What changed in this filing

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Item 1. Financial Statements

2022-10-28 compared with 2022-07-29 · 197 added, 178 removed, 1080 unchanged (26% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)

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

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

Cash and cash equivalents $ 36,578 $ 213,759

4 unchanged sentences

1,178,713 1,221,450

Income tax receivable 9,161 —

Securities purchased under agreements to resell — 935

32 unchanged sentences

shares issued and outstanding:

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

10,874,990 and 12,447,036 as of September 30, 2022 and December 31, 2021, respectively

shares authorized, issued and outstanding:

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

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

Additional paid-in capital 25,918 78,032

6 unchanged sentences

Total Liabilities, Redeemable Noncontrolling Interests and Stockholders' Equity $ 2,856,025 $ 3,043,250

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 .

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

OPPENHEIMER HOLDINGS INC.

1 unchanged sentence

For the Three Months Ended

June 30, For the Six Months Ended

September 30, For the Nine Months Ended

September 30,

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

14 unchanged sentences

Total expenses 286,873 277,948 782,079 896,228

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

Pre-tax income 7,238 37,394 15,282 132,689

Income taxes provision 2,573 11,144 5,559 36,622

Net income $ 4,665 $ 26,250 $ 9,723 $ 96,067

Net income (loss) attributable to noncontrolling interest, net of tax 145 — ( 215 ) —

Net income (loss) attributable to Oppenheimer Holdings Inc.

Net income attributable to Oppenheimer Holdings Inc.

$ 4,520 $ 26,250 $ 9,938 $ 96,067

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

Earnings per share attributable to Oppenheimer Holdings Inc.

Basic $ 0.40 $ 2.07 $ 0.84 $ 7.59

8 unchanged sentences

For the Three Months Ended

June 30, For the Six Months Ended

September 30, For the Nine Months Ended

September 30,

(Expressed in thousands) 2022 2021 2022 2021

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

Net income $ 4,665 $ 26,250 $ 9,723 $ 96,067

Other comprehensive income (loss), net of tax

Currency translation adjustment ( 410 ) 235 ( 3,062 ) ( 64 )

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

Comprehensive income $ 4,255 $ 26,485 6,661 96,003

Less net income (loss) attributable to noncontrolling interests 145 — ( 215 ) —

Comprehensive income (loss) attributable to Oppenheimer Holdings Inc.

Comprehensive income attributable to Oppenheimer Holdings Inc.

$ 4,110 $ 26,485 $ 6,876 $ 96,003

1 unchanged sentence

OPPENHEIMER HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (unaudited)

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY AND REDEEMABLE NONCONTROLLING INTERESTS (unaudited)

For the Three Months Ended

For the Six Months Ended (1)

September 30 (1) ,

For the Nine Months Ended

September 30 (1) ,

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

13 unchanged sentences

Balance at beginning of period 742,614 668,193 740,926 601,406

Net income (loss) (2)

Repurchase of Class A non-voting common stock for cancellation ( 1,781 ) — ( 1,781 ) —

Net income (2)

4,520 26,250 9,938 96,067

9 unchanged sentences

Balance at beginning of period 1,709 — 2,069 —

Capital distribution to noncontrolling interest ( 21 ) — ( 21 ) —

Net income (loss) attributable to noncontrolling interest 145 — ( 215 ) —

11 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

FOR THE SIX MONTHS ENDED JUNE 30,

FOR THE NINE MONTHS ENDED SEPTEMBER 30,

(Expressed in thousands) 2022 2021

26 unchanged sentences

Accounts payable and other liabilities ( 21,797 ) ( 11,588 )

Cash (used in)/provided by operating activities ( 231,371 ) 20,140

Cash provided by/(used in) operating activities ( 83,104 ) 135,188

Cash flows from investing activities

1 unchanged sentence

Proceeds from the settlement of Company-owned life insurance 1,191 2,001

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

Cash provided by/(used in) investing activities ( 10,436 ) ( 5,512 )

Cash flows from financing activities

Cash dividends paid on Class A non-voting and Class B voting common stock ( 5,433 ) ( 4,936 )

