Delaware
|
001-33440
|
30-0390693
|
(State or Other Jurisdiction
of Incorporation)
|
(Commission File Number)
|
(I.R.S. Employer Identification Number)
|
o |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
o |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
o |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
o |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
|
o | Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (240.12b-2 of this chapter). |
|
o |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
|
(d)
|
Exhibits.
|
99.1
|
Press Release dated October 16, 2018.
|
INTERACTIVE BROKERS GROUP, INC.
|
|||
By:
|
/s/ Paul J. Brody | ||
Name:
|
Paul J. Brody
|
||
Title:
|
Chief Financial Officer, Treasurer
and Secretary
|
·
|
63% pretax profit margin for this quarter and the year-ago quarter.
|
·
|
66% Electronic Brokerage pretax profit margin for this quarter, up from 61% in the year-ago quarter.
|
·
|
Customer equity grew 23% from the year-ago quarter to $142.5 billion and customer debits increased 22% to $30.7 billion.
|
·
|
Customer accounts increased 26% from the year-ago quarter to 576 thousand.
|
·
|
Total DARTs1 increased 10% from the year-ago quarter to 763 thousand.
|
·
|
Brokerage segment equity was $5.5 billion. Total equity was $6.9 billion.
|
|
Brokerage
|
|||||||||||||||||
Market
|
Brokerage
|
Non
|
Avg. Trades
|
|||||||||||||||
Making
|
%
|
Cleared
|
%
|
Cleared
|
%
|
Total
|
%
|
per U.S.
|
||||||||||
Period
|
Trades
|
Change
|
Trades
|
Change
|
Trades
|
Change
|
Trades
|
Change
|
Trading Day
|
|||||||||
2015
|
65,937
|
242,846
|
18,769
|
327,553
|
1,305
|
|||||||||||||
2016
|
64,038
|
(3%)
|
259,932
|
7%
|
16,515
|
(12%)
|
340,485
|
4%
|
1,354
|
|||||||||
2017
|
31,282
|
(51%)
|
265,501
|
2%
|
14,835
|
(10%)
|
311,618
|
(8%)
|
1,246
|
|||||||||
3Q2017
|
6,834
|
66,262
|
3,698
|
76,794
|
1,229
|
|||||||||||||
3Q2018
|
4,795
|
(30%)
|
71,646
|
8%
|
5,293
|
43%
|
81,734
|
6%
|
1,308
|
|||||||||
2Q2018
|
4,575
|
78,026
|
4,641
|
87,242
|
1,363
|
|||||||||||||
3Q2018
|
4,795
|
5%
|
71,646
|
(8%)
|
5,293
|
14%
|
81,734
|
(6%)
|
1,308
|
Options
|
%
|
Futures1
|
%
|
Stocks
|
%
|
|||||||
Period
|
(contracts)
|
Change
|
(contracts)
|
Change
|
(shares)
|
Change
|
||||||
2015
|
634,388
|
140,668
|
172,742,520
|
|||||||||
2016
|
572,834
|
(10%)
|
143,287
|
2%
|
155,439,227
|
(10%)
|
||||||
2017
|
395,885
|
(31%)
|
124,123
|
(13%)
|
220,247,921
|
42%
|
||||||
3Q2017
|
93,470
|
31,508
|
55,195,706
|
|||||||||
3Q2018
|
92,297
|
(1%)
|
29,936
|
(5%)
|
45,572,711
|
(17%)
|
||||||
|
||||||||||||
2Q2018
|
93,253
|
36,693
|
51,370,386
|
|||||||||
3Q2018
|
92,297
|
(1%)
|
29,936
|
(18%)
|
45,572,711
|
(11%)
|
Options
|
%
|
Futures1
|
%
|
Stocks
|
%
|
|||||||
Period
|
(contracts)
|
Change
|
(contracts)
|
Change
|
(shares)
|
Change
|
||||||
2015
|
335,406
|
14,975
|
15,376,076
|
|||||||||
2016
|
307,377
|
(8%)
|
14,205
|
(5%)
|
13,082,887
|
(15%)
|
||||||
2017
|
102,025
|
(67%)
|
5,696
|
(60%)
|
7,139,622
|
(45%)
|
||||||
3Q2017
|
18,676
|
1,040
|
1,814,393
|
|||||||||
3Q2018
|
11,805
|
(37%)
|
758
|
(27%)
|
2,995,942
|
65%
|
||||||
2Q2018
|
11,813
|
756
|
2,442,203
|
|||||||||
3Q2018
|
11,805
|
0%
|
758
|
0%
|
2,995,942
|
23%
|
Options
|
%
|
Futures1
|
%
|
Stocks
|
%
|
|||||||
Period
|
(contracts)
|
Change
|
(contracts)
|
Change
|
(shares)
|
Change
|
||||||
2015
|
298,982
|
125,693
|
157,366,444
|
|||||||||
2016
|
265,457
|
(11%)
|
129,082
|
3%
|
142,356,340
|
(10%)
|
||||||
2017
|
293,860
|
11%
|
118,427
|
(8%)
|
213,108,299
|
50%
|
||||||
3Q2017
|
74,794
|
30,468
|
53,381,313
|
|||||||||
3Q2018
|
80,492
|
8%
|
29,178
|
(4%)
|
42,576,769
|
(20%)
|
||||||
2Q2018
|
81,440
|
35,937
|
48,928,183
|
|||||||||
3Q2018
|
80,492
|
(1%)
|
29,178
|
(19%)
|
42,576,769
|
(13%)
|
1
|
Includes options on futures.
