What changed in this filing

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Item 1. Financial Statements

2022-07-29 compared with 2022-04-29 · 302 added, 180 removed, 956 unchanged (34% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)

(Expressed in thousands, except number of shares and per share amounts) March 31, 2022 December 31, 2021

(Expressed in thousands, except number of shares and per share amounts) June 30, 2022 December 31, 2021 (1)

Cash and cash equivalents $ 36,606 $ 213,759

4 unchanged sentences

1,288,079 1,221,450

Income tax receivable 9,161 —

Securities purchased under agreements to resell — 935

11 unchanged sentences

LIABILITIES AND STOCKHOLDERS' EQUITY

Drafts payable $ 10,020 $ —

Bank call loans $ 177,300 $ 69,500

15 unchanged sentences

Stockholders' equity

Share capital

Class A non-voting common stock, par value $ 0.001 per share, 50,000,000 shares authorized, 12,156,174 and 12,447,036 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively

22,495 36,309

Class B voting common stock, par value $ 0.001 per share, 99,665 shares authorized, issued and outstanding as of March 31, 2022 and December 31, 2021

22,628 36,442

Contributed capital 39,829 41,603

Common stock ($ 0.001 par value per share):

shares authorized:

shares issued and outstanding:

11,270,944 and 12,447,036 as of June 30, 2022 and December 31, 2021, respectively

shares authorized, issued and outstanding:

99,665 as of June 30, 2022 and December 31, 2021

Additional paid-In capital 35,461 78,032

Retained earnings 742,614 740,926

2 unchanged sentences

stockholders' equity 779,659 823,196

Noncontrolling interest 2,555 2,069

Noncontrolling interest (Note 2) 1,709 2,069

Total Stockholders' equity 781,368 825,265

1 unchanged sentence

The accompanying notes are an integral part of these condensed consolidated financial statements.

(1) Certain prior period reported amounts were reclassified to conform to the current period presentation, see Note 2 .

OPPENHEIMER HOLDINGS INC.

1 unchanged sentence

For the Three Months Ended

June 30, For the Six Months Ended

(Expressed in thousands, except number of shares and per share amounts) 2022 2021 2022 2021

14 unchanged sentences

Total expenses 243,391 297,125 495,206 618,280

Pre-tax income 14,213 52,127

Income taxes 4,435 13,469

Net income $ 9,778 $ 38,658

Net income attributable to noncontrolling interest, net of tax 486 —

Net income attributable to Oppenheimer Holdings Inc.

Pre-tax income (loss) ( 6,169 ) 43,168 8,044 95,295

Income taxes provision (benefit) ( 1,449 ) 12,009 2,986 25,478

Net income (loss) $ ( 4,720 ) $ 31,159 $ 5,058 $ 69,817

Net income (loss) attributable to noncontrolling interest, net of tax ( 846 ) — ( 360 ) —

Net income (loss) attributable to Oppenheimer Holdings Inc.

$ ( 3,874 ) $ 31,159 $ 5,418 $ 69,817

Earnings per share attributable to Oppenheimer Holdings Inc.

Earnings (Loss) per share attributable to Oppenheimer Holdings Inc.

Basic $ ( 0.32 ) $ 2.46 $ 0.44 $ 5.53

3 unchanged sentences

Diluted 11,980,115 13,681,146 13,141,538 13,495,589

Period end shares outstanding 11,370,609 12,692,311 11,370,609 12,692,311

The accompanying notes are an integral part of these condensed consolidated financial statements.

2 unchanged sentences

For the Three Months Ended

June 30, For the Six Months Ended

(Expressed in thousands) 2022 2021 2022 2021

Net income $ 9,778 $ 38,658

Net income (loss) $ ( 4,720 ) $ 31,159 $ 5,058 $ 69,817

Other comprehensive income (loss), net of tax

Currency translation adjustment ( 2,038 ) 537 ( 2,652 ) ( 299 )

Comprehensive income 9,164 37,822

Less net income attributable to noncontrolling interests 486 —

Comprehensive income attributable to Oppenheimer Holdings Inc.

Comprehensive income (loss) $ ( 6,758 ) $ 31,696 2,406 69,518

Less net income (loss) attributable to noncontrolling interests ( 846 ) — ( 360 ) —

Comprehensive income (loss) attributable to Oppenheimer Holdings Inc.

$ ( 5,912 ) $ 31,696 $ 2,766 $ 69,518

3 unchanged sentences

For the Three Months Ended (1)

(Expressed in thousands, except per share amounts) 2022 2021

Share capital

Balance at beginning of period $ 36,442 $ 39,333

For the Six Months Ended (1)

(Expressed in thousands, except per share amount) 2022 2021 2022 2021

Common stock ($ 0.001 par value per share)

Beginning Balance $ 12 $ 13 $ 12 $ 13

Issuance of Class A non-voting common stock — 0 0 0

Repurchase of Class A non-voting common stock for cancellation ( 1 ) — ( 1 ) —

Balance at end of period 22,628 43,141

Contributed capital

Ending Balance 11 13 11 13

Additional paid-in capital

Balance at beginning of period 62,446 78,557 78,034 80,801

Issuance of Class A non-voting common stock — 188 2,344 3,996

Repurchase of Class A non-voting common stock for cancellation ( 30,217 ) — ( 46,375 ) —

Share-based expense 3,232 2,759 6,053 5,219

3 unchanged sentences

Balance at beginning of period 748,323 638,558 740,926 601,406

Net income (1)

Net income (loss) (2)

( 3,874 ) 31,159 5,418 69,817

Dividends paid ( 1,835 ) ( 1,524 ) ( 3,730 ) ( 3,030 )

8 unchanged sentences

Balance at beginning of period 2,555 — 2,069 —

Net income attributable to non-controlling interest 486 —

Net income (loss) attributable to noncontrolling interest ( 846 ) — ( 360 ) —

Balance at end of period 1,709 — 1,709 —

5 unchanged sentences

Dividends paid per share $ 0.15 $ 0.12 $ 0.30 $ 0.24

(1) Certain prior period reported amounts were reclassified to conform to the current period presentation, see Note 2.

(2) Attributable to Oppenheimer Holdings Inc.

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

FOR THE THREE MONTHS ENDED MARCH 31,

FOR THE SIX MONTHS ENDED JUNE 30,

(Expressed in thousands) 2022 2021

25 unchanged sentences

Accrued compensation ( 160,196 ) ( 40,906 )

Income tax payable ( 378 ) 6,050

Accounts payable and other liabilities ( 45,119 ) ( 2,704 )

2 unchanged sentences

Purchase of furniture, equipment and leasehold improvements ( 2,307 ) ( 6,739 )

Proceeds from the settlement of Company-owned life insurance 1,191 1,308

Cash used in investing activities ( 1,116 ) ( 5,431 )

5 unchanged sentences

Increase/(decrease) in bank call loans, net 107,800 ( 2,400 )

Cash used in financing activities ( 11,654 ) ( 13,148 )

Net decrease in cash, cash equivalents and restricted cash ( 166,290 ) ( 6,879 )

Cash provided by/(used in) financing activities 55,444 ( 10,335 )

Net (decrease)/increase in cash, cash equivalents and restricted cash ( 177,043 ) 4,374

Cash, cash equivalents and restricted cash, beginning of period 341,524 35,424

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Although these estimates are based on management's knowledge of current events and actions that the Company may undertake in the future, actual results may differ materially from the estimates.

The condensed consolidated results of operations for the three-month period ended March 31, 2022 are not necessarily indicative of the results to be expected for any future interim or annual period.

On January 30, 2020, the spread of the novel coronavirus ("COVID-19") was declared a Public Health Emergency of International Concern by the World Health Organization ("WHO").