Issuance of Class A non-voting common stock 65 58

Repurchase of Class A non-voting common stock for cancellation ( 59,554 ) ( 4,715 )

Payments for employee taxes withheld related to vested share-based awards ( 2,283 ) ( 4,966 )

Distribution to noncontrolling interests ( 21 ) —

Debt issuance costs — ( 22 )

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

Decrease in bank call loans, net ( 15,900 ) ( 9,700 )

Cash provided by/(used in) financing activities ( 83,126 ) ( 24,281 )

35 unchanged sentences

Accordingly, they do not include all of the information and notes required by accounting principles generally accepted in the United States of America ("U.S.

GAAP") for complete financial statements and should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2021 (the "Form 10-K").

GAAP") and should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2021 (the "Form 10-K").

The accompanying condensed consolidated balance sheet data was derived from the audited consolidated financial statements but does not include all disclosures required by U.S.

3 unchanged sentences

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 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.

The condensed consolidated results of operations for the three-month and nine-month periods ended September 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.

Effective June 30, 2022, the Company reclassified certain stockholders' equity amounts on the condensed consolidated balance sheet and condensed consolidated statements of changes in stockholders' equity and redeemable noncontrolling interests.

The reclassification included separately presenting the par value of common stock, 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.

11 unchanged sentences

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”.

“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 September 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.

16 unchanged sentences

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

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

Additionally, noncontrolling interests include 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.

Under ASC 326 "Financial Instruments - Credit Losses", 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.

The Company has elected to use this approach for securities borrowed, margin loans, and reverse repurchase agreements.

1 unchanged sentence

See note 9 for details.

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

As of September 30, 2022, the Company had $ 57.2 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.

8 unchanged sentences

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

For the three months and nine months ended September 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 June 30, 2022, the uncollected balance of defaulted notes was $ 7.4 million and the allowance for uncollectibles was $ 5.1 million.

As of September 30, 2022, the uncollected balance of defaulted notes was $ 7.7 million and the allowance for uncollectibles was $ 5.2 million.

The allowance for uncollectibles consisted of $ 3.4 million related to defaulted notes balances (five years and older) and $ 1.8 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 June 30, 2022:

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

(Expressed in thousands)

As of June 30, 2022

As of September 30, 2022

2017 and prior 3,449

Total $ 7,662

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:

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

September 30, 2022 and 2021:

(Expressed in thousands)

For the Three Months Ended

June 30, For the Six Months Ended

September 30, For the Nine Months Ended

2022 2021 2022 2021

16 unchanged sentences

Notes to Condensed Consolidated Financial Statements (unaudited)

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 of September 30, 2022, the Company had right-of-use operating lease assets of $ 148.5 million (net of accumulated amortization of $ 77.5 million) which are comprised of real estate leases of $ 145.6 million (net of accumulated amortization of $ 75.2 million) and equipment leases of $ 2.9 million (net of accumulated amortization of $ 2.3 million).

As of September 30, 2022, the Company had operating lease liabilities of $ 189.3 million which are comprised of real estate lease liabilities of $ 186.4 million and equipment lease liabilities of $ 2.9 million.

The Company had no finance leases as of September 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 June 30, 2022 and December 31, 2021, respectively:

June 30, 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 September 30, 2022 and December 31, 2021, respectively:

September 30, 2022 December 31, 2021

Weighted average remaining lease term (in years) 6.96 7.38

Weighted average discount rate 6.67 % 6.89 %

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:

The following table presents operating lease costs recognized for the three and nine months ended September 30, 2022 and September 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

September 30, For the Nine Months Ended

September 30,

2022 2021 2022 2021

4 unchanged sentences

Equipment leases - Interest expense 41 34 108 110

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

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

OPPENHEIMER HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements (unaudited)

(Expressed in thousands)

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

2022 $ 10,716 $ 41,696

7 unchanged sentences

Present value of lease liabilities $ 189,298 $ 192,019

OPPENHEIMER HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements (unaudited)

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).

