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Item 1. Financial Statements

2024-07-26 compared with 2024-04-26 · 259 added, 197 removed, 993 unchanged (31% 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, 2024 December 31, 2023

(Expressed in thousands, except number of shares and per share amounts) June 30, 2024 December 31, 2023

Cash and cash equivalents $ 33,214 $ 28,835

25 unchanged sentences

Accrued compensation 209,502 256,244

Income tax payable 6,515 —

Accounts payable and other liabilities 69,187 82,810

10 unchanged sentences

shares issued and outstanding:

10,247,197 and 10,186,783 as of March 31, 2024 and December 31, 2023, respectively

10,227,845 and 10,186,783 as of June 30, 2024 and December 31, 2023, respectively

shares authorized, issued and outstanding:

99,665 as of March 31, 2024 and December 31, 2023

99,665 as of June 30, 2024 and December 31, 2023

Additional paid-in capital 23,365 31,774

Retained earnings 788,739 756,468

Accumulated other comprehensive income 526 914

Accumulated other comprehensive income (loss) ( 54 ) 914

Total Oppenheimer Holdings Inc.

7 unchanged sentences

For the Three Months Ended

June 30, For the Six Months Ended

(Expressed in thousands, except number of shares and per share amounts) 2024 2023 2024 2023

14 unchanged sentences

Total expenses 314,724 317,888 630,407 620,518

Pre-tax income 37,455 19,049

Income tax provision 11,711 4,585

Net income $ 25,744 $ 14,464

Pre-tax income (loss) 15,865 ( 11,699 ) 53,320 7,350

Income tax provision (benefit) 5,599 ( 2,131 ) 17,310 2,454

Net income (loss) $ 10,266 $ ( 9,568 ) $ 36,010 $ 4,896

Net loss attributable to noncontrolling interest, net of tax — ( 168 ) ( 310 ) ( 321 )

Net income attributable to Oppenheimer Holdings Inc.

Net income (loss) attributable to Oppenheimer Holdings Inc.

$ 10,266 $ ( 9,400 ) $ 36,320 $ 5,217

Earnings per share attributable to Oppenheimer Holdings Inc.

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

Basic $ 0.99 $ ( 0.85 ) $ 3.49 $ 0.47

8 unchanged sentences

For the Three Months Ended

For the Six Months Ended

(Expressed in thousands) 2024 2023 2024 2023

Net income $ 25,744 $ 14,464

Net income (loss) $ 10,266 $ ( 9,568 ) $ 36,010 $ 4,896

Other comprehensive loss, net of tax

Currency translation adjustment ( 580 ) ( 663 ) ( 967 ) ( 1,160 )

Comprehensive income $ 25,356 $ 13,967

Comprehensive income (loss) $ 9,686 $ ( 10,231 ) 35,043 3,736

Less net loss attributable to noncontrolling interests — ( 168 ) ( 310 ) ( 321 )

Comprehensive income attributable to Oppenheimer Holdings Inc.

Comprehensive income (loss) attributable to Oppenheimer Holdings Inc.

$ 9,686 $ ( 10,063 ) $ 35,353 $ 4,057

3 unchanged sentences

For the Three Months Ended

For the Six Months Ended

(Expressed in thousands, except per share amount) 2024 2023 2024 2023

15 unchanged sentences

Repurchase of Class A non-voting common stock for cancellation ( 924 ) ( 3,599 ) ( 924 ) ( 3,599 )

Net income (1)

Net income (loss) (1)

10,266 ( 9,400 ) 36,320 5,217

9 unchanged sentences

Balance at beginning of period — 433 73 722

Net income (loss) attributable to noncontrolling interest ( 310 ) ( 153 )

Capital addition to noncontrolling interest — 171 237 171

Net loss attributable to noncontrolling interest — ( 168 ) ( 310 ) ( 321 )

Change in redemption value of redeemable noncontrolling interests — ( 328 ) — ( 464 )

11 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

FOR THE THREE MONTHS ENDED MARCH 31,

FOR THE SIX MONTHS ENDED JUNE 30,

(Expressed in thousands) 2024 2023

41 unchanged sentences

Payments for employee taxes withheld related to vested share-based awards ( 6,758 ) ( 5,907 )

Addition to noncontrolling interests — 171

Redemption of redeemable noncontrolling interests 500 ( 83 )

1 unchanged sentence

Increase in bank call loans 218,800 94,400

Cash provided by (used in) financing activities 78,132 7,033

Net decrease in cash, cash equivalents and restricted cash ( 1,174 ) ( 82,066 )

Cash provided by financing activities 200,108 76,971

Net increase (decrease) in cash, cash equivalents and restricted cash 4,379 ( 83,019 )

Cash, cash equivalents and restricted cash, beginning of period 28,835 137,967

Cash, cash equivalents and restricted cash, end of period $ 33,214 $ 54,948

Reconciliation of cash, cash equivalents and restricted cash within the condensed consolidated balance sheets:

Reconciliation of cash and cash equivalents and restricted cash within the condensed consolidated balance sheets:

Cash and cash equivalents $ 33,214 $ 29,145

Restricted cash — 25,803

Total cash and cash equivalents $ 27,661 $ 55,901

Total cash and cash equivalents and restricted cash $ 33,214 $ 54,948

Schedule of non-cash financing activities

8 unchanged sentences

("OPY" or the "Parent") is incorporated under the laws of the State of Delaware.

The consolidated financial statements include the accounts of OPY and its consolidated subsidiaries (together, the "Company").

The condensed consolidated financial statements include the accounts of OPY and its consolidated subsidiaries (together, the "Company").

Oppenheimer Holdings Inc., through its operating subsidiaries, is a leading middle market investment bank and full service broker-dealer that is engaged in a broad range of activities in the financial services industry, including retail securities brokerage, institutional sales and trading, investment banking (corporate and public finance), equity and fixed income research, market-making, trust services, and investment advisory and asset management services.

17 unchanged sentences

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, 2023 (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.

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

GAAP for annual financial statement purposes.

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 months ended March 31, 2024 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 and six months ended June 30, 2024 are not necessarily indicative of the results to be expected for any future interim or annual period.

Oppenheimer Acquisition Corp.

6 unchanged sentences

On October 26, 2023, OHAA’s stockholders approved an amendment to its certificate of incorporation to extend the deadline by which it must complete its initial business combination from October 30, 2023 to June 30, 2024 on a month-to-month basis.