Subsequently, on March 11, 2020, the WHO characterized the COVID-19 outbreak as a pandemic (the "COVID-19 Pandemic").

The COVID-19 Pandemic coupled with the current market volatility ha s created an economic environment that may have significant accounting and financial reporting implications.

The disruption of businesses around the globe due to COVID-19 may be a "trigger event" for companies to reassess valuation and accounting estimates and assumptions such as, impairment of goodwill, valuation allowances of deferred tax assets, fair value of investments and collectability of receivables.

The condensed consolidated results of operations for the three-month and six-month period ended June 30, 2022 are not necessarily indicative of the results to be expected for any future interim or annual period.

Reclassification

Effective this quarter, the Company reclassified certain stockholders' equity amounts on the condensed consolidated balance sheet and condensed consolidated statements of changes in stockholders' equity.

The reclassification included separately presenting the par value of common stocks, and combining previously disclosed share capital and contributed capital amounts in the currently reported additional paid-in capital amount.

The reclassification had no impact on previously reported total stockholders’ equity amounts.

OPPENHEIMER HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements (unaudited)

The Company has reviewed the assumptions on which it values its goodwill, as well as valuation allowances on certain assets and the collectability of its receivables as of March 31, 2022, which did not result in any impairment or write-off.

Oppenheimer Acquisition Corp.

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Funds totaling $ 127.8 million, including proceeds from the OHAA IPO of $ 126.5 million and $ 1.3 million in investment from the Sponsor, are held in a trust account until the earlier of (i) the completion of a Business Combination or (ii) ten business days after April 29, 2023, 18 months from the closing of the OHAA IPO (“Combination Period”).

The cash held in the trust account is recorded in “Restricted Cash” on the consolidated balance sheet.

Transaction costs, which consisted of a net underwriting fee of $ 2.5 million and $ 0.5 million of other offering costs, were charged during fourth quarter of 2021 against the gross proceeds of the OHAA IPO consistent with SEC Staff Accounting Bulletin (SAB) Topic 5.

“Redeemable noncontrolling interests” of $ 127.8 million associated with the publicly held OHAA Class A ordinary shares are recorded on the Company’s consolidated balance sheet as of March 31, 2022 at redemption value and classified as temporary equity in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity”.

The cash held in the trust account is recorded in “Restricted Cash” on the condensed consolidated balance sheet.

Transaction costs, which consisted of a net underwriting fee of $ 2.5 million and $ 0.5 million of other offering costs, were charged during the fourth quarter of 2021 against the gross proceeds of the OHAA IPO consistent with SEC Staff Accounting Bulletin (SAB) Topic 5.

“Redeemable noncontrolling interests” of $ 127.8 million associated with the publicly held OHAA Class A ordinary shares are recorded on the Company’s consolidated balance sheet as of June 30, 2022 at redemption value and classified as temporary equity in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity”.

Changes in redemption value are recognized immediately as they occur and will adjust the carrying value of redeemable noncontrolling interests to equal the redemption value at the end of each reporting period.

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Noncontrolling Interests

Noncontrolling interests represents ownership interests in the Sponsor of OHAA which includes OHAA Class A founder and Class A ordinary shares held by management and employees of the Company as well as OHAA Class B shares held by directors and officers of OHAA and an employee of the Company.

Noncontrolling interests represents ownership interests in the Sponsor of OHAA, OHAA Class A founder and Class A ordinary shares held by management and employees of the Company, as well as OHAA Class B shares held by directors and officers of OHAA and an employee of the Company.

Noncontrolling interests also include publicly held warrants to purchase OHAA Class A ordinary shares.

Additionally, noncontrolling interests also includes the profits allocated to employees who have profit interests in OPI's Series.

Additionally, noncontrolling interests includes the profits allocated to employees who have profit interests in OPI's Series.

Restricted Cash

1 unchanged sentence

Financial Instruments - Credit Losses

The Company follows ASU 2016-13, "Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments".

The Company can elect to use an approach to measure the allowance for credit losses using the fair value of collateral where the borrower is required to, and reasonably expected to, continually adjust and replenish the amount of collateral securing the instrument to reflect changes in the fair value of such collateral.

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See note 9 for details.

As of March 31, 2022, the Company had $ 57.9 million of notes receivable ($ 54.0 million as of December 31, 2021).

Notes receivable represents recruiting and retention payments generally in the form of upfront loans to financial advisors and key revenue producers as part of the Company's overall growth strategy.

As of June 30, 2022, the Company had $ 59.1 million of notes receivable ($ 54.0 million as of December 31, 2021).

Notes receivable represent recruiting and retention payments generally in the form of upfront loans to financial advisors and key revenue producers as part of the Company's overall growth strategy.

These notes generally amortize over a service period of 3 to 10 years from the initial date of the note or based on productivity levels of the respective employees.

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The expected loss rate is adjusted for changes in market conditions such as changes in unemployment rates, changes in interest rates and other relevant factors.

For the three months ended March 31, 2022 no adjustments were made to the expected loss rates.

For the three months and six months ended June 30, 2022, no adjustments were made to the expected loss rates.

The Company will continuously monitor the effect of these factors on the expected loss rate and adjust it as necessary.

The allowance is measured on a pool basis as the Company has determined that the entire defaulted portion of notes receivable has similar risk characteristics.

As of March 31, 2022, the uncollected balance of defaulted notes was $ 7.6 million and the allowance for uncollectibles was $ 5.2 million.

As of June 30, 2022, the uncollected balance of defaulted notes was $ 7.4 million and the allowance for uncollectibles was $ 5.1 million.

The allowance for uncollectibles consisted of $ 3.4 million related to defaulted notes balances (five years and older) and $ 1.7 million related to defaulted notes balances (under five years).

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements (unaudited)

The following table presents the disaggregation of defaulted notes by year of default as of March 31, 2022:

The following table presents the disaggregation of defaulted notes by year of default as of June 30, 2022:

(Expressed in thousands)

As of March 31, 2022

As of June 30, 2022

2017 and prior 3,452

Total $ 7,424

The following table presents activity in the allowance for uncollectibles of defaulted notes for the three months ended

March 31, 2022 and 2021:

The following table presents activity in the allowance for uncollectibles of defaulted notes for the three and six months ended

June 30, 2022 and 2021:

(Expressed in thousands)

For the Three Months Ended

June 30, For the Six Months Ended

2022 2021 2022 2021

Beginning balance $ 5,247 $ 4,766 $ 4,923 $ 4,234

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Notes to Condensed Consolidated Financial Statements (unaudited)

As of March 31, 2022, the Company had right-of-use operating lease assets of $ 151.2 million (net of accumulated amortization of $ 69.9 million) which are comprised of real estate leases of $ 148.6 million (net of accumulated amortization of $ 67.5 million) and equipment leases of $ 2.6 million (net of accumulated amortization of $ 2.4 million).

As of March 31, 2022, the Company had operating lease liabilities of $ 194.1 million which are comprised of real estate lease liabilities of $ 191.5 million and equipment lease liabilities of $ 2.6 million.

The Company had no finance leases or embedded leases as of March 31, 2022.

As of June 30, 2022, the Company had right-of-use operating lease assets of $ 146.1 million (net of accumulated amortization of $ 74.2 million) which are comprised of real estate leases of $ 143.3 million (net of accumulated amortization of $ 71.8 million) and equipment leases of $ 2.8 million (net of accumulated amortization of $ 2.4 million).

As of June 30, 2022, the Company had operating lease liabilities of $ 187.5 million which are comprised of real estate lease liabilities of $ 184.8 million and equipment lease liabilities of $ 2.7 million.

The Company had no finance leases or embedded leases as of June 30, 2022.

As most of the Company's leases do not provide an implicit rate, the Company uses the incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.