As of September 30, 2022, the Company had $ 30.0 million of additional real estate operating leases that have not yet commenced ($ 16.2 million as of December 31, 2021).

Revenue from contracts with customers

13 unchanged sentences

Trade execution and clearing services, when provided together, represent a single performance obligation, as the services are not separately identifiable in the context of the contract.

Commission revenue associated with combined trade execution and clearing services, as well as trade execution services on a standalone basis, is recognized at a point in time on trade date when the performance obligation is satisfied.

Commission revenue associated with combined trade execution and clearing services, as well as trade execution services on a standalone basis, are recognized at a point in time on trade date when the performance obligation is satisfied.

Commission revenue is generally paid on settlement date, which is generally two business days after trade date for equity securities and corporate bond transactions and one day for government securities, options and commodities transactions.

The Company records a receivable on the trade date and receives a payment on the settlement date.

OPPENHEIMER HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements (unaudited)

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.

3 unchanged sentences

Mutual fund income is generally received within 90 days.

OPPENHEIMER HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements (unaudited)

Advisory Fees

2 unchanged sentences

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.

Performance fees are considered variable and they are recognized at a point in time 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.

Such fees are computed as of the fund's year-end when the measurement period ends and generally are recorded as earned in the fourth quarter of the Company's fiscal year.

17 unchanged sentences

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 and six months ended June 30, 2022 and 2021:

(Expressed in thousands) For the Three Months Ended June 30, 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 nine months ended September 30, 2022 and 2021:

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

Reportable Segments

15 unchanged sentences

Total revenue $ 178,614 $ 24,870 $ 90,947 $ ( 320 ) $ 294,111

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

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

Reportable Segments

17 unchanged sentences

Notes to Condensed Consolidated Financial Statements (unaudited)

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

(Expressed in thousands) For the Nine Months Ended September 30, 2022

Reportable Segments

15 unchanged sentences

Total revenue $ 473,932 $ 76,302 $ 247,272 $ ( 145 ) $ 797,361

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

(Expressed in thousands) For the Nine Months Ended September 30, 2021

Reportable Segments

15 unchanged sentences

Total revenue $ 491,750 $ 76,668 $ 460,129 $ 370 $ 1,028,917

OPPENHEIMER HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements (unaudited)

Contract Balances

2 unchanged sentences

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

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.

The Company had receivables related to revenue from contracts with customers of $ 32.9 million and $ 37.2 million at September 30, 2022 and December 31, 2021, respectively.

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

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

Total deferred revenue was $ 994,000 and $ 235,000 at September 30, 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 condensed consolidated balance sheet:

(Expressed in thousands) As of

June 30, 2022

September 30, 2022

December 31, 2021

27 unchanged sentences

For the Three Months Ended

June 30, For the Six Months Ended

September 30, For the Nine Months Ended

September 30,

2022 2021 2022 2021

3 unchanged sentences

Diluted weighted average number of shares outstanding 12,190,425 13,664,214 12,809,000 13,539,373

Net income (loss) attributable to Oppenheimer Holdings Inc.

Net income attributable to Oppenheimer Holdings Inc.

$ 4,520 $ 26,250 $ 9,938 $ 96,067

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

Earnings per share attributable to Oppenheimer Holdings Inc.

Basic $ 0.40 $ 2.07 $ 0.84 $ 7.59

Diluted $ 0.37 $ 1.92 $ 0.78 $ 7.10

(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.

(1) For the three months ended September 30, 2022, the diluted net income per share computation did not include the anti-dilutive effect of 398,198 shares of Class A Stock granted under share-based compensation arrangements.

For the nine months ended September 30, 2022, the diluted net income per share computation did not include the anti-dilutive effect of 22,250 shares of Class A Stock granted under share-based compensation arrangements.

For the three and nine months ended September 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)

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

Receivable from brokers, dealers and clearing organizations consists of:

1 unchanged sentence

Receivable from brokers 69,653 39,716

Securities failed to deliver 26,705 9,212

Clearing organizations 22,287 19,518

Securities failed to deliver 9,801 9,212

Other 3,198 1,704

44 unchanged sentences

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 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.