In the fourth quarter of 2023, a fter careful consideration of the special purpose acquisition company ("SPAC") market and after having completed an extensive search, OHAA determined it would be unable to deliver and fund a high quality value enhancing transaction to stockholders despite the extension.

In the fourth quarter of 2023, a fter careful consideration of the special purpose acquisition company market and after having completed an extensive search, OHAA determined it would be unable to deliver and fund a high quality value enhancing transaction to stockholders despite the extension.

Therefore, on December 18, 2023, OHAA determined not to further extend the term it has to complete an initial business combination and instead announced its intention to dissolve and liquidate.

1 unchanged sentence

Accordingly, there were no “Redeemable non-controlling interests” or restricted cash balances associated with the publicly held OHAA Class A ordinary shares recorded on the Company’s consolidated balance sheet as of December 31, 2023.

OHAA was dissolved in March of 2024.

OHAA was dissolved in March 2024.

Oppenheimer Principal Investments LLC

10 unchanged sentences

Non-controlling Interests

Non-controlling interests represents ownership interests in the Sponsor of OHAA.

For the three months ended March 31, 2024 and March 31, 2023, the net loss (net of taxes) attributed to noncontrolling interests was $ 310,000 and $ 153,000 , respectively.

Non-controlling interests represent ownership interests in the Sponsor of OHAA.

For the six months ended June 30, 2024 and June 30, 2023, the net loss (net of taxes) attributed to noncontrolling interests was $ 310,000 and $ 321,000 , respectively.

Financial Instruments - Credit Losses

3 unchanged sentences

See note 9 for details.

As of March 31, 2024, the Company had $ 66.9 million of notes receivable ($ 62.6 million as of December 31, 2023).

As of June 30, 2024, the Company had $ 63.3 million of notes receivable ($ 62.6 million as of December 31, 2023).

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.

10 unchanged sentences

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

For the three months ended March 31, 2024, no adjustments were made to the expected loss rates.

For the three and six months ended June 30, 2024, 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, 2024, the uncollected balance of defaulted notes was $ 7.2 million and the allowance for uncollectibles was $ 4.1 million.

As of June 30, 2024, the uncollected balance of defaulted notes was $ 6.6 million and the allowance for uncollectibles was $ 3.9 million.

The allowance for uncollectibles consisted of $ 2.0 million related to defaulted notes balances (five years and older) and $ 1.9 million (under five years).

The following table presents the disaggregation of defaulted notes by year of default as of March 31, 2024:

The following table presents the disaggregation of defaulted notes by year of default as of June 30, 2024:

(Expressed in thousands)

As of March 31, 2024

As of June 30, 2024

2019 and prior 1,985

Total $ 6,601

The following table presents activity in the allowance for uncollectibles of defaulted notes for the three months ended March 31, 2024 and 2023:

The following table presents activity in the allowance for uncollectibles of defaulted notes for the three and six months ended June 30, 2024 and 2023:

(Expressed in thousands)

For the Three Months Ended

For the Six Months Ended

2024 2023 2024 2023

Beginning balance $ 4,091 $ 4,051 $ 3,869 $ 4,327

15 unchanged sentences

The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants.

As of March 31, 2024, the Company had right-of-use operating lease assets of $ 136.1 million (net of accumulated amortization of $ 101.9 million) which are comprised of real estate leases of $ 133.5 million (net of accumulated amortization of $ 99.1 million) and equipment leases of $ 2.6 million (net of accumulated amortization of $ 2.8 million).

As of March 31, 2024, the Company had operating lease liabilities of $ 177.3 million which are comprised of real estate lease liabilities of $ 174.8 million and equipment lease liabilities of $ 2.5 million.

The Company had no finance leases as of March 31, 2024.

As of June 30, 2024, the Company had right-of-use operating lease assets of $ 132.4 million (net of accumulated amortization of $ 107.6 million) which are comprised of real estate leases of $ 129.9 million (net of accumulated amortization of $ 104.8 million) and equipment leases of $ 2.5 million (net of accumulated amortization of $ 2.8 million).

As of June 30, 2024, the Company had operating lease liabilities of $ 172.6 million which are comprised of real estate lease liabilities of $ 170.1 million and equipment lease liabilities of $ 2.5 million.

The Company had no finance leases as of June 30, 2024.

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, 2024 and December 31, 2023, respectively:

March 31, 2024

The following table presents the weighted average lease term and weighted average discount rate for the Company's operating leases as of June 30, 2024 and December 31, 2023, respectively:

June 30, 2024

December 31, 2023

1 unchanged sentence

Weighted average discount rate 7.75 % 7.72 %

The following table presents operating lease costs recognized for the three months ended March 31, 2024 and March 31, 2023, 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, 2024 and June 30, 2023, respectively, which are included in occupancy and equipment costs on the condensed consolidated income statements:

(Expressed in thousands)

For the Three Months Ended

For the Six Months Ended

2024 2023 2024 2023

Operating lease costs:

5 unchanged sentences

Notes to Condensed Consolidated Financial Statements (unaudited)

The maturities of lease liabilities as of March 31, 2024 and December 31, 2023 are as follows:

The maturities of lease liabilities as of June 30, 2024 and December 31, 2023 are as follows:

(Expressed in thousands)

March 31, 2024

June 30, 2024

December 31, 2023

8 unchanged sentences

Present value of lease liabilities $ 172,604 $ 183,273

As of March 31, 2024, the Company had $ 6.5 million of additional real estate operating leases that have not yet commenced ($ 5.8 million as of December 31, 2023).

As of June 30, 2024, the Company had $ 25.2 million of additional real estate operating leases that have not yet commenced ($ 5.8 million as of December 31, 2023).

Revenue from contracts with customers

14 unchanged sentences

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 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.

Commission revenue is generally paid on settlement date, which is generally one business day after trade date.