1 unchanged sentence

The Company used the incremental borrowing rate as of the lease commencement date for the operating leases that commenced subsequent to January 1, 2019.

The following table presents the weighted average lease term and weighted average discount rate for the Company's operating leases as of March 31, 2022 and December 31, 2021, respectively:

March 31, 2022 December 31, 2021

The following table presents the weighted average lease term and weighted average discount rate for the Company's operating leases as of June 30, 2022 and December 31, 2021, respectively:

June 30, 2022 December 31, 2021

Weighted average remaining lease term (in years) 7.06 7.38

Weighted average discount rate 6.81 % 6.89 %

The following table presents operating lease costs recognized for the three months ended March 31, 2022 and March 31, 2021, respectively, which are included in occupancy and equipment costs on the condensed consolidated income statements:

The following table presents operating lease costs recognized for the three and six months ended June 30, 2022 and June 30, 2021, respectively, which are included in occupancy and equipment costs on the condensed consolidated income statements:

(Expressed in thousands)

For the Three Months Ended

June 30, For the Six Months Ended

2022 2021 2022 2021

Operating lease costs:

3 unchanged sentences

Equipment leases - Interest expense 35 37 67 76

The maturities of lease liabilities as of March 31, 2022 and December 31, 2021 are as follows:

The maturities of lease liabilities as of June 30, 2022 and December 31, 2021 are as follows:

(Expressed in thousands)

March 31, 2022 December 31, 2021

June 30, 2022 December 31, 2021

2022 $ 21,196 $ 41,696

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Notes to Condensed Consolidated Financial Statements (unaudited)

As of March 31, 2022, the Company had $ 15.9 million of additional operating leases that have not yet commenced ($ 16.2 million as of December 31, 2021).

As of June 30, 2022, the Company had $ 33.2 million of additional operating leases that have not yet commenced ($ 16.2 million as of December 31, 2021).

Revenue from contracts with customers

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Mutual Fund Income — The Company earns mutual fund income for sales and distribution of mutual fund shares, which consists of a fixed fee amount and a variable amount.

The Company recognizes mutual fund income at a point in time on trade date when the performance obligation is satisfied which is when the mutual fund interest is sold to the investor.

The Company recognizes mutual fund income at a point in time on the trade date when the performance obligation is satisfied which is when the mutual fund interest is sold to the investor.

The ongoing distribution fees for distributing investment products from mutual fund companies are generally considered variable consideration because they are based on the value of AUM and are uncertain on trade date.

1 unchanged sentence

Mutual fund income is generally received within 90 days.

Advisory Fees

The Company earns management and performance (or incentive) fees in connection with the advisory and asset management services it provides to various types of funds, asset-based programs and investment vehicles through its subsidiaries.

Management fees are generally based on the account value at the valuation date per the respective asset management agreements and are recognized over time as the customer receives the benefits of the services evenly throughout the term of the

OPPENHEIMER HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements (unaudited)

Performance fees are recognized when the return on client AUM exceeds a specified benchmark return or other performance targets over a 12-month measurement period are met.

Advisory Fees

Performance fees are recognized when the return on client AUM exceeds a specified benchmark return or as other performance targets over a 12-month measurement period are met.

Performance fees are considered variable as they are subject to fluctuation and/or are contingent on a future event over the measurement period and are not subject to adjustment once the measurement period ends.

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Transaction-related expenses, primarily consisting of legal, travel and other costs directly associated with the transaction, are deferred and recognized in the same period as the related investment banking transaction revenue.

Underwriting revenues and related expenses are presented gross on the consolidated income statements.

Revenue from financial advisory services includes fees generated in connection with mergers, acquisitions and restructuring transactions and such revenue and fees are primarily recorded at a point in time when services for the transactions are completed and income is reasonably determinable, generally as set forth under the terms of the engagement.

Underwriting revenues and related expenses are presented gross on the condensed consolidated income statements.

Revenue from financial advisory services includes fees generated in connection with mergers, acquisitions, and restructuring transactions.

Such revenue and fees are primarily recorded at a point in time when services for the transactions are completed and income is reasonably determinable, generally as set forth under the terms of the engagement.

Payment for advisory services is generally due upon completion of the transaction or milestone.

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Disaggregation of Revenue

The following presents the Company's revenue from contracts with customers disaggregated by major business activity and other sources of revenue for the three months ended March 31, 2022 and 2021:

(Expressed in thousands) For the Three Months Ended March 31, 2022

The following presents the Company's revenue from contracts with customers disaggregated by major business activity and other sources of revenue for the three and six months ended June 30, 2022 and 2021:

(Expressed in thousands) For the Three Months Ended June 30, 2022

Reportable Segments

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Total revenue $ 144,471 $ 24,315 $ 71,274 $ ( 2,838 ) $ 237,222

(Expressed in thousands) For the Three Months Ended March 31, 2021

(Expressed in thousands) For the Three Months Ended June 30, 2021

Reportable Segments

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Notes to Condensed Consolidated Financial Statements (unaudited)

(Expressed in thousands) For the Six Months Ended June 30, 2022

Reportable Segments

Private Client Asset Management Capital Markets Corporate/Other Total

Revenue from contracts with customers:

Commissions from sales and trading $ 81,463 $ — 95,061 17 $ 176,541

Mutual fund and insurance income 16,130 — 6 22 16,158

Advisory fees 171,613 51,424 117 17 223,171

Investment banking - capital markets 5,665 — 19,234 — 24,899

Investment banking - advisory 35 — 30,189 — 30,224

Bank deposit sweep income 19,199 — — — 19,199

Other 7,642 — 797 188 8,627

Total revenue from contracts with customers 301,747 51,424 145,404 244 498,819

Other sources of revenue:

Interest 18,517 — 2,685 104 21,306

Principal transactions, net ( 4,166 ) — 8,080 ( 292 ) 3,622

Other ( 20,780 ) 8 156 119 ( 20,497 )

Total other sources of revenue ( 6,429 ) 8 10,921 ( 69 ) 4,431

Total revenue $ 295,318 $ 51,432 $ 156,325 $ 175 $ 503,250

(Expressed in thousands) For the Six Months Ended June 30, 2021

Reportable Segments

Private Client Asset Management Capital Markets Corporate/Other Total

Revenue from contracts with customers:

Commissions from sales and trading $ 92,908 $ — $ 98,207 $ 1 $ 191,116

Mutual fund and insurance income 18,441 — 4 81 18,526

Advisory fees 165,852 49,768 3 25 215,648

Investment banking - capital markets 14,280 — 128,277 — 142,557

Investment banking - advisory 250 — 86,436 — 86,686

Bank deposit sweep income 7,720 — — — 7,720

Other 7,594 — 761 33 8,388

Total revenue from contracts with customers 307,045 49,768 313,688 140 670,641

Other sources of revenue:

Interest 13,711 — 3,818 46 17,575

Principal transactions, net 2,176 — 13,832 1,162 17,170

Other 7,954 6 206 23 8,189

Total other sources of revenue 23,841 6 17,856 1,231 42,934

Total revenue $ 330,886 $ 49,774 $ 331,544 $ 1,371 $ 713,575

Contract Balances

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Alternatively, when payment precedes the provision of the related services, the Company records deferred revenue until the performance obligations are satisfied.

The Company had receivables related to revenue from contracts with customers of $ 28.0 million and $ 37.2 million at March 31, 2022 and December 31, 2021, respectively.

The Company had no significant impairments related to these receivables during the three months ended March 31, 2022.

Deferred revenue relates to IRA fees received annually in advance on customers' IRA accounts managed by the Company and retainer fees and other fees earned from certain advisory transactions where the performance obligations have not yet been satisfied.

Total deferred revenue was $ 180,000 and $ 235,000 at March 31, 2022 and December 31, 2021, respectively.

