general, and administrative expenses (2,379 ) (2,253 ) (7,138 ) (6,395 ) Depreciation and amortization (56 ) (43 ) (159 ) (130 ) Segment income 2,902 2,969 7,698 7,243 Principal Investments - United Online segment: Revenues - Services and fees 11,403 12,249 34,170 38,504 Revenues - Sale of goods 24 78 90 220 Total revenues 11,427 12,327 34,260 38,724 Direct cost of services (3,251 ) (2,975 ) (9,082 ) (9,711 ) Cost of goods sold (28 ) (122 ) (101 ) (311 ) Selling, general, and administrative expenses (2,348 ) (2,433 ) (6,321 ) (8,536 ) Depreciation and amortization (1,682 ) (1,703 ) (5,040 ) (5,313 ) Restructuring charge — (150 ) — (633 ) Segment income 4,118 4,944 13,716 14,220 Consolidated operating income from reportable segments 18,343 9,751 68,856 34,198 Corporate and other expenses (including restructuring recovery of $210 during the nine months ended September 30, 2018; and restructuring charge of $1,424 and $3,606 during the three and nine months ended September 30, 2017, respectively. (5,505 ) (8,395 ) (16,938 ) (19,571 ) Interest income 442 76 736 358 Income (loss) on equity investments 828 (157 ) 5,049 (157 ) Interest expense (9,340 ) (2,510 ) (23,926 ) (5,195 ) Income (loss) before income taxes 4,768 (1,235 ) 33,777 9,633 (Provision for) benefit from income taxes (2,046 ) 1,357 (8,412 ) 7,753 Net income 2,722 122 25,365 17,386 Net (loss) income attributable to noncontrolling interests (92 ) (246 ) 1,051 (283 ) Net income attributable to B. Riley Financial, Inc. $ 2,814 $ 368 $ 24,314 $ 17,669 The following table presents revenues by geographical area: Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Revenues: Revenues - Services and fees: North America $ 90,649 $ 85,437 $ 296,718 $ 200,809 Australia — — — 940 Europe 6 13 1,268 914 Total Revenues - Services and fees $ 90,655 $ 85,450 $ 297,986 $ 202,663 Revenues - Sale of goods North America $ 72 $ 79 $ 138 $ 221 Revenues - Interest income - Securities lending: North America $ 8,954 $ 6,897 $ 22,836 $ 9,115 Total Revenues: North America $ 99,675 $ 92,413 $ 319,692 $ 210,145 Australia — — — 940 Europe 6 13 1,268 914 Total Revenues $ 99,681 $ 92,426 $ 320,960 $ 211,999 The following table presents long-lived assets, which consists of property and equipment and other assets, by geographical area: September 30, December 31, 2018 2017 Long-lived Assets - Property and Equipment, net: North America $ 11,143 $ 11,977 Australia — — Europe — — Total $ 11,143 $ 11,977 Segment assets are not reported to, or used by, the Company’s Chief Operating Decision Maker to allocate resources to, or assess performance of, the segments and therefore, total segment assets have not been disclosed. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Principles of Consolidation and Basis of Presentation | (a) Principles of Consolidation and Basis of Presentation The condensed consolidated financial statements include the accounts of B. Riley Financial, Inc. and its wholly-owned and majority-owned subsidiaries. The condensed consolidated financial statements also include the accounts of (a) Great American Global Partners, LLC which is controlled by the Company as a result of its ownership of a 50% member interest, appointment of two of the three executive officers and significant influence over the funding of operations, and (b) GA Retail Investments, L.P. which is controlled by the Company as a result of its ownership of a 50% partnership interest, appointment of executive officers and significant influence over the operations. The condensed consolidated financial statements have been prepared by the Company, without audit, pursuant to interim financial reporting guidelines and the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted pursuant to such rules and regulations. In the opinion of the Company’s management, all adjustments, consisting of only normal and recurring adjustments, necessary for a fair presentation of the financial position and the results of operations for the periods presented have been included. These condensed consolidated financial statements and the accompanying notes should be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, filed with the SEC on March 14, 2018. The results of operations for the nine months ended September 30, 2018 are not necessarily indicative of the operating results to be expected for the full fiscal year or any future periods. |
Use of Estimates | (b) Use of Estimates The preparation of the condensed consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the condensed consolidated financial statements and reported amounts of revenue and expense during the reporting period. Estimates are used when accounting for certain items such as valuation of securities, reserves for accounts receivable and slow moving goods held for sale or auction, the carrying value of intangible assets and goodwill, the fair value of mandatorily redeemable noncontrolling interests, fair value of share-based arrangements, fair value of contingent consideration in business combinations and accounting for income tax valuation allowances. Estimates are based on historical experience, where applicable, and assumptions that management believes are reasonable under the circumstances. Due to the inherent uncertainty involved with estimates, actual results may differ. |
Revenue Recognition | (c) Revenue Recognition On January 1, 2018, we adopted Accounting Standards Codification (“ASC”) 606 – Revenue from Contracts with Customers Revenues are recognized when control of the promised goods or performance obligations for services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for the goods or services. Revenues from contracts with customers in the Capital Markets segment, Auction and Liquidation segment, Valuation and Appraisal segment, and Principal Investments – United Online segment are primarily comprised of the following: Capital Markets Segment Fees from wealth and asset management services consist primarily of investment management fees that are recognized over the period the performance obligation for the services are provided. Investment management fees are primarily comprised of fees for investment management services and are generally based on the dollar amount of the assets being managed. Revenues from sales and trading are recognized when the performance obligation is satisfied and include commissions resulting from equity securities transactions executed as agent or principal and are recorded on a trade date basis and fees paid for equity research. Auction and Liquidation Segment Revenues earned from auction and liquidation services contracts where the Company guarantees a minimum recovery value for goods being sold at auction or liquidation are recognized over time when the performance obligation is satisfied. We generally use the cost-to-cost measure of progress for our contracts because it best depicts the transfer of services to the customer which occurs as we incur costs on our contracts. Under the cost-to-cost measure of progress, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation. Revenues, including estimated fees or profits, are recorded proportionally as costs are incurred. Costs to fulfill the contract include labor and other direct costs related to the contract. Due to the nature of the guarantees and performance obligations under these contracts, the estimation of revenue that is ultimately earned is complex and subject to many variables and requires significant judgment. It is common for these contracts to contain provisions that can either increase or decrease the transaction price upon completion of our performance obligations under the contract. Estimated amounts are included in the transaction price at the most likely amount it is probable that a significant reversal of revenue will not occur. Our estimates of variable consideration and determination of whether or not to include estimated amounts in the transaction price are based on an assessment of our anticipated performance under the contract taking into consideration all historical, current and forecasted information that is reasonably available to us. Costs that directly relate to the contract and expected to be recoverable are capitalized as an asset and included in advances against customer contracts in the accompanying condensed consolidated balance sheets. These costs are amortized as the services are transferred to the customer over the contract period, which generally does not exceed six months, and the expense is recognized a component of direct cost of services. If, during the auction or liquidation sale, the Company determines that the total costs to be incurred on a performance obligation under a contract exceeds the total estimated revenues to be earned, a provision for the entire loss on the performance obligation is recognized in the period the loss is determined. Valuation and Appraisal Segment Principal Investments – United Online Segment Advertising revenues consist primarily of amounts from the Company’s Internet search partner that are generated as a result of users utilizing the partner’s Internet search services and amounts generated from display advertisements. The Company recognizes such advertising revenues in the period in which the advertisement is displayed or, for performance-based arrangements, when the related performance criteria are met. In determining whether an arrangement exists, the Company ensures that a written contract is in place, such as a standard insertion order or a customer-specific agreement. The Company assesses whether performance criteria have been met and whether the transaction price is determinable based on a reconciliation of the performance criteria and the payment terms associated with the transaction. The reconciliation of the performance criteria generally includes a comparison of customer-provided performance data to the contractual performance obligation and to internal or third-party performance data in circumstances where that data is available. Sale of product revenues are derived primarily from the sale of mobile broadband service devices to customers and includes the related shipping and handling fees. Revenues from other sources in the Capital Markets segment is primarily comprised of (i) interest income from loans receivable and securities lending activities, (ii) related net trading gains and losses from market making activities, the commitment of capital to facilitate customer orders, (iii) trading activities from our principal investments in equity and other securities for the Company’s account, and (iv) other income. Interest income from securities lending activities consists of interest income from equity and fixed income securities that are borrowed from one party and loaned to another. The Company maintains relationships with a broad group of banks and broker-dealers to facilitate the sourcing, borrowing and lending of equity and fixed income securities in a “matched book” to limit the Company’s exposure to fluctuations in the market value or securities borrowed and securities loaned. Other revenues includes (i) net trading gains and losses from market making activities in our fixed income group, (ii) carried interest from our asset management recognized as earnings from financial assets within the scope of ASC 323 - Investments - Equity Method and Joint Ventures Revenue from Contracts with Customers Investments - Equity Method and Joint Ventures |
Direct Cost of Services | (d) Direct Cost of Services Direct cost of services relate to service and fee revenues. The costs consist of employee compensation and related payroll benefits, travel expenses, the cost of consultants assigned to revenue-generating activities and direct expenses billable to clients in the Valuation and Appraisal segment. Direct costs of services include participation in profits under collaborative arrangements in which the Company is a majority participant. Direct costs of services also include the cost of consultants and other direct expenses related to auction and liquidation contracts pursuant to commission and fee based arrangements in the Auction and Liquidation segment. Direct cost of services in the Principal Investments - United Online segment include cost of telecommunications and data center costs, personnel and overhead-related costs associated with operating the Company’s networks and data centers, depreciation of network computers and equipment, third party advertising sales commissions, license fees, costs related to providing customer support, costs related to customer billing and processing of customer credit cards and associated bank fees. Direct cost of services does not include an allocation of the Company’s overhead costs. |
Interest Expense - Securities Lending Activities | <tr style="vertical-align: top"><td style="width: 0.35in"><font style="font: 10pt Times New Roman, Times, Serif"><b><i>(e)</i></b></font></td> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><b><i>Interest Expense - Securities Lending Activities</i></b></font></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"><font style="font: 10pt Times New Roman, Times, Serif">Interest expense from securities lending activities is included in operating expenses related to operations in the Capital Markets segment. Interest expense from securities lending activities is incurred from equity and fixed income securities that are loaned to the Company.</font></p>" id="sjs-B8"><table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; margin-bottom: 0pt; margin-top: 0pt; width: 100%"><tr style="vertical-align: top"><td style="width: 0.35in"><font style="font: 10pt Times New Roman, Times, Serif"><b><i>(e)</i></b></font></td> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><b><i>Interest Expense - Securities Lending Activities</i></b></font></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"><font style="font: 10pt Times New Roman, Times, Serif">Interest expense from securities lending activities is included in operating expenses related to operations in the Capital Markets segment. Interest expense from securities lending activities is incurred from equity and fixed income securities that are loaned to the Company.</font></p> |
Concentration of Risk | f) Concentration of Risk Revenues in the Capital Markets, Valuation and Appraisal and Principal Investments – United Online segments are currently primarily generated in the United States. Revenues in the Auction and Liquidation segment are primarily generated in the United States, Australia, Canada and Europe. The Company’s activities in the Auction and Liquidation segment are executed frequently with, and on behalf of, distressed customers and secured creditors. Concentrations of credit risk can be affected by changes in economic, industry, or geographical factors. The Company seeks to control its credit risk and potential risk concentration through risk management activities that limit the Company’s exposure to losses on any one specific liquidation services contract or concentration within any one specific industry. To mitigate the exposure to losses on any one specific liquidation services contract, the Company sometimes conducts operations with third parties through collaborative arrangements. The Company maintains cash in various federally insured banking institutions. The account balances at each institution periodically exceed the Federal Deposit Insurance Corporation’s (“FDIC”) insurance coverage, and as a result, there is a concentration of credit risk related to amounts in excess of FDIC insurance coverage. The Company has not experienced any losses in such accounts. The Company also has substantial cash balances from proceeds received from auctions and liquidation engagements that are distributed to parties in accordance with the collaborative arrangements. |
Advertising Expense | g) Advertising Expenses The Company expenses advertising costs, which consist primarily of costs for printed materials, as incurred. Advertising costs totaled $371 and $183 for the three months ended September 30, 2018 and 2017, respectively, and $1,656 and $1,227 for the nine months ended September 30, 2018 and 2017, respectively. Advertising expense is included as a component of selling, general and administrative expenses in the accompanying condensed consolidated statements of income |
Share-Based Compensation | h) Share-Based Compensation The Company’s share-based payment awards principally consist of grants of restricted stock, restricted stock units and costs associated with the Company’s employee stock purchase plan. In accordance with the applicable accounting guidance, share-based payment awards are classified as either equity or liabilities. For equity-classified awards, the Company measures compensation cost for the grant of membership interests at fair value on the date of grant and recognizes compensation expense in the condensed consolidated statements of income over the requisite service or performance period the award is expected to vest. The fair value of the liability-classified award will be subsequently remeasured at each reporting date through the settlement date. Change in fair value during the requisite service period will be recognized as compensation cost over that period. |
Restructuring Charge | <tr style="vertical-align: top"><td style="width: 0.35in"><font style="font: 10pt Times New Roman, Times, Serif"><b><i>(i)</i></b></font></td> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><b><i>Restructuring Charge </i></b></font></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"><font style="font: 10pt Times New Roman, Times, Serif">The Company recorded a restructuring charge in the amount of $428 and $4,896 for the three months ended September 30, 2018 and 2017, respectively, and $2,247 and $11,484, for the nine months ended September 30, 2018 and 2017, respectively.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"><font style="font: 10pt Times New Roman, Times, Serif">The restructuring charge of $428 and $2,247 during the three and nine months ended September 30, 2018, respectively, was primarily related to severance costs and lease loss accruals for the planned consolidation of office space related to operations in the Capital Markets segment.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"><font style="font: 10pt Times New Roman, Times, Serif">The restructuring charge of $4,896 and $11,484 during the three and nine months ended September 30, 2017, respectively, was primarily related to costs savings measures taking into account the planned synergies as a result of the acquisitions of FBR & Co. (“FBR”) and Wunderlich Investment Company, Inc. (“Wunderlich”), which included a reduction in workforce for some of the corporate executives of FBR and Wunderlich and a restructuring to integrate FBR’s and Wunderlich’s operations with the Company’s operations in the Capital Markets segment.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"><font style="font: 10pt Times New Roman, Times, Serif">The following table summarizes the changes in accrued restructuring charge during the three and nine months ended September 30, 2018 and 2017:</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p> <table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; margin-left: 0.25in; width: 92%"> <tr style="vertical-align: bottom"> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td colspan="6" style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Three Months Ended</b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="6" style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Nine Months Ended</b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td></tr> <tr style="vertical-align: bottom"> <td><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="6" style="border-bottom: black 1pt solid; font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>September 30,</b></font></td> <td style="font-weight: bold; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="6" style="border-bottom: black 1pt solid; font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>September 30,</b></font></td> <td style="font-weight: bold; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom"> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="font-weight: bold; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td colspan="2" style="border-bottom: black 1pt solid; font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">2018</font></td> <td style="font-weight: bold; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="font-weight: bold; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td colspan="2" style="border-bottom: black 1pt solid; font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">2017</font></td> <td style="font-weight: bold; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="font-weight: bold; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td colspan="2" style="border-bottom: black 1pt solid; font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">2018</font></td> <td style="font-weight: bold; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="font-weight: bold; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td colspan="2" style="border-bottom: black 1pt solid; font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">2017</font></td> <td style="font-weight: bold; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 48%"><font style="font: 10pt Times New Roman, Times, Serif">Balance, beginning of period</font></td> <td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 10%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">1,827</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="width: 10%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">3,287</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="width: 10%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">2,600</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="width: 10%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">694</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: left; padding-left: 0.125in"><font style="font: 10pt Times New Roman, Times, Serif">Restructuring charge</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">428</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">4,896</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">2,247</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">11,484</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-left: 0.125in"><font style="font: 10pt Times New Roman, Times, Serif">Cash paid</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(504</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(3,092</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(2,954</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(4,880</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-bottom: 