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

As of September 30, 2022, the Company owned $ 33.1 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.

4 unchanged sentences

In such cases, other valuation techniques might be necessary.

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).

As of September 30, 2022, the Company had a valuation allowance 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 June 30, 2022:

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

(Expressed in thousands)

29 unchanged sentences

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

As of September 30, 2022, the fair value of the investment was $ 5.8 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 June 30, 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 September 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 June 30, 2022 :

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

(Expressed in thousands)

Fair Value Measurements as of June 30, 2022

Fair Value Measurements as of September 30, 2022

Level 1 Level 2 Level 3 Total

66 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 and six months ended June 30, 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 nine months ended September 30, 2022 and 2021:

(Expressed in thousands)

Level 3 Assets and Liabilities

For the Three Months Ended June 30, 2022

For the Three Months Ended September 30, 2022

Total Realized

Beginning and Unrealized Purchases Sales and Transfers Ending

Balance Losses and Issuances Settlements In (Out) Balance

Balance Losses (3) (4)

and Issuances Settlements In (Out) Balance

Auction rate securities (1)

3 unchanged sentences

Level 3 Assets and Liabilities

For the Three Months Ended June 30, 2021

For the Three Months Ended September 30, 2021

Total Realized

Beginning and Unrealized Purchases Sales and Transfers Ending

Balance Gains (Losses) (3)(4)

Balance Losses (3)(4)

and Issuances Settlements In (Out) Balance

8 unchanged sentences

Level 3 Assets and Liabilities

For the Six Months Ended June 30, 2022

For the Nine Months Ended September 30, 2022

Total Realized

Beginning and Unrealized Purchases Sales and Transfers Ending

Balance Losses and Issuances Settlements In (Out) Balance

Balance Losses (3) (4)

and Issuances Settlements In (Out) Balance

Auction rate securities (1)

2 unchanged sentences

Level 3 Assets and Liabilities

For the Six Months Ended June 30, 2021

For the Nine Months Ended September 30, 2021

Total Realized

17 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.

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

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

(Expressed in thousands) Fair Value Measurement:

65 unchanged sentences

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

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.

As of September 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

9 unchanged sentences

Such hedges have not been designated as accounting hedges.

Unrealized gains and losses on foreign exchange forward contracts are recorded in other assets on the condensed consolidated balance sheet and other income in the condensed consolidated income statement.

Unrealized gains and losses on foreign exchange forward contracts are recorded in other assets or other liabilities on the condensed consolidated balance sheet and other income in the condensed consolidated income statement.

Derivatives used for trading and investment purposes

10 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 June 30, 2022 and December 31, 2021 by product were as follows:

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

(Expressed in thousands)

Fair Value of Derivative Instruments as of June 30, 2022

Fair Value of Derivative Instruments as of September 30, 2022

Description Notional Fair Value

Derivatives not designated as hedging instruments (1)

Other contracts TBAs $ 3,842 $ —

Forward reverse repurchase agreements 123,350 —

$ 127,192 $ —

Derivatives not designated as hedging instruments (1)

Commodity contracts

Futures $ 5,000,000 $ 149

Other contracts TBAs 3,842 3

$ 5,000,000 $ 149

16 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 and six months ended June 30, 2022 and 2021:

(Expressed in thousands)

The Effect of Derivative Instruments in the Income Statement

For the Three Months Ended June 30, 2022

For the Three Months Ended September 30, 2022

Recognized in Income on Derivatives

Types Description Location Net Gain/(Loss)

Types Description Location Net Gain

Commodity contracts Futures Principal transactions revenue, net $ 349

Other contracts Foreign exchange forward contracts Other revenue ( 20 )

Other contracts TBAs Principal transactions revenue, net 1

1 unchanged sentence

The Effect of Derivative Instruments in the Income Statement

For the Three Months Ended June 30, 2021

For the Three Months Ended September 30, 2021

Recognized in Income on Derivatives

Types Description Location Net Gain/(Loss)

Types Description Location Net Loss

Commodity contracts Futures Principal transactions revenue, net $ ( 13 )

Other contracts Foreign exchange forward contracts Other revenue ( 8 )

TBAs Principal transactions revenue, net 14

Other contracts TBAs Principal transactions revenue, net ( 15 )

Purchase commitments Principal transactions revenue, net ( 497 )

ARS purchase commitments Principal transactions revenue, net ( 1 )

OPPENHEIMER HOLDINGS INC.