The following presents the Company's contract assets and deferred revenue balances from contracts with customers, which are included in other assets and other liabilities, respectively, on the consolidated balance sheet:

OPPENHEIMER HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements (unaudited)

The Company had receivables related to revenue from contracts with customers of $ 25.1 million and $ 37.2 million at June 30, 2022 and December 31, 2021, respectively.

The Company had no significant impairments related to these receivables during the three months ended June 30, 2022.

Deferred revenue relates to IRA fees received annually in advance on customers' IRA accounts and retainer fees and other fees earned from certain advisory transactions where the performance obligations have not yet been satisfied.

Total deferred revenue was $ 2.0 million and $ 235,000 at June 30, 2022 and December 31, 2021, respectively.

(Expressed in thousands) As of

March 31, 2022

June 30, 2022

December 31, 2021

18 unchanged sentences

obligations have not yet been satisfied.

(7) Fee received in advance on an annual basis.

OPPENHEIMER HOLDINGS INC.

6 unchanged sentences

For the Three Months Ended

June 30, For the Six Months Ended

2022 2021 2022 2021

Basic weighted average number of shares outstanding 11,980,115 12,689,191 12,222,527 12,634,464

Net dilutive effect of share-based awards, treasury method (1)

Net dilutive effect of share-based awards, treasury stock method (1)

— 991,955 919,011 861,125

Diluted weighted average number of shares outstanding 11,980,115 13,681,146 13,141,538 13,495,589

Net income attributable to Oppenheimer Holdings Inc.

Net income (loss) attributable to Oppenheimer Holdings Inc.

$ ( 3,874 ) $ 31,159 $ 5,418 $ 69,817

Earnings per share attributable to Oppenheimer Holdings Inc.

Earnings (Loss) per share attributable to Oppenheimer Holdings Inc.

Basic $ ( 0.32 ) $ 2.46 $ 0.44 $ 5.53

Diluted $ ( 0.32 ) $ 2.28 $ 0.41 $ 5.17

(1) For the three months ended March 31, 2022 and March 31, 2021, there was no Class A Stock granted under share-based compensation arrangements that were anti-dilutive.

(1) For the three months ended June 30, 2022, the diluted net loss per share computation did not include the anti-dilutive effect of 1,267,733 shares of Class A Stock granted under share-based compensation arrangements.

For the six months ended June 30, 2022, the diluted net income per share computation did not include the anti-dilutive effect of 4,100 shares of Class A Stock granted under share-based compensation arrangements.

For the three and six months ended June 30, 2021, there was no Class A Stock granted under share-based compensation arrangements that was anti-dilutive.

Receivable from and payable to brokers, dealers and clearing organizations

(Expressed in thousands)

March 31, 2022 December 31, 2021

June 30, 2022 December 31, 2021

Receivable from brokers, dealers and clearing organizations consists of:

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Clearing organizations and other (1)

53,675 169,300

Total $ 388,467 $ 422,057

(1) The balance at December 31, 2021 primarily related to a trade/settlement date adjustment for U.S.

(1) The balances are primarily related to a trade/settlement date adjustment for U.S.

Government Securities.

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In addition to the settlements with the Regulators, Oppenheimer had also reached settlements of and received adverse awards in legal proceedings with various clients where the Company was obligated to purchase ARS.

As of March 31, 2022, the Company no longer had any obligations to purchase ARS from such legal settlements or adverse awards.

As of March 31, 2022, the Company owned $ 31.8 million of ARS.

As of June 30, 2022, the Company no longer had any obligations to purchase ARS from such legal settlements or adverse awards.

As of June 30, 2022, the Company owned $ 32.0 million of ARS.

This amount represents the unredeemed or unsold amount that the Company holds as a result of ARS buybacks pursuant to the settlements with the Regulators and legal settlements and awards referred to above.

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In such cases, other valuation techniques might be necessary.

As of March 31, 2022, the Company had a valuation adjustment totaling $ 5.2 million relating to ARS owned (which is included as a reduction to securities owned on the condensed consolidated balance sheet).

As of June 30, 2022, the Company had a valuation adjustment totaling $ 5.2 million relating to ARS owned (which is included as a reduction to securities owned on the condensed consolidated balance sheet).

In its role as general partner in certain hedge funds and private equity funds, the Company, through its subsidiaries, holds direct investments in such funds.

The Company uses the net asset value of the underlying fund as a basis for estimating the fair value of its investment.

The following table provides information about the Company's investments in Company-sponsored funds as of March 31, 2022:

The following table provides information about the Company's investments in Company-sponsored funds as of June 30, 2022:

(Expressed in thousands)

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(1) Includes investments in hedge funds and hedge fund of funds that pursue long/short, event-driven, and activist strategies.

(2) Includes private equity funds and private equity fund of funds with diversified portfolios focusing on but not

limited to technology companies, venture capital and global natural resources.

(2) Includes private equity funds and private equity fund of funds with diversified portfolios focusing on but not limited to technology companies, venture capital and global natural resources.

During 2020, the Company made an investment in a financial technologies firm.

1 unchanged sentence

The Company determined the fair value of the investment based on an implied market-multiple approach and observable market data, including comparable company transactions.

As of March 31, 2022, the fair value of the investment was $ 4.8 million and was categorized in Level 2 of the fair value hierarchy.

As of June 30, 2022, the fair value of the investment was $ 4.6 million and was categorized in Level 2 of the fair value hierarchy.

Assets and Liabilities Measured at Fair Value

The Company's assets and liabilities, recorded at fair value on a recurring basis as of March 31, 2022 and December 31, 2021, have been categorized based upon the above fair value hierarchy as follows:

The Company's assets and liabilities, recorded at fair value on a recurring basis as of June 30, 2022, and December 31, 2021, have been categorized based upon the above fair value hierarchy as follows:

OPPENHEIMER HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements (unaudited)

Assets and liabilities measured at fair value on a recurring basis as of March 31, 2022 :

Assets and liabilities measured at fair value on a recurring basis as of June 30, 2022 :

(Expressed in thousands)

Fair Value Measurements as of March 31, 2022

Fair Value Measurements as of June 30, 2022

Level 1 Level 2 Level 3 Total

9 unchanged sentences

Corporate equities 27,013 — — 27,013

Money markets 314 — — 314

Auction rate securities — — 31,977 31,977

2 unchanged sentences

— 9,150 — 9,150

Derivative contracts:

Derivative contracts, total — 6 — 6

Total $ 435,941 $ 203,693 $ 31,977 $ 671,611

2 unchanged sentences

Agency securities — 3 — 3

Sovereign obligations — 4,171 — 4,171

Corporate debt and other obligations — 4,867 — 4,867

4 unchanged sentences

Futures 371 — — 371

TBAs — 26 — 26

Derivative contracts, total 371 3 — 374

40 unchanged sentences

Notes to Condensed Consolidated Financial Statements (unaudited)

The following tables present changes in Level 3 assets and liabilities measured at fair value on a recurring basis for the three months ended March 31, 2022 and 2021:

The following tables present changes in Level 3 assets and liabilities measured at fair value on a recurring basis for the three and six months ended June 30, 2022 and 2021:

(Expressed in thousands)

Level 3 Assets and Liabilities

For the Three Months Ended March 31, 2022

For the Three Months Ended June 30, 2022

Total Realized

6 unchanged sentences

Level 3 Assets and Liabilities

For the Three Months Ended March 31, 2021

For the Three Months Ended June 30, 2021

Total Realized

10 unchanged sentences

(4) Unrealized gains are attributable to assets or liabilities that are still held at the reporting date.

Level 3 Assets and Liabilities

For the Six Months Ended June 30, 2022

Total Realized

Beginning and Unrealized Purchases Sales and Transfers Ending

Balance Losses and Issuances Settlements In (Out) Balance

Auction rate securities (1)

$ 31,804 $ ( 27 ) $ 200 $ — $ — $ 31,977

1) Represents auction rate securities that failed in the auction rate market.