1pt; text-align: left; padding-left: 0.125in"><font style="font: 10pt Times New Roman, Times, Serif">Non-cash items</font></td> <td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="border-bottom: black 1pt solid; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="border-bottom: black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(1</font></td> <td style="padding-bottom: 1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td> <td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="border-bottom: black 1pt solid; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="border-bottom: black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(1,732</font></td> <td style="padding-bottom: 1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td> <td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="border-bottom: black 1pt solid; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="border-bottom: black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(143</font></td> <td style="padding-bottom: 1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td> <td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="border-bottom: black 1pt solid; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="border-bottom: black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(3,939</font></td> <td style="padding-bottom: 1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt; padding-left: 0.125in"><font style="font: 10pt Times New Roman, Times, Serif">Balance, end of period</font></td> <td style="padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="border-bottom: black 2.5pt double; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.5pt double; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">1,750</font></td> <td style="padding-bottom: 2.5pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="border-bottom: black 2.5pt double; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.5pt double; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">3,359</font></td> <td style="padding-bottom: 2.5pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="border-bottom: black 2.5pt double; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.5pt double; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">1,750</font></td> <td style="padding-bottom: 2.5pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="border-bottom: black 2.5pt double; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.5pt double; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">3,359</font></td> <td style="padding-bottom: 2.5pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; text-align: left; margin-top: 0; margin-right: 0; margin-bottom: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p> <p style="font: 10pt Times New Roman, Times, Serif; text-align: left; margin-top: 0; margin-right: 0; margin-bottom: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"><font style="font: 10pt Times New Roman, Times, Serif">The following table summarizes the restructuring activities during the three months ended September 30, 2018 and 2017:</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p> <table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; margin-left: 0.25in; width: 97%"> <tr style="vertical-align: bottom"> <td style="padding-left: 8.65pt; text-indent: -8.65pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="font-weight: bold; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td colspan="30" style="border-bottom: black 1pt solid; font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Three Months Ended September 30,</b></font></td> <td style="font-weight: bold; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td></tr> <tr style="vertical-align: bottom"> <td style="padding-left: 8.65pt; text-indent: -8.65pt"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="14" style="border-bottom: black 1pt solid; font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>2018</b></font></td> <td style="font-weight: bold; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="14" style="border-bottom: black 1pt solid; font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>2017</b></font></td> <td style="font-weight: bold; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td></tr> <tr style="vertical-align: bottom"> <td style="padding-left: 8.65pt; text-indent: -8.65pt"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Principal</b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Principal</b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td></tr> <tr style="vertical-align: bottom"> <td style="padding-left: 8.65pt; text-indent: -8.65pt"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Investments -</b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Investments -</b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td></tr> <tr style="vertical-align: bottom"> <td style="padding-left: 8.65pt; text-indent: -8.65pt"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Capital</b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>United</b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Capital</b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>United</b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font>&" id="sjs-B12"><table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; margin-bottom: 0pt; margin-top: 0pt; width: 100%"><tr style="vertical-align: top"><td style="width: 0.35in"><font style="font: 10pt Times New Roman, Times, Serif"><b><i>(i)</i></b></font></td> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><b><i>Restructuring Charge </i></b></font></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"><font style="font: 10pt Times New Roman, Times, Serif">The Company recorded a restructuring charge in the amount of $428 and $4,896 for the three months ended September 30, 2018 and 2017, respectively, and $2,247 and $11,484, for the nine months ended September 30, 2018 and 2017, respectively.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"><font style="font: 10pt Times New Roman, Times, Serif">The restructuring charge of $428 and $2,247 during the three and nine months ended September 30, 2018, respectively, was primarily related to severance costs and lease loss accruals for the planned consolidation of office space related to operations in the Capital Markets segment.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"><font style="font: 10pt Times New Roman, Times, Serif">The restructuring charge of $4,896 and $11,484 during the three and nine months ended September 30, 2017, respectively, was primarily related to costs savings measures taking into account the planned synergies as a result of the acquisitions of FBR & Co. (“FBR”) and Wunderlich Investment Company, Inc. (“Wunderlich”), which included a reduction in workforce for some of the corporate executives of FBR and Wunderlich and a restructuring to integrate FBR’s and Wunderlich’s operations with the Company’s operations in the Capital Markets segment.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"><font style="font: 10pt Times New Roman, Times, Serif">The following table summarizes the changes in accrued restructuring charge during the three and nine months ended September 30, 2018 and 2017:</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p> <table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; margin-left: 0.25in; width: 92%"> <tr style="vertical-align: bottom"> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td colspan="6" style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Three Months Ended</b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="6" style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Nine Months Ended</b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td></tr> <tr style="vertical-align: bottom"> <td><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="6" style="border-bottom: black 1pt solid; font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>September 30,</b></font></td> <td style="font-weight: bold; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="6" style="border-bottom: black 1pt solid; font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>September 30,</b></font></td> <td style="font-weight: bold; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom"> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="font-weight: bold; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td colspan="2" style="border-bottom: black 1pt solid; font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">2018</font></td> <td style="font-weight: bold; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="font-weight: bold; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td colspan="2" style="border-bottom: black 1pt solid; font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">2017</font></td> <td style="font-weight: bold; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="font-weight: bold; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td colspan="2" style="border-bottom: black 1pt solid; font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">2018</font></td> <td style="font-weight: bold; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="font-weight: bold; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td colspan="2" style="border-bottom: black 1pt solid; font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif">2017</font></td> <td style="font-weight: bold; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="width: 48%"><font style="font: 10pt Times New Roman, Times, Serif">Balance, beginning of period</font></td> <td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 10%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">1,827</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="width: 10%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">3,287</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="width: 10%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">2,600</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="width: 10%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">694</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: left; padding-left: 0.125in"><font style="font: 10pt Times New Roman, Times, Serif">Restructuring charge</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">428</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">4,896</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">2,247</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">11,484</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-left: 0.125in"><font style="font: 10pt Times New Roman, Times, Serif">Cash paid</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(504</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(3,092</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(2,954</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(4,880</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="padding-bottom: 1pt; text-align: left; padding-left: 0.125in"><font style="font: 10pt Times New Roman, Times, Serif">Non-cash items</font></td> <td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="border-bottom: black 1pt solid; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="border-bottom: black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(1</font></td> <td style="padding-bottom: 1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td> <td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="border-bottom: black 1pt solid; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="border-bottom: black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(1,732</font></td> <td style="padding-bottom: 1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td> <td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="border-bottom: black 1pt solid; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="border-bottom: black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(143</font></td> <td style="padding-bottom: 1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td> <td style="padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="border-bottom: black 1pt solid; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="border-bottom: black 1pt solid; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">(3,939</font></td> <td style="padding-bottom: 1pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">)</font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="padding-bottom: 2.5pt; padding-left: 0.125in"><font style="font: 10pt Times New Roman, Times, Serif">Balance, end of period</font></td> <td style="padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="border-bottom: black 2.5pt double; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.5pt double; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">1,750</font></td> <td style="padding-bottom: 2.5pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="border-bottom: black 2.5pt double; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.5pt double; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">3,359</font></td> <td style="padding-bottom: 2.5pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="border-bottom: black 2.5pt double; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.5pt double; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">1,750</font></td> <td style="padding-bottom: 2.5pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="padding-bottom: 2.5pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="border-bottom: black 2.5pt double; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="border-bottom: black 2.5pt double; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">3,359</font></td> <td style="padding-bottom: 2.5pt; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; text-align: left; margin-top: 0; margin-right: 0; margin-bottom: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p> <p style="font: 10pt Times New Roman, Times, Serif; text-align: left; margin-top: 0; margin-right: 0; margin-bottom: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"><font style="font: 10pt Times New Roman, Times, Serif">The following table summarizes the restructuring activities during the three months ended September 30, 2018 and 2017:</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p> <table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; margin-left: 0.25in; width: 97%"> <tr style="vertical-align: bottom"> <td style="padding-left: 8.65pt; text-indent: -8.65pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="font-weight: bold; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td colspan="30" style="border-bottom: black 1pt solid; font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Three Months Ended September 30,</b></font></td> <td style="font-weight: bold; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td></tr> <tr style="vertical-align: bottom"> <td style="padding-left: 8.65pt; text-indent: -8.65pt"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="14" style="border-bottom: black 1pt solid; font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>2018</b></font></td> <td style="font-weight: bold; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="14" style="border-bottom: black 1pt solid; font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>2017</b></font></td> <td style="font-weight: bold; padding-bottom: 1pt"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td></tr> <tr style="vertical-align: bottom"> <td style="padding-left: 8.65pt; text-indent: -8.65pt"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Principal</b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Principal</b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td></tr> <tr style="vertical-align: bottom"> <td style="padding-left: 8.65pt; text-indent: -8.65pt"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Investments -</b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Investments -</b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td></tr> <tr style="vertical-align: bottom"> <td style="padding-left: 8.65pt; text-indent: -8.65pt"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Capital</b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>United</b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Capital</b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>United</b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font>& |
Income Taxes | (j) Income Taxes The Company recognizes deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the condensed consolidated financial statements or tax returns. Deferred tax liabilities and assets are determined based on the difference between the financial statement basis and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company estimates the degree to which tax assets and credit carryforwards will result in a benefit based on expected profitability by tax jurisdiction. A valuation allowance for such tax assets and loss carryforwards is provided when it is determined to be more likely than not that the benefit of such deferred tax asset will not be realized in future periods. Tax benefits of operating loss carryforwards are evaluated on an ongoing basis, including a review of historical and projected future operating results, the eligible carryforward period, and other circumstances. If it becomes more likely than not that a tax asset will be used, the related valuation allowance on such assets would be reduced. The Company recognizes tax benefits from uncertain tax positions only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. Once this threshold has been met, the Company’s measurement of its expected tax benefits is recognized in its financial statements. The Company accrues interest on unrecognized tax benefits as a component of income tax expense. Penalties, if incurred, would be recognized as a component of income tax expense. The Tax Cuts and Jobs Act (the “Tax Reform Act”) was enacted on December 22, 2017. The Tax Reform Act reduces the U.S. federal corporate tax rate from 35% to 21%, requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred, provides an exemption from U.S. federal tax for dividends received from foreign subsidiaries, and creates new taxes on certain foreign sourced earnings. As of the completion of these financial statements and related disclosures, we have not completed our accounting for the tax effects of the Tax Reform Act; however, as described below, we have made a reasonable estimate of such effects and recorded a provisional tax expense of $13,052, which is included as a component of income tax expense in the fourth quarter of 2017. This provisional tax expense incorporates assumptions made based upon the Company’s current interpretation of the Tax Reform Act, and may change as we receive additional clarification and implementation guidance and as the interpretation of the Tax Reform Act evolves. In accordance with SEC Staff Accounting Bulletin No. 118, the Company will finalize the accounting for the effects of the Tax Reform Act no later than the fourth quarter of 2018. Future adjustments made to the provisional effects will be reported as a component of income tax expense from continuing operations in the reporting period in which any such adjustments are determined. |
Cash and Cash Equivalents | (k) Cash and Cash Equivalents The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. |
Restricted Cash | (l) Restricted Cash As of September 30, 2018, restricted cash balance of $468 is cash collateral for one of our telecommunication suppliers. As of December 31, 2017, restricted cash balance of $19,711 included $19,197 of cash collateral related to a retail liquidation engagement and $514 cash segregated in a special bank account for the benefit of customers related to our broker dealer subsidiary and collateral for one of our telecommunication suppliers. |
Securities Borrowed and Securities Loaned | <tr style="vertical-align: top"><td style="width: 0.35in"><font style="font: 10pt Times New Roman, Times, Serif"><b><i>(m)</i></b></font></td> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><b><i>Securities Borrowed and Securities Loaned</i></b></font></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"><font style="font: 10pt Times New Roman, Times, Serif">Securities borrowed and securities loaned are recorded based upon the amount of cash advanced or received. Securities borrowed transactions facilitate the settlement process and require the Company to deposit cash or other collateral with the lender. With respect to securities loaned, the Company receives collateral in the form of cash. The amount of collateral required to be deposited for securities borrowed, or received for securities loaned, is an amount generally in excess of the market value of the applicable securities borrowed or loaned. The Company monitors the market value of the securities borrowed and loaned on a daily basis, with additional collateral obtained, or excess collateral recalled, when deemed appropriate.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"><font style="font: 10pt Times New Roman, Times, Serif">The Company accounts for securities lending transactions in accordance with ASC <i>“Topic 210: Balance Sheet,” </i>which requires companies to report disclosures of offsetting assets and liabilities. The Company does not net securities borrowed and securities loaned and these items are presented on a gross basis in the condensed consolidated balance sheets.</font></p>" id="sjs-B16"><table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; margin-bottom: 0pt; margin-top: 0pt; width: 100%"><tr style="vertical-align: top"><td style="width: 0.35in"><font style="font: 10pt Times New Roman, Times, Serif"><b><i>(m)</i></b></font></td> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><b><i>Securities Borrowed and Securities Loaned</i></b></font></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"><font style="font: 10pt Times New Roman, Times, Serif">Securities borrowed and securities loaned are recorded based upon the amount of cash advanced or received. Securities borrowed transactions facilitate the settlement process and require the Company to deposit cash or other collateral with the lender. With respect to securities loaned, the Company receives collateral in the form of cash. The amount of collateral required to be deposited for securities borrowed, or received for securities loaned, is an amount generally in excess of the market value of the applicable securities borrowed or loaned. The Company monitors the market value of the securities borrowed and loaned on a daily basis, with additional collateral obtained, or excess collateral recalled, when deemed appropriate.</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"><font style="font: 10pt Times New Roman, Times, Serif">The Company accounts for securities lending transactions in accordance with ASC <i>“Topic 210: Balance Sheet,” </i>which requires companies to report disclosures of offsetting assets and liabilities. The Company does not net securities borrowed and securities loaned and these items are presented on a gross basis in the condensed consolidated balance sheets.</font></p> |