1 unchanged sentence

The Effect of Derivative Instruments in the Income Statement

For the Six Months Ended June 30, 2022

For the Nine Months Ended September 30, 2022

Recognized in Income on Derivatives

Types Description Location Net Gain/(Loss)

Commodity contracts Futures Principal transactions revenue $ 3,519

Commodity contracts Futures Principal transactions revenue, net $ 3,868

Other contracts Foreign exchange forward contracts Other revenue ( 20 )

TBAs Principal transactions revenue 56

TBAs Principal transactions revenue, n et 57

(Expressed in thousands)

The Effect of Derivative Instruments in the Income Statement

For the Six Months Ended June 30, 2021

For the Nine Months Ended September 30, 2021

Recognized in Income on Derivatives

Types Description Location Net Gain/(Loss)

Commodity contracts Futures Principal transactions revenue $ 495

Commodity contracts Futures Principal transactions revenue, net $ 482

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 )

TBAs Principal transactions revenue, net 146

Purchase commitments Principal transactions revenue, net ( 987 )

ARS purchase commitments Principal transactions revenue, net ( 1 )

Collateralized transactions

5 unchanged sentences

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

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

As of September 30, 2022, the outstanding balance of bank call loans was $ 53.6 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 $ 39.0 million and $ 24.8 million, respectively.

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.

As of September 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 $ 263.1 million under securities loan agreements.

As of September 30, 2022, the Company had pledged $ 391.4 million of customer securities directly with the Options Clearing Corporation to secure obligations and margin requirements under option contracts written by customers.

As of September 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.

4 unchanged sentences

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 June 30, 2022:

(Expressed in thousands)

5 unchanged sentences

Gross amount of recognized liabilities for repurchase agreements and securities loaned $ 786,542

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 June 30, 2022 and December 31, 2021:

As of June 30, 2022

As of September 30, 2022

(Expressed in thousands)

52 unchanged sentences

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

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 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 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).

As of September 30, 2022, the fair value of securities received as collateral under securities borrowed transactions and reverse repurchase agreements was $ 70.0 million ($ 96.4 million as of December 31, 2021) and $ 194.9 million ($ 307.3 million as of December 31, 2021), respectively, of which the Company has sold and re-pledged approximately $ 29.7 million ($ 29.4 million as of December 31, 2021) under securities loaned transactions and $ 194.9 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 $ 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 carrying value of pledged securities owned that can be sold or re-pledged by the counterparty was $ 385.8 million, as presented on the face of the condensed consolidated balance sheet as of September 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.

8 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 June 30, 2022 were receivables from three major U.S.

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

broker-dealers totaling approximately $ 57.1 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 June 30, 2022 are with the FICC .

With respect to its business in reverse repurchase and repurchase agreements, substantially all open contracts as of September 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 June 30, 2022, the Company had recorded no liabilities with regard to this right.

As of September 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.

Variable interest entities ("VIEs")

The Company's policy is to consolidate all subsidiaries in which it has a controlling financial interest, as well as any VIEs where the Company is deemed to be the primary beneficiary when it has the power to make the decisions that most significantly affect the economic performance of the VIE and has the obligation to absorb significant losses or the right to receive benefits that could potentially be significant to the VIE.

The Company's policy is to consolidate all subsidiaries in which it has a controlling financial interest, as well as any VIEs where the Company is deemed to be the primary beneficiary when it has the power to make the decisions that most significantly affect the economic performance of the VIE and has the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE.

The Company serves as general partner of hedge funds and private equity funds that were established for the purpose of providing alternative investments to both its institutional and qualified retail clients.