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

28 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 months ended March 31, 2024 and 2023:

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, 2024 and 2023:

OPPENHEIMER HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements (unaudited)

(Expressed in thousands) For the Three Months Ended March 31, 2024

(Expressed in thousands) For the Three Months Ended June 30, 2024

Reportable Segments

15 unchanged sentences

Total revenue $ 208,701 $ 25,825 $ 92,141 $ 3,922 $ 330,589

(Expressed in thousands) For the Three Months Ended March 31, 2023

(Expressed in thousands) For the Three Months Ended June 30, 2023

Reportable Segments

15 unchanged sentences

Total revenue $ 201,245 $ 22,198 $ 79,582 $ 3,164 $ 306,189

OPPENHEIMER HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements (unaudited)

(Expressed in thousands) For the Six Months Ended June 30, 2024

Reportable Segments

Private Client Asset Management Capital Markets Corporate/Other Total

Revenue from contracts with customers:

Commissions from sales and trading $ 89,696 $ — $ 87,219 $ 8 $ 176,923

Mutual fund and insurance income 15,970 — 2 10 15,982

Advisory fees 179,823 52,201 — 20 232,044

Investment banking - capital markets 5,828 — 29,649 ( 1 ) 35,476

Investment banking - advisory 21 — 44,159 — 44,180

Bank deposit sweep income 71,532 — — ( 1 ) 71,531

Other 6,584 ( 1 ) 900 2,922 10,405

Total revenue from contracts with customers 369,454 52,200 161,929 2,958 586,541

Other sources of revenue:

Interest 41,822 — 15,713 4,036 61,571

Principal transactions, net 2,112 — 26,299 ( 103 ) 28,308

Other 8,346 ( 1,447 ) 283 125 7,307

Total other sources of revenue 52,280 ( 1,447 ) 42,295 4,058 97,186

Total revenue $ 421,734 $ 50,753 $ 204,224 $ 7,016 $ 683,727

(Expressed in thousands) For the Six Months Ended June 30, 2023

Reportable Segments

Private Client Asset Management Capital Markets Corporate/Other Total

Revenue from contracts with customers:

Commissions from sales and trading $ 76,590 $ — $ 83,201 $ 14 $ 159,805

Mutual fund and insurance income 15,423 — 5 8 15,436

Advisory fees 155,394 46,150 — 15 201,559

Investment banking - capital markets 3,475 — 15,586 — 19,061

Investment banking - advisory — — 38,882 — 38,882

Bank deposit sweep income 92,969 — — — 92,969

Other 7,277 — 1,100 118 8,495

Total revenue from contracts with customers 351,128 46,150 138,774 155 536,207

Other sources of revenue:

Interest 42,982 — 7,138 2,141 52,261

Principal transactions, net 2,121 — 23,814 3,808 29,743

Other 8,435 7 138 1,077 9,657

Total other sources of revenue 53,538 7 31,090 7,026 91,661

Total revenue $ 404,666 $ 46,157 $ 169,864 $ 7,181 $ 627,868

Contract Assets and Liabilities

2 unchanged sentences

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 $ 49.7 million and $ 39.9 million at March 31, 2024 and December 31, 2023, respectively.

The Company had no significant impairments related to these receivables during the three months ended March 31, 2024.

OPPENHEIMER HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements (unaudited)

The Company had receivables related to revenue from contracts with customers of $ 37.3 million and $ 39.9 million at June 30, 2024 and December 31, 2023, respectively.

The Company had no significant impairments related to these receivables during the three months ended June 30, 2024.

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

Total deferred revenue was $ 1.4 million and $ 1.1 million at March 31, 2024 and December 31, 2023, respectively.

Total deferred revenue was $ 2.5 million and $ 1.1 million at June 30, 2024 and December 31, 2023, respectively.

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

(Expressed in thousands) As of

March 31, 2024

June 30, 2024

December 31, 2023

20 unchanged sentences

(7) Software license fees received upfront from customers and recognized ratably over the contract period

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

Earnings per share

6 unchanged sentences

For the Three Months Ended

For the Six Months Ended

2024 2023 2024 2023

Basic weighted average number of shares outstanding 10,327,818 11,016,430 10,367,636 11,054,306

7 unchanged sentences

Diluted $ 0.92 $ ( 0.85 ) $ 3.29 $ 0.44

(1) For the three months ended March 31, 2024 , there was no shares of Class A Stock with an anti-dilutive effect granted under share-based compensation arrangements.

For the three months ended March 31, 2023, the diluted net income per share computation did not include the anti-dilutive effect of 282,360 shares of Class A Stock granted under share-based compensation arrangements.

(1) For the three months ended June 30, 2024 , there were no shares of Class A Stock with an anti-dilutive effect granted under share-based compensation arrangements.

For the six months ended June 30, 2024, the diluted net income per share computation did not include the anti-dilutive effect of 1,000 shares of Class A Stock granted under share-based compensation arrangements.

For the three months ended June 30, 2023, the diluted net income per share computation did not include the anti-dilutive effect of 1,138,992 shares of Class A Stock granted under share-based compensation arrangements.

For the six months ended June 30, 2023, the diluted net income per share computation did not include the anti-dilutive effect of 281,810 shares of Class A Stock granted under share-based compensation arrangements.

Receivable from and payable to brokers, dealers and clearing organizations

(Expressed in thousands)

March 31, 2024 December 31, 2023

June 30, 2024 December 31, 2023

Receivable from brokers, dealers and clearing organizations consisting of:

2 unchanged sentences

Clearing organizations and other (1)

84,824 30,789

Securities failed to deliver 20,054 29,656

5 unchanged sentences

Clearing organizations and other (2)

173,012 52,647

Total $ 278,226 $ 361,890

(1) The balances are primarily related to trade/settlement date adjustment for positions in inventory.

(1) As of June 30, 2024, approximately $ 41.5 million of this balance represents a receivable for trades executed, but not yet settled.

(2) As of December 31, 2023, approximately $ 48.4 million of this balance represents a payable for trades executed, but not yet settled.

OPPENHEIMER HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements (unaudited)

Fair value measurements

2 unchanged sentences

A description of the valuation techniques applied, and inputs used in measuring the fair value of the Company's financial instruments, is as follows:

OPPENHEIMER HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements (unaudited)

Government Obligations

4 unchanged sentences

Callable agency issued debt securities are valued by benchmarking model-derived prices to quoted market prices and trade data for identical or comparable securities.

The fair value of mortgage pass-through securities are model driven with respect to spreads of the comparable to-be-announced ("TBA") security.

The fair value of mortgage pass-through securities is model driven with respect to spreads of the comparable to-be-announced ("TBA") security.