Due from/to Brokers, Dealers, and Clearing Organizations | <tr style="vertical-align: top"><td style="width: 0.35in"><font style="font: 10pt Times New Roman, Times, Serif"><b><i>(n)</i></b></font></td> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><b><i>Due from/to Brokers, Dealers, and Clearing Organizations</i></b></font></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"><font style="font: 10pt Times New Roman, Times, Serif">The Company clears all of its proprietary and customer transactions through other broker-dealers on a fully disclosed basis. The amount receivable from or payable to the clearing brokers represents the net of proceeds from unsettled securities sold, the Company’s clearing deposit and amounts receivable for commissions less amounts payable for unsettled securities purchased by the Company and amounts payable for clearing costs and other settlement charges. This amount also includes the cash collateral received for securities loaned less cash collateral for securities borrowed. Any amounts payable would be fully collateralized by all of the securities owned by the Company and held on deposit at the clearing broker.</font></p>" id="sjs-B17"><table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; margin-bottom: 0pt; margin-top: 0pt; width: 100%"><tr style="vertical-align: top"><td style="width: 0.35in"><font style="font: 10pt Times New Roman, Times, Serif"><b><i>(n)</i></b></font></td> <td style="text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"><b><i>Due from/to Brokers, Dealers, and Clearing Organizations</i></b></font></td></tr> </table> <p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"><font style="font: 10pt Times New Roman, Times, Serif">The Company clears all of its proprietary and customer transactions through other broker-dealers on a fully disclosed basis. The amount receivable from or payable to the clearing brokers represents the net of proceeds from unsettled securities sold, the Company’s clearing deposit and amounts receivable for commissions less amounts payable for unsettled securities purchased by the Company and amounts payable for clearing costs and other settlement charges. This amount also includes the cash collateral received for securities loaned less cash collateral for securities borrowed. Any amounts payable would be fully collateralized by all of the securities owned by the Company and held on deposit at the clearing broker.</font></p> |
Accounts Receivable | (o) Accounts Receivable Accounts receivable represents amounts due from the Company’s Auction and Liquidation, Valuation and Appraisal, Capital Markets and Principal Investments - United Online segment customers. The Company maintains an allowance for doubtful accounts for estimated losses inherent in its accounts receivable portfolio. In establishing the required allowance, management utilizes a specific customer identification methodology. Management also considers historical losses adjusted for current market conditions and the customers’ financial condition and the current receivables aging and current payment patterns. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company does not have any off-balance sheet credit exposure related to its customers. Bad debt expense and changes in the allowance for doubtful accounts for the three and nine months ended September 30, 2018 and 2017 are included in Note 5. |
Advances Against Customer Contracts | (p) Advances Against Customer Contracts Advances against customer contracts represent advances of contractually reimbursable funds incurred prior to, and during the term of the auction and liquidation services contract. On April 18, 2018, the Company entered into an agency agreement to participate in the right to liquidate certain assets of The Bon-Ton Stores, Inc. (the “Agency Agreement”). There are three parties to the Agency Agreement which were granted the right to act as the exclusive agent to conduct the sale of substantially all of the assets of The Bon-Ton Stores, Inc. (the “Bon-Ton Transaction”). The Company initially advanced $407,426 in connection with Agency Agreement. As of September 30, 2018, $21,405 remained outstanding and is included in the advances against customer contracts. Management expects the outstanding advance continue to be repaid from proceeds generated from the liquidation of the assets related to the Bon-Ton Transaction. |
Loans Receivable | q) Loans Receivable Loans are measured at historical cost and reported at their outstanding principal balances net of any unearned income, charge-offs, unamortized deferred fees and costs on originated loans, and for purchased loans, net of any unamortized premiums or discounts. Loan origination fees and certain direct origination costs are deferred and recognized as adjustments to interest income over the lives of the related loans. Unearned income, discounts and premiums are amortized to interest income using a level yield methodology. Loans receivable at September 30, 2018, consists of one loan in the amount of $15,000 that was fully repaid in October 2018 and the other loan in the amount of $22,147 which is due in May 2020. |
Property and Equipment | (r) Property and Equipment Property and equipment are stated at cost. Depreciation and amortization is computed using the straight-line method over the estimated useful lives of the assets. Property and equipment held under capital leases are amortized on a straight-line basis over the shorter of the lease term or estimated useful life of the asset. Depreciation and amortization expense on property and equipment was $1,005 and $1,243 for the three months ended September 30, 2018 and 2017, respectively, and $3,369 and $2,458 for the nine months ended September 30, 2018 and 2017, respectively. |
Securities Owned and Securities Sold Not Yet Purchased | s) Securities Owned and Securities Sold Not Yet Purchased Securities owned consist of marketable securities and investments in partnership interests and other securities recorded at fair value. Securities sold, but not yet purchased represents obligations of the Company to deliver the specified security at the contracted price and thereby create a liability to purchase the security in the market at prevailing prices. Changes in the value of these securities are reflected currently in the results of operations. As of September 30, 2018 and December 31, 2017, the Company’s securities and other investments owned and securities sold not yet purchased measured at fair value consisted of the following securities and investments: September 30, December 31, 2018 2017 Securities and other investments owned: Common stocks and warrants $ 106,317 $ 67,306 Corporate bonds 18,909 6,539 Fixed income securities 4,467 2,329 Loans receivable 36,587 33,713 Partnership interests and other 56,241 35,473 $ 222,521 $ 145,360 Securities sold not yet purchased: Common stocks $ 47,929 $ 19,145 Corporate bonds 6,381 1,175 Fixed income securities 598 699 Partnership interests and other 4,764 7,272 $ 59,672 $ 28,291 |
Fair Value Measurements | (t) Fair Value Measurements The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market. In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) for identical instruments that are highly liquid, observable and actively traded in over-the-counter markets. Fair values determined by Level 2 inputs utilize inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-derived valuations whose inputs are observable and can be corroborated by market data. Level 3 inputs are unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability. The Company’s securities and other investments owned and securities sold and not yet purchased are comprised of common and preferred stocks and warrants, corporate bonds, loans receivable and investments in partnerships. Investments in common stocks that are based on quoted prices in active markets are included in Level 1 of the fair value hierarchy. The Company also holds nonpublic common and preferred stocks and warrants for which there is little or no public market and fair value is determined by management on a consistent basis. For investments where little or no public market exists, management’s determination of fair value is based on the best available information which may incorporate management’s own assumptions and involves a significant degree of judgment, taking into consideration various factors including earnings history, financial condition, recent sales prices of the issuer’s securities and liquidity risks. These investments are included in Level 3 of the fair value hierarchy. Investments in partnership interests include investments in private equity partnerships that primarily invest in equity securities, bonds, and direct lending funds. The Company’s partnership interests are valued based on the Company’s proportionate share of the net assets of the partnership which is derived from the most recent statements received from the general partner which are included in Level 3 of the fair value hierarchy. The Company also invests in certain proprietary investment funds that are valued at net asset value (“NAV”) determined by the fund administrator. The underlying securities held by these investment companies are primarily corporate and asset-backed fixed income securities and restrictions exist on the redemption of amounts invested by the Company. As a practical expedient, the Company relies on the NAV of these investments as their fair value. The NAVs that have been provided by the fund administrators are derived from the fair values of the underlying investments as of the reporting date. In accordance with ASC “Topic 820: Fair Value Measurements,” The fair value of mandatorily redeemable noncontrolling interests is determined based on the issuance of similar interests for cash, references to industry comparables, and relied, in part, on information obtained from appraisal reports and internal valuation models. The following tables present information on the financial assets and liabilities measured and recorded at fair value on a recurring basis as of September 30, 2018 and December 31, 2017: Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis at September 30, 2018 Using Quoted prices in Other Significant Fair value at active markets for observable unobservable September 30, identical assets inputs inputs 2018 (Level 1) (Level 2) (Level 3) Assets: Securities and other investments owned: Common stocks and warrants $ 106,317 $ 72,153 $ 25,207 $ 8,957 Corporate bonds 18,909 — 18,909 — Fixed income securities 4,467 — 4,467 — Loans receivable 36,587 — — 36,587 Partnership interests and other 54,114 1,280 10 52,824 Total assets measured at fair value $ 220,394 $ 73,433 $ 48,593 $ 98,368 Liabilities: Securities sold not yet purchased: Common stocks $ 47,929 $ 47,929 $ — $ — Corporate bonds 6,381 — 6,381 Fixed income securities 598 — 598 — Partnership interests and other 4,764 4,764 — — Total securities sold not yet purchased 59,672 52,693 6,979 — Mandatorily redeemable noncontrolling interests issued after November 5, 2003 4,409 — — 4,409 Total liabilities measured at fair value $ 64,081 $ 52,693 $ 6,979 $ 4,409 Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis at December 31, 2017 Using Quoted prices in Other Significant Fair value at active markets for observable unobservable December 31, identical assets inputs inputs 2017 (Level 1) (Level 2) (Level 3) Assets: Securities and other investments owned: Common stocks and warrants $ 67,306 $ 38,960 $ — $ 28,346 Corporate bonds 6,539 — 6,539 — Fixed income securities 2,329 — 2,329 — Loans receivable 33,713 — — 33,713 Partnership interests and other 31,883 686 5,093 26,104 Total assets measured at fair value $ 141,770 $ 39,646 $ 13,961 $ 88,163 Liabilities: Securities sold not yet purchased: Common stocks $ 19,145 $ 19,145 $ — $ — Corporate bonds 1,175 — 1,175 — Fixed income securities 699 — 699 — Partnership interests and other 7,272 7,272 — — Total securities sold not yet purchased 28,291 26,417 1,874 — Mandatorily redeemable noncontrolling interests issued after November 5, 2003 4,478 — — 4,478 Total liabilities measured at fair value $ 32,769 $ 26,417 $ 1,874 $ 4,478 As of September 30, 2018, securities and other investments owned included $2,127 of investment funds valued at NAV per share as a practical expedient. As such, total securities and other investments owned of $222,521 in the condensed consolidated balance sheets at September 30, 2018 included investments in investment funds of $2,127 and securities and other investments owned in the amount of $220,394 as outlined in the fair value table above. As of December 31, 2017, securities and other investments owned included $3,590 of investment funds valued at NAV per share as a practical expedient. As such, total securities and other investments owned of $145,360 in the condensed consolidated balance sheets at December 31, 2017 included investments in investment funds of $3,590 and securities and other investments owned in the amount of $141,770 as outlined in the fair value table above. As of September 30, 2018 and December 31, 2017, financial assets measured and reported at fair value on a recurring basis and classified within Level 3 were $98,368 and $88,163, respectively, or 5.1% and 6.4%, respectively, of the Company’s total assets. In determining the fair value for these Level 3 financial assets, the Company analyzes various financial, performance and market factors to estimate the value, including where applicable, over-the-counter market trading activity. The following table summarizes the significant unobservable inputs in the fair value measurement of level 3 financial assets and liabilities by category of investment and valuation technique as of September 30, 2018: Fair value at September 30, Weighted 2018 Valuation Technique Unobservable Input Range Average Assets: Common stocks and warrants $ 8,957 Market approach Over-the-counter trading activity $10.00-$10.50/share $ 10.29 Market approach Market price of related security $0.61/share $ 0.61 Pending transaction Discount 50% 50% Loans receivable 36,587 Market approach Revenue multiple 1.4x 1.4x Partnership interests and other 52,824 Market approach Revenue multiple 1.4x 1.4x Total level 3 assets measured at fair value $ 98,368 Liabilities: Mandatorily redeemable noncontrolling interests issued after November 5, 2003 $ 4,409 Market approach Operating income multiple 6.0x 6.0x The changes in Level 3 fair value hierarchy during the nine months ended September 30, 2018 and 2017 are as follows: Level 3 Level 3 Changes During the Period Level 3 Balance at Fair Relating to Purchases, Transfer in Balance at Beginning of Value Undistributed Sales and and/or out End of Year Adjustments Earnings Settlements of Level 3 Period Nine Months Ended September 30, 2018 Common stocks and warrants $ 28,346 $ (3,247 ) $ 578 $ 4,250 $ (20,970 ) $ 8,957 Loans receivable 33,713 (11 ) 100 2,785 — 36,587 Partnership interests and other 26,104 1,411 (2,735 ) 28,044 — 52,824 Mandatorily redeemable noncontrolling interests issued after November 5, 2003 4,478 — (69 ) — — 4,409 Nine Months Ended September 30, 2017 Common stocks and warrants $ 299 $ (463 ) $ — $ 10,146 $ — $ 9,982 Corporate bonds 160 — — — (160 ) — Loans receivable — 1,375 — 25,493 — 26,868 Partnership interests and other 13,426 2,820 — (4,390 ) — 11,856 Mandatorily redeemable noncontrolling interests issued after November 5, 2003 3,214 9,000 (190 ) — 806 12,830 Contingent consideration 1,242 8 — (1,250 ) — — The fair value adjustment for contingent consideration of $8 represents imputed interest for the nine months ended September 30, 2017. During the second quarter of 2017, the Company had a triggering event for the mandatorily redeemable noncontrolling interests that resulted in a fair value adjustment of $6,250 of the total fair value adjustment of $9,000 for the nine months ended September 30, 2017. In connection with this event, the Company received proceeds of $6,000 from key man life insurance. These amounts have been recorded in the condensed consolidated statements of income in selling, general and administrative expenses in the Corporate and Other segment. The amount reported in the table above also for the nine months ended September 30, 2018 and 2017 includes the amount of undistributed earnings attributable to the noncontrolling interests that is distributed on a quarterly basis. The carrying amounts reported in the condensed consolidated financial statements for cash and cash equivalents, restricted cash, accounts receivable, accounts payable and accrued expenses and other liabilities approximate fair value based on the short-term maturity of these instruments. The carrying amount of the senior notes payable approximates fair value because the contractual interest rates or effective yields of such instruments are consistent with current market rates of interest for instruments of comparable credit risk. During the nine months ended September 30, 2018 and 2017, there were no assets or liabilities measured at fair value on a non-recurring basis. |
Derivative and Foreign Currency Translation | (u) Derivative and Foreign Currency Translation The Company periodically uses derivative instruments, which primarily consist of the purchase of forward exchange contracts, for certain auction and liquidation engagements with operations outside the United States. During the nine months ended September 30, 2018, the Company’s use of derivatives consisted of the purchase of forward exchange contracts (a) in the amount of $54,406 Canadian dollars that were settled during the first and second quarter of 2018 and (b) $1,500 Euro’s that was settled in March 2018. During the nine months ended September 30, 2017, the Company’s use of derivatives consisted of the purchase of forward exchange contracts in the amount of $25,000 Australian dollars that was settled on January 31, 2017. The forward exchange contract was entered into to improve the predictability of cash flows related to a retail store liquidation engagement that was completed in December 2016. The net loss from forward exchange contracts was $33 during the three months ended September 30, 2017 and net loss from forward exchange contracts was $91 and $103 during the nine months ended September 30, 2018 and 2017, respectively. This amount is reported as a component of selling, general and administrative expenses in the condensed consolidated statements of income. The Company transacts business in various foreign currencies. In countries where the functional currency of the underlying operations has been determined to be the local country’s currency, revenues and expenses of operations outside the United States are translated into United States dollars using average exchange rates while assets and liabilities of operations outside the United States are translated into United States dollars using period-end exchange rates. The effects of foreign currency translation adjustments are included in stockholders’ equity as a component of accumulated other comprehensive loss in the accompanying condensed consolidated balance sheets. Transaction losses were $51 and $389 during the three months ended September 30, 2018 and 2017, respectively. Transactions gains were $843 during the nine months ended September 30, 2018 compared to transaction losses of $919 during the same 2017 period. These amounts are included in selling, general and administrative expenses in our condensed consolidated statements of income. |
Common Stock Warrants | (v) Common Stock Warrants The Company issued 821,816 warrants to purchase common stock of the Company in connection with the acquisition of Wunderlich on July 3, 2017. The common stock warrants entitle the holders of the warrants to acquire shares of the Company’s common stock from the Company at a price of $17.50 per share (the “Exercise Price”), subject to, among other matters, the proper completion of an exercise notice and payment. The Exercise Price and the number of shares of Company common stock issuable upon exercise are subject to customary anti-dilution and adjustment provisions, which include stock splits, subdivisions or reclassifications of the Company’s common stock. The common stock warrants expire on July 3, 2022. |
Equity Investment | w) Equity Investment At December 31, 2017, the Company had a loan receivable from bebe stores, inc. (“bebe”) with a fair value of $16,867 included in securities and other investments owned. On January 12, 2018, the loan receivable in the amount of $16,867 plus accrued interest of $51 was converted into 2,819,528 shares of common stock of bebe, representing a conversion price at $6.00 per share. On January 12, 2018, the Company also purchased 500,000 shares of bebe common stock at $6.00 per share of which 250,000 shares were newly issued common stock by bebe and 250,000 shares were purchased from the majority shareholder of bebe. At September 30, 2018, the Company had an ownership of approximately 30.1% of bebe’s outstanding common shares. The equity ownership in bebe is accounted for under the equity method of accounting. The carrying value for the bebe investment at September 30, 2018 was $26,012 and is included in prepaid expenses and other assets in the condensed consolidated balance sheets. For the three and nine months ended September 30, 2018, the equity income from bebe was $1,062 and $7,144, respectively, and is included in income from equity investments on the condensed consolidated statements of income. |
Statements of Cash Flows - Supplemental Non-cash Disclosures | x) Statements of Cash Flows – Supplemental Non-cash Disclosures During the nine months ended September 30, 2018, non-cash investing activities included the conversion of a loan receivable in the amount of $16,867 and accrued interest receivable of $51 into an equity investment that totaled $16,918 as more fully discussed in Note 2(v) above. |