5 unchanged sentences

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

As of September 30, 2022, the Company did not have any hedge funds and private equity funds that are VIE.

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

9 unchanged sentences

(Expressed in thousands)

As of June 30,

As of September 30,

Cash and cash equivalents $ 1,369 $ —

6 unchanged sentences

(Expressed in thousands)

Issued Maturity Date June 30, 2022 December 31, 2021

Issued Maturity Date September 30, 2022 December 31, 2021

5.50 % Senior Secured Notes

27 unchanged sentences

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

As of September 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 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;

Interest expense on the Notes for the three and nine months ended September 30, 2022 was $ 1.7 million and $ 5.2 million, respectively.

Interest expense on the Notes for the three and nine months ended September 30, 2021 was $ 1.7 million and $ 5.2 million, respectively.

The effective income tax rate for the three and nine months ended September 30, 2022 was 35.5 % and 36.4 % respectively, compared with 29.8 % and 27.6 % for the three and nine months ended September 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 third quarter of 2022 was negatively impacted by unfavorable permanent items.

Stockholders' Equity

The Company's authorized shares consist 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;

4 unchanged sentences

The following table reflects changes in the number of shares of Class A Stock outstanding for the periods indicated:

OPPENHEIMER HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements (unaudited)

For the Three Months Ended

June 30, For the Six Months Ended

September 30, For the Nine Months Ended

September 30,

2022 2021 2022 2021

10 unchanged sentences

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.

On July 29, 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.

During the three months ended September 30, 2022, the Company purchased and canceled an aggregate of 413,052 shares of Class A Stock for a total consideration of $ 14.0 million ($ 33.86 per share) under this program.

During the nine months ended September 30, 2022, the Company purchased and canceled an aggregate of 1,675,595 shares of Class A Stock for a total consideration of $ 60.4 million ($ 36.02 per share) under this program.

During the three and nine months ended September 30, 2021, the Company purchased and canceled an aggregate of 108,494 shares of Class A Stock for a total consideration of $ 4.7 million ($ 43.46 per share) under this program.

As of September 30, 2022, 152,726 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.

13 unchanged sentences

The investigations include inquiries from the SEC, the Financial Industry Regulatory Authority ("FINRA") and various state regulators.

The Company accrues for estimated loss contingencies related to legal and regulatory matters when available information indicates that it is probable a liability had been incurred and the Company can reasonably estimate the amount of that loss.

The Company accrues for estimated loss contingencies related to legal and regulatory matters within Other Expenses in the condensed consolidated income statement when available information indicates that it is probable a liability had been incurred and the Company can reasonably estimate the amount of that loss.

In many proceedings, however, it is inherently difficult to determine whether any loss is probable or even possible or to estimate the amount of any loss.

4 unchanged sentences

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 $ 41.3 million as of June 30, 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.

9 unchanged sentences

District Court for the Northern District of Georgia.

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 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.

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

Horizon is alleged to be a fraudulent scheme and the plaintiff was 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 did 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, 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.

The motion to dismiss was fully briefed on January 17, 2022, and the

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.

Court heard oral argument on the motion on June 21, 2022.

On August 17, 2022, the Court granted Oppenheimer’s motion and dismissed the complaint without prejudice.

On September 21, 2022, 6694 Dawson Blvd, LLC filed a first amended complaint solely on behalf of itself based on substantially the same allegations as the original complaint seeking unspecified damages sounding solely in violations of the Georgia RICO statute.

On October 14, 2022, Oppenheimer filed a motion to dismiss the first amended complaint on a number of grounds.

On October 21, 2022, 6694 Dawson Blvd, LLC voluntarily dismissed its first amended complaint without prejudice, thereby terminating the action.

In addition to the class action described in the preceding paragraph Oppenheimer has also been named as a respondent in twenty-eight 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.

One arbitration entitled Donald Robinson, Timothy and Sharon Padden, Rhett Rainey, Kelly A.