Sovereign Obligations

15 unchanged sentences

In rare occurrences when observable pricing information is not available, fair value is generally determined based on cash flow models using discounted cash flow models, competitor comparable data and other valuation metrics.

OPPENHEIMER HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements (unaudited)

Auction Rate Securities ("ARS")

As of March 31, 2024, the Company owned $ 2.7 million of ARS.

As of June 30, 2024, the Company owned $ 2.7 million of ARS.

This represents the amount that the Company holds as a result of ARS buybacks in previous years.

1 unchanged sentence

The fair value of ARS is particularly sensitive to movements in interest rates.

However, an increase or decrease in short-term interest rates may or may not result in a higher or lower tender offer in the future or the tender offer price may not provide a reasonable estimate of the fair value of the securities.

However, an increase or decrease in short-term interest rates may or may not result in a higher or lower tender offer price in the future or the tender offer price may not provide a reasonable estimate of the fair value of the securities.

In such cases, other valuation techniques might be necessary.

As of March 31, 2024, the Company had a valuation allowance totaling $ 0.2 million relating to ARS owned (which is included as a reduction to securities owned on the condensed consolidated balance sheet).

OPPENHEIMER HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements (unaudited)

As of June 30, 2024, the Company had a valuation allowance totaling $ 0.2 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.

1 unchanged sentence

Changes in the fair value of these investments are reflected within other income in the consolidated financial statements.

The following table provides information about the Company's investments in Company-sponsored funds as of March 31, 2024:

The following table provides information about the Company's investments in Company-sponsored funds as of June 30, 2024:

(Expressed in thousands)

26 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 March 31, 2024, the fair value of the investment was $ 7.2 million and was categorized in Level 2 of the fair value hierarchy.

As of June 30, 2024, the fair value of the investment was $ 7.2 million and was categorized in Level 2 of the fair value hierarchy.

OPPENHEIMER HOLDINGS INC.

1 unchanged sentence

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, 2024 and December 31, 2023, have been categorized based upon the above fair value hierarchy as follows:

Assets and liabilities measured at fair value on a recurring basis as of March 31, 2024 :

The Company's assets and liabilities, recorded at fair value on a recurring basis as of June 30, 2024 and December 31, 2023, have been categorized based upon the above fair value hierarchy as follows:

Assets and liabilities measured at fair value on a recurring basis as of June 30, 2024 :

(Expressed in thousands)

Fair Value Measurements as of March 31, 2024

Fair Value Measurements as of June 30, 2024

Level 1 Level 2 Level 3 Total

3 unchanged sentences

Agency securities — 5,755 — 5,755

Sovereign obligations — 424 — 424

Corporate debt and other obligations — 18,104 — 18,104

8 unchanged sentences

1,369 17,287 — 18,656

— 2,485 — 2,485

Derivative contracts:

6 unchanged sentences

Corporate debt and other obligations — 7,279 — 7,279

Mortgage and other asset-backed securities — — — —

Convertible bonds — 13,450 — 13,450

47 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 months ended March 31, 2024 and 2023:

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, 2024 and 2023:

(Expressed in thousands)

Level 3 Assets and Liabilities

For the Three Months Ended March 31, 2024

For the Three Months Ended June 30, 2024

Total Realized

6 unchanged sentences

Level 3 Assets and Liabilities

For the Three Months Ended March 31, 2023

For the Three Months Ended June 30, 2023

Total Realized

5 unchanged sentences

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

(Expressed in thousands)

Level 3 Assets and Liabilities

For the Six Months Ended June 30, 2024

Total Realized

Beginning and Unrealized Purchases Sales and Transfers Ending

Balance Losses

and Issuances Settlements In (Out) Balance

Auction rate securities (1)

$ 2,713 $ — $ — $ — $ — $ 2,713

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

(Expressed in thousands)

Level 3 Assets and Liabilities

For the Six Months Ended June 30, 2023

Total Realized

Beginning and Unrealized Purchases Sales and Transfers Ending

Balance Losses and Issuances Settlements In (Out) Balance

Auction rate securities (1)

$ 31,776 $ 6 $ — $ ( 100 ) $ — $ 31,682

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

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, 2024:

Assets and liabilities not measured at fair value as of June 30, 2024:

(Expressed in thousands) Fair Value Measurement:

11 unchanged sentences

Securities purchased under agreements to resell 4,079 — 4,079 — 4,079

Corporate-owned life 94,646 — 94,646 — 94,646

Investments (1)

1,647 — 1,647 — 1,647

(1) The cash surrender value of Company-owned life insurance policies, which fluctuates based on changes in fair value of the policies’ underlying investments, comprises approximately $ 95.2 million of this balance.

This balance is included within other assets on the consolidated balance sheet.

(1) Included within other assets on the consolidated balance sheet.

(Expressed in thousands) Fair Value Measurement:

26 unchanged sentences

Notes receivable, net 62,640 — 62,640 — 62,640

Corporate-owned life 88,989 — 88,989 — 88,989

Investments (1)

2,010 — 2,010 — 2,010

This balance is included within other assets on the consolidated balance sheet.

(1) Included within other assets on the consolidated balance sheet.

(Expressed in thousands) Fair Value Measurement:

33 unchanged sentences

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

The notional amounts and fair values of the Company's derivatives as of March 31, 2024 and December 31, 2023 by product were as follows:

The notional amounts and fair values of the Company's derivatives as of June 30, 2024 and December 31, 2023 by product were as follows:

(Expressed in thousands)

Fair Value of Derivative Instruments as of March 31, 2024

Fair Value of Derivative Instruments as of June 30, 2024

Description Notional Fair Value

16 unchanged sentences

Other contracts TBAs $ 3,700 $ 11

Commodity contracts

Futures 5,000 2

6 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 consolidated income statements for the three months ended March 31, 2024 and 2023:

The following table presents the location and fair value amounts of the Company's derivative instruments and their effect in the consolidated income statements for the three and six months ended June 30, 2024 and 2023:

(Expressed in thousands)

The Effect of Derivative Instruments in the Income Statement

For the Three Months Ended March 31, 2024

For the Three Months Ended June 30, 2024

Recognized in Income on Derivatives

1 unchanged sentence

Commodity contracts Futures Principal transactions revenue, net $ 1,184

Other contracts Foreign exchange forward contracts Other revenue/(Compensation and related expenses) ( 24 )