Variable Interest Entity | y) Variable Interest Entity In January 2018, the operations of GACP II, LP, a private debt investment limited partnership (the “Partnership”) commenced operations. The Company’s investment in the Partnership is a Variable Interest Entity (“VIE”) since the unaffiliated limited partners do not have substantive kick-out or participating rights to remove the Company’s subsidiary that is the general partner managing the Partnership. The Company has determined that it is not the primary beneficiary due to the fact that its fee arrangements are considered at-market and thus not deemed to be variable interests, and it does not hold any other interests in the Partnership that are considered to be more than insignificant. The Company determines whether it is the primary beneficiary of a VIE at the time it becomes involved with a VIE and reconsiders that conclusion at each reporting date. In evaluating whether the Company is the primary beneficiary, the Company evaluates its economic interests in the entity held either directly by the Company or indirectly through related parties. The consolidation analysis can generally be performed qualitatively; however, if it is not readily apparent that the Company is not the primary beneficiary, a quantitative analysis may also be performed. The carrying value of the Company’s investments in the VIE that was not consolidated is shown below. September 30, 2018 Partnership investments $ 5,179 Due from related party 1,071 Maximum exposure to loss $ 6,250 |
Reclassification | (z) Reclassification The Company reclassified $262 of revenues that was reported as interest income – securities lending during the three months ended March 31, 2018 to revenues – services and fees. The previously reported amount of $7,553 as interest income – securities lending was reduced by $262 to $7,291 for the three months ended March 31, 2018 and the previously reported amount of $52,776 as revenues – services and fees was increased by $262 to $53,038 for the three months ended March 31, 2018. The Company reclassified $309 of revenues that was reported as interest income – securities lending during the three months ended September 30, 2017 to revenues – services and fees. The previously reported amount of $7,206 and $9,424 as interest income – securities lending for the three and nine months ended September 30, 2017, respectively, was reduced by $309, to $6,897 and $9,115, respectively. The previously reported amount of $85,141 and $202,354 as revenues – services and fees for the three and nine months ended September 30, 2017, respectively, was increased by $309, to $85,450 and $202,663. The impact of these reclassifications is reflected in the revenues as reported in the condensed consolidated statements of income for the three and nine months ended September 30, 2018 and 2017. The impact of this reclassification on the amounts reported during the periods was deemed to be immaterial. |
Recent Accounting Pronouncements | (aa) Recent Accounting Pronouncements In August 2018, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2018-13: Fair Value Measurement (Topic 820) In March 2018, the FASB issued ASU 2018-05: Income Taxes (Topic 740) - Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118. In February 2016, the FASB issued ASU No. 2016-02: Leases (Topic 842) Codification Improvements to Topic 842, Leases, In February 2018, the FASB issued ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments In January 2017, the FASB issued ASU 2017-04, Intangibles—Goodwill and Other (Topic 350) Simplifying the Test for Goodwill Impairment On January 1, 2018, we adopted ASU 2016-18 – Statement of Cash Flows (Topic 230): Restricted Cash On January 1, 2018, we adopted ASC 606 – Revenue from Contracts with Customers |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Schedule of restructuring charges | The following table summarizes the changes in accrued restructuring charge during the three and nine months ended September 30, 2018 and 2017: Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Balance, beginning of period $ 1,827 3,287 2,600 694 Restructuring charge 428 4,896 2,247 11,484 Cash paid (504 ) (3,092 ) (2,954 ) (4,880 ) Non-cash items (1 ) (1,732 ) (143 ) (3,939 ) Balance, end of period $ 1,750 $ 3,359 $ 1,750 $ 3,359 The following table summarizes the restructuring activities during the three months ended September 30, 2018 and 2017: Three Months Ended September 30, 2018 2017 Principal Principal Investments - Investments - Capital United Capital United Markets Online Corporate Total Markets Online Corporate Total Restructuring charge: Employee termination costs $ 76 — — $ 76 $ 2,285 $ 150 $ 1,102 $ 3,537 Facility closure and consolidation charge 352 — — 352 1,037 — 322 1,359 Total restructuring charge $ 428 $ — $ — $ 428 $ 3,322 $ 150 $ 1,424 $ 4,896 The following table summarizes the restructuring activities during the nine months ended September 30, 2018 and 2017: Nine Months Ended September 30, 2018 2017 Principal Principal Investments - Investments - Capital United Capital United Markets Online Corporate Total Markets Online Corporate Total Restructuring charge: Employee termination costs $ 729 — — $ 729 $ 4,819 $ 633 $ 3,284 $ 8,736 Facility closure and consolidation charge (recovery) 1,728 — (210 ) 1,518 2,426 — 322 2,748 Total restructuring charge $ 2,457 $ — $ (210 ) $ 2,247 $ 7,245 $ 633 $ 3,606 $ 11,484 |
Schedule of securities owned and securities sold not yet purchased at fair value | As of September 30, 2018 and December 31, 2017, the Company’s securities and other investments owned and securities sold not yet purchased measured at fair value consisted of the following securities and investments: September 30, December 31, 2018 2017 Securities and other investments owned: Common stocks and warrants $ 106,317 $ 67,306 Corporate bonds 18,909 6,539 Fixed income securities 4,467 2,329 Loans receivable 36,587 33,713 Partnership interests and other 56,241 35,473 $ 222,521 $ 145,360 Securities sold not yet purchased: Common stocks $ 47,929 $ 19,145 Corporate bonds 6,381 1,175 Fixed income securities 598 699 Partnership interests and other 4,764 7,272 $ 59,672 $ 28,291 |
Schedule of financial assets and liabilities measured on recurring basis | The following tables present information on the financial assets and liabilities measured and recorded at fair value on a recurring basis as of September 30, 2018 and December 31, 2017: Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis at September 30, 2018 Using Quoted prices in Other Significant Fair value at active markets for observable unobservable September 30, identical assets inputs inputs 2018 (Level 1) (Level 2) (Level 3) Assets: Securities and other investments owned: Common stocks and warrants $ 106,317 $ 72,153 $ 25,207 $ 8,957 Corporate bonds 18,909 — 18,909 — Fixed income securities 4,467 — 4,467 — Loans receivable 36,587 — — 36,587 Partnership interests and other 54,114 1,280 10 52,824 Total assets measured at fair value $ 220,394 $ 73,433 $ 48,593 $ 98,368 Liabilities: Securities sold not yet purchased: Common stocks $ 47,929 $ 47,929 $ — $ — Corporate bonds 6,381 — 6,381 Fixed income securities 598 — 598 — Partnership interests and other 4,764 4,764 — — Total securities sold not yet purchased 59,672 52,693 6,979 — Mandatorily redeemable noncontrolling interests issued after November 5, 2003 4,409 — — 4,409 Total liabilities measured at fair value $ 64,081 $ 52,693 $ 6,979 $ 4,409 Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis at December 31, 2017 Using Quoted prices in Other Significant Fair value at active markets for observable unobservable December 31, identical assets inputs inputs 2017 (Level 1) (Level 2) (Level 3) Assets: Securities and other investments owned: Common stocks and warrants $ 67,306 $ 38,960 $ — $ 28,346 Corporate bonds 6,539 — 6,539 — Fixed income securities 2,329 — 2,329 — Loans receivable 33,713 — — 33,713 Partnership interests and other 31,883 686 5,093 26,104 Total assets measured at fair value $ 141,770 $ 39,646 $ 13,961 $ 88,163 Liabilities: Securities sold not yet purchased: Common stocks $ 19,145 $ 19,145 $ — $ — Corporate bonds 1,175 — 1,175 — Fixed income securities 699 — 699 — Partnership interests and other 7,272 7,272 — — Total securities sold not yet purchased 28,291 26,417 1,874 — Mandatorily redeemable noncontrolling interests issued after November 5, 2003 4,478 — — 4,478 Total liabilities measured at fair value $ 32,769 $ 26,417 $ 1,874 $ 4,478 |
Schedule of changes in Level 3 fair value hierarchy | The following table summarizes the significant unobservable inputs in the fair value measurement of level 3 financial assets and liabilities by category of investment and valuation technique as of September 30, 2018: Fair value at September 30, Weighted 2018 Valuation Technique Unobservable Input Range Average Assets: Common stocks and warrants $ 8,957 Market approach Over-the-counter trading activity $10.00-$10.50/share $ 10.29 Market approach Market price of related security $0.61/share $ 0.61 Pending transaction Discount 50% 50% Loans receivable 36,587 Market approach Revenue multiple 1.4x 1.4x Partnership interests and other 52,824 Market approach Revenue multiple 1.4x 1.4x Total level 3 assets measured at fair value $ 98,368 Liabilities: Mandatorily redeemable noncontrolling interests issued after November 5, 2003 $ 4,409 Market approach Operating income multiple 6.0x 6.0x The changes in Level 3 fair value hierarchy during the nine months ended September 30, 2018 and 2017 are as follows: Level 3 Level 3 Changes During the Period Level 3 Balance at Fair Relating to Purchases, Transfer in Balance at Beginning of Value Undistributed Sales and and/or out End of Year Adjustments Earnings Settlements of Level 3 Period Nine Months Ended September 30, 2018 Common stocks and warrants $ 28,346 $ (3,247 ) $ 578 $ 4,250 $ (20,970 ) $ 8,957 Loans receivable 33,713 (11 ) 100 2,785 — 36,587 Partnership interests and other 26,104 1,411 (2,735 ) 28,044 — 52,824 Mandatorily redeemable noncontrolling interests issued after November 5, 2003 4,478 — (69 ) — — 4,409 Nine Months Ended September 30, 2017 Common stocks and warrants $ 299 $ (463 ) $ — $ 10,146 $ — $ 9,982 Corporate bonds 160 — — — (160 ) — Loans receivable — 1,375 — 25,493 — 26,868 Partnership interests and other 13,426 2,820 — (4,390 ) — 11,856 Mandatorily redeemable noncontrolling interests issued after November 5, 2003 3,214 9,000 (190 ) — 806 12,830 Contingent consideration 1,242 8 — (1,250 ) — — |
Schedule of investments in the VIE | The carrying value of the Company’s investments in the VIE that was not consolidated is shown below. September 30, 2018 Partnership investments $ 5,179 Due from related party 1,071 Maximum exposure to loss $ 6,250 |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Schedule of pro forma financial information | The pro forma financial information as presented below is for informational purposes only and is not necessarily indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of the earliest period presented, nor does it intend to be a projection of future results. Pro Forma (Unaudited) Three Months Ended September 30, 2017 Nine Months Ended September 30, 2017 Revenues $ 92,461 $ 320,546 Net (loss) income attributable to B. Riley Financial, Inc. $ (42 ) $ 11,785 Basic (loss) earnings per share $ (0.00 ) $ 0.46 Diluted (loss) earnings per share $ (0.00 ) $ 0.43 Weighted average basic shares outstanding 26,094,000 25,888,446 Weighted average diluted shares outstanding 26,094,000 27,137,419 |
Delaware corporation ("Wunderlich") [Member] | |
Schedule of accquisition consideration | The purchase price allocation was as follows: Consideration paid by B. Riley: Cash paid $ 29,737 Fair value of 1,974,812 B. Riley common shares issued 31,495 Fair value of 821,816 B. Riley common stock warrants issued 3,886 Total consideration $ 65,118 The assets acquired and assumed was as follows: Tangible assets acquired and assumed: Cash and cash equivalents $ 4,259 Securities owned 1,413 Accounts receivable 3,193 Due from clearing broker 15,133 Prepaid expenses and other assets 10,103 Property and equipment 2,315 Deferred taxes 5,456 Accounts payable (1,718 ) Accrued payroll and related expenses (6,387 ) Accrued expenses and other liabilities (10,223 ) Securities sold, not yet purchased (1,707 ) Notes payable (10,579 ) Customer relationships 15,320 Trademarks 1,340 Goodwill 37,200 Total $ 65,118 |
FBR & Co. ("FBR") [Member] | |
Schedule of accquisition consideration | The purchase price allocation was as follows: Consideration paid by B. Riley: Number of FBR Common Shares outstanding at June 1, 2017 7,099,511 Stock merger exchange ratio 0.671 Number of B. Riley common shares 4,763,772 Number of B. Riley common shares to be issued from acceleration of vesting for outstanding FBR stock options, restricted stock and RSU awards 67,861 Total number of B. Riley common shares to be issued 4,831,633 Closing market price of B. Riley common shares on December 31, 2016 $ 14.70 Total value of B. Riley common shares 71,025 Fair value of RSU’s attributable to service period prior to June 1, 2017 (a) 2,446 Total consideration $ 73,471 (a) Outstanding FBR restricted stock awards at June 1, 2017, the date of the acquisition, were adjusted in accordance with the FBR Merger Agreement with the right to receive 0.671 shares of the Company’s common stock for each outstanding FBR stock award unit. The fair value of the FBR restricted stock awards at June 1, 2017 was determined based on the closing price of the Company’s common stock of $14.70 on June 1, 2017. The fair value of the FBR restricted stock awards were apportioned as purchase consideration based on service provided to FBR as of June 1, 2017 with the remaining fair value of the FBR restricted stock awards to be recognized prospectively over the restricted stock and FBR restricted stock awards remaining vesting period. The assets acquired and assumed was as follows: Tangible assets acquired and assumed: Cash and cash equivalents $ 15,738 Securities owned 11,188 Securities borrowed 861,197 Accounts receivable 4,341 Due from clearing broker 29,169 Prepaid expenses and other assets 5,486 Property and equipment 8,663 Deferred taxes 17,706 Accounts payable (1,524 ) Accrued payroll and related expenses (7,182 ) Accrued expenses and other liabilities (22,411 ) Securities loaned (867,626 ) Customer relationships 5,600 Tradename and other intangibles 1,790 Goodwill 11,336 Total $ 73,471 |
SECURITIES LENDING (Tables)
SECURITIES LENDING (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Securities Lending | |
Schedule of contractual gross and net securities borrowing and lending balances | <font style="font: 10pt Times New Roman, Times, Serif">The following table presents the contractual gross and net securities borrowing and lending balances and the related offsetting amount as of September 30, 2018 and December 31, 2017:</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p> <table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="text-align: center; padding-left: 8.65pt; text-indent: -8.65pt"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Amounts not</b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center; padding-left: 8.65pt; text-indent: -8.65pt"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>offset in the</b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center; padding-left: 8.65pt; text-indent: -8.65pt"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>consolidated balance</b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center; padding-left: 8.65pt; text-indent: -8.65pt"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Gross amounts</b></font></td> <td style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Net amounts</b></font></td> <td style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>sheets but eligible</b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center; padding-left: 8.65pt; text-indent: -8.65pt"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>offset in the</b></font></td> <td style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>included in the</b></font></td> <td style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>for offsetting</b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center; padding-left: 8.65pt; text-indent: -8.65pt"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Gross amounts</b></font></td> <td style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>consolidated</b></font></td> <td style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>consolidated</b></font></td> <td style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>upon counterparty</b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td></tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1pt; text-align: center; padding-left: 8.65pt; text-indent: -8.65pt"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold; padding-bottom: 1pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="border-bottom: black 1pt solid; font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>recognized</b></font></td> <td style="font-weight: bold; padding-bottom: 1pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold; padding-bottom: 1pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="border-bottom: black 1pt solid; font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>balance sheets <sup>(1)</sup></b></font></td> <td style="font-weight: bold; padding-bottom: 1pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold; padding-bottom: 1pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="border-bottom: black 1pt solid; font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>balance sheets</b></font></td> <td style="font-weight: bold; padding-bottom: 1pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="border-bottom: black 1pt solid; font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>default<sup>(2)</sup></b></font></td> <td style="font-weight: bold; padding-bottom: 1pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="border-bottom: black 1pt solid; font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Net amounts</b></font></td> <td style="font-weight: bold; padding-bottom: 1pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-weight: bold; padding-left: 8.65pt; text-indent: -8.65pt"><font style="font: 10pt Times New Roman, Times, Serif"><b>As of September 30, 2018</b></font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="width: 32%; text-align: left; padding-left: 0.25in; text-indent: -8.65pt"><font style="font: 10pt Times New Roman, Times, Serif">Securities borrowed</font></td> <td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 10%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">1,042,295</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 12%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 10%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">1,042,295</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 13%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">1,042,295</font></td> <td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 10%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-left: 0.25in; text-indent: -8.65pt"><font style="font: 10pt Times New Roman, Times, Serif">Securities loaned</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">1,035,408</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">1,035,408</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">1,035,408</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: left; padding-left: 8.65pt; text-indent: -8.65pt"><font style="font: 10pt Times New Roman, Times, Serif"><b>As of December 31, 2017</b></font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-left: 0.25in; text-indent: -8.65pt"><font style="font: 10pt Times New Roman, Times, Serif">Securities borrowed</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">807,089</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">807,089</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">807,089</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: left; padding-left: 0.25in; text-indent: -8.65pt"><font style="font: 10pt Times New Roman, Times, Serif">Securities loaned</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">803,371</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">803,371</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">803,371</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> </table> <p style="margin-top: 0; margin-bottom: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p> <p style="margin-top: 0; margin-bottom: 0"></p> <table cellspacing="0" cellpadding="0" style="font-size: 11pt; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom; background-color: white"> <td style="font-family: Times Roman; width: 5%; white-space: nowrap; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><sup>(1)</sup></font></td> <td style="font-family: Times Roman; width: 95%; white-space: nowrap"><font style="font: 10pt Times New Roman, Times, Serif">Includes financial instruments subject to enforceable master netting provisions that are permitted to be offset to the extent an event of default has occurred.</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="font-family: Times Roman; white-space: nowrap; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><sup>(2)</sup></font></td> <td style="font-family: Times Roman; white-space: nowrap"><font style="font: 10pt Times New Roman, Times, Serif">Includes the amount of cash collateral held/posted.