Level 3 Assets and Liabilities

For the Six Months Ended June 30, 2021

Total Realized

Beginning and Unrealized Purchases Sales and Transfers Ending

Balance Losses (3)(4)

and Issuances Settlements In (Out) Balance

Auction rate securities (1)

$ 30,701 $ ( 129 ) $ 1,875 $ ( 1,025 ) $ — $ 31,422

ARS Purchase Commitments (2)

195 ( 1 ) — ( 130 ) — 66

(1) Represents auction rate securities that failed in the auction rate market.

(2) Represents the difference in principal and fair value for auction rate securities purchase commitments outstanding at the end of the period.

(3) Included in principal transactions in the condensed consolidated income statement.

(4) Unrealized losses are attributable to assets or liabilities that are still held at the reporting date.

OPPENHEIMER HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements (unaudited)

Financial Instruments Not Measured at Fair Value

3 unchanged sentences

The fair value of the Company's senior secured notes, categorized in Level 2 of the fair value hierarchy, is based on quoted prices from the market in which the notes trade.

OPPENHEIMER HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements (unaudited)

Assets and liabilities not measured at fair value as of March 31, 2022:

Assets and liabilities not measured at fair value as of June 30, 2022:

(Expressed in thousands) Fair Value Measurement:

17 unchanged sentences

Carrying Value Level 1 Level 2 Level 3 Total

Drafts payable $ 10,020 $ 10,020 $ — $ — $ 10,020

Bank call loans $ 177,300 $ — $ 177,300 $ — $ 177,300

3 unchanged sentences

Securities failed to receive 50,028 — 50,028 — 50,028

Other 53,304 — 53,304 — 53,304

388,096 — 388,096 — 388,096

39 unchanged sentences

fair value versus carrying value) for certain assets and liabilities.

As of March 31, 2022, the Company did not have any repurchase agreements and reverse repurchase agreements that do not settle overnight or have an open settlement date.

As of June 30, 2022, the Company did not have any repurchase agreements and reverse repurchase agreements that do not settle overnight or have an open settlement date.

Derivative Instruments and Hedging Activities

The Company transacts, on a limited basis, in exchange traded and over-the-counter derivatives for both asset and liability management as well as for trading and investment purposes.

Risks managed using derivative instruments include interest rate risk and, to a lesser extent, foreign exchange risk.

All derivative instruments are measured at fair value and are recognized as either assets or liabilities on the condensed consolidated balance sheet.

Risks managed using derivative instruments include interest rate

OPPENHEIMER HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements (unaudited)

risk and, to a lesser extent, foreign exchange risk.

All derivative instruments are measured at fair value and are recognized as either assets or liabilities on the condensed consolidated balance sheet.

Foreign exchange hedges

15 unchanged sentences

Net unrealized gains and losses on TBAs are recorded on the condensed consolidated balance sheet in receivable from brokers, dealers and clearing organizations or payable to brokers, dealers and clearing organizations and in the condensed consolidated income statement as principal transactions revenue, net.

The notional amounts and fair values of the Company's derivatives as of March 31, 2022 and December 31, 2021 by product were as follows:

The notional amounts and fair values of the Company's derivatives as of June 30, 2022 and December 31, 2021 by product were as follows:

(Expressed in thousands)

Fair Value of Derivative Instruments as of March 31, 2022

Fair Value of Derivative Instruments as of June 30, 2022

Description Notional Fair Value

1 unchanged sentence

Other contracts TBAs $ 3,842 $ —

Forward reverse repurchase agreements 123,350 —

$ 127,192 $ —

Derivatives not designated as hedging instruments (1)

20 unchanged sentences

Such derivative instruments are not subject to master netting agreements, thus the related amounts are not offset.

The following table presents the location and fair value amounts of the Company's derivative instruments and their effect in the condensed consolidated income statements for the three months ended March 31, 2022 and 2021:

(Expressed in thousands)

The Effect of Derivative Instruments in the Income Statement

For the Three Months Ended March 31, 2022

For the Three Months Ended June 30, 2022

Recognized in Income on Derivatives

Types Description Location Net Gain

Types Description Location Net Gain/(Loss)

Commodity contracts Futures Principal transactions revenue, net $ 1,328

Other contracts Foreign exchange forward contracts Other revenue ( 20 )

Other contracts TBAs Principal transactions revenue, net ( 6 )

1 unchanged sentence

The Effect of Derivative Instruments in the Income Statement

For the Three Months Ended March 31, 2021

For the Three Months Ended June 30, 2021

Recognized in Income on Derivatives

Types Description Location Net Gain

Types Description Location Net Gain/(Loss)

Commodity contracts Futures Principal transactions revenue, net $ ( 525 )

Other contracts TBAs Principal transactions revenue, net 37

Other contracts Foreign exchange forward contracts Other revenue ( 8 )

TBAs Principal transactions revenue, net 14

Purchase commitments Principal transactions revenue, net ( 490 )

ARS purchase commitments Principal transactions revenue, net ( 1 )

OPPENHEIMER HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements (unaudited)

The Effect of Derivative Instruments in the Income Statement

For the Six Months Ended June 30, 2022

Recognized in Income on Derivatives

Types Description Location Net Gain/(Loss)

Commodity contracts Futures Principal transactions revenue $ 3,519

Other contracts Foreign exchange forward contracts Other revenue ( 20 )

TBAs Principal transactions revenue 56

(Expressed in thousands)

The Effect of Derivative Instruments in the Income Statement

For the Six Months Ended June 30, 2021

Recognized in Income on Derivatives

Types Description Location Net Gain/(Loss)

Commodity contracts Futures Principal transactions revenue $ 495

Other contracts Foreign exchange forward contracts Other revenue ( 8 )

TBAs Principal transactions revenue 51

Purchase commitments Principal transactions revenue ( 490 )

ARS purchase commitments Principal transactions revenue ( 1 )

Collateralized transactions

5 unchanged sentences

Bank call loans are generally payable on demand and bear interest at various rates.

As of March 31, 2022, the outstanding balance of bank call loans was $ 78.2 million ($ 69.5 million as of December 31, 2021).

As of June 30, 2022, the outstanding balance of bank call loans was $ 177.3 million ($ 69.5 million as of December 31, 2021).

Such loans with commercial banks were collateralized by the Company's securities and customer securities with market values of approximately $ 55.9 million and $ 145.0 million, respectively.

As of March 31, 2022, the Company had approximately $ 1.8 billion of customer securities under customer margin loans that are available to be pledged, of which the Company has re-pledged approximately $ 252.2 million under securities loan agreements.

As of March 31, 2022, the Company had pledged $ 424.0 million of customer securities directly with the Options Clearing Corporation to secure obligations and margin requirements under option contracts written by customers.

As of March 31, 2022, the Company had no outstanding letters of credit.

The Company enters into reverse repurchase agreements, repurchase agreements, securities borrowed and securities loaned transactions to, among other things, acquire securities to cover short positions and settle other securities obligations, to accommodate customers' needs and to finance the Company's inventory positions.

As of June 30, 2022, the Company had approximately $ 1.7 billion of customer securities under customer margin loans that are available to be pledged, of which the Company has re-pledged approximately $ 236.3 million under securities loan agreements.

As of June 30, 2022, the Company had pledged $ 518.5 million of customer securities directly with the Options Clearing Corporation to secure obligations and margin requirements under option contracts written by customers.

As of June 30, 2022, the Company had no outstanding letters of credit.

The Company enters into reverse repurchase agreements, repurchase agreements, securities borrowed and securities loaned transactions in order to, among other things, acquire securities to cover short positions and settle other securities obligations, so as to accommodate customers' needs and to finance the Company's inventory positions.