|
Options
|
%
|
Futures1
|
%
|
Stocks
|
%
|
|||||||
Period
|
(contracts)
|
Change
|
(contracts)
|
Change
|
(shares)
|
Change
|
||||||
2015
|
244,356
|
124,206
|
153,443,988
|
|||||||||
2016
|
227,413
|
(7%)
|
128,021
|
3%
|
138,523,932
|
(10%)
|
||||||
2017
|
253,304
|
11%
|
116,858
|
(9%)
|
209,435,662
|
51%
|
||||||
3Q2017
|
64,363
|
30,034
|
52,515,806
|
|||||||||
3Q2018
|
70,233
|
9%
|
28,922
|
(4%)
|
41,406,443
|
(21%)
|
||||||
2Q2018
|
71,873
|
35,679
|
47,840,126
|
|||||||||
3Q2018
|
70,233
|
(2%)
|
28,922
|
(19%)
|
41,406,443
|
(13%)
|
1
|
Includes options on futures.
|
Year over Year
|
3Q2018
|
3Q2017
|
% Change
|
||||
Total Accounts
|
576
|
457
|
26%
|
||||
Customer Equity (in billions)1
|
$
|
142.5
|
$
|
115.7
|
23%
|
||
Cleared DARTs
|
696
|
646
|
8%
|
||||
Total Customer DARTs
|
763
|
695
|
10%
|
||||
Cleared Customers (in $'s, except DART per account)
|
|||||||
Commission per DART
|
$
|
3.78
|
$
|
3.96
|
(5%)
|
||
DART per Avg. Account (Annualized)
|
312
|
365
|
(15%)
|
||||
Net Revenue per Avg. Account (Annualized)
|
$
|
3,109
|
$
|
3,249
|
(4%)
|
||
Consecutive Quarters
|
3Q2018
|
2Q2018
|
% Change
|
||||
Total Accounts
|
576
|
542
|
6%
|
||||
Customer Equity (in billions)1
|
$
|
142.5
|
$
|
134.7
|
6%
|
||
Cleared DARTs
|
696
|
739
|
(6%)
|
||||
Total Customer DARTs
|
763
|
797
|
(4%)
|
||||
Cleared Customers (in $'s, except DART per account)
|
|||||||
Commission per DART
|
$
|
3.78
|
$
|
3.86
|
(2%)
|
||
DART per Avg. Account (Annualized)
|
312
|
350
|
(11%)
|
||||
Net Revenue per Avg. Account (Annualized)
|
$
|
3,109
|
$
|
3,190
|
(3%)
|
1
|
Excludes non-customers.