</font></td></tr></table>" id="sjs-B4"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"><font style="font: 10pt Times New Roman, Times, Serif">The following table presents the contractual gross and net securities borrowing and lending balances and the related offsetting amount as of September 30, 2018 and December 31, 2017:</font></p> <p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p> <table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%"> <tr style="vertical-align: bottom"> <td style="text-align: center; padding-left: 8.65pt; text-indent: -8.65pt"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Amounts not</b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center; padding-left: 8.65pt; text-indent: -8.65pt"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>offset in the</b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center; padding-left: 8.65pt; text-indent: -8.65pt"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>consolidated balance</b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center; padding-left: 8.65pt; text-indent: -8.65pt"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Gross amounts</b></font></td> <td style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Net amounts</b></font></td> <td style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>sheets but eligible</b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center; padding-left: 8.65pt; text-indent: -8.65pt"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>offset in the</b></font></td> <td style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>included in the</b></font></td> <td style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>for offsetting</b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td></tr> <tr style="vertical-align: bottom"> <td style="text-align: center; padding-left: 8.65pt; text-indent: -8.65pt"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Gross amounts</b></font></td> <td style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>consolidated</b></font></td> <td style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>consolidated</b></font></td> <td style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>upon counterparty</b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td></tr> <tr style="vertical-align: bottom"> <td style="padding-bottom: 1pt; text-align: center; padding-left: 8.65pt; text-indent: -8.65pt"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold; padding-bottom: 1pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="border-bottom: black 1pt solid; font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>recognized</b></font></td> <td style="font-weight: bold; padding-bottom: 1pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold; padding-bottom: 1pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="border-bottom: black 1pt solid; font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>balance sheets <sup>(1)</sup></b></font></td> <td style="font-weight: bold; padding-bottom: 1pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td style="font-weight: bold; padding-bottom: 1pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="border-bottom: black 1pt solid; font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>balance sheets</b></font></td> <td style="font-weight: bold; padding-bottom: 1pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="border-bottom: black 1pt solid; font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>default<sup>(2)</sup></b></font></td> <td style="font-weight: bold; padding-bottom: 1pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td> <td colspan="2" style="border-bottom: black 1pt solid; font-weight: bold; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b>Net amounts</b></font></td> <td style="font-weight: bold; padding-bottom: 1pt; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><b> </b></font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="font-weight: bold; padding-left: 8.65pt; text-indent: -8.65pt"><font style="font: 10pt Times New Roman, Times, Serif"><b>As of September 30, 2018</b></font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="width: 32%; text-align: left; padding-left: 0.25in; text-indent: -8.65pt"><font style="font: 10pt Times New Roman, Times, Serif">Securities borrowed</font></td> <td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 10%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">1,042,295</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 12%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 10%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">1,042,295</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 13%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">1,042,295</font></td> <td style="width: 1%"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="width: 10%; text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td> <td style="width: 1%; text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-left: 0.25in; text-indent: -8.65pt"><font style="font: 10pt Times New Roman, Times, Serif">Securities loaned</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">1,035,408</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">1,035,408</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">1,035,408</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: left; padding-left: 8.65pt; text-indent: -8.65pt"><font style="font: 10pt Times New Roman, Times, Serif"><b>As of December 31, 2017</b></font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: rgb(204,238,255)"> <td style="text-align: left; padding-left: 0.25in; text-indent: -8.65pt"><font style="font: 10pt Times New Roman, Times, Serif">Securities borrowed</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">807,089</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">807,089</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">807,089</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="text-align: left; padding-left: 0.25in; text-indent: -8.65pt"><font style="font: 10pt Times New Roman, Times, Serif">Securities loaned</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">803,371</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">803,371</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">803,371</font></td> <td><font style="font: 10pt Times New Roman, Times, Serif"> </font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif">$</font></td> <td style="text-align: right"><font style="font: 10pt Times New Roman, Times, Serif">—</font></td> <td style="text-align: left"><font style="font: 10pt Times New Roman, Times, Serif"> </font></td></tr> </table> <p style="margin-top: 0; margin-bottom: 0"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p> <p style="margin-top: 0; margin-bottom: 0"></p> <table cellspacing="0" cellpadding="0" style="font-size: 11pt; width: 100%; border-collapse: collapse"> <tr style="vertical-align: bottom; background-color: white"> <td style="font-family: Times Roman; width: 5%; white-space: nowrap; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><sup>(1)</sup></font></td> <td style="font-family: Times Roman; width: 95%; white-space: nowrap"><font style="font: 10pt Times New Roman, Times, Serif">Includes financial instruments subject to enforceable master netting provisions that are permitted to be offset to the extent an event of default has occurred.</font></td></tr> <tr style="vertical-align: bottom; background-color: white"> <td style="font-family: Times Roman; white-space: nowrap; text-align: center"><font style="font: 10pt Times New Roman, Times, Serif"><sup>(2)</sup></font></td> <td style="font-family: Times Roman; white-space: nowrap"><font style="font: 10pt Times New Roman, Times, Serif">Includes the amount of cash collateral held/posted.</font></td></tr></table> |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets | Intangible assets consisted of the following: As of September 30, 2018 As of December 31, 2017 Gross Gross Carrying Accumulated Intangibles Carrying Accumulated Intangibles Useful Life Value Amortization Net Value Amortization Net Amortizable assets: Customer relationships 4 to 16 Years $ 58,330 $ 14,440 $ 43,890 $ 58,330 $ 9,100 $ 49,230 Domain names 7 Years 237 75 162 287 61 226 Advertising relationships 8 Years 100 28 72 100 19 81 Internally developed software and other intangibles 0.5 to 4 Years 3,373 2,035 1,338 3,373 1,445 1,928 Trademarks 7 to 8 Years 4,190 881 3,309 4,190 447 3,743 Total 66,230 17,459 48,771 66,280 11,072 55,208 Non-amortizable assets: Tradenames 2,240 — 2,240 1,740 — 1,740 Total intangible assets $ 68,470 $ 17,459 $ 51,011 $ 68,020 $ 11,072 $ 56,948 |
ACCOUNTS RECEIVABLE (Tables)
ACCOUNTS RECEIVABLE (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Receivables [Abstract] | |
Schedule of components of accounts receivable | The components of accounts receivable, net, include the following: September 30, December 31, 2018 2017 Accounts receivable $ 22,597 $ 15,593 Investment banking fees, commissions and other receivables 16,219 4,199 Unbilled receivables 966 1,023 Total accounts receivable 39,782 20,815 Allowance for doubtful accounts (824 ) (800 ) Accounts receivable, net $ 38,958 $ 20,015 |
Schedule of allowance for doubtful accounts | Additions and changes to the allowance for doubtful accounts consist of the following: Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Balance, beginning of period $ 796 $ 599 $ 800 $ 255 Add: Additions to reserve 192 123 840 827 Less: Write-offs (164 ) (94 ) (816 ) (262 ) Less: Recoveries — — — (192 ) Balance, end of period $ 824 $ 628 $ 824 $ 628 |
NOTES PAYABLE (Tables)
NOTES PAYABLE (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Notes Payable [Abstract] | |
Schedule of senior notes payable | Senior notes payable, net, is comprised of the following as of September 30, 2018 and December 31, 2017: September 30, December 31, 2018 2017 7.50% Senior notes due October 31, 2021 $ 46,407 $ 35,231 7.50% Senior notes due May 31, 2027 107,429 92,490 7.25% Senior notes due December 31, 2027 100,441 80,500 7.375% Senior notes due May 31, 2023 109,183 — 6.875% Senior notes due September 30, 2023 100,050 — 463,510 208,221 Less: Unamortized debt issuance costs (7,727 ) (4,600 ) $ 455,783 $ 203,621 (a) $46,407 Senior Notes Payable due October 31, 2021 |
REVENUE FROM CONTRACTS WITH C_2
REVENUE FROM CONTRACTS WITH CUSTOMERS (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of revenues from contracts with customers | Revenue from contracts with customers by reportable segment for the three months ended September 30, 2018 is as follows: Three Months Ended September 30, 2018 Reportable Segment Principal Auction and Valuation and Investments - Capital Markets Liquidation Appraisal United Online Total Revenues from contracts with customers: Corporate finance, consulting and investment banking fees $ 35,902 $ — $ — $ — $ 35,902 Wealth and asset management fees 19,171 — — — 19,171 Commissions, fees and reimbursed expenses 10,533 2,399 9,404 — 22,336 Subscription services — — — 9,151 9,151 Service contract revenues — 108 — — 108 Advertising and other — — — 2,276 2,276 Total revenues from contracts with customers 65,606 2,507 9,404 11,427 88,944 Other sources of revenue: Interest income - Securities lending 8,954 — — — 8,954 Trading loss on investments (3,462 ) — — — (3,462 ) Other 5,245 — — — 5,245 Total revenues $ 76,343 $ 2,507 $ 9,404 $ 11,427 $ 99,681 Revenue from contracts with customers by reportable segment for the nine months ended September 30, 2018 is as follows: Nine Months Ended September 30, 2018 Reportable Segment Principal Auction and Valuation and Investments - Capital Markets Liquidation Appraisal United Online Total Revenues from contracts with customers: Corporate finance, consulting and investment banking fees $ 84,927 $ — $ — $ — $ 84,927 Wealth and asset management fees 56,928 — — — 56,928 Commissions, fees and reimbursed expenses 31,546 33,212 27,383 — 92,141 Subscription services — — — 27,335 27,335 Service contract revenues — 11,648 — — 11,648 Advertising and other — — — 6,925 6,925 Total revenues from contracts with customers 173,401 44,860 27,383 34,260 279,904 Other sources of revenue: Interest income - Securities lending 22,836 — — — 22,836 Trading gain on investments 1,449 — — — 1,449 Other 16,771 — — — 16,771 Total revenues $ 214,457 $ 44,860 $ 27,383 $ 34,260 $ 320,960 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of basic and diluted earnings per share | Basic and diluted earnings per share was calculated as follows: Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Net income attributable to B. Riley Financial, Inc. $ 2,814 $ 368 $ 24,314 $ 17,669 Weighted average shares outstanding: Basic 25,968,997 26,059,490 25,856,339 22,180,808 Effect of dilutive potential common shares: Restricted stock units and warrants 705,557 1,193,007 740,087 816,841 Contingently issuable shares 179,707 387,365 179,707 387,365 Diluted 26,854,261 27,639,862 26,776,133 23,385,014 Basic income per share $ 0.11 $ 0.01 $ 0.94 $ 0.80 Diluted income per share $ 0.10 $ 0.01 $ 0.91 $ 0.76 |
SHARE BASED PAYMENTS (Tables)
SHARE BASED PAYMENTS (Tables) - Restricted Stock Units (RSUs) [Member] | 9 Months Ended |
Sep. 30, 2018 | |
Amended and Restated 2009 Stock Incentive Plan [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of equity incentive award activity | A summary of equity incentive award activity under the Plan for the nine months ended September 30, 2018 was as follows: Weighted Average Shares Fair Value Nonvested at January 1, 2018 792,264 $ 13.30 Granted 424,235 20.87 Vested (304,599 ) 13.17 Forfeited (9,057 ) 12.49 Nonvested at September 30, 2018 902,843 $ 16.91 |
FBR Stock Plan [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of equity incentive award activity | A summary of equity incentive award activity under the Plan for the nine months ended September 30, 2018 was as follows: Weighted Average Shares Fair Value Nonvested at January 1, 2018 1,066,133 $ 16.15 Granted 186,662 20.73 Vested (347,265 ) 15.33 Forfeited (84,238 ) 15.85 Nonvested at September 30, 2018 821,292 $ 17.57 |
BUSINESS SEGMENTS (Tables)
BUSINESS SEGMENTS (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Schedule of reportable segments | The following is a summary of certain financial data for each of the Company’s reportable segments: Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Capital Markets reportable segment: Revenues - Services and fees $ 67,389 $ 56,782 $ 191,621 $ 96,181 Interest income - Securities lending 8,954 6,897 22,836 9,115 Total revenues 76,343 63,679 214,457 105,296 Selling, general, and administrative expenses (57,207 ) (53,955 ) (168,559 ) (87,753 ) Restructuring charge (428 ) (3,322 ) (2,457 ) (7,245 ) Interest expense - Securities lending (6,425 ) (4,950 ) (16,317 ) (6,515 ) Depreciation and amortization (1,309 ) (1,636 ) (4,428 ) (2,167 ) Segment income (loss) 10,974 (184 ) 22,696 1,616 Auction and Liquidation reportable segment: Revenues - Services and fees 2,459 7,376 44,812 43,179 Revenues - Sale of goods 48 1 48 1 Total revenues 2,507 7,377 44,860 43,180 Direct cost of services (838 ) (3,385 ) (12,263 ) (25,482 ) Cost of goods sold (24 ) (2 ) (41 ) (2 ) Selling, general, and administrative expenses (1,289 ) (1,963 ) (7,787 ) (6,562 ) Depreciation and amortization (7 ) (5 ) (23 ) (15 ) Segment income 349 2,022 24,746 11,119 Valuation and Appraisal reportable segment: Revenues - Services and fees 9,404 9,043 27,383 24,799 Direct cost of services (4,067 ) (3,778 ) (12,388 ) (11,031 ) Selling, general, and administrative expenses (2,379 ) (2,253 ) (7,138 ) (6,395 ) Depreciation and amortization (56 ) (43 ) (159 ) (130 ) Segment income 2,902 2,969 7,698 7,243 Principal Investments - United Online segment: Revenues - Services and fees 11,403 12,249 34,170 38,504 Revenues - Sale of goods 24 78 90 220 Total revenues 11,427 12,327 34,260 38,724 Direct cost of services (3,251 ) (2,975 ) (9,082 ) (9,711 ) Cost of goods sold (28 ) (122 ) (101 ) (311 ) Selling, general, and administrative expenses (2,348 ) (2,433 ) (6,321 ) (8,536 ) Depreciation and amortization (1,682 ) (1,703 ) (5,040 ) (5,313 ) Restructuring charge — (150 ) — (633 ) Segment income 4,118 4,944 13,716 14,220 Consolidated operating income from reportable segments 18,343 9,751 68,856 34,198 Corporate and other expenses (including restructuring recovery of $210 during the nine months ended September 30, 2018; and restructuring charge of $1,424 and $3,606 during the three and nine months ended September 30, 2017, respectively. (5,505 ) (8,395 ) (16,938 ) (19,571 ) Interest income 442 76 736 358 Income (loss) on equity investments 828 (157 ) 5,049 (157 ) Interest expense (9,340 ) (2,510 ) (23,926 ) (5,195 ) Income (loss) before income taxes 4,768 (1,235 ) 33,777 9,633 (Provision for) benefit from income taxes (2,046 ) 1,357 (8,412 ) 7,753 Net income 2,722 122 25,365 17,386 Net (loss) income attributable to noncontrolling interests (92 ) (246 ) 1,051 (283 ) Net income attributable to B. Riley Financial, Inc. $ 2,814 $ 368 $ 24,314 $ 17,669 |
Schedule of revenues by geographical area | The following table presents revenues by geographical area: Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Revenues: Revenues - Services and fees: North America $ 90,649 $ 85,437 $ 296,718 $ 200,809 Australia — — — 940 Europe 6 13 1,268 914 Total Revenues - Services and fees $ 90,655 $ 85,450 $ 297,986 $ 202,663 Revenues - Sale of goods North America $ 72 $ 79 $ 138 $ 221 Revenues - Interest income - Securities lending: North America $ 8,954 $ 6,897 $ 22,836 $ 9,115 Total Revenues: North America $ 99,675 $ 92,413 $ 319,692 $ 210,145 Australia — — — 940 Europe 6 13 1,268 914 Total Revenues $ 99,681 $ 92,426 $ 320,960 $ 211,999 |
Schedule of long-lived assets of property and equipment and other assets, by geographical area | The following table presents long-lived assets, which consists of property and equipment and other assets, by geographical area: September 30, December 31, 2018 2017 Long-lived Assets - Property and Equipment, net: North America $ 11,143 $ 11,977 Australia — — Europe — — Total $ 11,143 $ 11,977 |
ORGANIZATION, BUSINESS OPERAT_2
ORGANIZATION, BUSINESS OPERATIONS AND SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) $ / shares in Units, $ in Thousands | 9 Months Ended | |
Sep. 30, 2018Number | Nov. 09, 2017USD ($)$ / shares | |
Business Acquisition [Line Items] | ||
Number of operating segment | Number | 4 | |
MagicJack VocalTec [Member] | ||
Business Acquisition [Line Items] | ||
Right share price (in dollars per share) | $ / shares | $ 8.71 | |
Total consideration | $ | $ 143,500 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Restructuring Reserve [Roll Forward] | ||||
Balance, beginning of period | $ 1,827 | $ 3,287 | $ 2,600 | $ 694 |
Restructuring charge | 428 | 4,896 | 2,247 | 11,484 |
Cash paid | (504) | (3,092) | (2,954) | (4,880) |
Non-cash items | (1) | (1,732) | (143) | (3,939) |
Balance, end of period | $ 1,750 | $ 3,359 | $ 1,750 | $ 3,359 |
SUMMARY OF SIGNIFICANT ACCOUN_5
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Restructuring charge | $ 428 | $ 4,896 | $ 2,247 | $ 11,484 |
Capital Markets Reportable Segment [Member] | ||||
Restructuring charge | 428 | 3,322 | 2,457 | 7,245 |
Principal Investments - United Online Segment [Member] | ||||
Restructuring charge | 150 | 633 | ||
Corporate Overhead [Member] | ||||
Restructuring charge | 1,424 | (210) | 3,606 | |
Employee Termination (Recovery) Costs [Member] | ||||
Restructuring charge | 76 | 3,537 | 729 | 8,736 |
Employee Termination (Recovery) Costs [Member] | Capital Markets Reportable Segment [Member] | ||||
Restructuring charge | 76 | 2,285 | 729 | 4,819 |
Employee Termination (Recovery) Costs [Member] | Principal Investments - United Online Segment [Member] | ||||
Restructuring charge | 150 | 633 | ||
Employee Termination (Recovery) Costs [Member] | Corporate Overhead [Member] | ||||
Restructuring charge | 1,102 | 3,284 | ||
Facility closure and Consolidation Charge (Recovery) [Member] | ||||
Restructuring charge | 352 | 1,359 | 1,518 | 2,748 |
Facility closure and Consolidation Charge (Recovery) [Member] | Capital Markets Reportable Segment [Member] | ||||
Restructuring charge | 352 | 1,037 | 1,728 | 2,426 |
Facility closure and Consolidation Charge (Recovery) [Member] | Principal Investments - United Online Segment [Member] | ||||
Restructuring charge | ||||
Facility closure and Consolidation Charge (Recovery) [Member] | Corporate Overhead [Member] | ||||
Restructuring charge | $ 322 | $ (210) | $ 322 |
SUMMARY OF SIGNIFICANT ACCOUN_6
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Securities and other investments owned: | ||
Securities and other investments owned | $ 222,521 | $ 145,360 |
Securities sold not yet purchased: | ||
Securities sold not yet purchased | 59,672 | 28,291 |
Common Stock [Member] | ||
Securities sold not yet purchased: | ||
Securities sold not yet purchased | 47,929 | 19,145 |
Common Stocks and Warrants [Member] | ||
Securities and other investments owned: | ||
Securities and other investments owned | 106,317 | 67,306 |
Corporate Bonds [Member] | ||
Securities and other investments owned: | ||
Securities and other investments owned | 18,909 | 6,539 |
Securities sold not yet purchased: | ||
Securities sold not yet purchased | 6,381 | 1,175 |
Fixed Income Securities [Member] | ||
Securities and other investments owned: | ||
Securities and other investments owned | 4,467 | 2,329 |
Securities sold not yet purchased: | ||
Securities sold not yet purchased | 598 | 699 |
Loans Receivable [Member] | ||
Securities and other investments owned: | ||
Securities and other investments owned | 36,587 | 33,713 |
Partnership Interests and Other [Member] | ||
Securities and other investments owned: | ||
Securities and other investments owned | 56,241 | 35,473 |
Securities sold not yet purchased: | ||
Securities sold not yet purchased | $ 4,764 | $ 7,272 |
SUMMARY OF SIGNIFICANT ACCOUN_7
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 3) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Securities and other investments owned: | ||
Total assets measured at fair value | $ 222,521 | $ 145,360 |
Securities sold not yet purchased: | ||
Total securities sold not yet purchased | 59,672 | 28,291 |
Common Stock [Member] | ||
Securities sold not yet purchased: | ||
Total securities sold not yet purchased | 47,929 | 19,145 |
Common Stocks and Warrants [Member] | ||
Securities and other investments owned: | ||
Total assets measured at fair value | 106,317 | 67,306 |
Corporate Bonds [Member] | ||
Securities and other investments owned: | ||
Total assets measured at fair value | 18,909 | 6,539 |
Securities sold not yet purchased: | ||
Total securities sold not yet purchased | 6,381 | 1,175 |
Fixed Income Securities [Member] | ||
Securities and other investments owned: | ||
Total assets measured at fair value | 4,467 | 2,329 |
Securities sold not yet purchased: | ||
Total securities sold not yet purchased | 598 | 699 |
Loans Receivable [Member] | ||
Securities and other investments owned: | ||
Total assets measured at fair value | 36,587 | 33,713 |
Partnership Interests and Other [Member] | ||
Securities and other investments owned: | ||
Total assets measured at fair value | 56,241 | 35,473 |
Securities sold not yet purchased: | ||
Total securities sold not yet purchased | 4,764 | 7,272 |
Fair Value, Measurements, Recurring [Member] | ||
Securities and other investments owned: | ||
Total assets measured at fair value | 220,394 | 141,770 |
Securities sold not yet purchased: | ||
Total securities sold not yet purchased | 59,672 | 28,291 |
Mandatorily redeemable noncontrolling interests issued after November 5, 2003 | 4,409 | 4,478 |
Total liabilities measured at fair value | 64,081 | 32,769 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Securities and other investments owned: | ||
Total assets measured at fair value | 73,433 | 39,646 |
Securities sold not yet purchased: | ||
Total securities sold not yet purchased | 52,693 | 26,417 |
Mandatorily redeemable noncontrolling interests issued after November 5, 2003 | ||
Total liabilities measured at fair value | 52,693 | 26,417 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Securities and other investments owned: | ||
Total assets measured at fair value | 48,593 | 13,961 |
Securities sold not yet purchased: | ||
Total securities sold not yet purchased | 6,979 | 1,874 |
Mandatorily redeemable noncontrolling interests issued after November 5, 2003 | ||
Total liabilities measured at fair value | 6,979 | 1,874 |