Except as described below, repurchase and reverse repurchase agreements, principally involving U.S.

Government and Agency securities, are carried at amounts at which the securities subsequently will be resold or reacquired as specified in the respective agreements and include accrued interest.

OPPENHEIMER HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements (unaudited)

Repurchase agreements and reverse repurchase agreements are presented on a net-by-counterparty basis, when the repurchase agreements and reverse repurchase agreements are executed with the same counterparty, have the same explicit settlement date, are executed in accordance with a master netting arrangement, the securities underlying the repurchase agreements and reverse repurchase agreements exist in "book entry" form and certain other requirements are met.

The following table presents a disaggregation of the gross obligation by the class of collateral pledged and the remaining contractual maturity of the repurchase agreements and securities loaned transactions as of March 31, 2022:

(Expressed in thousands)

5 unchanged sentences

Gross amount of recognized liabilities for repurchase agreements and securities loaned $ 693,120

OPPENHEIMER HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements (unaudited)

The following tables present the gross amounts and the offsetting amounts of reverse repurchase agreements, repurchase agreements, securities borrowed and securities loaned transactions as of March 31, 2022 and December 31, 2021:

As of March 31, 2022

As of June 30, 2022

(Expressed in thousands)

24 unchanged sentences

(2) Included in payable to brokers, dealers and clearing organizations on the condensed consolidated balance sheet.

OPPENHEIMER HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements (unaudited)

As of December 31, 2021

24 unchanged sentences

(2) Included in payable to brokers, dealers and clearing organizations on the condensed consolidated balance sheet.

OPPENHEIMER HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements (unaudited)

The Company elected the fair value option for those repurchase agreements and reverse repurchase agreements that do not settle overnight or have an open settlement date.

As of March 31, 2022, the Company did not have any repurchase agreements and reverse repurchase agreements that do not settle overnight or have an open settlement date.

As of June 30, 2022, the Company did not have any repurchase agreements or reverse repurchase agreements that do not settle overnight or have an open settlement date.

The Company receives collateral in connection with securities borrowed and reverse repurchase agreement transactions and customer margin loans.

Under many agreements, the Company is permitted to sell or re-pledge the securities received (e.g., use the securities to enter into securities lending transactions, or deliver to counterparties to cover short positions).

As of March 31, 2022, the fair value of securities received as collateral under securities borrowed transactions and reverse repurchase agreements was $ 94.5 million ($ 96.4 million as of December 31, 2021) and $ 44.2 million ($ 307.3 million as of December 31, 2021), respectively, of which the Company has sold and re-pledged approximately $ 31.4 million ($ 29.4 million as of December 31, 2021) under securities loaned transactions and $ 44.2 million under repurchase agreements ($ 307.3 million as of December 31, 2021).

As of June 30, 2022, the fair value of securities received as collateral under securities borrowed transactions and reverse repurchase agreements was $ 76.1 million ($ 96.4 million as of December 31, 2021) and $ 240.9 million ($ 307.3 million as of December 31, 2021), respectively, of which the Company has sold and re-pledged approximately $ 31.6 million ($ 29.4 million as of December 31, 2021) under securities loaned transactions and $ 240.9 million under repurchase agreements ($ 307.3 million as of December 31, 2021).

The Company pledges certain of its securities owned for securities lending and repurchase agreements and to collateralize bank call loan transactions.

The carrying value of pledged securities owned that can be sold or re-pledged by the counterparty was $ 551.7 million, as presented on the face of the condensed consolidated balance sheet as of March 31, 2022 ($ 266.4 million as of December 31, 2021).

The carrying value of pledged securities owned that can be sold or re-pledged by the counterparty was $ 316.6 million, as presented on the face of the condensed consolidated balance sheet as of June 30, 2022 ($ 266.4 million as of December 31, 2021).

The Company manages credit exposure arising from repurchase and reverse repurchase agreements by, in appropriate circumstances, entering into master netting agreements and collateral arrangements with counterparties that provide the Company, in the event of a customer default, the right to liquidate securities and the right to offset a counterparty's rights and obligations.

2 unchanged sentences

In the event the counterparty is unable to meet its contractual obligation to return the securities, the Company may be exposed to off-balance sheet risk of acquiring securities at prevailing market prices.

OPPENHEIMER HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements (unaudited)

Credit Concentrations

2 unchanged sentences

The Company seeks to mitigate these risks by actively monitoring exposures and obtaining collateral as deemed appropriate.

Included in receivable from brokers, dealers and clearing organizations as of March 31, 2022 were receivables from three major U.S.

Included in receivable from brokers, dealers and clearing organizations as of June 30, 2022 were receivables from three major U.S.

broker-dealers totaling approximately $ 61.7 million.

4 unchanged sentences

O'Brien & Associates (commodities transactions), Mortgage-Backed Securities Division (a division of FICC), and others.

With respect to its business in reverse repurchase and repurchase agreements, substantially all open contracts as of March 31, 2022 are with the FICC .

With respect to its business in reverse repurchase and repurchase agreements, substantially all open contracts as of June 30, 2022 are with the FICC .

In addition, the Company clears its non-U.S.

5 unchanged sentences

As the right to charge the Company has no maximum amount and applies to all trades executed through the clearing brokers, the Company believes there is no maximum amount assignable to this right.

As of March 31, 2022, the Company had recorded no liabilities with regard to this right.

As of June 30, 2022, the Company had recorded no liabilities with regard to this right.

The Company's policy is to monitor the credit standing of the clearing brokers and banks with which it conducts business.

OPPENHEIMER HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements (unaudited)

Variable interest entities ("VIEs")

5 unchanged sentences

In each instance, the Company has determined that it is not the primary beneficiary and therefore need not consolidate the hedge funds or private equity funds.

The subsidiaries' general and limited partnership interests and additional capital commitments represent its maximum exposure to loss.

The subsidiaries' general partnership and limited partnership interests are included in other assets on the consolidated balance sheet.

In addition, the Company serves as general partner of Oppenheimer Acquisition LLC I and Oppenheimer Acquisition LLC II (the "Sponsors").

They are sponsors of two Special Purpose Acquisition Companies, Oppenheimer Acquisition Corp.

I ("OHAA") and Oppenheimer Acquisition Corp.

The subsidiaries' general and limited partnership interests and additional capital commitments represent the Company's maximum exposure to loss.

The subsidiaries' general partnership and limited partnership interests are included in other assets on the condensed consolidated balance sheet.

In addition, the Company serves as general partner of the Sponsor and Oppenheimer Acquisition LLC II (the "Sponsors").

They are sponsors of two Special Purpose Acquisition Companies, respectively, OHAA and Oppenheimer Acquisition Corp.

II (together, the "SPACs”), that are seeking to effect a transaction which could be in the form of a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses.

The Sponsors and the SPACs are consolidated VIE's as the Company is the primary beneficiary.

The Sponsors and the SPACs are consolidated VIEs as the Company is the primary beneficiary.

On October 26, 2021, OHAA consummated its $ 126.5 million IPO.

The Company and its employees control OHAA through the Oppenheimer Acquisition LLC I’s ownership of Class A founder shares of OHAA.

The Company and its employees control OHAA through the Sponsor's ownership of Class A founder shares of OHAA.

As a result, both OHAA and such Sponsor are consolidated in the Company’s financial statements.