|
Three Months
|
Nine Months
|
|||||||||||||
Ended September 30,
|
Ended September 30,
|
|||||||||||||
2018
|
2017
|
2018
|
2017
|
|||||||||||
(in millions)
|
||||||||||||||
Average interest-earning assets
|
||||||||||||||
Segregated cash and securities
|
$
|
20,923
|
$
|
24,043
|
$
|
20,437
|
$
|
24,207
|
||||||
Customer margin loans
|
29,339
|
24,132
|
29,599
|
22,017
|
||||||||||
Securities borrowed
|
3,531
|
4,096
|
3,295
|
4,071
|
||||||||||
Other interest-earning assets
|
4,371
|
3,155
|
4,208
|
2,748
|
||||||||||
FDIC sweeps1
|
1,423
|
63
|
1,122
|
52
|
||||||||||
$
|
59,587
|
$
|
55,489
|
$
|
58,661
|
$
|
53,095
|
|||||||
Average interest-bearing liabilities
|
||||||||||||||
Customer credit balances
|
$
|
48,544
|
$
|
46,910
|
$
|
47,954
|
$
|
44,901
|
||||||
Securities loaned
|
3,882
|
3,964
|
4,068
|
3,765
|
||||||||||
$
|
52,426
|
$
|
50,874
|
$
|
52,022
|
$
|
48,666
|
|||||||
Net interest income
|
||||||||||||||
Segregated cash and securities, net2/3
|
$
|
91
|
$
|
60
|
$
|
233
|
$
|
143
|
||||||
Customer margin loans4
|
182
|
106
|
485
|
270
|
||||||||||
Securities borrowed and loaned, net
|
33
|
42
|
116
|
112
|
||||||||||
Customer credit balances, net2/4
|
(79)
|
(36)
|
(191)
|
(68)
|
||||||||||
Other net interest income1/3/5
|
25
|
11
|
63
|
23
|
||||||||||
Net interest income
|
$
|
252
|
$
|
183
|
$
|
706
|
$
|
480
|
||||||
Net interest margin ("NIM")
|
1.68%
|
1.31%
|
1.61%
|
1.21%
|
||||||||||
Annualized yields
|
||||||||||||||
Segregated cash and securities
|
1.73%
|
0.99%
|
1.52%
|
0.79%
|
||||||||||
Customer margin loans
|
2.46%
|
1.74%
|
2.19%
|
1.64%
|
||||||||||
Customer credit balances
|
0.65%
|
0.30%
|
0.53%
|
0.20%
|
1
|
Represents the average amount of customer cash swept into FDIC-insured banks as part of our Insured Bank Deposit Sweep Program. This item is not recorded in the Company's consolidated statements of financial condition. Income derived from program deposits is reported in other net interest income in the table above.
|
|||||||||||||
2
|
We have recategorized components of net interest income related to currencies with negative interest rates and as such, prior period amounts have been adjusted to conform to the current period presentation. For the quarter and nine months ended September 30, 2017, $4 million and $12 million has been recategorized from net interest income on "segregated cash and securities, net" to "customer credit balances, net", respectively.
|
|||||||||||||
3
|
During the current quarter, we have reclassified certain components of net interest income related to investments in U.S. Treasury notes and reverse repurchase agreements and as such, prior period amounts have been adjusted to conform to the current period presentation. For the quarter and the nine months ended September 30, 2017, $2 million and $5 million has been reclassified from net interest income on "Segregated cash and securities, net" to "Other net interest income, net", respectively. For the quarters ended March 31, 2017, June 30, 2017, December 31, 2017, March 31, 2018, and June 30, 2018 the amounts reclassified were $1 million, $2 million, $3 million, $3 million, and $4 million, respectively.
|
|||||||||||||
4
|
Interest income and interest expense on customer margin loans and customer credit balances, respectively, are calculated on daily cash balances within each customer's account on a net basis, which may result in an offset of balances across multiple account segments (e.g., between securities and commodities segments).
|
|||||||||||||
5
|
Includes income from financial instruments which has the same characteristics as interest, but is reported in other income.