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Securities and other investments owned: | ||
Total assets measured at fair value | 98,368 | 88,163 |
Securities sold not yet purchased: | ||
Total securities sold not yet purchased | ||
Mandatorily redeemable noncontrolling interests issued after November 5, 2003 | 4,409 | 4,478 |
Total liabilities measured at fair value | 4,409 | 4,478 |
Fair Value, Measurements, Recurring [Member] | Common Stock [Member] | ||
Securities sold not yet purchased: | ||
Total securities sold not yet purchased | 47,929 | 19,145 |
Fair Value, Measurements, Recurring [Member] | Common Stock [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Securities sold not yet purchased: | ||
Total securities sold not yet purchased | 47,929 | 19,145 |
Fair Value, Measurements, Recurring [Member] | Common Stock [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Securities sold not yet purchased: | ||
Total securities sold not yet purchased | ||
Fair Value, Measurements, Recurring [Member] | Common Stock [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Securities sold not yet purchased: | ||
Total securities sold not yet purchased | ||
Fair Value, Measurements, Recurring [Member] | Common Stocks and Warrants [Member] | ||
Securities and other investments owned: | ||
Total assets measured at fair value | 106,317 | 67,306 |
Fair Value, Measurements, Recurring [Member] | Common Stocks and Warrants [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Securities and other investments owned: | ||
Total assets measured at fair value | 72,153 | 38,960 |
Fair Value, Measurements, Recurring [Member] | Common Stocks and Warrants [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Securities and other investments owned: | ||
Total assets measured at fair value | 25,207 | |
Fair Value, Measurements, Recurring [Member] | Common Stocks and Warrants [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Securities and other investments owned: | ||
Total assets measured at fair value | 8,957 | 28,346 |
Fair Value, Measurements, Recurring [Member] | Corporate Bonds [Member] | ||
Securities and other investments owned: | ||
Total assets measured at fair value | 18,909 | 6,539 |
Securities sold not yet purchased: | ||
Total securities sold not yet purchased | 6,381 | 1,175 |
Fair Value, Measurements, Recurring [Member] | Corporate Bonds [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Securities and other investments owned: | ||
Total assets measured at fair value | ||
Securities sold not yet purchased: | ||
Total securities sold not yet purchased | ||
Fair Value, Measurements, Recurring [Member] | Corporate Bonds [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Securities and other investments owned: | ||
Total assets measured at fair value | 18,909 | 6,539 |
Securities sold not yet purchased: | ||
Total securities sold not yet purchased | 6,381 | 1,175 |
Fair Value, Measurements, Recurring [Member] | Corporate Bonds [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Securities and other investments owned: | ||
Total assets measured at fair value | ||
Securities sold not yet purchased: | ||
Total securities sold not yet purchased | ||
Fair Value, Measurements, Recurring [Member] | Fixed Income Securities [Member] | ||
Securities and other investments owned: | ||
Total assets measured at fair value | 4,467 | 2,329 |
Securities sold not yet purchased: | ||
Total securities sold not yet purchased | 598 | 699 |
Fair Value, Measurements, Recurring [Member] | Fixed Income Securities [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Securities and other investments owned: | ||
Total assets measured at fair value | ||
Securities sold not yet purchased: | ||
Total securities sold not yet purchased | ||
Fair Value, Measurements, Recurring [Member] | Fixed Income Securities [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Securities and other investments owned: | ||
Total assets measured at fair value | 4,467 | 2,329 |
Securities sold not yet purchased: | ||
Total securities sold not yet purchased | 598 | 699 |
Fair Value, Measurements, Recurring [Member] | Fixed Income Securities [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Securities and other investments owned: | ||
Total assets measured at fair value | ||
Securities sold not yet purchased: | ||
Total securities sold not yet purchased | ||
Fair Value, Measurements, Recurring [Member] | Loans Receivable [Member] | ||
Securities and other investments owned: | ||
Total assets measured at fair value | 36,587 | 33,713 |
Fair Value, Measurements, Recurring [Member] | Loans Receivable [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Securities and other investments owned: | ||
Total assets measured at fair value | ||
Fair Value, Measurements, Recurring [Member] | Loans Receivable [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Securities and other investments owned: | ||
Total assets measured at fair value | ||
Fair Value, Measurements, Recurring [Member] | Loans Receivable [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Securities and other investments owned: | ||
Total assets measured at fair value | 36,587 | 33,713 |
Fair Value, Measurements, Recurring [Member] | Partnership Interests and Other [Member] | ||
Securities and other investments owned: | ||
Total assets measured at fair value | 54,114 | 31,883 |
Securities sold not yet purchased: | ||
Total securities sold not yet purchased | 4,764 | 7,272 |
Fair Value, Measurements, Recurring [Member] | Partnership Interests and Other [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Securities and other investments owned: | ||
Total assets measured at fair value | 1,280 | 686 |
Securities sold not yet purchased: | ||
Total securities sold not yet purchased | 4,764 | 7,272 |
Fair Value, Measurements, Recurring [Member] | Partnership Interests and Other [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Securities and other investments owned: | ||
Total assets measured at fair value | 10 | 5,093 |
Securities sold not yet purchased: | ||
Total securities sold not yet purchased | ||
Fair Value, Measurements, Recurring [Member] | Partnership Interests and Other [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Securities and other investments owned: | ||
Total assets measured at fair value | 52,824 | $ 26,104 |
Securities sold not yet purchased: | ||
Total securities sold not yet purchased |
SUMMARY OF SIGNIFICANT ACCOUN_8
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 4) - Fair Value, Inputs, Level 3 [Member] - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Common Stock And Warrants [Member] | ||
Fair Value, Instruments Classified in Shareholders' Equity Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance at Beginning of Period | $ 28,346 | $ 299 |
Fair Value Adjustments | (3,247) | (463) |
Relating to Undistribute Earnings | 578 | |
Purchases, Sales and Settlements | 4,250 | 10,146 |
Transfer in and/or out of Level 3 | (20,970) | |
Balance at End of Period | 8,957 | 9,982 |
Loans Receivables [Member] | ||
Fair Value, Instruments Classified in Shareholders' Equity Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance at Beginning of Period | 33,713 | |
Fair Value Adjustments | (11) | 1,375 |
Relating to Undistribute Earnings | 100 | |
Purchases, Sales and Settlements | 2,785 | 25,493 |
Transfer in and/or out of Level 3 | ||
Balance at End of Period | 36,587 | 26,868 |
Partnership Interests and Other [Member] | ||
Fair Value, Instruments Classified in Shareholders' Equity Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance at Beginning of Period | 26,104 | 13,426 |
Fair Value Adjustments | 1,411 | 2,820 |
Relating to Undistribute Earnings | (2,735) | |
Purchases, Sales and Settlements | 28,044 | (4,390) |
Transfer in and/or out of Level 3 | ||
Balance at End of Period | 52,824 | 11,856 |
Mandatorily redeemable noncontrolling interests issued after November 5, 2003 [Member] | ||
Fair Value, Instruments Classified in Shareholders' Equity Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance at Beginning of Period | 4,478 | 3,214 |
Fair Value Adjustments | 9,000 | |
Relating to Undistribute Earnings | (69) | (190) |
Purchases, Sales and Settlements | ||
Transfer in and/or out of Level 3 | 806 | |
Balance at End of Period | $ 4,409 | 12,830 |
Corporate Bond [Member] | ||
Fair Value, Instruments Classified in Shareholders' Equity Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance at Beginning of Period | 160 | |
Fair Value Adjustments | ||
Relating to Undistribute Earnings | ||
Purchases, Sales and Settlements | ||
Transfer in and/or out of Level 3 | (160) | |
Balance at End of Period | ||
Contingent Consideration [Member] | ||
Fair Value, Instruments Classified in Shareholders' Equity Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance at Beginning of Period | 1,242 | |
Fair Value Adjustments | 8 | |
Relating to Undistribute Earnings | ||
Purchases, Sales and Settlements | (1,250) | |
Transfer in and/or out of Level 3 | ||
Balance at End of Period |
SUMMARY OF SIGNIFICANT ACCOUN_9
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 5) - Fair Value, Inputs, Level 3 [Member] $ in Thousands | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Fair value assets | $ 98,368 |
Common Stocks and Warrants [Member] | Market Approach [Member] | Over-The-Counter Trading Activity [Member] | |
Fair value assets | $ 8,957 |
Weighted Average | 10.29 |
Common Stocks and Warrants [Member] | Market Approach [Member] | Over-The-Counter Trading Activity [Member] | Minimum [Member] | |
Range | 10 |
Common Stocks and Warrants [Member] | Market Approach [Member] | Over-The-Counter Trading Activity [Member] | Maximum [Member] | |
Range | 10.50 |
Common Stock And Warrants [Member] | Market Approach [Member] | Market Price Of Related Security [Member] | |
Range | 0.61 |
Weighted Average | 0.61 |
Common Stock And Warrants [Member] | Pending Transaction [Member] | Discount Rate [Member] | |
Range | 0.5 |
Weighted Average | 0.5 |
Loans Receivables [Member] | Market Approach [Member] | Revenue Multiple [Member] | |
Fair value assets | $ 36,587 |
Range | 1.4 |
Weighted Average | 1.4 |
Partnership Interests and Other [Member] | Market Approach [Member] | Revenue Multiple [Member] | |
Fair value assets | $ 52,824 |
Range | 1.4 |
Weighted Average | 1.4 |
Mandatorily redeemable noncontrolling interests issued after November 5, 2003 [Member] | Market Approach [Member] | Operating Income Multiple [Member] | |
Fair value liabilities | $ 4,409 |
Range | 6 |
Weighted Average | 6 |
SUMMARY OF SIGNIFICANT ACCOU_10
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 6) - Variable Interest Entity, Primary Beneficiary [Member] $ in Thousands | Sep. 30, 2018USD ($) |
Variable Interest Entity [Line Items] | |
Partnership investments | $ 5,179 |
Due from related party | 1,071 |
Maximum exposure to loss | $ 6,250 |
SUMMARY OF SIGNIFICANT ACCOU_11
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) $ / shares in Units, € in Thousands, $ in Thousands, $ in Thousands, $ in Thousands | Jan. 12, 2018USD ($)Number$ / sharesshares | Dec. 22, 2017 | Sep. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Jun. 30, 2018CAD ($) | Mar. 31, 2018CAD ($) | Mar. 31, 2018EUR (€) | Jan. 31, 2017AUD ($) |
Advertising costs | $ 371 | $ 183 | $ 1,656 | $ 1,227 | ||||||||||
Restructuring charge | 428 | 4,896 | 2,247 | 11,484 | ||||||||||
Restricted cash and cash equivalents | 468 | $ 19,711 | $ 468 | 468 | ||||||||||
Cash collateral | 19,197 | |||||||||||||
Net gain (loss) from forward exchange contracts | 33 | 33 | 91 | 103 | ||||||||||
Transaction losses | 51 | 389 | 843 | 919 | ||||||||||
Securities and other investments owned | 2,127 | 3,590 | 2,127 | 2,127 | ||||||||||
Securities and other investments owned, at fair value | 222,521 | 145,360 | 222,521 | 222,521 | ||||||||||
Proceeds from key man life insurance | 6,000 | |||||||||||||
Fair Value Adjustments | 6,250 | 9,000 | ||||||||||||
Total assets measured at fair value | $ 220,394 | $ 141,770 | $ 220,394 | $ 220,394 | ||||||||||
Percentage of assets measured at fair value | 5.10% | 6.40% | 5.10% | 5.10% | ||||||||||
Revised federal statutory rate | 21.00% | |||||||||||||
Previously federal statutory rate | 35.00% | |||||||||||||
Estimate provisional tax expense | $ 13,052 | |||||||||||||
Depreciation and amortization | $ 1,005 | 1,243 | $ 3,369 | 2,458 | ||||||||||
Number of shares issued | shares | 500,000 | |||||||||||||
Shares issued price per share (in dollars per share) | $ / shares | $ 6 | |||||||||||||
Ownership percentage | 30.10% | 30.10% | 30.10% | |||||||||||
Carrying value of investment | $ 16,918 | $ 16,918 | $ 16,918 | |||||||||||
Loss from equity method investments | 828 | (157) | 5,049 | (157) | ||||||||||
Non-cash investing activities, conversion of a loan receivable | 16,867 | |||||||||||||
Non-cash investing activities, accrued interest receivable | 51 | |||||||||||||
Interest Income - Securities lending [Member] | ||||||||||||||
Interest income | $ 7,291 | $ 7,553 | ||||||||||||
Services And Fees [Member] | ||||||||||||||
Interest income | $ 53,038 | $ 52,776 | ||||||||||||
Majority Shareholder [Member] | ||||||||||||||
Number of shares issued | shares | 250,000 | |||||||||||||
Bebe Stores, Inc. ("bebe") [Member] | ||||||||||||||
Securities and other investments owned | 16,867 | |||||||||||||
Loan face value | $ 16,867 | |||||||||||||
Loan accrued interest | $ 51 | |||||||||||||
Number of shares converted | Number | 2,819,528 | |||||||||||||
Loan conversion price (in dollars per share) | $ / shares | $ 6 | |||||||||||||
Number of shares issued | shares | 250,000 | |||||||||||||
Loss from equity method investments | 1,062 | 6,470 | 7,144 | |||||||||||
Bebe Stores, Inc. ("bebe") [Member] | Prepaid Expenses and Other Current Assets [Member] | ||||||||||||||
Carrying value of investment | 26,012 | 26,012 | 26,012 | |||||||||||
Capital Markets Reportable Segment [Member] | ||||||||||||||
Restructuring charge | 428 | $ 3,322 | 2,457 | $ 7,245 | ||||||||||
Fair Value, Measurements, Recurring [Member] | Fair Value, Inputs, Level 3 [Member] | ||||||||||||||
Total assets measured at fair value | $ 98,368 | 88,163 | $ 98,368 | $ 98,368 | ||||||||||
Foreign Exchange Contract [Member] | CAD | ||||||||||||||
Derivatives | $ 54,406 | $ 54,406 | ||||||||||||
Foreign Exchange Contract [Member] | AUD | ||||||||||||||
Derivatives | $ 25,000 | |||||||||||||
Foreign Exchange Contract [Member] | EUR | ||||||||||||||
Derivatives | € | € 1,500 | |||||||||||||
Special Bank Accounts [Member] | ||||||||||||||
Restricted cash and cash equivalents | $ 514 |
SUMMARY OF SIGNIFICANT ACCOU_12
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative 1) - USD ($) $ / shares in Units, $ in Thousands | Jan. 12, 2018 | Jul. 03, 2017 | Sep. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Apr. 18, 2018 | Dec. 31, 2017 |
Number of shares issued | 500,000 | |||||||||
Fair Value Adjustments | $ 6,250 | $ 9,000 | ||||||||
Loss from equity method investments | $ 828 | $ (157) | 5,049 | (157) | ||||||
Outstanding balance | 21,405 | $ 21,405 | 21,405 | $ 5,208 | ||||||
Revenue | 99,681 | 92,426 | 320,960 | 211,999 | ||||||
Interest Income - Securities lending [Member] | ||||||||||
Decrease in revenue | 309 | |||||||||
Revenue | 8,954 | 6,897 | 22,836 | 9,115 | ||||||
Services And Fees [Member] | ||||||||||
Revenue | 90,655 | 85,450 | 297,986 | 202,663 | ||||||
One Loans Receivable [Member] | ||||||||||
Loans receivable maturity period | 15,000 | 15,000 | 15,000 | |||||||
Other Loans Receivable [Member] | ||||||||||
Loans receivable maturity period | 22,147 | 22,147 | $ 22,147 | |||||||
Loans receivable maturity period | 2020-05 | |||||||||
Previously Reported [Member] | ||||||||||
Interest income - Securities lending | $ 262 | |||||||||
Previously Reported [Member] | Interest Income - Securities lending [Member] | ||||||||||
Revenue | 7,206 | 9,424 | ||||||||
Previously Reported [Member] | Services And Fees [Member] | ||||||||||
Revenue | $ 85,141 | 202,354 | ||||||||
Increase in revenue | 309 | |||||||||
Bebe Stores, Inc. ("bebe") [Member] | ||||||||||
Number of shares issued | 250,000 | |||||||||
Loss from equity method investments | 1,062 | 6,470 | $ 7,144 | |||||||
Fair Value, Inputs, Level 3 [Member] | Mandatorily redeemable noncontrolling interests issued after November 5, 2003 [Member] | ||||||||||
Fair Value Adjustments | $ 6,250 | |||||||||
Agency Agreement [Member] | Bon-Ton Stores, Inc. [Member] | ||||||||||
Initial advance | $ 407,426 | |||||||||
Outstanding balance | 21,405 | |||||||||
Agency Agreement [Member] | Bon-Ton Stores, Inc. [Member] | ||||||||||
Initial advance | $ 407,426 | |||||||||
Outstanding balance | $ 21,405 | $ 21,405 | 21,405 | |||||||
MK Capital Advisors, LLC [Member] | Purchase Agreement [Member] | ||||||||||
Imputed interest | $ 8 | |||||||||
Warrant [Member] | Wunderlich [Member] | ||||||||||
Number of shares issued | 821,816 | |||||||||
Exercise price (in dollars per share) | $ 17.50 |
ACQUISITIONS (Details)
ACQUISITIONS (Details) $ / shares in Units, $ in Thousands | Jul. 03, 2017USD ($)shares | Jun. 01, 2017USD ($)$ / sharesshares | Sep. 30, 2018shares | Dec. 31, 2017shares | Sep. 30, 2017shares | Dec. 31, 2016shares | |
Common Stock [Member] | |||||||
Consideration paid by B. Riley: | |||||||
Number of FBR Common Shares outstanding at June 1, 2017 | shares | 26,526,445 | 26,569,462 | 26,461,568 | 19,140,342 | |||
FBR & Co. ("FBR") [Member] | |||||||
Consideration paid by B. Riley: | |||||||
Number of FBR Common Shares outstanding at June 1, 2017 | shares | 7,099,511 | ||||||
Stock merger exchange ratio | 0.671 | ||||||
Number of B. Riley common shares | shares | 4,763,772 | ||||||
Number of B. Riley common shares to be issued from acceleration of vesting for outstanding FBR stock options, restricted stock and RSU awards | shares | 67,861 | ||||||
Total number of B. Riley common shares to be issued | shares | 4,831,633 | ||||||
Closing market price of B. Riley common shares on December 31, 2016 | $ / shares | $ 14.70 | ||||||
Total value of B. Riley common shares | $ 71,025 | ||||||
Fair value of RSU's attributable to service period prior to June 1, 2017 | [1] | 2,446 | |||||
Total consideration | 73,471 | ||||||
Delaware corporation ("Wunderlich") [Member] | Merger Agreement [Member] | |||||||
Consideration paid by B. Riley: | |||||||
Cash paid | $ 29,737 | ||||||
Fair value of shares issued for acquisition | 31,495 | ||||||
Total consideration | $ 65,118 | ||||||
Delaware corporation ("Wunderlich") [Member] | Merger Agreement [Member] | Common Stock [Member] | |||||||
Consideration paid by B. Riley: | |||||||
Cash paid | $ 29,737 | ||||||
Total number of B. Riley common shares to be issued | shares | 1,974,812 | ||||||
Fair value of shares issued for acquisition | $ 3,886 | ||||||
[1] | Outstanding FBR restricted stock awards at June 1, 2017, the date of the acquisition, were adjusted in accordance with the Merger Agreement with the right to receive 0.671 shares of the Company's common stock for each outstanding FBR stock award unit. The fair value of the FBR restricted stock awards at June 1, 2017 was determined based on the closing price of the Company's common stock of $14.70 on June 1, 2017. The fair value of the FBR restricted stock awards were apportioned as purchase consideration based on service provided to FBR as of June 1, 2017 with the remaining fair value of the FBR restricted stock awards to be recognized prospectively over the restricted stock and FBR restricted stock awards remaining vesting period. |
ACQUISITIONS (Details 1)
ACQUISITIONS (Details 1) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 | Jun. 01, 2017 | |
Tangible assets acquired and assumed: | ||||
Securities borrowed | $ 1,042,295 | [1] | $ 807,089 | |
Securities loaned | (1,035,408) | [1] | (803,371) | |
Goodwill | $ 120,129 | $ 98,771 | ||
FBR & Co. ("FBR") [Member] | ||||
Tangible assets acquired and assumed: | ||||
Cash and cash equivalents | $ 15,738 | |||
Securities owned | 11,188 | |||
Securities borrowed | 861,197 | |||
Accounts receivables | 4,341 | |||
Due from clearing broker | 29,169 | |||
Prepaid expenses and other assets | 5,486 | |||
Property and equipment | 8,663 | |||
Deferred taxes | 17,706 | |||
Accounts payable | (1,524) | |||
Accrued payroll and related expenses | (7,182) | |||
Accrued expenses and other liabilities | (22,411) | |||
Securities loaned | (867,626) | |||
Customer relationships | 5,600 | |||
Trade name and trademarks | 1,790 | |||
Goodwill | 11,336 | |||
Total consideration | 73,471 | |||
Delaware corporation ("Wunderlich") [Member] | Merger Agreement [Member] | ||||
Tangible assets acquired and assumed: | ||||
Cash and cash equivalents | 4,259 | |||
Securities owned | 1,413 | |||
Accounts receivables | 3,193 | |||
Due from clearing broker | 15,133 | |||
Prepaid expenses and other assets | 10,103 | |||
Property and equipment | 2,315 | |||
Deferred taxes | 5,456 | |||
Accounts payable | (1,718) | |||
Accrued payroll and related expenses | (6,387) | |||
Accrued expenses and other liabilities | (10,223) | |||
Securities loaned | (1,707) | |||
Notes payable | (10,579) | |||
Customer relationships | 15,320 | |||
Trade name and trademarks | 1,340 | |||
Goodwill | 37,200 | |||
Total consideration | $ 65,118 | |||
[1] | Includes financial instruments subject to enforceable master netting provisions that are permitted to be offset to the extent an event of default has occurred. |
ACQUISITIONS (Details 2)
ACQUISITIONS (Details 2) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Weighted average basic shares outstanding (in shares) | 25,968,997 | 26,059,490 | 25,856,339 | 22,180,808 |
Weighted average diluted shares outstanding (in shares) | 26,854,261 | 27,639,862 | 26,776,133 | 23,385,014 |
United Online Inc [Member] | ||||
Revenues | $ 92,461 | $ 320,546 | ||
Net (loss) income attributable to B. Riley Financial, Inc. | $ (42) | $ 11,785 | ||
Basic (loss) earnings per share (in dollars per share) | $ 0 | $ 0.46 | ||
Diluted (loss) earnings per share (in dollars per shares) | $ 0 | $ 0.43 | ||
Weighted average basic shares outstanding (in shares) | 26,094,000 | 25,888,446 | ||
Weighted average diluted shares outstanding (in shares) | 26,094,000 | 27,137,419 |
AQUISITIONS (Details Narrative)
AQUISITIONS (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Jul. 03, 2017 | Jun. 01, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Increase in goodwill | $ 21,358 | $ 2,562 | $ 18,796 | |||||
Acquisition consideration payable | $ 10,381 | |||||||
Goodwill | 120,129 | 120,129 | $ 98,771 | |||||
Revenues | 99,681 | 92,426 | 320,960 | 211,999 | ||||
Net income (loss) | 2,722 | 122 | 25,365 | 17,386 | ||||
Revenue | 99,681 | 320,960 | ||||||
Earnings | 2,814 | 368 | 24,314 | 17,669 | ||||
Restructuring charges | 428 | 4,896 | 2,247 | 11,484 | ||||