Rainey Trust, Toucan Holdings LP, Robert Goodman, Robert Daniel Burgner, Individually and as Trustee of the Burgner Family Charitable Remainder Trust, Douglas Kasemeier, Wesley Callaway, and Billy Loveless v.

Oppenheimer & Co.

(the “Robinson Arbitration”) was commenced on August 31, 2021.

On September 6, 2022, the arbitration panel found in favor of the claimants and awarded them total compensatory damages of approximately $ 5.7 million, RICO damages pursuant to O.C.G.A.

§ 16-14-6(c) of approximately $ 14.2 million, and punitive damages, attorneys’ fees and costs of approximately $ 16.8 million.

The total amount awarded to claimants was $ 36,744,276 (the “Robinson Award”).

On October 6, 2022, Oppenheimer filed a motion to vacate the Robinson Award with the Superior Court of DeKalb County, Georgia based on, among other defects, arbitrator bias, failure to postpone the hearing to permit key witnesses to testify, and manifest disregard of the law.

On October 18, 2022, the claimants in the Robinson Arbitration filed a petition to confirm the Arbitration Award.

Oppenheimer intends to vigorously pursue vacatur of the Robinson Award.

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 Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Rule 15c2-12 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.

On September 13, 2022, the SEC filed a complaint against Oppenheimer in the United States District Court for the Southern District of New York (the “Court") alleging that Oppenheimer violated Section 15B(c)(1) of the Exchange Act and Rule 15c2-12 thereunder as well as Municipal Securities Rulemaking Board Rules G-17 and G-27 for not having fully complied with the exemption from the continuing disclosure obligations under Rule 15c2-12.

The SEC asked the Court to enter an order enjoining Oppenheimer from violating the above referenced rules and requiring it to disgorge approximately $ 1.9 million plus interest.

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

1 unchanged sentence

The Company's U.S.

broker dealer subsidiaries, Oppenheimer and Freedom, are subject to the uniform net capital requirements of the SEC under Rule 15c3-1 (the "Rule") promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act").

broker dealer subsidiaries, Oppenheimer and Freedom, are subject to the uniform net capital requirements of the SEC under Rule 15c3-1 (the "Rule") promulgated under the Exchange Act.

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 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.

As of September 30, 2022, the net capital of Oppenheimer as calculated under the Rule was $ 425.8 million or 32.17 % of Oppenheimer's aggregate debit items.

This was $ 399.4 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 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.

As of September 30, 2022, Freedom had net capital of $ 4.3 million, which was $ 4.2 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 September 30, 2022, the capital required and held under the FCA’s Investment Firms’ Prudential Regime (“IFPR”) for Oppenheimer Europe Ltd.

was as follows:

4 unchanged sentences

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

As of June 30, 2022, Oppenheimer Europe Ltd.

is in compliance with its regulatory requirements.

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.

As of September 30, 2022, Oppenheimer Europe Ltd.

was in compliance with its regulatory requirements.

As of September 30, 2022, the regulatory capital of Oppenheimer Investments Asia Limited was $ 4.8 million, which was $ 4.4 million in excess of the $ 382,163 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 June 30, 2022, Oppenheimer Investment Asia Limited is in compliance with its regulatory requirements.

OPPENHEIMER HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements (unaudited)

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

Segment information

9 unchanged sentences

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

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.

The table below presents information about the reported revenue and pre-tax income (loss) of the Company for the three and nine months ended September 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.

OPPENHEIMER HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements (unaudited)

(Expressed in thousands)

For the Three Months Ended

June 30, For the Six Months Ended

September 30, For the Nine Months Ended

September 30,

2022 2021 2022 2021

16 unchanged sentences

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

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:

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

(Expressed in thousands)

For the Three Months Ended

June 30, For the Six Months Ended

September 30, For the Nine Months Ended

September 30,

2022 2021 2022 2021

4 unchanged sentences

Subsequent events

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.

On October 28, 2022, the Company announced a quarterly dividend in the amount of $ 0.15 per share, payable on November 25, 2022 to holders of Class A Stock and Class B Stock of record on November 11, 2022.

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