Other contracts TBAs Principal transactions revenue, net 2

1 unchanged sentence

The Effect of Derivative Instruments in the Income Statement

For the Three Months Ended March 31, 2023

For the Three Months Ended June 30, 2023

Recognized in Income on Derivatives

1 unchanged sentence

Commodity contracts Futures Principal transactions revenue, net $ 3,529

Other contracts Foreign exchange forward contracts Other revenue ( 1 )

Other contracts Foreign exchange forward contracts Other revenue/(Compensation and related expenses) ( 7 )

Other contracts TBAs Principal transactions revenue, net 36

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements (unaudited)

(Expressed in thousands)

The Effect of Derivative Instruments in the Income Statement

For the Six Months Ended June 30, 2024

Recognized in Income on Derivatives

Types Description Location Net Gain

Commodity contracts Futures Principal transactions revenue, net $ 4,436

Other contracts Foreign exchange forward contracts Other revenue/(Compensation and related expenses) $ ( 24 )

Other contracts TBAs Principal transactions revenue, net 3

(Expressed in thousands)

The Effect of Derivative Instruments in the Income Statement

For the Six Months Ended June 30, 2023

Recognized in Income on Derivatives

Types Description Location Net Gain

Commodity contracts Futures Principal transactions revenue, net $ 3,739

Other contracts Foreign exchange forward contracts Other revenue/(Compensation and related expenses) $ ( 8 )

Other contracts TBAs Principal transactions revenue, net $ 38

Collateralized transactions

5 unchanged sentences

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

As of March 31, 2024, the outstanding balance of bank call loans was $ 94.4 million ( zero as of December 31, 2023).

As of March 31, 2024, such loans with commercial banks were collateralized by the Company's securities and customer securities with market values of approximately $ 24.7 million and $ 82.3 million, respectively.

As of March 31, 2024, 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 $ 229.0 million under securities loan agreements.

As of March 31, 2024, the Company had pledged $ 32.0 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, 2024, the Company had no outstanding letters of credit.

As of June 30, 2024, the outstanding balance of bank call loans was $ 218.8 million ( zero as of December 31, 2023).

As of June 30, 2024, such loans with commercial banks were collateralized by the Company's securities and customer securities with market values of approximately $ 39.1 million and $ 208.0 million, respectively.

As of June 30, 2024, the Company had approximately $ 1.6 billion of customer securities under customer margin loans that are available to be pledged, of which the Company has re-pledged approximately $ 186.2 million under securities loan agreements.

As of June 30, 2024, the Company had pledged $ 22.9 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, 2024, 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.

1 unchanged sentence

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, 2024:

(Expressed in thousands)

5 unchanged sentences

Gross amount of recognized liabilities for repurchase agreements and securities loaned $ 1,093,488

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, 2024 and December 31, 2023:

As of March 31, 2024

As of June 30, 2024

(Expressed in thousands)

24 unchanged sentences

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

OPPENHEIMER HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements (unaudited)

As of December 31, 2023

25 unchanged sentences

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

OPPENHEIMER HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements (unaudited)

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, 2024, the fair value of securities received as collateral under securities borrowed transactions and reverse repurchase agreements was $ 142.5 million ($ 151.9 million as of December 31, 2023) and $ 578.4 million ($ 8.8 million as of December 31, 2023), respectively, of which the Company has sold and re-pledged approximately $ 56.7 million ($ 61.5 million as of December 31, 2023) under securities loaned transactions and $ 578.4 million under repurchase agreements ($ 8.8 million as of December 31, 2023).

As of June 30, 2024, the fair value of securities received as collateral under securities borrowed transactions and reverse repurchase agreements was $ 130.3 million ($ 151.9 million as of December 31, 2023) and $ 27.5 million ($ 8.8 million as of December 31, 2023), respectively, of which the Company has sold and re-pledged approximately $ 50.0 million ($ 61.5 million as of December 31, 2023) under securities loaned transactions and $ 27.5 million under repurchase agreements ($ 8.8 million as of December 31, 2023).

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 $ 917.8 million, as presented on the face of the consolidated balance sheet as of March 31, 2024 ($ 689.4 million as of December 31, 2023).

The carrying value of pledged securities owned that can be sold or re-pledged by the counterparty was $ 867.3 million, as presented on the face of the consolidated balance sheet as of June 30, 2024 ($ 689.4 million as of December 31, 2023).

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, 2024 were receivables from three major U.S.

Included in receivable from brokers, dealers and clearing organizations as of June 30, 2024 were receivables from two major U.S.

broker-dealers totaling approximately $ 81.2 million.

Included in receivable from customers as of June 30, 2024 were fully secured margin loans from our two largest customer accounts totaling approximately $ 543.8 million.

The Company is obligated to settle transactions with brokers and other financial institutions even if its clients fail to meet their obligations to the Company.

Clients are required to complete their transactions on the settlement date, generally one to two business days after the trade date.

Clients are required to complete their transactions on the settlement date, generally one business day after the trade date.

If clients do not fulfill their contractual obligations, the Company may incur losses.

The Company has clearing/participating arrangements with the National Securities Clearing Corporation, the Fixed Income Clearing Corporation ("FICC"), the 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, 2024 are with the FICC .

With respect to its business in reverse repurchase and repurchase agreements, substantially all open contracts as of June 30, 2024 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, 2024, the Company had recorded no liabilities with regard to this right.

As of June 30, 2024, 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.

2 unchanged sentences

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.

The Company's investment in and

OPPENHEIMER HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements (unaudited)

additional capital commitments to these hedge funds and private equity funds are considered variable interests.

The Company's investment in and additional capital commitments to these hedge funds and private equity funds are considered variable interests.

The Company's additional capital commitments are subject to call at a later date and are limited to the amount committed.

3 unchanged sentences

The subsidiaries' general partnership and limited partnership interests is included in other assets on the condensed 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, OHAA and Oppenheimer Acquisition Corp.

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

They were sponsors of two special purpose acquisition companies, OHAA and Oppenheimer Acquisition Corp.

II (the "SPACs”).

Both the Sponsors and the SPACs have been or are in the process of liquidating and dissolving, as indicated above, OHAA was dissolved in March of 2024..

Until the liquidations and dissolutions are complete, the Sponsors and the SPACs will remain consolidated VIEs as the Company is the primary beneficiary.

Both the Sponsors and the SPACs have been liquidated.