FBR & Co. ("FBR") [Member] | ||||||||
Share price (in dollars per share) | $ 14.70 | |||||||
Goodwill | $ 11,336 | |||||||
Number of shares issued for acquisition | 4,831,633 | |||||||
Total consideration | $ 73,471 | |||||||
Fair value of total purchase consideration | [1] | 2,446 | ||||||
Revenues | 37,745 | |||||||
Net income (loss) | 12,706 | |||||||
FBR & Co. ("FBR") [Member] | Richard J. Hendrix [Member] | ||||||||
Acquisition related costs | 3,551 | |||||||
Payroll and severance costs | 9,096 | |||||||
Delaware corporation ("Wunderlich") [Member] | Merger Agreement [Member] | ||||||||
Cash consideration paid | $ 29,737 | |||||||
Goodwill | 37,200 | |||||||
Payroll and severance costs | 317 | 1,083 | ||||||
Total consideration | $ 65,118 | |||||||
Revenues | 17,239 | 60,578 | ||||||
Net income (loss) | 276 | 844 | ||||||
Value of shares issued upon acqusition | 31,495 | |||||||
Earnings | $ 276 | $ 844 | ||||||
Revenue | 20,412 | 17,239 | 60,578 | |||||
Earnings | 1,928 | 276 | (844) | |||||
Restructuring charges | 1,387 | $ 317 | $ 1,083 | |||||
Delaware corporation ("Wunderlich") [Member] | Merger Agreement [Member] | Common Stock [Member] | ||||||||
Cash consideration paid | 29,737 | |||||||
Acquisition consideration payable | $ 65,118 | |||||||
Number of shares issued for acquisition | 1,974,812 | |||||||
Number of shares issued held in escrow account | 387,365 | 387,365 | ||||||
Value of shares issued upon acqusition | $ 3,886 | |||||||
Delaware corporation ("Wunderlich") [Member] | Merger Agreement [Member] | Warrant [Member] | ||||||||
Number of shares issued for acquisition | 821,816 | |||||||
Fair value of total purchase consideration | $ 3,886 | |||||||
Number of shares issued held in escrow account | 167,352 | |||||||
Delaware corporation ("Wunderlich") [Member] | Merger Agreement [Member] | Selling, General and Administrative Expenses [Member] | ||||||||
Acquisition related costs | $ 12 | |||||||
[1] | Outstanding FBR restricted stock awards at June 1, 2017, the date of the acquisition, were adjusted in accordance with the Merger Agreement with the right to receive 0.671 shares of the Company's common stock for each outstanding FBR stock award unit. The fair value of the FBR restricted stock awards at June 1, 2017 was determined based on the closing price of the Company's common stock of $14.70 on June 1, 2017. The fair value of the FBR restricted stock awards were apportioned as purchase consideration based on service provided to FBR as of June 1, 2017 with the remaining fair value of the FBR restricted stock awards to be recognized prospectively over the restricted stock and FBR restricted stock awards remaining vesting period. |
SECURITIES LENDING (Details)
SECURITIES LENDING (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 | ||
Securities borrowed | ||||
Gross amounts recognized | $ 1,042,295 | [1] | $ 807,089 | |
Gross amounts offset in the consolidated balance sheets | [2] | [1] | ||
Net amounts included in the consolidated balance sheets | 1,042,295 | [1] | 807,089 | |
Amounts not offset in the consolidated balance sheets but eligible for offsetting upon counterparty default | 1,042,295 | [1] | 807,089 | [2] |
Net amounts | [2] | |||
Securities loaned | ||||
Gross amounts recognized | 1,035,408 | [1] | 803,371 | |
Gross amounts offset in the consolidated balance sheets | [2] | [1] | ||
Net amounts included in the consolidated balance sheets | 1,035,408 | [1] | 803,371 | |
Amounts not offset in the consolidated balance sheets but eligible for offsetting upon counterparty default | 1,035,408 | [1] | 803,371 | [2] |
Net amounts | [2] | |||
[1] | Includes financial instruments subject to enforceable master netting provisions that are permitted to be offset to the extent an event of default has occurred. | |||
[2] | Includes the amount of cash collateral held/posted. |
ACCOUNTS RECEIVABLE (Details)
ACCOUNTS RECEIVABLE (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Receivables [Abstract] | ||
Accounts receivable | $ 22,597 | $ 15,593 |
Investment banking fees, commissions and other receivables | 16,219 | 4,199 |
Unbilled receivables | 966 | 1,023 |
Total accounts receivable | 39,782 | 20,815 |
Allowance for doubtful accounts | (824) | (800) |
Accounts receivable, net | $ 38,958 | $ 20,015 |
ACCOUNTS RECEIVABLE (Details 1)
ACCOUNTS RECEIVABLE (Details 1) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Receivables [Abstract] | ||||
Balance, beginning of period | $ 796 | $ 599 | $ 800 | $ 255 |
Add: Additions to reserve | 343 | 379 | 840 | 827 |
Less: Write-offs | (164) | (94) | (816) | (262) |
Less: Recoveries | (192) | |||
Balance, ending of period | $ 824 | $ 628 | $ 824 | $ 628 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2018 | Sep. 30, 2018 | Dec. 31, 2017 | |
Amortizable assets: | |||
Gross Carrying Value | $ 66,230 | $ 66,280 | |
Accumulated Amortization | 17,459 | 11,072 | |
Intangibles Net | 48,771 | 55,208 | |
Non-amortizable assets: | |||
Gross Carrying Value | 68,470 | 68,020 | |
Accumulated Amortization | 17,459 | 11,072 | |
Intangibles Net | 51,011 | 56,948 | |
Customer Relationships [Member] | |||
Amortizable assets: | |||
Gross Carrying Value | 58,330 | 58,330 | |
Accumulated Amortization | 14,440 | 9,100 | |
Intangibles Net | 43,890 | 49,230 | |
Customer Relationships [Member] | Minimum [Member] | |||
Amortizable assets: | |||
Useful Life | 4 years | ||
Customer Relationships [Member] | Maximum [Member] | |||
Amortizable assets: | |||
Useful Life | 16 years | ||
Domain Names [Member] | |||
Amortizable assets: | |||
Gross Carrying Value | 237 | 287 | |
Accumulated Amortization | 75 | 61 | |
Intangibles Net | 162 | 226 | |
Useful Life | 7 years | ||
Advertising Relationships [Member] | |||
Amortizable assets: | |||
Gross Carrying Value | 100 | 100 | |
Accumulated Amortization | 28 | 19 | |
Intangibles Net | 72 | 81 | |
Useful Life | 8 years | ||
Internally Developed Software and Other Intangibles [Member] | |||
Amortizable assets: | |||
Gross Carrying Value | 3,373 | 3,373 | |
Accumulated Amortization | 2,035 | 1,445 | |
Intangibles Net | 1,338 | 1,928 | |
Internally Developed Software and Other Intangibles [Member] | Minimum [Member] | |||
Amortizable assets: | |||
Useful Life | 6 months | ||
Internally Developed Software and Other Intangibles [Member] | Maximum [Member] | |||
Amortizable assets: | |||
Useful Life | 4 years | ||
Trademarks [Member] | |||
Amortizable assets: | |||
Gross Carrying Value | 4,190 | 4,190 | |
Accumulated Amortization | 881 | 447 | |
Intangibles Net | 3,309 | 3,743 | |
Trademarks [Member] | Minimum [Member] | |||
Amortizable assets: | |||
Useful Life | 7 years | ||
Trademarks [Member] | Maximum [Member] | |||
Amortizable assets: | |||
Useful Life | 8 years | ||
Tradenames [Member] | |||
Non-amortizable assets: | |||
Gross Carrying Value | 2,240 | 1,740 | |
Accumulated Amortization | |||
Intangibles Net | $ 2,240 | $ 1,740 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Goodwill | $ 120,129 | $ 120,129 | $ 98,771 | ||
Increase in goodwill | 21,358 | $ 2,562 | 18,796 | ||
Amortization expense | 2,093 | $ 2,172 | 6,399 | $ 5,248 | |
Estimated future amortization expense | |||||
Estimated future amortization expense 2018 (Remaining six months) | 2,093 | 2,093 | |||
Estimated future amortization expense 2019 | 8,369 | 8,369 | |||
Estimated future amortization expense 2020 | 7,987 | 7,987 | |||
Estimated future amortization expense 2021 | 7,605 | 7,605 | |||
Estimated future amortization expense 2022 | 7,585 | 7,585 | |||
Estimated future amortization expense after 2022 | 15,132 | 15,132 | |||
Capital Markets Reportable Segment [Member] | |||||
Goodwill | 98,714 | 98,714 | 77,356 | ||
Auction and Liquidation Reportable Segment [Member] | |||||
Goodwill | 1,975 | 1,975 | 1,975 | ||
Valuation and Appraisal Reportable Segment [Member] | |||||
Goodwill | 3,713 | 3,713 | 3,713 | ||
Principal Investments - United Online Segment [Member] | |||||
Goodwill | $ 15,727 | $ 15,727 | $ 15,727 |
CREDIT FACILITIES (Details Narr
CREDIT FACILITIES (Details Narrative) - USD ($) $ in Thousands | Apr. 19, 2018 | Apr. 21, 2017 | Apr. 13, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Mar. 19, 2015 |
Interest expense | $ 1,103 | $ 1,407 | $ 2,721 | $ 1,810 | |||||
Amortization of deferred loan fees | 620 | 1,110 | |||||||
Second Amended and Restated Credit Agreement [Member] | Wells Fargo Bank, National Association [Member] | Asset Based Credit Facility [Member] | |||||||||
Credit facility | $ 200 | ||||||||
Outstanding balance credit facility | $ 18,505 | ||||||||
Credit facility expiration date | Apr. 21, 2022 | ||||||||
Description of interest rate | The interest rate for each revolving credit advance under the Credit Agreement is, subject to certain terms and conditions, equal to the LIBOR plus a margin of 2.25% to 3.25% depending on the type of advance and the percentage such advance represents of the related transaction for which such advance is provided.</font></p>" id="sjs-C8"><p><font style="font: 10pt Times New Roman, Times, Serif">The interest rate for each revolving credit advance under the Credit Agreement is, subject to certain terms and conditions, equal to the LIBOR plus a margin of 2.25% to 3.25% depending on the type of advance and the percentage such advance represents of the related transaction for which such advance is provided.</font></p> | ||||||||
Description of success fees | The credit facility also provides for success fees in the amount of 2.5% to 17.5% of the net profits, if any, earned on the liquidation engagements funded under the Credit Agreement as set forth therein.</font></p>" id="sjs-C9"><p><font style="font: 10pt Times New Roman, Times, Serif">The credit facility also provides for success fees in the amount of 2.5% to 17.5% of the net profits, if any, earned on the liquidation engagements funded under the Credit Agreement as set forth therein.</font></p> | ||||||||
Interest expense | 809 | $ 168 | 4,138 | $ 863 | |||||
Description of collateral | The credit facility is secured by the proceeds received for services rendered in connection with liquidation service contracts pursuant to which any outstanding loan or letters of credit are issued and the assets that are sold at liquidation related to such contract.</font></p>" id="sjs-C11"><p><font style="font: 10pt Times New Roman, Times, Serif">The credit facility is secured by the proceeds received for services rendered in connection with liquidation service contracts pursuant to which any outstanding loan or letters of credit are issued and the assets that are sold at liquidation related to such contract.</font></p> | ||||||||
Payment for closing fee | $ 500 | ||||||||
UK Credit Agreement [Member] | Wells Fargo Bank, National Association [Member] | Line of Credit [Member] | GBP [Member] | |||||||||
Maximum borrowing capacity credit facility | $ 50,000 | ||||||||
Credit Agreement [Member] | |||||||||
Repayment of borrowing | $ 200 | ||||||||
Credit Agreement [Member] | Maximum [Member] | |||||||||
Maximum borrowing capacity credit facility | 200 | ||||||||
Credit Agreement [Member] | Minimum [Member] | |||||||||
Maximum borrowing capacity credit facility | $ 300 | ||||||||
Credit Agreement [Member] | Line of Credit [Member] | United Online, Inc. ("UOL") [Member] | |||||||||
Credit facility | $ 20 | ||||||||
Credit facility expiration date | Apr. 13, 2020 | ||||||||
Description of interest rate | </a><font style="font: 10pt Times New Roman, Times, Serif">Borrowings under the UOL Credit Agreement will bear interest at a rate equal to (a) (i) the base rate (the greater of the federal funds rate plus one half of one percent (0.5%), or the prime rate) for U.S. dollar loans or (ii) at UOL’s option, the LIBOR Rate for Eurodollar loans, plus (b) the applicable margin rate, which ranges from two percent (2%) to three and one-half percent (3.5%) per annum, based upon UOL’s ratio of funded indebtedness to adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) for the preceding four (4) fiscal quarters. Interest payments are to be made each one, three or six months for Eurodollar loans, and quarterly for U.S. dollar loans.</font></p>" id="sjs-D24"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></a><font style="font: 10pt Times New Roman, Times, Serif">Borrowings under the UOL Credit Agreement will bear interest at a rate equal to (a) (i) the base rate (the greater of the federal funds rate plus one half of one percent (0.5%), or the prime rate) for U.S. dollar loans or (ii) at UOL’s option, the LIBOR Rate for Eurodollar loans, plus (b) the applicable margin rate, which ranges from two percent (2%) to three and one-half percent (3.5%) per annum, based upon UOL’s ratio of funded indebtedness to adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) for the preceding four (4) fiscal quarters. Interest payments are to be made each one, three or six months for Eurodollar loans, and quarterly for U.S. dollar loans.</font></p> | ||||||||
Interest expense | 62 | 228 | |||||||
Amortization of deferred loan fees | $ 34 | $ (102) | |||||||
Description of collateral | </a><font style="font: 10pt Times New Roman, Times, Serif">Each of UOL’s U.S. subsidiaries is a guarantor of all obligations under the UOL Credit Agreement and are parties to the UOL Credit Agreement in such capacity (collectively, the “Secured Guarantors”). In addition, the Company and B. Riley Principal Investments, LLC, the parent corporation of UOL and a subsidiary of the Company, are guarantors of the obligations under the UOL Credit Agreement pursuant to standalone guaranty agreements pursuant to which the shares of outstanding capital stock of UOL are pledged as collateral. The obligations under the UOL Credit Agreement are secured by first-priority liens on, and a first-priority security interest in, substantially all of the assets of UOL and the Secured Guarantors, including a pledge of (a) 100% of the equity interests of the Secured Guarantors and (b) 65% of the equity interests in United Online Software Development (India) Private Limited, a private limited company organized under the laws of India. </font></p>" id="sjs-D27"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></a><font style="font: 10pt Times New Roman, Times, Serif">Each of UOL’s U.S. subsidiaries is a guarantor of all obligations under the UOL Credit Agreement and are parties to the UOL Credit Agreement in such capacity (collectively, the “Secured Guarantors”). In addition, the Company and B. Riley Principal Investments, LLC, the parent corporation of UOL and a subsidiary of the Company, are guarantors of the obligations under the UOL Credit Agreement pursuant to standalone guaranty agreements pursuant to which the shares of outstanding capital stock of UOL are pledged as collateral. The obligations under the UOL Credit Agreement are secured by first-priority liens on, and a first-priority security interest in, substantially all of the assets of UOL and the Secured Guarantors, including a pledge of (a) 100% of the equity interests of the Secured Guarantors and (b) 65% of the equity interests in United Online Software Development (India) Private Limited, a private limited company organized under the laws of India. </font></p> | ||||||||
Description of line of credit | <font style="font: 10pt Times New Roman, Times, Serif">Amount is reduced by $1,500 commencing on June 30, 2017 and on the last day of each calendar quarter thereafter.</font></p>" id="sjs-D28"><p style="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 10pt Times New Roman, Times, Serif">Amount is reduced by $1,500 commencing on June 30, 2017 and on the last day of each calendar quarter thereafter.</font></p> | ||||||||
Percent of commitment fees | 1.00% | ||||||||
Description of unused line fee payable | <font style="font: 10pt Times New Roman, Times, Serif">(a) 0.50% per annum times the amount of the unused revolving commitment that is less than or equal to the amount of the cash maintained in accounts with the agent (as depositary bank); plus (b) 1.00% per annum times the amount of the unused revolving commitment that is greater than the amount of the cash maintained in accounts with the agent (as depositary bank).</font></p>" id="sjs-D30"><p style="font: 12pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font: 10pt Times New Roman, Times, Serif">(a) 0.50% per annum times the amount of the unused revolving commitment that is less than or equal to the amount of the cash maintained in accounts with the agent (as depositary bank); plus (b) 1.00% per annum times the amount of the unused revolving commitment that is greater than the amount of the cash maintained in accounts with the agent (as depositary bank).</font></p> |
NOTES PAYABLE (Details)
NOTES PAYABLE (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Short-term Debt [Line Items] | ||
Senior notes payable | $ 463,510 | $ 208,221 |
Less: Unamortized debt issue costs | (7,727) | (4,600) |
Senior notes payable , net | 455,783 | 203,621 |
7.50% Senior notes due October 31, 2021 [Member] | ||
Short-term Debt [Line Items] | ||
Senior notes payable | 46,407 | 35,231 |
Less: Unamortized debt issue costs | (522) | (748) |
7.50% Senior Notes Due May 31, 2027 [Member] | ||
Short-term Debt [Line Items] | ||
Senior notes payable | 107,429 | 92,490 |
Less: Unamortized debt issue costs | (1,569) | (90,904) |
7.25% Senior Notes Due December 31, 2027 [Member] | ||
Short-term Debt [Line Items] | ||
Senior notes payable | 100,441 | 80,500 |
Less: Unamortized debt issue costs | (2,418) | (2,266) |
7.375% Senior notes due May 31, 2023 [Member] | ||
Short-term Debt [Line Items] | ||
Senior notes payable | 109,183 | |
6.875% Senior Notes Due September 30, 2023 [Member] | ||
Short-term Debt [Line Items] | ||
Senior notes payable | 100,050 | |
Less: Unamortized debt issue costs | $ (1,431) |
NOTES PAYABLE (Details Narrativ
NOTES PAYABLE (Details Narrative) - USD ($) $ in Thousands | Jun. 05, 2018 | Apr. 25, 2018 | Apr. 19, 2018 | Dec. 31, 2017 | Nov. 02, 2016 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | May 31, 2018 | Jun. 30, 2017 | May 31, 2017 |
Interest expense | $ 1,103 | $ 1,407 | $ 2,721 | $ 1,810 | ||||||||||
Unamortized debt issuance cost and premiums | $ 4,600 | 7,727 | 7,727 | $ 4,600 | ||||||||||
Proceeds from Notes Payable | 51,020 | |||||||||||||
Notes payable | 2,243 | 1,671 | 1,671 | 2,243 | ||||||||||
Amortization of deferred loan fees | 620 | 1,110 | ||||||||||||
GACP I, L.P [Member] | ||||||||||||||
Principal amount | $ 51,020 | |||||||||||||
Notes payable | 1,020 | |||||||||||||
Advance for borrowing | $ 50,000 | |||||||||||||
LIBOR rate | Interest is payable monthly and accrues at the three-month LIBOR rate plus 9% (11.34% at June 30, 2018). </font></p>" id="sjs-D11"><p><font style="font: 10pt Times New Roman, Times, Serif">Interest is payable monthly and accrues at the three-month LIBOR rate plus 9% (11.34% at June 30, 2018). </font></p> | |||||||||||||
Other Notes Payable [Member] | ||||||||||||||
Interest expense | $ 34 | |||||||||||||
Outstanding amount | $ 1,671 | 2,243 | ||||||||||||
Description of non interest bearing notes payable | <font style="font: 10pt Times New Roman, Times, Serif">Notes payable include notes payable to a clearing organization for one of the Company’s broker dealers. The notes payable accrue interest at rates ranging from the prime rate plus 0.25% to 2.0% (5.25% to 7.00% at June 30, 2018) payable annually.</font></p>" id="sjs-J15"><p style="margin: 0pt"><font style="font: 10pt Times New Roman, Times, Serif">Notes payable include notes payable to a clearing organization for one of the Company’s broker dealers. The notes payable accrue interest at rates ranging from the prime rate plus 0.25% to 2.0% (5.25% to 7.00% at June 30, 2018) payable annually.</font></p> | |||||||||||||
Payment terms | <font style="font: 10pt Times New Roman, Times, Serif">The principal payments on the notes payable are due annually in the amount of $357 on January 31, $214 on September 30, and $121 on October 31.</font></p>" id="sjs-J16"><p style="margin: 0pt"><font style="font: 10pt Times New Roman, Times, Serif">The principal payments on the notes payable are due annually in the amount of $357 on January 31, $214 on September 30, and $121 on October 31.</font></p> | |||||||||||||
Maturity date, description | <font style="font: 10pt Times New Roman, Times, Serif">The notes payable mature at various dates from September 30, 2018 through January 31, 2022.</font></p>" id="sjs-J17"><p style="margin: 0pt"><font style="font: 10pt Times New Roman, Times, Serif">The notes payable mature at various dates from September 30, 2018 through January 31, 2022.</font></p> | |||||||||||||
7.50% Senior notes due October 31, 2021 [Member] | ||||||||||||||
Principal amount | $ 28,750 | 46,407 | $ 46,407 | |||||||||||
Interest expense | $ 898 | 643 | 2,380 | 2,380 | ||||||||||
Outstanding amount | $ 45,885 | 34,483 | ||||||||||||
Proceeds from note payable | 45,502 | |||||||||||||
Interest rate | 7.50% | 7.50% | ||||||||||||
Unamortized debt issuance cost and premiums | 748 | $ 522 | $ 522 | 748 | ||||||||||
Underwriting commissions, fees and other issuance costs | $ 905 | |||||||||||||
7.50% Senior notes due October 31, 2021 [Member] | At The Market Issuance Sales Agreement [Member] | ||||||||||||||
Principal amount | 11,176 | 11,176 | $ 6,481 | |||||||||||
7.50% Senior Notes Due May 31, 2027 [Member] | ||||||||||||||
Principal amount | 107,429 | 107,429 | $ 60,375 | |||||||||||
Interest expense | $ 2,304 | $ 1,407 | 5,672 | $ 1,810 | ||||||||||
Outstanding amount | 105,860 | |||||||||||||
Proceeds from note payable | $ 105,621 | |||||||||||||
Interest rate | 7.50% | 7.50% | ||||||||||||
Unamortized debt issuance cost and premiums | 90,904 | $ 1,569 | $ 1,569 | 90,904 | ||||||||||
Underwriting commissions, fees and other issuance costs | 1,808 | 1,586 | ||||||||||||
7.50% Senior Notes Due May 31, 2027 [Member] | At The Market Issuance Sales Agreement [Member] | ||||||||||||||
Principal amount | 14,939 | 14,939 | $ 32,115 | |||||||||||
7.50% Senior Notes Due 2021/ 7.25% Senior Notes Due 2027 [Member] | At The Market Issuance Sales Agreement [Member] | ||||||||||||||
Principal amount | $ 50,000 | 12,997 | 12,997 | |||||||||||
Interest rate | 7.50% | |||||||||||||
7.25% Senior Notes Due December 31, 2027 [Member] | ||||||||||||||
Principal amount | 100,441 | 100,441 | ||||||||||||
Interest expense | $ 1,871 | 5,155 | ||||||||||||
Outstanding amount | $ 98,023 | 78,234 | ||||||||||||
Proceeds from note payable | 97,825 | |||||||||||||
Interest rate | 7.25% | 7.25% | ||||||||||||
Unamortized debt issuance cost and premiums | 2,266 | $ 2,418 | $ 2,418 | 2,266 | ||||||||||
Underwriting commissions, fees and other issuance costs | 2,616 | |||||||||||||