The following table sets forth the total assets and liabilities of VIE's consolidated on our condensed consolidated balance sheet:

OPPENHEIMER HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements (unaudited)

The following table sets forth the total assets and liabilities of VIEs consolidated on our condensed consolidated balance sheet:

(Expressed in thousands)

As of March 31,

As of June 30,

Cash and cash equivalents $ 1,458 $ —

4 unchanged sentences

Total Liabilities $ 123 $ —

OPPENHEIMER HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements (unaudited)

Long-term debt

(Expressed in thousands)

Issued Maturity Date March 31, 2022 December 31, 2021

Issued Maturity Date June 30, 2022 December 31, 2021

5.50 % Senior Secured Notes

16 unchanged sentences

In addition, certain of the covenants will be suspended upon the Parent attaining an investment grade debt rating for the Notes from both S&P Global Ratings and Moody’s Investors Service, Inc.

OPPENHEIMER HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements (unaudited)

Pursuant to the indenture, the following covenants apply to the Parent and its restricted subsidiaries, but generally do not apply, or apply only in part, to its Regulated Subsidiaries (as defined):

2 unchanged sentences

• limitation on dividends and other payment restrictions affecting restricted subsidiaries or Regulated Subsidiaries, which generally limits the ability of certain of the Parent’s subsidiaries to pay dividends or make other transfers;

• limitation on future Subsidiary Guarantors, which prohibits certain of the Parent’s subsidiaries from guaranteeing its indebtedness or indebtedness of any restricted subsidiary unless the Notes are comparably guaranteed;

• limitation on future Subsidiary Guarantors (as hereinafter defined), which prohibits certain of the Parent’s subsidiaries from guaranteeing its indebtedness or indebtedness of any restricted subsidiary unless the Notes are comparably guaranteed;

• limitation on transactions with shareholders and affiliates, which generally requires transactions among the Parent’s affiliated entities to be conducted on an arm’s-length basis;

OPPENHEIMER HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements (unaudited)

• limitation on liens, which generally prohibits the Parent and its restricted subsidiaries from granting liens unless the Notes are comparably secured;

1 unchanged sentence

The indenture also provides for events of default which, if any of them occurs, would permit or require the principal of and accrued interest on the Notes to become or to be declared due and payable.

As of March 31, 2022, the Parent was in compliance with all of its covenants.

As of June 30, 2022, the Parent was in compliance with all of its covenants.

The Notes are jointly and severally and fully and unconditionally guaranteed on a senior secured basis by the Subsidiary Guarantors and future subsidiaries are required to guarantee the Notes pursuant to the indenture.

The Notes are secured by a first-priority security interest in substantially all of the Parent’s and the Subsidiary Guarantors’ existing and future tangible and intangible assets, subject to certain exceptions and permitted liens.

Interest expense on the Notes for the three months ended March 31, 2022 and March 31, 2021 was $ 1.7 million and $ 1.7 million, respectively.

The effective income tax rate for the three months ended March 31, 2022 was 31.2 % compared with 25.8 % for the prior year period and reflects the Company's estimate of the statutory federal and state tax rates adjusted for certain discrete items.

The effective tax rate for the first quarter of 2022 was negatively impacted by unfavorable permanent items whereas the effective tax rate for the first quarter of 2021 was positively impacted by favorable discrete items.

Share capital

The Company's authorized share capital consists of (a) 50,000,000 shares of Preferred Stock, par value $ 0.001 per share;

Interest expense on the Notes for the three and six months ended June 30, 2022 was $ 1.7 million and $ 3.4 million, respectively.

Interest expense on the Notes for the three and six months ended June 30, 2021 was $ 1.7 million and $ 3.4 million, respectively.

The effective income tax rate for the three and six months ended June 30, 2022 was 23.5 % and 37.1 % respectively, compared with 27.8 % and 26.7 % for the three and six months ended June 30, 2021 and reflects the Company's annual estimate of the statutory federal and state tax rates adjusted for certain discrete items.

The effective tax rate for the second quarter of 2022 was negatively impacted by valuation allowance on the Company's foreign operations whereas the effective tax rate for the second quarter of 2021 was impacted by unfavorable permanent items.

OPPENHEIMER HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements (unaudited)

Stockholder's Equity

The Company's shares authorized consists of (a) 50,000,000 shares of Preferred Stock, par value $ 0.001 per share;

(b) 50,000,000 shares of Class A Stock, par value $ 0.001 per share;

5 unchanged sentences

For the Three Months Ended

June 30, For the Six Months Ended

2022 2021 2022 2021

Class A Stock outstanding, beginning of period 12,156,174 12,586,043 12,447,036 12,381,778

2 unchanged sentences

Class A Stock outstanding, end of period 11,270,944 12,592,646 11,270,944 12,592,646

OPPENHEIMER HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements (unaudited)

Stock buy-back

3 unchanged sentences

This authorization supplemented the 12,407 shares that remained authorized and available under the Company's previous share repurchase program for a total of 530,407 shares authorized and available for repurchase at February 28, 2022.

During the three months ended March 31, 2022, the Company purchased and canceled an aggregate of 377,313 shares of Class A Stock for a total consideration of $ 16.2 million ($ 42.82 per share) under this program.

During the three months ended March 31, 2021, the Company did not purchase or cancel Class A Stock under this program.

As of March 31, 2022, 364,508 shares remained available to be purchased under the share repurchase program.

Any such share purchases will be made by the Company from time to time in the open market at the prevailing open market price using cash on hand, in compliance with the applicable rules and regulations of the New York Stock Exchange and federal and state securities laws and the terms of the Company's Notes.

On May 24, 2022, the Company announced that its Board of Directors approved a share repurchase program that authorizes the Company to purchase up to 550,000 shares of the Company's Class A Stock, representing approximately 4.6 % of its 11,863,559 then issued and outstanding shares of Class A Stock.

This authorization supplemented the 71,893 shares that remained authorized and available under the Company's previous share repurchase program for a total of 621,893 shares authorized and available for repurchase at May 24, 2022.

During the three months ended June 30, 2022, the Company purchased and canceled an aggregate of 885,230 shares of Class A Stock for a total consideration of $ 30.2 million ($ 34.13 per share) under this program.

During the six months ended June 30, 2022, the Company purchased and canceled an aggregate of 1,262,543 shares of Class A Stock for a total consideration of $ 46.4 million ($ 36.73 per share) under this program.

During the three and six months ended June 30, 2021, the Company did not purchase or cancel any Class A Stock under this program.

As of June 30, 2022, 29,278 shares remained available to be purchased under the share repurchase program.

The Company repurchases shares from time to time in the open market at the prevailing open market price using cash on hand, in compliance with the applicable rules and regulations of the New York Stock Exchange and federal and state securities laws and the terms of the Company's Notes.

All shares purchased will be canceled.

3 unchanged sentences

Depending on market conditions and other factors, these repurchases may be commenced or suspended from time to time without prior notice.

OPPENHEIMER HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements (unaudited)

Contingencies

11 unchanged sentences

Even after lengthy review and analysis, the Company, in many legal and regulatory proceedings, may not be able to reasonably estimate possible losses or range of loss.

OPPENHEIMER HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements (unaudited)

For certain other legal and regulatory proceedings, the Company can estimate possible losses, or range of loss in excess of amounts accrued, but does not believe, based on current knowledge and after consultation with counsel, that such losses individually, or in the aggregate, will have a material adverse effect on the Company's condensed consolidated financial statements as a whole.

For legal and regulatory proceedings where there is at least a reasonable possibility that a loss or an additional loss may be incurred, the Company estimates a range of aggregate loss in excess of amounts accrued of $ 0 to $ 32.0 million as of March 31, 2022.

This estimated aggregate range is based upon currently available information for those legal proceedings in which the Company is involved, where the Company can make an estimate for such losses.

10 unchanged sentences

Plaintiff purports to represent a class of investors in Horizon Private Equity, III, LLC (“Horizon”).

Horizon is alleged to be a fraudulent scheme and plaintiff is seeking unspecified damages alleging violations of the Georgia RICO statute, breach of fiduciary duty, procurement of breach of fiduciary duty, negligent misrepresentation, aiding and abetting fraud, unjust enrichment, punitive damages and attorneys’ fees.