See note 2 for further details.

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 $ — $ 5,487

6 unchanged sentences

(Expressed in thousands)

Issued Maturity Date March 31, 2024 December 31, 2023

Issued Maturity Date June 30, 2024 December 31, 2023

5.50 % Senior Secured Notes

2 unchanged sentences

$ 112,767 $ 112,658

5.50 % Senior Secured Notes due 2025 (the "Notes")

5.50 % Senior Secured Notes due 2025

On September 22, 2020, in a private offering, the Company issued $ 125.0 million aggregate principal amount of 5.50 % Senior Secured Notes due 2025 (the "Unregistered Notes") under an indenture at an issue price of 100 % of the principal amount.

1 unchanged sentence

The Company used the net proceeds from the offering of the Unregistered Notes, along with cash on hand, to redeem in full our 6.75 % Senior Secured Notes due July 1, 2022 (the "Old Notes") in the principal amount of $ 150.0 million (the Company held $ 1.4 million in treasury for a net outstanding amount of $ 148.6 million), and pay all related fees and expenses in relation thereto.

On November 23, 2020, we completed an exchange offer in which we exchanged 99.8 % of the Unregistered Notes for a like principal amount of Notes with identical terms, except that such new notes have been registered under the Securities Act of 1933, as amended (the "Securities Act").

On November 23, 2020, we completed an exchange offer in which we exchanged 99.8 % of the Unregistered Notes for a like principal amount of notes (the "Notes")with identical terms, except that such new Notes have been registered under the Securities Act of 1933, as amended (the "Securities Act").

We did not receive any proceeds in the exchange offer.

The Notes will mature on October 1, 2025 and bear interest at a rate of 5.50 % per annum, payable semiannually on April 1st and October 1st, respectively, of each year.

OPPENHEIMER HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements (unaudited)

The Parent used the net proceeds from the offering of the Notes, along with cash on hand, to redeem in full its Old Notes, in the principal amount of $ 150.0 million (the Parent held $ 1.4 million in treasury for a net outstanding amount of $ 148.6 million), and pay all related fees and expenses in relation thereto.

The cost to issue the Notes was $ 3.1 million, of which $ 1.9 million was paid to its subsidiary, (Oppenheimer & Co Inc., who served as the initial purchaser of the offering), and was eliminated in consolidation.

3 unchanged sentences

During the first quarter of 2023, the Company repurchased and cancelled $ 1.0 million aggregate principal amount of its Notes in the open market.

As of March 31, 2024, $ 113.05 million aggregate principal amount of the Notes remain outstanding.

The Company may redeem the notes, in whole or in part, at their par amount plus accrued and unpaid interest on or after July 1, 2024.

The indenture governing the Notes contains covenants which place restrictions on the incurrence of indebtedness, the payment of dividends, the repurchase of equity, the sale of assets, the issuance of guarantees, mergers and acquisitions and the granting of liens.

As of June 30, 2024, $ 113.05 million aggregate principal amount of the Notes remain outstanding.

The Company may redeem the Notes, in whole or in part, at their par amount plus accrued and unpaid interest on or after October 1, 2024.

OPPENHEIMER HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements (unaudited)

The indenture governing the Notes (the "Indenture") contains covenants which place restrictions on the incurrence of indebtedness, the payment of dividends, the repurchase of equity, the sale of assets, the issuance of guarantees, mergers and acquisitions and the granting of liens.

These covenants are subject to a number of important exceptions and qualifications.

19 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 March 31, 2024, the Parent was in compliance with all of its covenants.

As of June 30, 2024, 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, 2024 was $ 1.6 million.

Interest expense on the Notes for the three months ended March 31, 2023 was $ 1.6 million.

Interest expense on the Notes for the three and six months ended June 30, 2024 was $ 1.6 million and $ 3.1 million, respectively.

Interest expense on the Notes for the three and six months ended June 30, 2023 was $ 1.6 million and $ 3.1 million, respectively.

The effective income tax rate for the three and six months ended June 30, 2024 was 35.3 % and 32.5 % respectively, compared with 18.2 % and 33.4 % for the three and six months ended June 30, 2023 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 2024 was impacted by permanent items and non-deductible losses in non-U.S.

OPPENHEIMER HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements (unaudited)

The effective income tax rate for the three months ended March 31, 2024 was 31.3 %, compared with 24.1 % for the three months ended March 31, 2023 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 first quarter of 2024 was impacted by permanent items and losses in non-U.S.

Stockholders' Equity

7 unchanged sentences

For the Three Months Ended

June 30, For the Six Months Ended

2024 2023 2024 2023

Class A Stock outstanding, beginning of period 10,247,197 10,975,723 10,186,783 10,868,556

10 unchanged sentences

This authorization supplemented the 120,155 shares that remained authorized and available under the Company's previous share repurchase program for a total of 638,155 shares authorized.

During the three months ended March 31, 2024, the Company purchased and canceled an aggregate of 214,723 shares of Class A Stock for a total consideration of $ 8.4 million ($ 39.05 per share) under its share repurchase program.

During the three months ended March 31, 2023, the Company purchased and canceled an aggregate of 95,055 shares of Class A Stock for a total consideration of $ 3.7 million ($ 38.79 per share) under this program.

As of March 31, 2024, 526,976 shares remained available to be purchased under the share repurchase program.

During the three months ended June 30, 2024, the Company purchased and canceled an aggregate of 23,102 shares of Class A Stock for a total consideration of $ 924,364 ($ 40.01 per share) under its share repurchase program.

During the six months ended June 30, 2024, the Company purchased and canceled an aggregate of 237,825 shares of Class A Stock for a total consideration of $ 9.3 million ($ 39.14 per share) under its share repurchase program.

During the three months ended June 30, 2023, the Company purchased and canceled an aggregate of 96,135 shares of Class A Stock for a total consideration of $ 3.6 million ($ 37.43 per share) under this program.

During the six months ended June 30, 2023, the Company purchased and canceled an aggregate of 191,190 shares of Class A Stock for a total consideration of $ 7.3 million ($ 38.11 per share) under this program.

As of June 30, 2024, 503,874 shares remained available to be purchased under the share repurchase program.

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.

2 unchanged sentences

The timing and amounts of any purchases will be based on market conditions and other factors including price, regulatory requirements and capital availability.