|
Three Months
|
Nine Months
|
||||||||||||
Ended September 30,
|
Ended September 30,
|
||||||||||||
2018
|
2017
|
2018
|
2017
|
||||||||||
(in millions) | |||||||||||||
Electronic Brokerage
|
Net revenues
|
$
|
444
|
$
|
367
|
$
|
1,352
|
$
|
1,015
|
||||
Non-interest expenses
|
152
|
142
|
486
|
407
|
|||||||||
Income before income taxes
|
$
|
292
|
$
|
225
|
$
|
866
|
$
|
608
|
|||||
Pre-tax profit margin
|
66%
|
61%
|
64%
|
60%
|
|||||||||
Market Making
|
Net revenues
|
$
|
16
|
$
|
30
|
$
|
59
|
$
|
61
|
||||
Non-interest expenses
|
9
|
19
|
34
|
96
|
|||||||||
Income (loss) before income taxes
|
$
|
7
|
$
|
11
|
$
|
25
|
$
|
(35)
|
|||||
Pre-tax profit (loss) margin
|
44%
|
37%
|
42%
|
(57%)
|
|||||||||
Corporate 1
|
Net revenues
|
$
|
(21)
|
$
|
29
|
$
|
-
|
$
|
111
|
||||
Non-interest expenses
|
2
|
(3)
|
4
|
(1)
|
|||||||||
Income (loss) before income taxes
|
$
|
(23)
|
$
|
32
|
$
|
(4)
|
$
|
112
|
|||||
Total
|
Net revenues
|
$
|
439
|
$
|
426
|
$
|
1,411
|
$
|
1,187
|
||||
Non-interest expenses
|
163
|
158
|
524
|
502
|
|||||||||
Income before income taxes
|
$
|
276
|
$
|
268
|
$
|
887
|
$
|
685
|
|||||
Pre-tax profit margin
|
63%
|
63%
|
63%
|
58%
|
1
|
Corporate includes corporate related activities as well as inter-segment eliminations and gains and losses on positions held as part of our overall currency diversification strategy.
|
Three Months
|
Nine Months
|
|||||||||||||
Ended September 30,
|
Ended September 30,
|
|||||||||||||
2018
|
2017
|
2018
|
2017
|
|||||||||||
(in millions, except share and per share data)
|
||||||||||||||
Revenues:
|
||||||||||||||
Commissions
|
$
|
167
|
$
|
163
|
$
|
572
|
$
|
477
|
||||||
Interest income
|
363
|
243
|
1,007
|
626
|
||||||||||
Trading gains
|
7
|
11
|
32
|
26
|
||||||||||
Other income
|
21
|
70
|
121
|
205
|
||||||||||
Total revenues
|
558
|
487
|
1,732
|
1,334
|
||||||||||
Interest expense
|
119
|
61
|
321
|
147
|
||||||||||
Total net revenues
|
439
|
426
|
1,411
|
1,187
|
||||||||||
Non-interest expenses:
|
||||||||||||||
Execution and clearing
|
57
|
61
|
196
|
185
|
||||||||||
Employee compensation and benefits
|
63
|
64
|
201
|
192
|
||||||||||
Occupancy, depreciation and amortization
|
12
|
11
|
35
|
34
|
||||||||||
Communications
|
7
|
7
|
20
|
22
|
||||||||||
General and administrative
|
25
|
15
|
70
|
67
|
||||||||||
Customer bad debt
|
(1)
|
-
|
2
|
2
|
||||||||||
Total non-interest expenses
|
163
|
158
|
524
|
502
|
||||||||||
Income before income taxes
|
276
|
268
|
887
|
685
|
||||||||||
Income tax expense
|
18
|
21
|
52
|
56
|
||||||||||
Net income
|
258
|
247
|
835
|
629
|
||||||||||
Net income attributable to noncontrolling interests
|
219
|
216
|
709
|
551
|
||||||||||
Net income available for common stockholders
|
$
|
39
|
$
|
31
|
$
|
126
|
$
|
78
|
||||||
Earnings per share:
|
||||||||||||||
Basic
|
$
|
0.52
|
$
|
0.44
|
$
|
1.73
|
$
|
1.12
|
||||||
Diluted
|
$
|
0.51
|
$
|
0.43
|
$
|
1.71
|
$
|
1.10
|
||||||
Weighted average common shares outstanding:
|
||||||||||||||
Basic
|
74,649,469
|
71,109,577
|
72,879,007
|
69,405,624
|
||||||||||
Diluted
|
75,360,089
|
71,973,483
|
73,745,640
|
70,409,619
|
||||||||||
Comprehensive income:
|
||||||||||||||
Net income available for common stockholders
|
$
|
39
|
$
|
31
|
$
|
126
|
$
|
78
|
||||||
Other comprehensive income:
|
||||||||||||||
Cumulative translation adjustment, before income taxes
|
(1)
|
1
|
(14)
|
11
|
||||||||||
Income taxes related to items of other comprehensive income
|
-
|
-
|
(1)
|
-
|
||||||||||
Other comprehensive income (loss), net of tax
|
(1)
|
1
|
(13)
|
11
|
||||||||||
Comprehensive income available for common stockholders
|
$
|
38
|
$
|
32
|
$
|
113
|
$
|
89
|
||||||
Comprehensive income attributable to noncontrolling interests:
|
||||||||||||||
|
Net income attributable to noncontrolling interests
|
$
|
219
|
$
|
216
|
$
|
709
|
$
|
551
|
|||||
|
Other comprehensive income - cumulative translation adjustment |
(2)
|
5
|
(60)
|
55
|
|||||||||
Comprehensive income attributable to noncontrolling interests
|
$
|
217
|
$
|
221
|
$
|
649
|
$
|
606
|
||||||
Three Months
|
Nine Months
|
|||||||||||||
Ended September 30,
|
Ended September 30,
|
|||||||||||||
2018
|
2017
|
2018
|
2017
|
|||||||||||
(in millions, except share and per share data)
|
||||||||||||||
Comprehensive income available for common stockholders, net of tax
|
$
|
38
|
$
|
32
|
$
|
113
|
$
|
89
|
||||||
Comprehensive earnings per share:
|
||||||||||||||
Basic
|
$
|
0.51
|
$
|
0.45
|
$
|
1.55
|
$
|
1.28
|
||||||
Diluted
|
$
|
0.50
|
$
|
0.44
|
$
|
1.54
|
$
|
1.26
|
||||||
Weighted average common shares outstanding:
|
||||||||||||||
Basic
|
74,649,469
|
71,109,577
|
72,879,007
|
69,405,624
|
||||||||||
Diluted
|
75,360,089
|
71,973,483
|
73,745,640
|
70,409,619
|
September 30,
2018
|
December 31,
2017
|
|||||||||
(in millions)
|
||||||||||
Assets
|
||||||||||
Cash and cash equivalents
|
$
|
3,062
|
$
|
1,732
|
||||||
Cash - segregated for regulatory purposes
|
7,523
|
6,547
|
||||||||
Securities - segregated for regulatory purposes
|
12,832
|
13,685
|
||||||||
Securities borrowed
|
3,551
|
2,957
|
||||||||
Securities purchased under agreements to resell
|
331
|
2,035
|
||||||||
Financial instruments owned, at fair value
|
2,588
|
3,154
|
||||||||
Receivables from customers, net of allowance for doubtful accounts
|
30,913
|
29,821
|
||||||||
Receivables from brokers, dealers and clearing organizations
|
846
|
823
|
||||||||
Other assets
|
416
|
408
|
||||||||
Total assets
|
$
|
62,062
|
$
|
61,162
|
||||||
Liabilities and equity
|
||||||||||
Liabilities
|
||||||||||
Short-term borrowings
|
$
|
28
|
$
|
15
|
||||||
Securities loaned
|
3,834
|
4,444
|
||||||||
Securities sold under agreements to repurchase
|
-
|
1,316
|
||||||||
Financial instruments sold but not yet purchased, at fair value
|
915
|
767
|
||||||||
Other payables:
|
||||||||||
Customers
|
49,823
|
47,548
|
||||||||
Brokers, dealers and clearing organizations
|
179
|
283
|
||||||||
Other payables
|
380
|
356
|
||||||||
50,382
|
48,187
|
|||||||||
Total liabilities
|
55,159
|
54,729
|
||||||||
Equity
|
||||||||||
Stockholders' equity
|
1,243
|
1,090
|
||||||||
Noncontrolling interests
|
5,660
|
5,343
|
||||||||
Total equity
|
6,903
|
6,433
|
||||||||
Total liabilities and equity
|
$
|
62,062
|
$
|
61,162
|
||||||
September 30, 2018
|
December 31, 2017
|
|||||||||
Ownership of IBG LLC Membership Interests
|
Interests
|
%
|
Interests
|
%
|
||||||
IBG, Inc.
|
75,097,443
|
18.1%
|
71,479,604
|
17.4%
|
||||||
Noncontrolling interests (IBG Holdings LLC)
|
338,691,717
|
81.9%
|
340,229,444
|
82.6%
|
||||||
Total IBG LLC membership interests
|
413,789,160
|
100.0%
|
411,709,048
|
100.0%
|
||||||