7.25% Senior Notes Due December 31, 2027 [Member] | At The Market Issuance Sales Agreement [Member] | ||||||||||||||
Principal amount | $ 80,500 | 19,941 | 19,941 | $ 80,500 | ||||||||||
7.375% Senior Notes Due May 31, 2023 [Member] | ||||||||||||||
Principal amount | 109,183 | 109,183 | $ 100,050 | |||||||||||
Interest expense | $ 2,047 | 3,023 | ||||||||||||
Outstanding amount | 107,396 | |||||||||||||
Proceeds from note payable | $ 107,248 | |||||||||||||
Interest rate | 7.375% | 7.375% | ||||||||||||
Unamortized debt issuance cost and premiums | $ 1,787 | $ 1,787 | ||||||||||||
Underwriting commissions, fees and other issuance costs | 1,935 | |||||||||||||
Offering price | $ 6,343 | $ 43,657 | ||||||||||||
7.375% Senior Notes Due May 31, 2023 [Member] | At The Market Issuance Sales Agreement [Member] | ||||||||||||||
Principal amount | 9,133 | 9,133 | ||||||||||||
Offering price | $ 36,903 | $ 13,097 | ||||||||||||
6.875% Senior Notes Due September 30, 2023 [Member] | ||||||||||||||
Principal amount | 100,050 | 100,050 | ||||||||||||
Interest expense | $ 398 | 398 | ||||||||||||
Outstanding amount | 98,619 | |||||||||||||
Proceeds from note payable | $ 98,603 | |||||||||||||
Interest rate | 6.875% | 6.875% | ||||||||||||
Unamortized debt issuance cost and premiums | $ 1,431 | $ 1,431 | ||||||||||||
Underwriting commissions, fees and other issuance costs | $ 1,447 |
REVENUE FROM CONTRACTS WITH C_3
REVENUE FROM CONTRACTS WITH CUSTOMERS (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2018 | Sep. 30, 2018 | |
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | $ 88,944 | $ 279,904 |
Other sources of revenue: | ||
Total revenues | 99,681 | 320,960 |
Corporate Finance And Investment Banking Fees [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | 35,902 | 84,927 |
Wealth And Asset Management Fees [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | 19,171 | 56,928 |
Commissions, Fees And Reimbursed Expenses [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | 22,336 | 92,141 |
Subscription Services [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | 9,151 | 27,335 |
Service Contract Revenues [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | 108 | 11,648 |
Advertising And Other [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | 2,276 | 6,925 |
Interest Income - Securities lending [Member] | ||
Other sources of revenue: | ||
Total revenues | 8,954 | 22,836 |
Trading Gain On Investments [Member] | ||
Other sources of revenue: | ||
Total revenues | (3,462) | 1,449 |
Other [Member] | ||
Other sources of revenue: | ||
Total revenues | 5,245 | 16,771 |
Capital Markets Reportable Segment [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | 65,606 | 173,401 |
Other sources of revenue: | ||
Total revenues | 76,343 | 214,457 |
Capital Markets Reportable Segment [Member] | Corporate Finance And Investment Banking Fees [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | 35,902 | 84,927 |
Capital Markets Reportable Segment [Member] | Wealth And Asset Management Fees [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | 19,171 | 56,928 |
Capital Markets Reportable Segment [Member] | Commissions, Fees And Reimbursed Expenses [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | 10,533 | 31,546 |
Capital Markets Reportable Segment [Member] | Subscription Services [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | ||
Capital Markets Reportable Segment [Member] | Service Contract Revenues [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | ||
Capital Markets Reportable Segment [Member] | Advertising And Other [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | ||
Capital Markets Reportable Segment [Member] | Interest Income - Securities lending [Member] | ||
Other sources of revenue: | ||
Total revenues | 8,954 | 22,836 |
Capital Markets Reportable Segment [Member] | Trading Gain On Investments [Member] | ||
Other sources of revenue: | ||
Total revenues | (3,462) | 1,449 |
Capital Markets Reportable Segment [Member] | Other [Member] | ||
Other sources of revenue: | ||
Total revenues | 5,245 | 16,771 |
Auction and Liquidation Reportable Segment [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | 2,507 | 44,860 |
Other sources of revenue: | ||
Total revenues | 2,507 | 44,860 |
Auction and Liquidation Reportable Segment [Member] | Corporate Finance And Investment Banking Fees [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | ||
Auction and Liquidation Reportable Segment [Member] | Wealth And Asset Management Fees [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | ||
Auction and Liquidation Reportable Segment [Member] | Commissions, Fees And Reimbursed Expenses [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | 2,399 | 33,212 |
Auction and Liquidation Reportable Segment [Member] | Subscription Services [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | ||
Auction and Liquidation Reportable Segment [Member] | Service Contract Revenues [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | 108 | 11,648 |
Auction and Liquidation Reportable Segment [Member] | Advertising And Other [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | ||
Auction and Liquidation Reportable Segment [Member] | Interest Income - Securities lending [Member] | ||
Other sources of revenue: | ||
Total revenues | ||
Auction and Liquidation Reportable Segment [Member] | Trading Gain On Investments [Member] | ||
Other sources of revenue: | ||
Total revenues | ||
Auction and Liquidation Reportable Segment [Member] | Other [Member] | ||
Other sources of revenue: | ||
Total revenues | ||
Valuation and Appraisal Reportable Segment [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | 9,404 | 27,383 |
Other sources of revenue: | ||
Total revenues | 9,404 | 27,383 |
Valuation and Appraisal Reportable Segment [Member] | Corporate Finance And Investment Banking Fees [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | ||
Valuation and Appraisal Reportable Segment [Member] | Wealth And Asset Management Fees [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | ||
Valuation and Appraisal Reportable Segment [Member] | Commissions, Fees And Reimbursed Expenses [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | 9,404 | 27,383 |
Valuation and Appraisal Reportable Segment [Member] | Subscription Services [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | ||
Valuation and Appraisal Reportable Segment [Member] | Service Contract Revenues [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | ||
Valuation and Appraisal Reportable Segment [Member] | Advertising And Other [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | ||
Valuation and Appraisal Reportable Segment [Member] | Interest Income - Securities lending [Member] | ||
Other sources of revenue: | ||
Total revenues | ||
Valuation and Appraisal Reportable Segment [Member] | Trading Gain On Investments [Member] | ||
Other sources of revenue: | ||
Total revenues | ||
Valuation and Appraisal Reportable Segment [Member] | Other [Member] | ||
Other sources of revenue: | ||
Total revenues | ||
Principal Investments - United Online Segment [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | 11,427 | 34,260 |
Other sources of revenue: | ||
Total revenues | 11,427 | 34,260 |
Principal Investments - United Online Segment [Member] | Corporate Finance And Investment Banking Fees [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | ||
Principal Investments - United Online Segment [Member] | Wealth And Asset Management Fees [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | ||
Principal Investments - United Online Segment [Member] | Commissions, Fees And Reimbursed Expenses [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | ||
Principal Investments - United Online Segment [Member] | Subscription Services [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | 9,151 | 27,335 |
Principal Investments - United Online Segment [Member] | Service Contract Revenues [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | ||
Principal Investments - United Online Segment [Member] | Advertising And Other [Member] | ||
Revenues from contracts with customers: | ||
Total revenues from contracts with customers | 2,276 | 6,925 |
Principal Investments - United Online Segment [Member] | Interest Income - Securities lending [Member] | ||
Other sources of revenue: | ||
Total revenues | ||
Principal Investments - United Online Segment [Member] | Trading Gain On Investments [Member] | ||
Other sources of revenue: | ||
Total revenues | ||
Principal Investments - United Online Segment [Member] | Other [Member] | ||
Other sources of revenue: | ||
Total revenues |
REVENUE FROM CONTRACTS WITH C_4
REVENUE FROM CONTRACTS WITH CUSTOMERS (Details Narrative) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 |
Revenue from Contract with Customer [Abstract] | |||
Accounts receivable, net | $ 38,958 | $ 20,015 | |
Deferred revenue | 3,205 | 3,141 | |
Recognized revenue from contract | 5,423 | 9,889 | |
prepaid expenses and other assets | 2,387 | ||
Contract capital cost | $ 0 | $ 602 |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) $ in Thousands | Dec. 22, 2017 | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 |
Operating Loss Carryforwards [Line Items] | ||||||
Effective income tax rate | 24.90% | 80.50% | ||||
Tax benefit | $ (2,046) | $ 13,052 | $ 1,357 | $ (8,412) | $ 7,753 | |
Expiration date | Dec. 31, 2029 | |||||
Previous U.S. federal corporate tax rate | 35.00% | |||||
U.S. federal corporate tax rate | 21.00% | |||||
Remeasurement of deferred tax assets and liabilities | 12,954 | |||||
Transition tax on foreign earnings | 98 | |||||
Deferred tax assets valuation allowance | $ 4,694 | |||||
Federal Tax Authority [Member] | ||||||
Operating Loss Carryforwards [Line Items] | ||||||
Net operating loss carryforwards | 63,445 | $ 63,445 | ||||
Expiration date | Dec. 31, 2029 | |||||
State and Local Jurisdiction [Member] | ||||||
Operating Loss Carryforwards [Line Items] | ||||||
Net operating loss carryforwards | $ 76,978 | $ 76,978 | ||||
Expiration date | Dec. 31, 2034 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Earnings Per Share [Abstract] | ||||
Net income attributable to B. Riley Financial, Inc. | $ 2,814 | $ 368 | $ 24,314 | $ 17,669 |
Weighted average shares outstanding: | ||||
Basic (in shares) | 25,968,997 | 26,059,490 | 25,856,339 | 22,180,808 |
Effect of dilutive potential common shares: | ||||
Restricted stock units and warrants | 705,557 | 1,193,007 | 740,087 | 816,841 |
Contingently issuable shares | 179,707 | 387,365 | 179,707 | 387,365 |
Diluted | 26,854,261 | 27,639,862 | 26,776,133 | 23,385,014 |
Basic income per share (in dollars per share) | $ 0.11 | $ 0.01 | $ 0.94 | $ 0.8 |
Diluted income per share (in dollars per share) | $ 0.1 | $ 0.01 | $ 0.91 | $ 0.76 |
EARNINGS PER SHARE (Details Nar
EARNINGS PER SHARE (Details Narrative) - USD ($) $ in Thousands | Jul. 03, 2017 | Sep. 30, 2018 | Sep. 30, 2017 |
Delaware corporation ("Wunderlich") [Member] | Merger Agreement [Member] | Common Stock [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Number of shares held in escrow account | 387,365 | 387,365 | |
Escrow Subject to Cancellation Escrow Claims [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Number of shares held in escrow account | 453,365 | ||
Escrow Subject to Cancellation Escrow Claims [Member] | Great American Group, LLC [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Number of shares held in escrow account | 66,000 | ||
Number of shares issued in escrow account to forfeiture for final settlement of claims | $ 387,365 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) $ in Thousands | Jan. 05, 2017 | Sep. 30, 2017 | Jul. 31, 2017 | Feb. 28, 2017 |
Frontier State Bank Vs Wunderlich Loan Capital Corp [Member] | ||||
Loss Contingencies [Line Items] | ||||
Damages value | $ 1,300 | |||
Arbitration Claim Against WSI and Gary Wunderlich [Member] | ||||
Loss Contingencies [Line Items] | ||||
Damages value | $ 8,000 | |||
Arbitration Claim Against WSI and Gary Wunderlich [Member] | MLV & Co. [Member] | ||||
Loss Contingencies [Line Items] | ||||
Offering price | $ 151 | |||
Arbitration Claim Against Wunderlich Securities, Inc. [Member] | ||||
Loss Contingencies [Line Items] | ||||
Damages value | $ 10,000 |
SHARE BASED PAYMENTS (Details)
SHARE BASED PAYMENTS (Details) - Restricted Stock Units (RSUs) [Member] - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Amended and Restated 2009 Stock Incentive Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||
Nonvested at beginning | 792,264 | |
Granted | 424,235 | |
Vested | (304,599) | |
Forfeited | (9,057) | |
Nonvested at end | 902,843 | 792,264 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | ||
Nonvested at beginning | $ 13.30 | |
Granted | 20.87 | |
Vested | 13.17 | |
Forfeited | 12.49 | |
Nonvested at end | $ 16.91 | $ 13.30 |
FBR Stock Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||
Nonvested at beginning | 1,066,133 | |
Granted | 186,662 | 871,317 |
Vested | (347,265) | |
Forfeited | (84,238) | |
Nonvested at end | 821,292 | 1,066,133 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | ||
Nonvested at beginning | $ 16.15 | |
Granted | 20.73 | |
Vested | 15.33 | |
Forfeited | 15.85 | |
Nonvested at end | $ 17.57 | $ 16.15 |
SHARE BASED PAYMENTS (Details N
SHARE BASED PAYMENTS (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share based compensation expense | $ 8,650 | $ 7,679 | |||
Amended and Restated 2009 Stock Incentive Plan [Member] | Restricted Stock Units (RSUs) [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares granted | 424,235 | ||||
Number of shares vested | (304,599) | ||||
Total fair value | $ 8,855 | $ 8,855 | |||
Share based compensation expense | 1,714 | $ 1,410 | 4,085 | 3,624 | |
Unrecognized share based compensation expense | $ 12,661 | $ 12,661 | |||
Unrecognized share based compensation weighted average period | 2 years 2 months 12 days | ||||
Weighted average grant date fair value (in dollars per share) | $ 20.87 | ||||
Amended and Restated 2009 Stock Incentive Plan [Member] | Restricted Stock Units (RSUs) [Member] | Employee and Directors [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares granted | 486,049 | ||||
Total fair value | $ 7,732 | $ 7,732 | |||
FBR Stock Plan [Member] | Restricted Stock Units (RSUs) [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares granted | 186,662 | 871,317 | |||
Number of shares vested | (347,265) | ||||
Total fair value | 5,324 | $ 5,324 | |||
Share based compensation expense | 1,321 | $ 1,383 | 4,509 | $ 1,687 | $ 14,577 |
Unrecognized share based compensation expense | $ 9,468 | $ 9,468 | |||
Unrecognized share based compensation weighted average period | 2 years 3 months 18 days | ||||
Weighted average grant date fair value (in dollars per share) | $ 20.73 |
NET CAPITAL REQUIREMENTS (Detai
NET CAPITAL REQUIREMENTS (Details Narrative) $ in Thousands | Sep. 30, 2018USD ($) |
FBR & Co. ("FBR") [Member] | |
Net capital | $ 76,053 |
Excess capital | 74,059 |
MLV & Co. [Member] | |
Net capital | 657 |
Excess capital | 557 |
Wunderlich Securities, Inc. [Member] | |
Net capital | 4,128 |
Excess capital | 3,514 |
Maximum [Member] | FBR & Co. ("FBR") [Member] | |
Net capital | 1,994 |
Maximum [Member] | MLV & Co. [Member] | |
Net capital | 100 |
Maximum [Member] | Wunderlich Securities, Inc. [Member] | |
Net capital | 614 |
B. Riley & Co., LLC [Member] | |
Net capital | 350 |
Excess capital | 100 |
B. Riley & Co., LLC [Member] | Maximum [Member] | |
Net capital | $ 250 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Apr. 19, 2018 | Dec. 31, 2017 | |
Due from related party | $ 9,921 | $ 9,921 | $ 5,689 | |||
Due to related party | 1,428 | 1,428 | 1,578 | |||
Unamortized debt issuance cost and premiums | 7,727 | 7,727 | 4,600 | |||
Interest expense | 1,103 | $ 1,407 | 2,721 | $ 1,810 | ||
Amortization of deferred loan fees | 620 | 1,110 | ||||
GACP I, L.P [Member] | ||||||
Principal amount | $ 51,020 | |||||
Due from related party | 6,807 | 6,807 | 5,585 | |||
GACP II, L.P [Member] | ||||||
Due from related party | $ 1,943 | $ 1,943 | 52 | |||
CA Global Partners, LLC [Member] | ||||||
Due from related party | $ 52 |
BUSINESS SEGMENTS (Details)
BUSINESS SEGMENTS (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Segment Reporting Information [Line Items] | |||||
Total revenues | $ 99,681 | $ 92,426 | $ 320,960 | $ 211,999 | |
Interest expense - Securities lending | 6,425 | 4,950 | 16,317 | 6,515 | |
Cost of goods sold | 52 | 124 | 142 | 313 | |
Selling, general, and administrative expenses | (71,782) | (70,962) | (216,603) | (132,836) | |
Depreciation and amortization | (9,768) | (7,705) | |||
Restructuring charge | (428) | (4,896) | (2,247) | (11,484) | |
Segment income (loss) | 12,838 | 1,356 | 51,918 | 14,627 | |
Consolidated operating income from reportable segments | 18,343 | 9,751 | 68,856 | 34,198 | |
Corporate and other expenses (including restructuring recovery of $172 and $210 during the three and six months ended June 30, 2018, respectively, and restructuring charge of $2,182 during the three and six months ended June 30, 2017 | (5,505) | (8,395) | (16,938) | (19,571) | |
Interest income | 442 | 76 | 736 | 358 | |
Income on equity investment | 828 | (157) | 5,049 | (157) | |
Interest expense | (9,340) | (2,510) | (23,926) | (5,195) | |
Income before income taxes | 4,768 | (1,235) | 33,777 | 9,633 | |
(Provision for) benefit from income taxes | (2,046) | $ 13,052 | 1,357 | (8,412) | 7,753 |
Net income | 2,722 | 122 | 25,365 | 17,386 | |
Net income (loss) attributable to noncontrolling interests | (92) | (246) | 1,051 | (283) | |
Net income attributable to B. Riley Financial, Inc. | 2,814 | 368 | 24,314 | 17,669 | |
Services And Fees [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | 90,655 | 85,450 | 297,986 | 202,663 | |
Sale Of Goods [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | 72 | 79 | 138 | 221 | |
Interest Income - Securities lending [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | 8,954 | 6,897 | 22,836 | 9,115 | |
Capital Markets Reportable Segment [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | 76,343 | 63,679 | 214,457 | 105,296 | |
Interest expense - Securities lending | (6,425) | (4,950) | (16,317) | (6,515) | |
Selling, general, and administrative expenses | (57,207) | (53,955) | (168,559) | (87,753) | |
Depreciation and amortization | (1,309) | (1,636) | (4,428) | (2,167) | |
Restructuring charge | (428) | (3,322) | (2,457) | (7,245) | |
Segment income (loss) | 10,974 | (184) | 22,696 | 1,616 | |
Capital Markets Reportable Segment [Member] | Services And Fees [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | 67,389 | 56,782 | 191,621 | 96,181 | |
Capital Markets Reportable Segment [Member] | Interest Income - Securities lending [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | 8,954 | 6,897 | 22,836 | 9,115 | |
Auction and Liquidation Reportable Segment [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | 2,507 | 7,377 | 44,860 | 43,180 | |
Direct cost of services | (838) | (3,385) | (12,263) | (25,482) | |
Cost of goods sold | (24) | (2) | (41) | (2) | |
Selling, general, and administrative expenses | (1,289) | (1,963) | (7,787) | (6,562) | |
Depreciation and amortization | (7) | (5) | (23) | (15) | |
Segment income (loss) | 349 | 2,022 | 24,746 | 11,119 | |
Auction and Liquidation Reportable Segment [Member] | Services And Fees [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | 2,459 | 7,376 | 44,812 | 43,179 | |
Auction and Liquidation Reportable Segment [Member] | Sale Of Goods [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | 48 | 1 | 48 | 1 | |
Valuation and Appraisal Reportable Segment [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Direct cost of services | (4,067) | (3,778) | (12,388) | (11,031) | |
Selling, general, and administrative expenses | (2,379) | (2,253) | (7,138) | (6,395) | |
Depreciation and amortization | (56) | (43) | (159) | (130) | |
Segment income (loss) | 2,902 | 2,969 | 7,698 | 7,243 | |
Valuation and Appraisal Reportable Segment [Member] | Services And Fees [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | 9,404 | 9,043 | 27,383 | 24,799 | |
Principal Investments - United Online Segment [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | 11,427 | 12,327 | 34,260 | 38,724 | |
Direct cost of services | (3,251) | (2,975) | (9,082) | (9,711) | |
Cost of goods sold | (28) | (122) | (101) | (311) | |
Selling, general, and administrative expenses | (2,348) | (2,433) | (6,321) | (8,536) | |
Depreciation and amortization | (1,682) | (1,703) | (5,040) | (5,313) | |
Restructuring charge | (150) | (633) | |||
Segment income (loss) | 4,118 | 4,944 | 13,716 | 14,220 | |
Principal Investments - United Online Segment [Member] | Services And Fees [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | 11,403 | 12,249 | 34,170 | 38,504 | |
Principal Investments - United Online Segment [Member] | Sale Of Goods [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | $ 24 | $ 78 | $ 90 | $ 220 |
BUSINESS SEGMENTS (Details 1)
BUSINESS SEGMENTS (Details 1) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Segment Reporting Information [Line Items] | ||||
Total revenues | $ 99,681 | $ 92,426 | $ 320,960 | $ 211,999 |
Services And Fees [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 90,655 | 85,450 | 297,986 | 202,663 |
Sale Of Goods [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 72 | 79 | 138 | 221 |
Interest Income - Securities lending [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 8,954 | 6,897 | 22,836 | 9,115 |
North America | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 99,675 | 92,413 | 319,692 | 210,145 |
North America | Services And Fees [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 90,649 | 85,437 | 296,718 | 200,809 |
North America | Sale Of Goods [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 72 | 79 | 138 | 221 |
North America | Interest Income - Securities lending [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 8,954 | 6,897 | 22,836 | 9,115 |
Australia | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 940 | |||
Australia | Services And Fees [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 940 | |||
Europe | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 6 | 13 | 1,268 | 914 |
Europe | Services And Fees [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | $ 6 | $ 1,268 | $ 13 | $ 914 |
BUSINESS SEGMENTS (Details 2)
BUSINESS SEGMENTS (Details 2) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Total Long-lived Assets - Property and Equipment, net | $ 11,143 | $ 11,977 |
North America | ||
Total Long-lived Assets - Property and Equipment, net | 11,143 | 11,977 |
Australia | ||
Total Long-lived Assets - Property and Equipment, net | ||
Europe | ||
Total Long-lived Assets - Property and Equipment, net |