The share repurchase program does not obligate the

The share repurchase program does not obligate the Company to repurchase any dollar amount or number of shares of Class A Stock.

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)

Company to repurchase any dollar amount or number of shares of Class A Stock.

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

Contingencies

17 unchanged sentences

Accordingly, the Company's estimate will change from time to time, and actual losses may be more than the current estimate.

On November 18, 2022, Oppenheimer received an information request from the SEC requesting information related to the use of text messaging and similar forms of electronic communications by employees of Oppenheimer and whether those communications were properly retained by Oppenheimer as part of its records preservation requirements relating to the broker-dealer business activities of Oppenheimer.

Subsequently, Oppenheimer received a similar information request from the Commodity Futures Trading Commission (“CFTC”).

On January 4, 2024, Oppenheimer submitted an Offer of Settlement to the SEC.

On February 9, 2024, the SEC issued an order (the “Order”) pursuant to which Oppenheimer agreed to pay a fine in the amount of $ 12 million and agree to certain undertakings.

In addition to the Order, Oppenheimer received a waiver of certain statutory disqualifications from the SEC.

On February 7, 2024, Oppenheimer submitted an Offer of Settlement to the CFTC.

OPPENHEIMER HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements (unaudited)

March 19, 2024, the CFTC issued an order pursuant to which Oppenheimer agreed to pay a fine of $ 1 million and agree to certain undertakings.

Beginning on or about August 31, 2021, Oppenheimer was named as a respondent in forty-eight arbitrations, many containing multiple claimants, each filed before FINRA, relating to those claimants’ purported investment in Horizon Private Equity, III, LLC (“Horizon”).

Beginning on or about August 31, 2021, Oppenheimer was named as a respondent in fifty-one arbitrations, many containing multiple claimants, each filed before FINRA, relating to those claimants’ purported investment in Horizon Private Equity, III, LLC (“Horizon”).

Horizon is alleged to be a fraudulent scheme involving, among others, a former Oppenheimer employee John Woods.

John Woods left Oppenheimer’s employ in 2016 and Oppenheimer never received a complaint or question from any of the investors prior to the SEC bringing a complaint against Woods and his co-conspirators in 2021.

Each investor who was an Oppenheimer client, signed a document acknowledging that Horizon was not an approved Oppenheimer product.

Over a protracted period of time, Woods made multiple false statements to Oppenheimer, to regulators and to a state court.

The claimants are seeking damages based on a number of legal theories, including, without limitation, violations of various state and federal statutes, breach of fiduciary duty, procurement of breach of fiduciary duty, negligent misrepresentation, aiding and abetting fraud, and unjust enrichment.

Claimants do 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.

Oppenheimer has settled, or settled in principle or an award has been rendered in forty-five of the Horizon-related arbitrations, with approximately one hundred fifty-five individual complainants.

The aggregate payments for those forty-five arbitrations total approximately $ 92.0 million.

The three arbitrations still pending claim specific monetary damages and allege losses of approximately $ 4.0 million in the aggregate.

On June 16, 2023, Oppenheimer was served with a complaint in an action entitled John and Cynthia Kearney, John & Tera Sargent, Mike Hall, Individually and as Assignee of 6694 Dawson Blvd, LLC, Thomas and Beverly Crampton, Roy and Shirley

Hill, Billy and Debra Lanter, Larry Lawson, Eugene Lyle, Scott Spence, and Dolores Willoughby v.

Oppenheimer has settled, or settled in principle or an award has been rendered in forty-nine of the Horizon-related arbitrations.

The two arbitrations still pending claim specific monetary damages and allege losses of approximately $ 3.8 million in the aggregate.

On June 16, 2023, Oppenheimer was served with a complaint in an action entitled John and Cynthia Kearney, John & Tera Sargent, Mike Hall et al v.

Oppenheimer & Co.

Inc., Anne Greene and Gordon Morse, filed in Georgia State Court, Fulton County.

Plaintiffs allege that they were all investors in Horizon.

However, all of the plaintiffs allege that they invested in Horizon after John Woods left Oppenheimer’s employ in 2016 and virtually all of the plaintiffs were not Oppenheimer customers.

Plaintiffs further allege that Oppenheimer, through its inaction and/or misconduct, is responsible for their alleged losses and are seeking unspecified damages alleging in violations of the Georgia RICO statute and negligence per se.

The case was subsequently transferred to the Metro Atlanta Business Case Division.

On September 5, 2023, Oppenheimer filed a motion to dismiss the complaint.

Inc., et al, filed in Georgia State Court, Fulton County.

Plaintiffs allege that Oppenheimer, through its inaction and/or misconduct, is responsible for their alleged losses and are seeking unspecified damages alleging in violations of the Georgia RICO statute and negligence per se.

Oppenheimer filed a motion to dismiss the complaint.

On April 17, 2024 the court issued an order granting plaintiffs John and Tera Sargent’s voluntary dismissal of their claims without prejudice.

On April 22, 2024, the court granted Oppenheimer’s motion to dismiss and terminated the case.

Also, on July 17, 2023, Oppenheimer was served with a complaint in an action entitled Mark Del Pico, Elizabeth Del Pico et al v.

Oppenheimer & Co.

Inc., and Michael Mooney , filed in Florida State Court, Sarasota County.

Plaintiffs allege that they were all investors in Horizon;

however, none of the plaintiffs were Oppenheimer customers.

All of the plaintiffs allege that they invested in Horizon years after John Woods left Oppenheimer’s employ in 2016.

Plaintiffs further allege that Oppenheimer, through its inaction and/or misconduct, is responsible for their alleged losses and are seeking unspecified damages from Oppenheimer alleging in negligence per se, aiding and abetting breach of fiduciary duty, and aiding and abetting fraud.

On August 28, 2023, Oppenheimer filed a motion to dismiss the complaint.

Rather than respond to Oppenheimer’s motion to dismiss, on January 12, 2024, plaintiffs filed an amended complaint that includes an additional claim of fraud against Oppenheimer.

On February 2, 2024 Oppenheimer filed a motion to dismiss the amended complaint.

Rather than respond to Oppenheimer’s motion to dismiss the amended complaint, Plaintiffs voluntarily dismissed their amended complaint without prejudice on April 12, 2024.

Finally, on August 25, 2023, Oppenheimer was served with a complaint in an action entitled Lisa Wright, Billy Ray Boaz, et al v.

On April 26, 2024, plaintiffs filed a notice of appeal of the court’s order dismissing the case.

Additionally, on August 25, 2023, Oppenheimer was served with a complaint in an action entitled Lisa Wright, Billy Ray Boaz, et al v.

Oppenheimer & Co.

Inc., Ann Greene and Gordon Morse , filed in Georgia State Court, Fulton County.

Plaintiffs allege that they were all investors in Horizon.

However, all of the plaintiffs allege that they invested in Horizon after John Woods left Oppenheimer’s employ in 2016 and virtually all of the plaintiffs were not Oppenheimer customers.

On September 15, 2023, Oppenheimer filed a motion to transfer the case to the Metro Atlanta Business Case Division, which motion was granted.

Inc., et al , filed in Georgia State Court, Fulton County.

On October 31, 2023, Oppenheimer filed a motion to dismiss the complaint.

On April 22, 2024 the court granted Oppenheimer’s motion to dismiss and terminated the case.

OPPENHEIMER HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements (unaudited)

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 and pay a civil penalty.

On April 26, 2024, plaintiffs filed a notice of appeal of the court’s order dismissing the case.

On June 30, 2022, the Oppenheimer 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.

The SEC asked the Court to enter an order enjoining Oppenheimer from violating the above-referenced rules and requiring disgorgement and payment of a civil penalty.

On January 30, 2024, Oppenheimer and the SEC reached an agreement in principle to settle the litigation pursuant to which Oppenheimer would pay a civil penalty of $ 1.2 million.

4 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, 2024, the net capital of Oppenheimer as calculated under the Rule was $ 431.4 million or 45.96 % of Oppenheimer's aggregate debit items.

As of June 30, 2024, the net capital of Oppenheimer as calculated under the Rule was $ 460.7 million or 43.90 % of Oppenheimer's aggregate debit items.

This was $ 439.7 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, 2024, Freedom had net capital of $ 4.0 million, which was $ 3.9 million in excess of the $ 100,000 required to be maintained at that date.

As of March 31, 2024, the capital required and held under the Financial Conduct Authority's Investment Firms’ Prudential Regime (“IFPR”) for Oppenheimer Europe Ltd.

As of June 30, 2024, Freedom had net capital of $ 3.9 million, which was $ 3.8 million in excess of the $ 100,000 required to be maintained at that date.

As of June 30, 2024, the capital required and held under the Financial Conduct Authority's Investment Firms’ Prudential Regime (“IFPR”) for Oppenheimer Europe Ltd.

was as follows:

1 unchanged sentence

• Tier 1 Capital ratio 127 % (required 75.0 %);

OPPENHEIMER HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements (unaudited)

• Total Capital ratio 171 % (required 100.0 %).

Effective January 2022, IFPR changed its minimum capital requirement, which is now £ 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, 2024, Oppenheimer Europe Ltd.

As of June 30, 2024, Oppenheimer Europe Ltd.

was in compliance with its regulatory requirements.

As of March 31, 2024, the regulatory capital of Oppenheimer Investments Asia Limited was $ 3.7 million, which was $ 3.3 million in excess of the $ 383,296 required to be maintained on that date.

As of June 30, 2024, the regulatory capital of Oppenheimer Investments Asia Limited was $ 3.6 million, which was $ 3.2 million in excess of the $ 384,170 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, 2024, Oppenheimer Investment Asia Limited was in compliance with its regulatory requirements.

As of March 31, 2024, Oppenheimer Trust is required to maintain minimal capital of $ 4.15 million.

Oppenheimer Trust was in compliance with its capital requirements.

As of June 30, 2024, Oppenheimer Investment Asia Limited was in compliance with its regulatory requirements.

As of June 30, 2024, Oppenheimer Trust is required to maintain minimal capital of $ 4.15 million.

Oppenheimer Trust is currently in compliance with its capital requirements.

Segment information

3 unchanged sentences

Private Client — includes commissions and a proportionate amount of fee income earned on assets under management ("AUM"), net interest earnings on client margin loans and cash balances, fees from money market funds, custodian fees, net contributions from stock loan activities and financing activities, and direct expenses associated with this segment;

OPPENHEIMER HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements (unaudited)

Asset Management — includes a proportionate amount of fee income earned on AUM from investment management services of Oppenheimer Asset Management Inc.

1 unchanged sentence

Capital Markets — includes investment banking, institutional equities sales, trading, and research, taxable fixed income sales, trading, and research, public finance and municipal trading, as well as the Company's operations in the United Kingdom, Hong Kong and Israel, and direct expenses associated with this segment.

OPPENHEIMER HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements (unaudited)

The Company does not allocate costs associated with certain infrastructure support groups that are centrally managed for its reportable segments.

2 unchanged sentences

The Company also includes activities associated with BondWave, LLC, a cloud-based financial markets software service provider in Corporate/Other.

The table below presents information about the reported revenue and pre-tax income (loss) of the Company for the three months ended March 31, 2024 and 2023.

The table below presents information about the reported revenue and pre-tax income (loss) of the Company for the three months ended June 30, 2024 and 2023.

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

For the Six Months Ended

2024 2023 2024 2023

Private client (1)

9 unchanged sentences

Asset management (1)

8,694 6,533 16,328 13,014

Capital markets ( 21,775 ) ( 14,051 ) ( 28,477 ) ( 29,528 )

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, 2024 and 2023 was:

Revenue, classified by the major geographic areas in which it was earned, for the three months ended June 30, 2024 and 2023 was:

(Expressed in thousands)

For the Three Months Ended

For the Six Months Ended

2024 2023 2024 2023

Americas $ 316,467 $ 295,496 $ 657,884 $ 605,285

2 unchanged sentences

Total $ 330,589 $ 306,189 $ 683,727 $ 627,868

OPPENHEIMER HOLDINGS INC.

Notes to Condensed Consolidated Financial Statements (unaudited)

Subsequent events

On April 26, 2024, the Company announced a quarterly dividend in the amount of $ 0.15 per share, payable on May 24, 2024 to holders of Class A Stock and Class B Stock of record on May 10, 2024.

On July 26, 2024, the Company announced a quarterly dividend in the amount of $ 0.18 per share, payable on August 23, 2024 to holders of Class A Stock and Class B Stock of record on August 9, 2024.

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