Plaintiff does not allege Oppenheimer received any of the funds invested in Horizon;

rather, that Oppenheimer’s failure to properly supervise its employees allowed the alleged scheme to occur and continue.

Horizon is alleged to be a fraudulent scheme and plaintiff is seeking unspecified damages sounding in violations of the Georgia RICO statute, breach of fiduciary duty, procurement of breach of fiduciary duty, negligent misrepresentation, aiding and abetting fraud, unjust enrichment, punitive damages and attorneys’ fees.

Plaintiff does not allege Oppenheimer received any of the funds invested in Horizon, but rather that Oppenheimer’s purported failure to properly supervise its employees allowed the alleged scheme to occur and continue.

On November 22, 2021, Oppenheimer filed a motion to dismiss the complaint on a number of grounds.

The motion to dismiss was fully briefed on January 17, 2021.

Oppenheimer believes these claims to be without merit and intends to vigorously defend itself against the claims made in this action.

In addition to the class action described in the preceding paragraph Oppenheimer has also been named as a respondent in twenty arbitrations, many containing multiple claimants, each filed before FINRA, relating to investments made by former Oppenheimer clients who invested in Horizon.

The motion to dismiss was fully briefed on January 17, 2022, and the Court heard oral argument on the motion on June 21, 2022.

Oppenheimer believes the claims to be without merit and intends to vigorously defend itself against the claims made in this action.

OPPENHEIMER HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements (unaudited)

In addition to the class action described in the preceding paragraph Oppenheimer has also been named as a respondent in twenty-four arbitrations, many containing multiple claimants, each filed before FINRA, relating to investments made by former Oppenheimer clients who invested in Horizon.

Claimants allege many of the causes of action alleged in the class action described in the preceding paragraph.

2 unchanged sentences

Oppenheimer believes these claims to be without merit and intends to defend itself vigorously against these claims.

On June 30, 2022, the Company received a "Wells Notice" from the SEC requesting that Oppenheimer make a written submission to the SEC to explain why Oppenheimer should not be charged with violations of Section 15c2-12 of the Exchange Act and Rule15c2-12 thereunder as well as Municipal Securities Rulemaking Board Rules G-17 and G-27 in relation to its sales of municipal notes pursuant to an exemption from continuing disclosure contained in Rule 15c2-12.

As a result of the foregoing the Company believes the SEC may institute an administrative proceeding against Oppenheimer for not having fully complied with the exemption from the continuing disclosure obligations under Rule 15c2-12.

The Company believes such claim to be without merit and intends to vigorously defend itself against any such claim.

Regulatory requirements

2 unchanged sentences

Oppenheimer computes its net capital requirements under the alternative method provided for in the Rule which requires that Oppenheimer maintain net capital equal to two percent of aggregate customer-related debit items, as defined in SEC Rule 15c3-3.

As of March 31, 2022, the net capital of Oppenheimer as calculated under the Rule was $ 440.4 million or 30.40 % of Oppenheimer's aggregate debit items.

As of June 30, 2022, the net capital of Oppenheimer as calculated under the Rule was $ 435.6 million or 27.53 % of Oppenheimer's aggregate debit items.

This was $ 404 million in excess of the minimum required net capital at that date.

Freedom computes its net capital requirement under the basic method provided for in the Rule, which requires that Freedom maintain net capital equal to the greater of $ 100,000 or 6-2/3% of aggregate indebtedness, as defined.

As of March 31, 2022, Freedom had net capital of $ 4.5 million, which was $ 4.4 million in excess of the $ 100,000 required to be maintained at that date.

OPPENHEIMER HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements (unaudited)

As of March 31, 2022, the capital required and held under the FCA’s Investment Firms’ Prudential Regime (“IFPR”) for Oppenheimer Europe Ltd.

As of June 30, 2022, Freedom had net capital of $ 4.4 million, which was $ 4.3 million in excess of the $ 100,000 required to be maintained at that date.

As of June 30, 2022, the capital required and held under the FCA’s Investment Firms’ Prudential Regime (“IFPR”) for Oppenheimer Europe Ltd.

was as follows:

2 unchanged sentences

• Total Capital ratio 174 % (required 100.0 %).

Effective January 2022 IFPR changed, minimum capital requirement, which is now sterling 750,000 (previously it was Euro 730,000 ).

Effective January 2022, IFPR changed its minimum capital requirement, which is now sterling 750,000 (previously it was Euro 730,000 ).

Capital ratios are now expressed differently, but are effectively unchanged when comparing performance to required regulatory minimums.

As of March 31, 2022, Oppenheimer Europe Ltd.

As of June 30, 2022, Oppenheimer Europe Ltd.

is in compliance with its regulatory requirements.

As of March 31, 2022, the regulatory capital of Oppenheimer Investments Asia Limited was $ 4.7 million, which was $ 4.3 million in excess of the $ 383,007 required to be maintained on that date.

As of June 30, 2022, the regulatory capital of Oppenheimer Investments Asia Limited was $ 4.8 million, which was $ 4.4 million in excess of the $ 382,297 required to be maintained on that date.

Oppenheimer Investments Asia Limited computes its regulatory capital pursuant to the requirements of the Securities and Futures Commission of Hong Kong.

As of March 31, 2022, Oppenheimer Investment Asia Limited is in compliance with its regulatory requirements.

As of June 30, 2022, Oppenheimer Investment Asia Limited is in compliance with its regulatory requirements.

OPPENHEIMER HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements (unaudited)

Segment information

9 unchanged sentences

Costs associated with these groups are separately reported in a Corporate/Other category and primarily include compensation and benefits.

OPPENHEIMER HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements (unaudited)

The table below presents information about the reported revenue and pre-tax income (loss) of the Company for the three months ended March 31, 2022 and 2021.

The table below presents information about the reported revenue and pre-tax income (loss) of the Company for the three and six months ended June 30, 2022 and 2021.

Asset information by reportable segment is not reported since the Company does not produce such information for internal use by the chief operating decision maker.

1 unchanged sentence

For the Three Months Ended

June 30, For the Six Months Ended

2022 2021 2022 2021

Private client (1)

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Asset management (1)

8,120 8,638 17,594 16,191

Capital markets ( 17,935 ) 39,373 ( 16,769 ) 89,364

3 unchanged sentences

Advisory fees are allocated 10.0 % to the Asset Management and 90.0 % to the Private Client segments.

Revenue, classified by the major geographic areas in which it was earned, for the three months ended March 31, 2022 and 2021 was:

OPPENHEIMER HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements (unaudited)

Revenue, classified by the major geographic areas in which it was earned, for the three and six months ended June 30, 2022 and 2021 was:

(Expressed in thousands)

For the Three Months Ended

June 30, For the Six Months Ended

2022 2021 2022 2021

Americas $ 225,500 $ 326,485 $ 477,410 $ 683,192

3 unchanged sentences

Subsequent events

On April 29, 2022, the Company announced a quarterly dividend in the amount of $ 0.15 per share, payable on May 27, 2022 to holders of Class A Stock and Class B Stock of record on May 13, 2022.

On July 29, 2022, the Company announced a quarterly dividend in the amount of $ 0.15 per share, payable on August 26, 2022 to holders of Class A Stock and Class B Stock of record on August 12, 2022.

On July 28, 2022, the Company's Board of Directors approved a share repurchase program that authorizes the Company to purchase up to 536,500 shares of the Company's Class A Stock, representing approximately 4.8 % of its 11,251,930 then issued and outstanding shares of Class A Stock.

This authorization supplemented the 4,278 shares that remained authorized and available under the Company's previous share repurchase program for a total of 540,778 shares authorized.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements