OPPENHEIMER HOLDINGS INC 10-K

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Management's Report on Internal Control over Financial Reporting 54 Report of Independent Registered Public Accounting Firm (PCAOB ID: 34 ) 55 Report of Independent Registered Public Accounting Firm 56 Consolidated Balance Sheets as of December 31, 202 4 and 202 3 58 Consolidated Income Statements for the three years ended December 31, 202 4 , 202 3 and 20 22 59 Consolidated Statements of Comprehensive Income for the three years ended December 31, 202 4 , 202 3 and 202 2 60 Consolidated Statements of Changes in Stockholders’ Equity for the three years ended December 31, 202 4 , 202 3 and 20 2 2 61 Consolidated Statements of Cash Flows for the three years ended December 31, 202 4 , 202 3 and 20 2 2 62 Notes to Consolidated Financial Statements 63 53 Table of Contents MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING Management of Oppenheimer Holdings Inc. is responsible for establishing and maintaining adequate internal control over financial reporting. The Company's internal control over financial reporting is a process designed under the supervision of the Company's principal executive and principal financial officers to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company's financial statements for external reporting purposes in accordance with U.S. generally accepted accounting principles. As of December 31, 2024, management conducted an assessment of the effectiveness of the Company's internal control over financial reporting based on the framework established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in 2013. Based on this assessment, management has concluded that the Company's internal control over financial reporting as of December 31, 2024 was effective. The Company's internal control over financial reporting includes policies and procedures that pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and dispositions of assets and provide reasonable assurances that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorizations of management and the directors of the Company and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on the Company's financial statements. The Company's internal control over financial reporting as of December 31, 2024 has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report included herein, which expresses an unqualified opinion on the effectiveness of the Company's internal control over financial reporting as of December 31, 2024. 54 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and the Board of Directors of Oppenheimer Holdings Inc. Opinion on Internal Control over Financial Reporting We have audited the internal control over financial reporting of Oppenheimer Holdings Inc. and subsidiaries (the “Company”) as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2024, of the Company and our report dated February 27, 2025, expressed an unqualified opinion on those financial statements. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Deloitte & Touche LLP New York, New York February 27, 2025 55 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Stockholders and the Board of Directors of Oppenheimer Holdings Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Oppenheimer Holdings Inc. and subsidiaries (the “Company”) as of December 31, 2024 and 2023, the related consolidated income statements, statements of comprehensive income, statements of changes in stockholders’ equity and redeemable noncontrolling interests, and statements of cash flows, for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 27, 2025, expressed an unqualified opinion on the Company’s internal control over financial reporting. Basis for Opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. 56 Table of Contents Advisory Fees – Earned on Asset-based programs - Refer to Note 6 to the financial statements Critical Audit Matter Description The Company earns advisory fees in connection with advisory and asset management services it provides to various types of funds and investment vehicles through its subsidiaries. Advisory fees earned on asset-based programs are generally based on the customer’s account value at the valuation date per the respective asset management agreements. Fees are calculated based on underlying information, such as asset balances and rates, sourced from multiple internal and external systems. Advisory fees earned on assets held in the Company’s asset-based programs are included as a part of the Company’s total advisory fee revenue. Given the Company's use of multiple systems and databases in recording advisory fees earned on asset-based programs, auditing advisory fees earned on asset-based programs was complex and challenging due to the extent of audit effort required to evaluate the completeness and accuracy of underlying information and required the involvement of information technology (IT) professionals with specialized skills and expertise. How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to the Company’s systems to process advisory fees earned on asset-based programs included the following, among others: • With the assistance of our IT specialists, we identified the significant systems used in the calculation of advisory fees earned on asset-based programs and, using a risk-based approach, tested the relevant general IT controls over each of these systems. Additionally, for the relevant service organizations, we obtained the service auditor's reports and evaluated IT-related controls, related exceptions and complementary user entity controls specified in the reports. • We tested the effectiveness of controls over the Company’s advisory fees earned on asset-based programs, including automated business controls and system interface controls, as well as the controls designed to ensure the accuracy and completeness of advisory fees earned on asset-based programs. • With the assistance of our data specialists, we created data visualizations to evaluate recorded advisory fees earned on asset-based programs and evaluate trends in the transactional revenue data. • For a sample of advisory fees earned on asset-based programs, we performed detail testing by agreeing the amounts recognized to source documents and testing the mathematical accuracy of the recorded advisory fees earned on asset-based programs. • For a sample of accounts within the asset-based programs, we tested the accuracy and completeness of assets under management by obtaining independent pricing support and reconciling total positions to third-party statements. /s/ Deloitte & Touche LLP New York, New York February 27, 2025 We have served as the Company’s auditor since 2013. 57 Table of Contents OPPENHEIMER HOLDINGS INC. CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, (Expressed in thousands, except number of shares and per share amounts) 2024 2023 ASSETS Cash and cash equivalents $ 33,150 $ 28,835 Deposits with clearing organizations 98,909 78,706 Receivable from brokers, dealers and clearing organizations 241,478 284,696 Receivable from customers, net of allowance for credit losses of $ 175 ($ 345 in 2023) 1,268,866 1,059,892 Income tax receivable 1,499 7,199 Securities purchased under agreements to resell — 5,842 Securities owned, including amounts pledged of $ 1,015,604 ($ 689,381 in 2023), at fair value 1,108,206 795,312 Notes receivable, net 67,931 62,640 Furniture, equipment and leasehold improvements, net of accumulated depreciation of $ 92,390 ($ 82,732 in 2023) 38,188 43,874 Right-of-use lease assets, net of accumulated amortization of $ 118,325 ($ 99,716 in 2023) 133,821 140,554 Corporate-owned life insurance 98,828 88,989 Intangible assets 35,709 34,340 Goodwill 143,607 142,162 Other assets 112,534 101,775 Total assets $ 3,382,726 $ 2,874,816 LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities Drafts payable $ 21,661 $ 9,002 Bank call loans 252,100 — Payable to brokers, dealers and clearing organizations 253,816 361,890 Payable to customers 357,835 369,287 Securities sold under agreements to repurchase 931,754 640,382 Securities sold but not yet purchased, at fair value 98,892 31,676 Accrued compensation 331,298 256,244 Accounts payable and other liabilities 65,764 82,810 Income tax payable 3,963 — Lease liabilities 173,320 183,273 Senior secured notes, net of debt issuance costs of $ 0 ($ 392 in 2023) — 112,658 Deferred tax liabilities, net of deferred tax assets of $ 48,640 ($ 45,961 in 2023) 41,928 38,355 Total liabilities 2,532,331 2,085,577 Commitments and contingencies (Note 18) Stockholders' equity Common Stock ($ 0.001 par value per share): Class A: shares authorized: 50,000,000 ; shares issued and outstanding 10,231,736 and 10,186,783 as of December 31, 2024 and 2023, respectively Class B: shares authorized, issued and outstanding: 99,665 as of December 31, 2024 and 2023 10 10 Additional paid-in capital 29,733 31,774 Retained earnings 819,961 756,468 Accumulated other comprehensive income 691 914 Total Oppenheimer Holdings Inc. stockholders' equity 850,395 789,166 Non-controlling interests (Note 2) $ — $ 73 Total Stockholders' Equity $ 850,395 $ 789,239 Total Liabilities and Stockholders' Equity $ 3,382,726 $ 2,874,816 The accompanying notes are an integral part of these consolidated financial statements. 58 Table of Contents OPPENHEIMER HOLDINGS INC. CONSOLIDATED INCOME STATEMENTS FOR THE THREE YEARS ENDED DECEMBER 31, (Expressed in thousands, except number of shares and per share amounts) 2024 2023 2022 REVENUE Commissions $ 409,710 $ 349,248 $ 370,382 Advisory fees 483,433 415,679 425,615 Investment banking 176,447 117,665 127,529 Bank deposit sweep income 138,770 172,807 104,558 Interest 135,537 104,550 60,713 Principal transactions, net 54,684 65,347 21,031 Other 33,915 23,529 1,113 Total revenue 1,432,496 1,248,825 1,110,941 EXPENSES Compensation and related expenses 936,814 782,396 740,827 Communications and technology 99,361 91,321 85,474 Occupancy and equipment costs 63,852 66,002 59,897 Clearing and exchange fees 27,641 24,928 25,566 Interest 87,991 68,599 23,846 Other 111,080 168,809 129,777 Total expenses 1,326,739 1,202,055 1,065,387 Pre-tax income 105,757 46,770 45,554 Income tax provision 34,510 16,498 13,444 Net income $ 71,247 $ 30,272 $ 32,110 Net income (loss) attributable to non-controlling interests, net of tax ( 310 ) 93 ( 241 ) Net income attributable to Oppenheimer Holdings Inc. $ 71,557 $ 30,179 $ 32,351 Earnings per share attributable to Oppenheimer Holdings Inc. Basic $ 6.91 $ 2.81 $ 2.77 Diluted 6.37 $ 2.59 $ 2.57 Weighted average shares outstanding Basic 10,349,803 10,736,166 11,666,194 Diluted 11,230,007 11,645,708 12,607,752 Period end shares outstanding 10,331,401 10,286,448 10,968,221 The accompanying notes are an integral part of these consolidated financial statements. 59 Table of Contents OPPENHEIMER HOLDINGS INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE THREE YEARS ENDED DECEMBER 31, (Expressed in thousands) 2024 2023 2022 Net income $ 71,247 $ 30,272 $ 32,110 Other comprehensive loss, net of tax Currency translation adjustment ( 223 ) ( 502 ) ( 2,809 ) Comprehensive income $ 71,024 $ 29,770 $ 29,301 Net income (loss) attributable to non-controlling interests ( 310 ) 93 ( 241 ) Comprehensive income attributable to Oppenheimer Holdings Inc. $ 71,334 $ 29,677 $ 29,542 The accompanying notes are an integral part of these consolidated financial statements. 60 Table of Contents OPPENHEIMER HOLDINGS INC. CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY AND REDEEMABLE NON-CONTROLLING INTERESTS FOR THE THREE YEARS ENDED DECEMBER 31, (Expressed in thousands except per share amounts) 2024 2023 2022 Common stock ($ 0.001 par value per share) Balance at beginning of year $ 10 $ 11 $ 13 Repurchase of Class A non-voting common stock for cancellation — ( 1 ) ( 2 ) Balance at end of year 10 10 11 Additional paid-in capital Balance at beginning of year 31,774 28,628 78,032 Issuance of Class A non-voting common stock 8,800 6,061 2,924 Repurchase of Class A non-voting common stock for cancellation ( 8,384 ) ( 3,936 ) ( 58,581 ) Share-based expense 12,859 13,058 11,555 Vested employee share plan awards ( 15,580 ) ( 11,892 ) ( 5,081 ) Change in redemption value of redeemable non-controlling interests 264 ( 145 ) ( 221 ) Balance at end of year 29,733 31,774 28,628 Retained earnings Balance at beginning of year 756,468 764,178 740,926 Repurchase of Class A non-voting common stock for cancellation ( 1,219 ) ( 31,437 ) ( 2,055 ) Net income (2) 71,557 30,179 32,351 Dividends paid ( 6,845 ) ( 6,452 ) ( 7,044 ) Balance at end of year 819,961 756,468 764,178 Accumulated other comprehensive income Balance at beginning of year 914 1,416 4,225 Currency translation adjustment ( 223 ) ( 502 ) ( 2,809 ) Balance at end of year 691 914 1,416 Total Oppenheimer Holdings Inc. stockholders' equity 850,395 789,166 794,233 Non-controlling interests Balance at beginning of year 73 722 2,069 Capital distribution to non-controlling interests — ( 198 ) ( 90 ) Net income (loss) attributable to non-controlling interests ( 310 ) 93 ( 241 ) Change in redemption value of redeemable non-controlling interests 237 ( 544 ) ( 1,016 ) Balance at end of year — 73 722 Total stockholders' equity $ 850,395 $ 789,239 $ 794,955 Redeemable Non-controlling Interests Balance at beginning of year — 25,466 127,765 Redemption of redeemable non-controlling interests — ( 26,155 ) ( 103,536 ) Change in redemption value of redeemable non-controlling interests — 689 1,237 Balance at end of year $ — $ — $ 25,466 Dividends paid per share $ 0.66 $ 0.60 $ 0.60 (1) Attributable to Oppenheimer Holdings Inc. The accompanying notes are an integral part of these consolidated financial statements. 61 Table of Contents OPPENHEIMER HOLDINGS INC. CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE YEARS ENDED DECEMBER 31, (Expressed in thousands) 2024 2023 2022 Cash flows from operating activities Net income $ 71,247 $ 30,272 $ 32,110 Adjustments to reconcile net income to net cash provided by (used in) operating activities Non-cash items included in net income: Depreciation and amortization of furniture, equipment and leasehold improvements 10,834 9,924 7,605 Deferred income taxes 3,551 6,457 ( 14,616 ) Amortization of intangible assets 350 — — Amortization of notes receivable 18,124 15,966 13,741 Amortization of debt issuance costs 170 219 248 Write-off of debt issuance costs 222 5 61 Provision for (reversal of) credit losses ( 137 ) ( 5 ) ( 2,955 ) Share-based compensation 45,506 16,940 15,914 Amortization of right-of-use lease assets 26,101 27,281 26,804 Gain on repurchase of senior secured notes — ( 51 ) ( 235 ) Decrease (increase) in operating assets: Deposits with clearing organizations ( 20,203 ) ( 1,015 ) ( 10,723 ) Receivable from brokers, dealers and clearing organizations 43,218 ( 78,619 ) ( 36,175 ) Receivable from customers ( 208,837 ) 142,877 21,641 Income tax receivable 5,700 ( 7,199 ) — Securities purchased under agreements to resell 5,842 ( 5,842 ) 935 Securities owned ( 312,894 ) ( 296,718 ) 135,910 Notes receivable ( 23,415 ) ( 21,111 ) ( 17,253 ) Corporate-owned life insurance ( 9,839 ) ( 11,535 ) 19,849 Other assets ( 14,641 ) 289 ( 3,437 ) Increase (decrease) in operating liabilities: Drafts payable 12,659 9,002 — Payable to brokers, dealers and clearing organizations ( 108,074 ) ( 188,116 ) 127,949 Payable to customers ( 11,452 ) ( 87,188 ) ( 483 ) Securities sold under agreements to repurchase 291,372 479,373 ( 116,313 ) Securities sold but not yet purchased 67,216 ( 21,092 ) ( 19,190 ) Accrued compensation 42,407 13,227 ( 107,350 ) Income tax payable 3,963 ( 4,130 ) ( 9,406 ) Accounts payable and other liabilities ( 47,158 ) ( 48,021 ) ( 139 ) Cash provided by/(used in) operating activities ( 108,168 ) ( 18,810 ) 64,492 Cash flows from investing activities Purchase of furniture, equipment and leasehold improvements ( 5,148 ) ( 17,056 ) ( 16,311 ) Acquisitions, net of cash consideration ( 2,350 ) ( 2,929 ) — Proceeds from the settlement of Corporate-owned life insurance 3,659 4,424 2,174 Cash used in investing activities ( 3,839 ) ( 15,561 ) ( 14,137 ) Cash flows from financing activities Cash dividends paid on Class A non-voting and Class B voting common stock ( 6,845 ) ( 6,452 ) ( 7,044 ) Issuance of Class A non-voting common stock 64 75 127 Repurchase of Class A non-voting common stock for cancellation ( 9,603 ) ( 35,124 ) ( 60,636 ) Payments for employee taxes withheld related to vested share-based awards ( 6,844 ) ( 5,907 ) ( 2,283 ) Distribution to non-controlling interests — ( 198 ) ( 90 ) Redemption on redeemable non-controlling interests 500 ( 26,155 ) ( 103,536 ) Repurchase of senior secured notes — ( 1,000 ) ( 10,950 ) Redemption of senior secured notes ( 113,050 ) — — Increase (decrease) in bank call loans, net 252,100 — ( 69,500 ) Cash provided by/(used in) financing activities 116,322 ( 74,761 ) ( 253,912 ) Net increase/(decrease) in cash and cash equivalents and restricted cash 4,315 ( 109,132 ) ( 203,557 ) Cash and cash equivalents and restricted cash, beginning of year 28,835 137,967 341,524 Cash and cash equivalents and restricted cash, end of year $ 33,150 $ 28,835 $ 137,967 Reconciliation of cash and cash equivalents and restricted cash within the consolidated balance sheet: 2024 2023 2022 Cash and cash equivalents $ 33,150 $ 28,835 $ 112,433 Restricted cash — — 25,534 Total cash and cash equivalents and restricted cash $ 33,150 $ 28,835 $ 137,967 Schedule of non-cash financing activities Employee share plan issuance $ 13,951 $ 9,376 $ 4,288 Fair value of non-cash assets acquired $ 3,165 $ 6,658 $ — Fair value of liabilities assumed in acquisition $ 840 $ 1,544 $ — Contingent consideration for BondWave LLC $ — $ ( 1,395 ) $ — Supplemental disclosure of cash flow information Cash paid during the year for interest $ 88,795 $ 68,399 $ 22,810 Cash paid during the year for income taxes, net $ 21,272 $ 20,576 $ 37,512 The accompanying notes are an integral part of these consolidated financial statements. 62 Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements 1. Organization Oppenheimer Holdings Inc. ("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"). 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. The Company is headquartered in New York and has 88 branch offices in 25 states located throughout the United States and offices in Puerto Rico, Tel Aviv, Israel, Hong Kong, China, London, England, St. Helier, Isle of Jersey, and Geneva, Switzerland. The principal subsidiaries of OPY are Oppenheimer & Co. Inc. ("Oppenheimer"), a registered broker-dealer in securities and investment adviser under the Investment Advisers Act of 1940; Oppenheimer Asset Management Inc. ("OAM") and its wholly-owned subsidiary, Oppenheimer Investment Management LLC, both registered investment advisers under the Investment Advisers Act of 1940; Oppenheimer Trust Company of Delaware ("Oppenheimer Trust"), a limited purpose trust company that provides fiduciary services such as trust and estate administration and investment management; OPY Credit Corp., which conducts secondary trading activities related to the purchase and sale of loans and trade claims, primarily on a riskless principal basis; Oppenheimer Europe Ltd., based in the United Kingdom, with offices in the Isle of Jersey, and Switzerland, which provides institutional equities and fixed income brokerage and corporate finance and is regulated by the Financial Conduct Authority; and Oppenheimer Investments Asia Limited, based in Hong Kong, China, which provides fixed income and equities brokerage services to institutional investors and is regulated by the Securities and Futures Commission. Oppenheimer owns Freedom Investments, Inc. ("Freedom"), a registered broker dealer in securities, which provides discount brokerage services on a limited basis, and Oppenheimer Israel (OPCO) Ltd., based in Tel Aviv, Israel, which provides investment services in the State of Israel and operates subject to the authority of the Israel Securities Authority. 2. Summary of significant accounting policies and estimates Basis of Presentation The consolidated financial statements of the Company have been prepared in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP"). Intercompany transactions and balances have been eliminated in the preparation of the consolidated financial statements. Change in Presentation Effective June 30, 2022, the Company reclassified certain stockholders' equity amounts on the consolidated balance sheet and consolidated statements of changes in stockholders' equity and redeemable non-controlling 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. Use of Estimates The preparation of the consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. In presenting the consolidated financial statements, management makes estimates regarding valuations of financial instruments, loans and allowances for credit losses, the outcome of legal and regulatory matters, goodwill and other intangible assets, share-based compensation plans and income taxes. Estimates, by their nature, are based on judgment and available information. Therefore, actual results may differ materially from the estimates. 63 Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements Accounting Standards Recently Adopted ASU 2023-07 – Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures In November 2023, the FASB issued this ASU to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The revised guidance requires disclosure of significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”), the title and position of the CODM and how the CODM uses the reported measures of segment profit or loss in assessing segment performance and make decisions about resource allocation, among other requirements. The Company adopted this guidance effective December 31, 2024. Refer to note 21 for additional information. Financial Instruments and F ai r Value Financial Instruments Securities owned, securities sold but not yet purchased, investments and derivative contracts are carried at fair value with changes in fair value recognized in earnings each period. Fair Value Measurements Accounting guidance for the fair value measurement of financial assets defines fair value, establishes a framework for measuring fair value, establishes a fair value measurement hierarchy, and requires certain fair value measurement disclosures. Fair value, as defined by the accounting guidance, is the price that would be received in the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy established by this accounting guidance prioritizes the inputs used in valuation techniques into the following three categories (highest to lowest priority): Level 1: Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets; Level 2: Inputs other than quoted prices included in Level 1 that are observable for the asset or liability either directly or indirectly; and Level 3: Unobservable inputs that are significant to the overall fair value measurement. The Company's financial instruments that are recorded at fair value generally are classified within Level 1 or Level 2 within the fair value hierarchy using quoted market prices or other pricing sources with reasonable levels of price transparency. Financial instruments classified within Level 1 are valued based on quoted market prices in active markets and consist of U.S. Treasury securities and corporate equities. Level 2 financial instruments primarily consist of investment grade and high-yield corporate debt, convertible bonds, U.S. Agency securities, mortgage and asset-backed securities, and municipal obligations. Financial instruments classified as Level 2 are valued based on quoted prices for similar assets and liabilities in active markets, pricing models which incorporate market observable inputs and quoted prices for identical or similar assets and liabilities in markets that are not active. Some financial instruments such as auction rate securities ("ARS") and trade claims are classified within Level 3 within the fair value hierarchy as observable pricing inputs are not available due to limited market activity for the asset or liability. As of December 31, 2024 and December 31, 2023, the Company had $ 2.7 million and $ 2.7 million respectively, of ARS in Level 3 assets. As of December 31, 2024, the Company had $ 2.7 million of trade claims in Level 3 assets. See note 8 for further details. Consolidation The Company consolidates all subsidiaries in which it has a controlling financial interest, as well as any variable interest entities ("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 reviews factors, including the rights of the equity holders at risk and obligations of equity holders to absorb losses or receive expected residual returns, to determine if the entity is a VIE. Under U.S. GAAP, a general partner will not consolidate a partnership or similar entity under the voting interest model. See note 10 for further details. 64 Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements Financing Receivables The Company's financing receivables include customer margin loans, securities purchased under agreements to resell ("reverse repurchase agreements"), and securities borrowed transactions. The Company uses financing receivables to extend margin loans to customers, meet trade settlement requirements, and facilitate its matched-book arrangements and inventory requirements. The Company's financing receivables are secured by collateral received from clients and counterparties. In many cases, the Company is permitted to sell or re-pledge securities held as collateral. These securities may be used to collateralize repurchase agreements, to enter into securities lending agreements, to cover short positions or to fulfill the obligation of securities fails to deliver. The Company monitors the fair value of the collateral received on a daily basis and may require clients and counterparties to deposit additional collateral or return collateral pledged, when appropriate. Customer receivables, primarily consisting of customer margin loans collateralized by customer-owned securities, are stated net of allowance for credit losses. The Company reviews large customer accounts that do not comply with the Company's margin requirements on a case-by-case basis to determine the likelihood of collection and records an allowance for credit loss following that process. For small customer accounts that do not comply with the Company's margin requirements, the allowance for credit loss is generally recorded as the amount of unsecured or partially secured receivables. The Company also periodically makes loans to financial advisors and other revenue producers as part of its hiring process. These loans are recorded as notes receivable on its consolidated balance sheet. Allowances are established on these loans if the employee is no longer associated with the Company and the loan has not been promptly repaid. Legal and Regulatory Reserves The Company records reserves related to legal and regulatory proceedings in accounts payable and other liabilities. The determination of the amounts of these reserves requires significant judgment on the part of management. In accordance with applicable accounting guidance, the Company establishes reserves for litigation and regulatory matters where available information indicates that it is probable a liability had been incurred and the Company can reasonably estimate the amount of that loss. When loss contingencies are not probable or cannot be reasonably estimated, the Company does not establish reserves. When determining whether to record a reserve, management considers many factors including, but not limited to, the amount of the claim; the stage and forum of the proceeding, the sophistication of the claimant, the amount of the loss, if any, in the client's account and the possibility of wrongdoing, if any, on the part of an employee of the Company; the basis and validity of the claim; previous results in similar cases; and applicable legal precedents and case law. Each legal and regulatory proceeding is reviewed with counsel in each accounting period and the reserve is adjusted as deemed appropriate by management. Any change in the reserve amount is recorded in the results of that period. The assumptions of management in determining the estimates of reserves may be incorrect and the actual disposition of a legal or regulatory proceeding could be greater or less than the reserve amount. Leases Right-of-use ("ROU") assets and lease liabilities are initially recognized based on the present value of the future minimum lease payments over the lease term, excluding non-base rent components such as fixed common area maintenance costs and other fixed costs such as real estate taxes and insurance. The discount rates used in determining the present value of leases are the Company’s incremental borrowing rates, developed based upon each lease’s term. The lease term may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. For operating leases, the ROU assets also include any prepaid lease payments and initial direct costs incurred and are reduced by lease incentives. For these leases, lease expense is recognized on a straight-line basis over the lease term if the ROU asset has not been impaired or abandoned. Goodwill The Company's goodwill resides in separate reporting units within its Wealth Management and Corporate/Other operating segments. Goodwill of a reporting unit is subject to at least an annual test for impairment to determine if the estimated fair value of a reporting unit is less than its carrying amount. Goodwill of a reporting unit is required to be tested for impairment between 65 Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. Due to the volatility in the financial services sector and equity markets in general, determining whether an impairment of goodwill has occurred is increasingly difficult and requires management to exercise significant judgment. Goodwill within the Corporate/Other operating segment largely relates to the Company’s acquisition of BondWave LLC, which closed on December 29, 2023. The Company's annual goodwill impairment analysis performed as of December 31, 2024 over the goodwill within the Private Client Division ("PCD") reporting unit, a separate reporting unit within Wealth Management, applied the same valuation methodologies with consistent inputs as that performed as of December 31, 2023. In estimating the fair value of the reporting units, the Company uses traditional standard valuation methods, including the market comparable approach and income approach. The market comparable approach is based on comparisons of the subject company to public companies whose stocks are actively traded ("Price Multiples") or to similar companies engaged in an actual merger or acquisition ("Precedent Transactions"). As part of this process, multiples of value relative to financial variables, such as earnings, revenue, EBITDA or stockholders' equity, are developed and applied to the appropriate financial variables of the subject company to indicate its value. The income approach involves estimating the present value of the subject company's future cash flows by using projections of the cash flows that the business is expected to generate, and discounting these cash flows at a given rate of return ("Discounted Cash Flow" or "DCF"). Each of these standard valuation methodologies requires the use of management estimates and assumptions. In its Price Multiples valuation analysis, the Company uses various operating metrics of comparable companies, including revenues, after-tax earnings, and EBITDA as well as price-to-book value ratios at a point in time. The Company analyzes prices paid in Precedent Transactions that are comparable to the business conducted in each of the reporting units. The DCF analysis includes the Company's assumptions regarding discount rate, growth rates of the reporting unit's revenues, expenses, EBITDA, and capital expenditures, adjusted for current economic conditions and expectations. The Company weighs each of the three valuation methods equally in its overall valuation. Given the subjectivity involved in selecting which valuation method to use, the corresponding weightings, and the input variables for use in the analyses, it is possible that a different valuation model and the selection of different input variables could produce a materially different estimate of the fair value of the respective reporting unit. Intangible Assets I ntangible assets are primarily comprised of trademarks, trade names and an Internet domain name, carried on the balance sheet at $ 35.7 million. Indefinite intangible assets are subject to at least an annual test for impairment to determine if the estimated fair value is less than their carrying amount. The fair value of the trademarks and trade names was substantially in excess of their carrying value as of December 31, 2024. Defined-lived intangible assets are comprised of software licenses, developed technology and customer relationships. These intangible assets carried at $ 2.9 million are amortized over their estimated lives and are periodically evaluated for impairment whenever events or circumstances indicate that the carrying amount may not be recoverable from future undiscounted cash flows. Share-Based Compensation Plans As part of the compensation to employees and directors, the Company uses stock-based compensation, consisting of restricted stock and stock appreciation rights. In accordance with ASC Topic 718, "Compensation - Stock Compensation," the Company classifies the restricted stock awards as equity awards, which requires the compensation cost to be recognized in the consolidated income statements over the requisite service period of the award at grant date fair value and adjusted for actual forfeitures. The fair value of restricted stock awards is determined based on the grant date closing price of the Company's Class A non-voting common stock ("Class A Stock") adjusted for the present value of the dividend to be received upon vesting. The fair value of stock options is determined using the Black-Scholes model. Key assumptions used to estimate the fair value include the expected term and the expected volatility of the Company's Class A Stock over the term of the award, the risk-free interest rate over the expected term, and the Company's expected annual dividend yield. The Company classifies stock appreciation rights ("OARs") as liability awards, which requires the fair value to be remeasured through earnings at each reporting period until the award vests. The fair value of OARs is also determined using the Black-Scholes model at the end of each reporting period. The compensation cost is adjusted each reporting period for changes in fair value prorated for the portion of the requisite service period rendered. 66 Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements Revenue Recognition Brokerage Customers' securities transactions are reported on a settlement date basis, which is generally one business day after trade date for securities transactions. Related commission income and expense is recorded on a trade date basis. Principal Transactions Transactions in proprietary securities and related revenue and expenses are recorded on a trade date basis. Securities owned and securities sold but not yet purchased are reported at fair value generally based upon quoted prices. Realized and unrealized changes in fair value are recognized in principal transactions, net in the period in which the change occurs. Investment Banking Fees Advisory fees from mergers, acquisitions and restructuring transactions are recorded when services for the transactions are completed and income is reasonably determinable, generally as set forth under the terms of the engagement. Retainer fees and engagement fees are recognized ratably over the service period. Underwriting fees are recorded when the transactions are completed. Transaction-related expenses, primarily consisting of legal, travel and other costs directly associated with the transaction, are deferred and recognized in the same period as the related investment banking transaction revenue. Underwriting revenues and the related expenses are presented gross on the consolidated income statements. Interest Interest revenue represents interest earned on margin debit balances, securities borrowed transactions, reverse repurchase agreements, fixed income securities, firm investments, and cash and cash equivalents. Interest revenue is recognized in the period earned based upon average or daily asset balances, contractual cash flows, and interest rates. Asset Management Asset management advisory fees are generally recognized over the period the related service is provided based on the account value at the valuation date per the respective asset management agreements. In certain circumstances, OAM is entitled to receive performance (or incentive) fees when the return on assets under management ("AUM") exceeds certain benchmark returns or other performance targets. Performance fees are generally based on investment performance over a 12-month 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. Asset management advisory fees and performance fees are included in advisory fees in the consolidated income statements. Assets under management are not included as assets of the Company. Bank Deposit Sweep Income Bank deposit sweep income consists of revenues earned from the Advantage Bank Deposit Program. Under this program, client funds are swept into deposit accounts at participating banks and are eligible for FDIC deposit insurance up to FDIC standard maximum deposit insurance amounts. The Company earns the fee paid on these deposits after administrative fees are paid to the administrator of the program. The fee earned in the period is recorded in bank deposit sweep income and the portion of interest credited to clients is recorded in interest expense in the consolidated income statements. Balance Sheet Cash and Cash Equivalents The Company defines cash equivalents as highly liquid investments with original maturities of less than 90 days that are not held for sale in the ordinary course of business. Receivables from / Payables to Brokers, Dealers and Clearing Organizations Securities borrowed and securities loaned are carried at the amounts of cash collateral advanced or received. Securities borrowed transactions require the Company to deposit cash or other collateral with the lender. The Company receives cash or 67 Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements collateral in an amount generally in excess of the market value of securities loaned. The Company monitors the market value of securities borrowed and loaned on a daily basis and may require counterparties to deposit additional collateral or return collateral pledged, when appropriate. Securities failed to deliver and receive represent the contract value of securities which have not been delivered or received, respectively, by settlement date. Receivables from / Payables to Customers Receivables from and payables to customers include balances arising from customer securities and margin transactions. Receivables from customers are recorded when margin loans are extended to customers and are recorded on a settlement date basis. Payables to customers are recorded when customers deposit cash into their accounts and are recorded on a settlement date basis. Securities Purchased under Agreements to Resell and Securities Sold under Agreements to Repurchase Reverse repurchase agreements and securities sold under agreements to repurchase ("repurchase agreements") are treated as collateralized financing transactions and are recorded at their contractual amounts plus accrued interest. The resulting interest income and expense for these arrangements are included in interest income and interest expense in the consolidated income statements. The Company presents the reverse repurchase and repurchase transactions on a net-by-counterparty basis when the specific offsetting requirements are satisfied. Notes Receivable Notes receivable primarily represent recruiting and retention payments generally in the form of upfront loans to financial advisors and key revenue producers as part of the Company's overall growth strategy. These notes generally amortize over a service period of 3 to 9 years from the initial date of the note or based on productivity levels of employees. All such notes are contingent on the employees' continued employment with the Company. The unforgiven portion of the notes becomes due on demand in the event the employee departs during the service period. Amortization of notes receivable is included in the consolidated income statements in compensation and related expenses. Furniture, Equipment and Leasehold Improvements Furniture, equipment and leasehold improvements are stated at cost less accumulated depreciation. Depreciation of furniture, fixtures, and equipment is provided on a straight-line basis generally over 3 to 7 years. Leasehold improvements are amortized on a straight-line basis over the shorter of the life of the improvement or the remaining term of the lease. Drafts Payable Drafts payable represent amounts drawn by the Company against a bank. Bank Call Loans Bank call loans are generally payable on demand and bear interest at various rates, and such loans are collateralized by firm and/or customer's margin securities. Foreign Currency Translations Foreign currency balances have been translated into U.S. dollars as follows: monetary assets and liabilities at exchange rates prevailing at period end; revenue and expenses at average rates for the period; and gains or losses resulting from translating foreign currency financial statements, net of related tax effects, are reflected in accumulated other comprehensive income in the consolidated balance sheets. The functional currency of the overseas operations is the local currency in each location except for Oppenheimer Europe Ltd. and Oppenheimer Investments Asia Limited which have the U.S. dollar as their functional currency. Income Taxes The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. 68 Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Company recognizes deferred tax assets to the extent it believes these assets are more likely than not to be realized. In making such a determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies, and the results of recent operations. The Company records uncertain tax positions on the basis of a two-step process whereby it determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and for those tax positions that meet the more-likely-than-not recognition threshold, the Company recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The Company records interest and penalties accruing on unrecognized tax benefits in pre-tax income as interest expense and other expense, respectively, in its consolidated income statements. The Company permanently reinvests eligible earnings of its foreign subsidiaries and, accordingly, does not accrue any U.S. income taxes that would arise if such earnings were repatriated. OPY Acquisition Corp. I On October 26, 2021, OPY Acquisition Corp. I (“OHAA”), a special purpose acquisition company, consummated its $ 126.5 million initial public offering (the “OHAA IPO”). OPY Acquisition LLC I (the “Sponsor”), a Delaware series limited liability company and the Company’s subsidiary, was the sponsor of and consolidated OHAA. Upon IPO completion, funds totaling $ 127.8 million, including proceeds from the OHAA IPO of $ 126.5 million and $ 1.3 million of investment from the Sponsor, were held in a trust account until the earlier of (i) the completion of a Business Combination or (ii) ten business days after April 29, 2023, 18 months from the closing of the OHAA IPO (“Combination Period”), pursuant to OHAA's certificate of incorporation. 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, after 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 had to complete an initial business combination and instead announced its intention to dissolve and liquidate. On December 28, 2023, all OHAA Class A ordinary shares were cancelled with shareholders receiving their respective share redemption amounts. 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 2024. Oppenheimer Principal Investments LLC Oppenheimer Principal Investments LLC ("OPI") is a Delaware special purpose "Series" limited liability company formed in December 2020 and designed to retain and reward talented employees of the Company, primarily in connection with the deployment of Company capital into successful private market investments, and also in connection with the Company's receipt of non-cash compensation from investment banking assignments. OPI is designed to promote alignment of Company, client and employee interests as they relate to profitable investment opportunities. This program acts as an incentive for senior employees to identify attractive private investments for the Company and its clients, and as a retention tool for key employees of the Company. OPI treats its members as partners for tax purposes generally and with respect to the separate Series formed to participate in (i) the incentive fees generated by successful client investments in the Company's Private Market Opportunities program, or (ii) principal investments made by the Company or a portion of the gains thereon, either through the outright 69 Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements purchase of an investment or consideration earned in lieu of an investment banking fee or other transaction fee. Employees who become members of a Series receive a "profit interest", as that term is used in Internal Revenue Service ("IRS") regulations, and receive an allocation of capital appreciation of the investment held by the particular Series that exceeds a threshold amount established for each Series. Participating employees are also subject to vesting and forfeiture requirements for each Series investment. Vested profit interests are accounted for as compensation expense under FASB Topic ASC 710. Additionally, the Company’s policy is to consolidate those entities where it owns the majority voting interests. The Company owns the majority voting interest of OPI through Oppenheimer Alternative Investment Management (“OAIM”), the managing member of OPI and a subsidiary of OAM. Pursuant to the Company’s policy for consolidation, the Company consolidates OPI. 3. Acquisitions On December 29, 2023, the Company acquired 100 % of the membership interests of BondWave LLC, a cloud-based financial markets software as a service provider that offers institutions active in fixed income markets with an integrated suite of portfolio analytics, transaction analytics and proprietary data solutions. Under the terms of the agreement, the Company paid approximately $ 3.6 million on closing, with the potential for additional contingent payments to be made within 18 months after the closing date. The Company allocated $ 4.3 million of the purchase price to goodwill, $ 2.2 million to definite-lived intangible assets, $ 625,000 to cash acquired and the remainder to other assets acquired and liabilities assumed as part of the acquisition accounted under ASC 805 ,“Business Combinations” ("ASC 805"). The goodwill, which has been allocated to the “Corporate/Other” segment, primarily reflects the expected synergies of combining the scalable software platform with Oppenheimer’s broader client base. On November 12, 2024, BondWave LLC acquired substantially all the assets of Bitvore Corp.’s (“Bitvore”) municipal bond data analytics business for $ 2.35 million in cash. Bitvore’s platform uses machine learning and artificial intelligence to provide municipal bond data analysis, news and information to financial institutions. The Company accounted for the acquisition under the acquisition method of accounting in accordance with ASC 805. The goodwill associated with this acquisition has been allocated to the “Corporate/Other” segment and reflects expected synergies when coupled with BondWave LLC’s existing platform and client base. 4. Financial Instruments - Credit Losses 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. No material historical losses have been reported on these assets. See note 9 for details. As of December 31, 2024, the Company had $ 67.9 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. These notes generally amortize over a service period of 3 to 9 years from the initial date of the note or based on productivity levels of employees. All such notes are contingent on the employees' continued employment with the Company. The unforgiven portion of the notes becomes due on demand in the event the employee departs during the service period. At that point, any uncollected portion of the notes is reclassified into a defaulted notes category. The allowance for uncollectibles is a valuation account that is deducted from the amortized cost basis of the defaulted notes balance to present the net amount expected to be collected. Balances are charged-off against the allowance when management deems the amount to be uncollectible. The Company reserves 100 % of the uncollected balance of defaulted notes which are five years and older and applies an expected loss rate to the remaining balance. The expected loss rate is based on historical collection rates of defaulted notes. The expected loss rate is adjusted for changes in environmental and market conditions such as changes in unemployment rates, changes in interest rates and/or other relevant factors. For the year ended December 31, 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. 70 Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements 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 December 31, 2024, the balance of defaulted notes was $ 5.0 million and the allowance for uncollectibles was $ 2.8 million. The allowance for uncollectibles consisted of $ 1.3 million related to defaulted notes balances (five years and older) and $ 1.5 million (under five years). The following table presents the disaggregation of defaulted notes by year of default as of December 31, 2024: (Expressed in thousands) As of December 31, 2024 2024 $ 449 2023 1,091 2022 141 2021 1,541 2020 423 2019 and prior 1,340 Total $ 4,985 The following table presents activity in the allowance for uncollectibles of defaulted notes for the years ended December 31, 2024 and 2023: (Expressed in thousands) For the Year Ended December 31, 2024 2023 Beginning balance $ 3,869 $ 4,327 Write-offs ( 1,901 ) ( 1,420 ) Recoveries $ 847 $ 962 Ending balance $ 2,815 $ 3,869 5. Leases The Company has operating leases for office space and equipment expiring at various dates through 2034. The Company leases its corporate headquarters at 85 Broad Street, New York, New York which houses its executive management team and many administrative functions for the Company as well as its research, trading, investment banking, and asset management divisions and an office in Troy, Michigan, which among other things, houses its payroll and human resources departments. In addition, the Company has 88 retail branch offices in the United States as well as offices in London, England, St. Helier, Isle of Jersey, Geneva, Switzerland, Tel Aviv, Israel and Hong Kong, China. The Company is constantly assessing its needs for office space and, on a rolling basis, has many leases that expire in any given year. Substantially all of the leases are held by the Company's subsidiary, Viner Finance Inc., which is a wholly owned subsidiary of the Company. Leases with an initial term of 12 months or less are not recorded on the balance sheet; the Company recognizes lease expense for these leases on a straight-line basis over the lease term. Most leases include an option to renew and the exercise of lease renewal options is at the Company's sole discretion. The Company did not include the renewal options as part of the right of use assets and liabilities. The depreciable life of assets and leasehold improvements is limited by the expected lease term. The Company's lease agreements do not contain any material residual value guarantees or material restrictive covenants. 71 Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements As of December 31, 2024, the Company had right-of-use operating lease assets of $ 133.8 million (net of accumulated amortization of $ 118.3 million) which are comprised of real estate leases of $ 131.4 million (net of accumulated amortization of $ 115.7 million) and equipment leases of $ 2.4 million (net of accumulated amortization of $ 2.6 million). As of December 31, 2024, the Company had operating lease liabilities of $ 173.3 million which are comprised of real estate lease liabilities of $ 171.0 million and equipment lease liabilities of $ 2.3 million. The Company had no finance leases as of December 31, 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. The following table presents the weighted average lease term and weighted average discount rate for the Company's operating leases as of December 31, 2024 and December 31, 2023, respectively: As of December 31, 2024 December 31, 2023 Weighted average remaining lease term (in years) 6.08 6.35 Weighted average discount rate 7.50 % 7.72 % The following table presents operating lease costs recognized for the years ended December 31, 2024 and December 31, 2023, respectively, which are included in occupancy and equipment costs on the consolidated income statements: (Expressed in thousands) For the Year Ended December 31, 2024 For the Year Ended December 31, 2023 Operating lease costs: Real estate leases - Right-of-use lease asset amortization $ 24,394 $ 25,568 Real estate leases - Interest expense 12,761 13,413 Equipment leases - Right-of-use lease asset amortization 1,706 1,717 Equipment leases - Interest expense 176 184 The maturities of lease liabilities as of December 31, 2024 are as follows: 72 Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements 73 Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements (Expressed in thousands) As of December 31, 2024 2025 $ 42,466 2026 40,596 2027 38,151 2028 24,794 2029 18,816 After 2029 52,472 Total lease payments $ 217,295 Less interest ( 43,975 ) Present value of lease liabilities $ 173,320 As of December 31, 2024, the Company had $ 6.9 million of additional operating leases that have not yet commenced. ($ 5.8 million as of December 31, 2023). 6. Revenue from contracts with customers Revenue from contracts with customers is recognized when, or as, the Company satisfies its performance obligations by transferring the promised goods or services to customers. A good or service is transferred to a customer when, or as, the customer obtains control of that good or service. A performance obligation may be satisfied over time or at a point in time. Revenue from a performance obligation satisfied over time is recognized by measuring the Company's progress in satisfying the performance obligation in a manner that depicts the transfer of the goods or services to the customer. Revenue from a performance obligation satisfied at a point in time is recognized at the point in time that the Company determines the customer obtains control over the promised good or service. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled in exchange for those promised goods or services (i.e., the "transaction price"). In determining the transaction price, the Company considers multiple factors, including the effects of variable consideration. Variable consideration is included in the transaction price only to the extent it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainties with respect to the amount are resolved. In determining when to include variable consideration in the transaction price, the Company considers the range of possible outcomes, the predictive value of its past experiences, the time period during which uncertainties are expected to be resolved and the amount of consideration that is susceptible to factors outside of the Company's influence, such as market volatility or the judgment and actions of third parties. The Company earns revenue from contracts with customers and other sources (principal transactions, interest and other). The following provides detailed information on the recognition of the Company's revenue from contracts with customers: Commissions Commissions from Sales and Trading — The Company earns commission revenue by executing, settling and clearing transactions with clients primarily in exchange-traded and over-the-counter corporate equity and debt securities, money market instruments and exchange-traded options and futures contracts. A substantial portion of the Company's revenue is derived from commissions from private clients through accounts with transaction-based pricing. 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 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. 74 Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements Mutual Fund Income — The Company earns mutual fund income for sales and distribution of mutual fund shares, which consists of a fixed fee amount and a variable amount. The Company recognizes mutual fund income at a point in time on the trade date when the performance obligation is satisfied which is when the mutual fund interest is sold to the investor. The ongoing distribution fees for distributing investment products from mutual fund companies are generally considered variable consideration because they are based on the value of AUM and are uncertain on trade date. The Company recognizes distribution fees over the investment period as the amounts become known and the portion recognized in the current period may relate to distribution services performed in prior periods. Mutual fund income is generally received within 90 days. Advisory Fees The Company earns management and performance (or incentive) fees in connection with the advisory and asset management services it provides to various types of funds, asset-based programs and investment vehicles through its subsidiaries. Management fees are generally based on the account value at the valuation date per the respective asset management agreements and are recognized over time as the customer receives the benefits of the services evenly throughout the term of the contract. Performance fees are recognized when the return on client AUM exceeds a specified benchmark return or other performance targets over a 12-month measurement period are met. 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. 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. Both management and performance fees are generally received within 90 days. Investment Banking The Company earns underwriting revenues by providing capital raising solutions for corporate clients through initial public offerings, follow-on offerings, equity-linked offerings, private investments in public entities, and private placements. Underwriting revenues are recognized at a point in time on trade date, as the client obtains the control and benefit of the capital markets offering at that time. These fees are generally received within 90 days after the transactions are completed. Transaction-related expenses, primarily consisting of legal, travel and other costs directly associated with the transaction, are deferred and recognized in the same period as the related investment banking transaction revenue. Underwriting revenues and related expenses are presented gross on the consolidated income statements. Revenue from financial advisory services includes fees generated in connection with mergers, acquisitions and restructuring transactions. Such revenue and fees are primarily recorded at a point in time when services for the performance obligations have been completed and income is reasonably determinable, generally as set forth under the terms of the engagement. Payment for advisory services is generally due upon a completion of the transaction or milestone. Retainer fees and fees earned from certain advisory services are recognized ratably over the service period as the customer receives the benefit of the services throughout the term of the contracts, and such fees are collected based on the terms of the contracts. Bank Deposit Sweep Income Bank deposit sweep income consists of revenue earned from the FDIC-insured bank deposit program. Under this program, client funds are swept into deposit accounts at participating banks and are eligible for FDIC deposit insurance up to FDIC standard maximum deposit insurance amounts. Fees are earned over time and are generally received within 30 days. 75 Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements 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 years ended December 31, 2024 and 2023: For the Year Ended December 31, 2024 Reportable Segments Wealth Management Capital Markets Corporate/Other Total Revenue from contracts with customers: Commissions from sales and trading $ 188,783 $ 188,113 $ 14 $ 376,910 Mutual fund and insurance income 32,775 4 21 32,800 Advisory fees 483,391 — 42 483,433 Investment banking - capital markets 11,155 58,022 — 69,177 Investment banking - advisory 46 107,224 — 107,270 Bank deposit sweep income 138,770 — — 138,770 Other 12,837 2,864 4,987 20,688 Total revenue from contracts with customers 867,757 356,227 5,064 1,229,048 Other sources of revenue: Interest 88,714 39,299 7,524 135,537 Principal transactions, net 3,263 51,382 39 54,684 Other 12,318 671 238 13,227 Total other sources of revenue 104,295 91,352 7,801 203,448 Total revenue $ 972,052 $ 447,579 $ 12,865 $ 1,432,496 (Expressed in thousands) For the Year Ended December 31, 2023 Reportable Segments Wealth Management Capital Markets Corporate/Other Total Revenue from contracts with customers: Commissions from sales and trading $ 155,039 $ 162,706 $ 23 $ 317,768 Mutual fund and insurance income 31,457 7 16 31,480 Advisory fees 415,450 — 229 415,679 Investment banking - capital markets 7,543 40,499 — 48,042 Investment banking - advisory — 69,623 — 69,623 Bank deposit sweep income 172,807 — — 172,807 Other 15,499 1,436 166 17,101 Total revenue from contracts with customers 797,795 274,271 434 1,072,500 Other sources of revenue: Interest 85,105 15,196 4,249 104,550 Principal transactions, net 3,400 55,572 6,375 65,347 Other 3,887 858 1,683 6,428 Total other sources of revenue 92,392 71,626 12,307 176,325 Total revenue $ 890,187 $ 345,897 $ 12,741 $ 1,248,825 76 Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements Contract Assets and Liabilities The timing of the Company's revenue recognition may differ from the timing of payment by its customers. The Company records contract assets when payment is due from a client conditioned on future performance or the occurrence of other events. 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 $ 46.2 million and $ 39.9 million at December 31, 2024 and December 31, 2023, respectively. The Company had no significant impairments related to these receivables during the years ended December 31, 2024 and 2023. 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 $ 930,000 and $ 1,118,000 for the years ended December 31, 2024 and 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 December 31, 2024 December 31, 2023 Receivables: Commission (1) $ 4,408 $ 4,554 Mutual fund and insurance income (2) 5,838 5,365 Advisory fees (3) 11,271 5,746 Bank deposit sweep income (4) 4,748 5,223 Investment banking fees (5) 14,798 12,847 Other 5,124 6,126 Total receivables $ 46,187 $ 39,861 Deferred revenue (payables): Investment Banking fees (6) $ 28 $ 1,118 Software license fees (7) 902 — $ 930 $ 1,118 (1) Commission earned but not yet received. (2) Mutual fund and insurance income earned but not yet received. (3) Management and performance fees earned but not yet received. (4) Fees earned from FDIC-insured bank deposit program but not yet received. (5) Underwriting revenue and advisory fees earned but not yet received. (6) Retainer fees and fees received from certain advisory transactions where the performance obligations have not yet been satisfied. (7) Software license fees received upfront from customers and recognized ratably over the contract period. Contract Costs The Company incurs incremental transaction-related costs to obtain and/or fulfill contracts associated with investment banking and advisory engagements where the revenue is recognized at a point in time and the costs are determined to be recoverable. As of December 31, 2024, these contract costs were $ 2.0 million ($ 1.9 million as of December 31, 2023). There were no significant charges recognized in relation to these costs for year ended December 31, 2024. 77 Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements 7. Receivable from and payable to brokers, dealers and clearing organizations (Expressed in thousands) As of December 31, 2024 2023 Receivable from brokers, dealers and clearing organizations consists of: Securities borrowed $ 137,177 $ 158,612 Receivable from brokers 59,487 65,639 Securities failed to deliver 8,459 29,656 Clearing organizations and other (1) 33,142 30,789 Other 3,213 — Total $ 241,478 $ 284,696 Payable to brokers, dealers and clearing organizations consists of: Securities loaned $ 235,498 $ 284,987 Payable to brokers 607 447 Securities failed to receive 14,757 23,809 Clearing organizations and other (2) 2,954 52,647 Total $ 253,816 $ 361,890 (1) As of December 31, 2024, approximately $ 15.4 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. 8. Fair value measurements Securities owned, securities sold but not yet purchased, investments, derivative contracts and certain loans are carried at fair value with changes in fair value recognized in earnings each period. Fair value is defined as the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. A description of the valuation techniques applied and inputs used in measuring the fair value of the Company’s financial instruments, as well as the general classification of such instruments pursuant to the valuation hierarchy, are as follows: Securities The Company determines the fair value of securities (both long and short) primarily based on pricing sources with reasonable levels of price transparency. Where unadjusted quoted prices for identical assets or liabilities are available in an active market, we classify the securities within Level 1 of the valuation hierarchy. Level 1 securities include U.S. Treasury securities, money market funds and corporate equities. If quoted market prices are unavailable, fair values are generally determined using pricing models which incorporate market observable inputs, such as benchmark yields, recently executed transaction prices, issuer spreads, reported trades, bids, offers and other reference data. Examples of such instruments, which are typically classified within Level 2 of the valuation hierarchy, include U.S. Agency securities, sovereign obligations, corporate debt and other obligations, mortgage and other asset-backed securities, municipal obligations, money market funds and convertible bonds. In limited situations where there is reduced activity or less observability around inputs to the valuation, we classify those securities in Level 3 of the valuation hierarchy. The Company has valued the ARS securities owned at the tender offer price and categorized them in Level 3 of the fair value hierarchy due to the illiquid nature of the securities and the period of time since the last tender offer. As of December 31, 2024 and December 31, 2023, the Company had $ 2.7 million and $ 2.7 million respectively, of auction rate securities in Level 3 assets. Derivative financial instruments 78 Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements The Company classifies exchange-traded derivative financial instruments such as futures contracts in Level 1 of the valuation hierarchy. Some of our derivative positions, such as to-be-announced securities, are valued using models that use observable market parameters, and we classify them in Level 2 of the valuation hierarchy. Loans The fair value of loans is estimated using recently executed transactions and current price quotations, which are usually observable. 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. Other The Company owns an equity method investment in a financial technologies firm. The Company elected the fair value option for this investment and it is included in other assets on the consolidated balance sheet. 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 December 31, 2024, the fair value of the investment was $ 5.9 million and was categorized in Level 2 of the fair value hierarchy. Trade claims are categorized in Level 3 of the fair value hierarchy due to the illiquid nature of the claims and the period of time since the executed prices. As of December 31, 2024, Company had $ 2.7 million of trade claims in level 3 assets. Investments Financial instruments measured at Net Asset Value ("NAV") 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. There are no readily available market quotations for these investments. The Company records these investments within other assets and uses the net asset value of the underlying fund as a basis for estimating the fair value of its investment unless another method provides a better indicator of fair value. 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 December 31, 2024: (Expressed in thousands) Fair Value Unfunded Commitments Redemption Frequency Redemption Notice Period Hedge funds (1) $ 283 $ — Quarterly - Annually 30 - 120 Days Private equity funds (2) 5,090 1,314 N/A N/A $ 5,373 $ 1,314 (1) Hedge funds represent investments in credit driven strategies. (2) Private equity funds include portfolios focused on technology, infrastructure, real estate, natural resources and specific co- investment opportunities. The following table provides information about the Company's investments in Company-sponsored funds as of December 31, 2023: (Expressed in thousands) Fair Value Unfunded Commitments Redemption Frequency Redemption Notice Period Hedge funds (1) $ 446 $ — Quarterly - Annually 30 - 120 Days Private equity funds (2) 5,072 2,367 N/A N/A $ 5,518 $ 2,367 (1) Hedge funds represent investments in credit driven strategies. 79 Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements (2) Includes private equity funds and private equity fund of funds with diversified portfolios, focusing on but not limited to technology companies, venture capital and global natural resources. Assets and Liabilities Measured at Fair Value The Company's assets and liabilities, recorded at fair value on a recurring basis, as of December 31, 2024 and 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 December 31, 2024 (Expressed in thousands) Fair Value Measurements as of December 31, 2024 Level 1 Level 2 Level 3 Total Assets Deposits with clearing organizations $ 28,071 $ — $ — $ 28,071 Securities owned: U.S. Treasury securities 995,420 — — 995,420 U.S. Agency securities — 3,691 — 3,691 Corporate debt and other obligations — 9,423 — 9,423 Mortgage and other asset-backed securities — 8,954 — 8,954 Municipal obligations — 34,704 — 34,704 Convertible bonds — 21,938 — 21,938 Corporate equities 23,873 — — 23,873 Money markets 7,551 — — 7,551 Auction rate securities — — 2,652 2,652 Securities owned, at fair value 1,026,844 78,710 2,652 1,108,206 Investments (1) 978 17,005 — 17,983 Trade claims (1) 2,684 2,684 Loans (1) 432 432 Total $ 1,055,893 $ 96,147 $ 5,336 $ 1,157,376 Liabilities Securities sold but not yet purchased: U.S. Treasury securities $ 82,767 $ — $ — $ 82,767 U.S. Agency securities — 4 — 4 Corporate debt and other obligations — 11 — 11 Convertible bonds — 4,998 — 4,998 Corporate equities 11,112 — — 11,112 Securities sold but not yet purchased, at fair value 93,879 5,013 — 98,892 Derivative contracts: Futures (2) 1,071 — — 1,071 Derivative contracts, total 1,071 — — 1,071 Total $ 94,950 $ 5,013 $ — $ 99,963 (1) Included in other assets on the consolidated balance sheet. (2) Included in receivable/payable to brokers, dealers and clearing organizations. 80 Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements Assets and liabilities measured at fair value on a recurring basis as of December 31, 2023 (Expressed in thousands) Fair Value Measurements as of December 31, 2023 Level 1 Level 2 Level 3 Total Assets Deposits with clearing organizations $ 34,789 $ — $ — $ 34,789 Securities owned: U.S. Treasury securities 695,346 — — 695,346 U.S. Agency securities — 2 — 2 Corporate debt and other obligations — 5,769 — 5,769 Mortgage and other asset-backed securities — 6,627 — 6,627 Municipal obligations — 35,333 — 35,333 Convertible bonds — 16,735 — 16,735 Corporate equities 27,170 — — 27,170 Money markets 5,400 217 — 5,617 Auction rate securities — — 2,713 2,713 Securities owned, at fair value 727,916 64,683 2,713 795,312 Investments (1) 1,872 16,913 — 18,785 Securities purchased under agreements to resell — 5,842 5,842 Derivative contracts: (2) Futures 2 — — 2 TBAs — 11 — 11 Derivative contracts, total 2 11 — 13 Total $ 764,579 $ 87,449 $ 2,713 $ 854,741 Liabilities Securities sold but not yet purchased: U.S. Treasury securities $ 14,603 $ — $ — $ 14,603 Corporate debt and other obligations — 1,508 — 1,508 Mortgage and other asset-backed securities — 2 — 2 Convertible bonds — 2,136 — 2,136 Corporate equities 13,427 — — 13,427 Securities sold but not yet purchased, at fair value 28,030 3,646 — 31,676 Derivative contracts: (2) Futures 735 — — 735 TBAs — 2 — 2 Derivative contracts, total 735 2 — 737 Total $ 28,765 $ 3,648 $ — $ 32,413 (1) Included in other assets on the consolidated balance sheet. (2) Included in receivable/payable to brokers, dealers and clearing organizations. 81 Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements The following tables present changes in Level 3 assets and liabilities measured at fair value on a recurring basis for the years ended December 31, 2024 and 2023: (Expressed in thousands) Level 3 Assets and Liabilities For the Year Ended December 31, 2024 Beginning Balance Total Realized and Unrealized Gains (2) Purchases and Issuances Sales and Settlements Transfers In / (Out) Ending Balance Assets Trade claims — — 1,427 — 1,257 2,684 Auction rate securities (1) $ 2,713 $ 9 $ — $ ( 70 ) $ — $ 2,652 (1) Represents auction rate securities that failed in the auction rate market. (2) Included in principal transactions in the consolidated income statement. (Expressed in thousands) Level 3 Assets and Liabilities For the Year Ended December 31, 2023 Beginning Balance Total Realized and Unrealized Losses (2) Purchases and Issuances Sales and Settlements Transfers In / (Out) Ending Balance Assets Auction rate securities (1) $ 31,776 $ 3,159 $ — $ ( 32,222 ) $ — $ 2,713 (1) Represents auction rate securities that failed in the auction rate market. (2) Included in principal transactions in the consolidated income statement. 82 Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements Financial Instruments Not Measured at Fair Value The table below presents the carrying value, fair value and fair value hierarchy category of certain financial instruments that are not measured at fair value on the consolidated balance sheets. The table below excludes non-financial assets and liabilities (e.g., furniture, equipment and leasehold improvements and accrued compensation). The carrying value of financial instruments not measured at fair value categorized in the fair value hierarchy as Level 1 or Level 2 (e.g., cash and receivables from customers) approximates fair value because of the relatively short-term nature of the underlying assets. 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 December 31, 2024 (Expressed in thousands) Fair Value Measurement: Assets Carrying Value Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 33,150 $ 33,150 $ — $ — $ 33,150 Deposits with clearing organizations 70,838 70,838 — — 70,838 Receivable from brokers, dealers and clearing organizations: Securities borrowed 137,177 — 137,177 — 137,177 Receivables from brokers 59,487 — 59,487 — 59,487 Securities failed to deliver 8,459 — 8,459 — 8,459 Clearing organizations and other 36,355 — 36,355 — 36,355 $ 241,478 — $ 241,478 — $ 241,478 Receivable from customers 1,268,866 — 1,268,866 — 1,268,866 Notes receivable, net 67,931 — 67,931 — 67,931 Corporate-owned life insurance 98,828 98,828 98,828 Investments (1) 1,634 — 1,634 — 1,634 (1) Included within other assets on the consolidated balance sheet. 83 Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements (Expressed in thousands) Fair Value Measurement: Liabilities Carrying Value Level 1 Level 2 Level 3 Total Drafts payable $ 21,661 $ 21,661 $ — $ — $ 21,661 Bank call loans $ 252,100 $ — $ 252,100 $ — $ 252,100 Payables to brokers, dealers and clearing organizations: Securities loaned $ 235,498 — $ 235,498 — $ 235,498 Payable to brokers 607 — 607 — 607 Securities failed to receive 14,757 — 14,757 — 14,757 Clearing Organizations and Other 1,883 — 1,883 — 1,883 $ 252,745 — $ 252,745 — $ 252,745 Payables to customers 357,835 — 357,835 — 357,835 Securities sold under agreements to repurchase 931,754 — 931,754 — 931,754 Assets and liabilities not measured at fair value as of December 31, 2023 (Expressed in thousands) Fair Value Measurement: Assets Carrying Value Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 28,835 $ 28,835 $ — $ — $ 28,835 Deposits with clearing organization 43,917 43,917 — — 43,917 Receivable from brokers, dealers and clearing organizations: Securities borrowed 158,612 — 158,612 — 158,612 Receivables from brokers 65,639 — 65,639 — 65,639 Securities failed to deliver 29,656 — 29,656 — 29,656 Clearing organizations 30,780 — 30,780 — 30,780 284,687 — 284,687 — 284,687 Receivable from customers 1,059,892 — 1,059,892 — 1,059,892 Notes receivable, net 62,640 — 62,640 — 62,640 Corporate-owned life insurance 88,989 88,989 88,989 Investments (1) 2,010 — 2,010 — 2,010 (1) Included within other assets on the consolidated balance sheet. 84 Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements (Expressed in thousands) Fair Value Measurement: Liabilities Carrying Value Level 1 Level 2 Level 3 Total Drafts payable $ 9,002 $ 9,002 $ — $ — $ 9,002 Payables to brokers, dealers and clearing organizations: Securities loaned $ 284,987 $ — $ 284,987 $ — $ 284,987 Payable to brokers 447 — 447 — 447 Securities failed to receive 23,809 — 23,809 — 23,809 Other 51,912 — 51,912 — 51,912 361,155 — 361,155 — 361,155 Payables to customers 369,287 — 369,287 — 369,287 Securities sold under agreements to repurchase 640,382 — 640,382 — 640,382 Senior secured notes 113,050 — 109,838 — 109,838 Derivative Instruments and Hedging Activities The Company transacts, on a limited basis, in exchange traded and over-the-counter derivatives for both asset and liability management as well as for trading and investment purposes. Risks managed using derivative instruments include interest rate risk and, to a lesser extent, foreign exchange risk. All derivative instruments are measured at fair value and are recognized as either assets or liabilities on the consolidated balance sheet. Foreign exchange hedges From time to time, the Company also utilizes forward and options contracts to hedge the foreign currency risk associated with compensation obligations to Oppenheimer Israel (OPCO) Ltd. employees denominated in New Israeli Shekel ("NIS"). Such hedges have not been designated as accounting hedges. Any unrealized gains and losses on foreign exchange forward contracts are recorded in other assets or other liabilities on the consolidated balance sheet and other income in the consolidated income statement. Derivatives used for trading and investment purposes Futures contracts represent commitments to purchase or sell securities or other commodities at a future date and at a specified price. Market risk exists with respect to these instruments. Notional or contractual amounts are used to express the volume of these transactions and do not represent the amounts potentially subject to market risk. The Company uses futures contracts, including U.S. Treasury notes, Federal Funds, General Collateral futures and Eurodollar contracts primarily as an economic hedge of interest rate risk associated with government trading activities. Unrealized gains and losses on futures contracts are recorded on the consolidated balance sheet in payable to brokers, dealers and clearing organizations and in the consolidated income statement as principal transactions revenue, net. To-be-announced securities The Company also transacts in pass-through mortgage-backed securities eligible to be sold in the TBA market as economic hedges against mortgage-backed securities that it owns or has sold but not yet purchased. TBAs provide for the forward or delayed delivery of the underlying instrument with settlement up to 180 days. The contractual or notional amounts related to these financial instruments reflect the volume of activity and do not reflect the amounts at risk. 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. 85 Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements The notional amounts and fair values of the Company's derivatives as of December 31, 2024 and 2023 by product were as follows: (Expressed in thousands) Fair Value of Derivative Instruments as of December 31, 2024 Description Notional Fair Value Assets: Derivatives not designated as hedging instruments (1) Other contracts TBAs $ 360 $ — $ 360 $ — Liabilities: Derivatives not designated as hedging instruments (1) Commodity contracts Futures $ 11,475,000 $ 1,071 Other contracts TBAs 360 — $ 11,475,360 $ 1,071 (1) See "Derivative Instruments and Hedging Activities" above for a description of derivative financial instruments. Such derivative instruments are not subject to master netting agreements, thus the related amounts are not offset. (Expressed in thousands) Fair Value of Derivative Instruments as of December 31, 2023 Description Notional Fair Value Assets: Derivatives not designated as hedging instruments (1) Other contracts TBAs $ 3,700 $ 11 Commodity contracts Futures 5,000 2 $ 8,700 $ 13 Liabilities: Derivatives not designated as hedging instruments (1) Commodity contracts Futures $ 6,875,000 $ 735 Other contracts TBAs 3,700 2 $ 6,878,700 $ 737 (1) See "Derivative Instruments and Hedging Activities" above for a description of derivative financial instruments. Such derivative instruments are not subject to master netting agreements, thus the related amounts are not offset. 86 Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements 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 years ended December 31, 2024 and 2023: (Expressed in thousands) The Effect of Derivative Instruments in the Consolidated Income Statement For the Year Ended December 31, 2024 Types Description Location Net Gain (Loss) Commodity contracts Futures Principal transactions revenue $ 3,083 Other contracts Foreign exchange forward contracts Other revenue ( 10 ) TBAs Principal transactions revenue 1 $ 3,074 (Expressed in thousands) The Effect of Derivative Instruments in the Consolidated Income Statement For the Year Ended December 31, 2023 Types Description Location Net Gain Commodity contracts Futures Principal transactions revenue $ 2,842 Other contracts Foreign exchange forward contracts Other revenue 65 TBAs Principal transactions revenue 26 $ 2,933 9. Collateralized transactions The Company enters into collateralized borrowing and lending transactions in order to meet customers' needs and earn interest rate spreads, obtain securities for settlement and finance trading inventory positions. Under these transactions, the Company either receives or provides collateral, including U.S. Government and Agency, asset-backed, corporate debt, equity, and non-U.S. Government and Agency securities. The Company obtains short-term borrowings primarily through bank call loans. Bank call loans are generally payable on demand and bear interest at various rates. As of December 31, 2024 and 2023, the outstanding balance of bank call loans was $ 252.1 million and 0 , respectively. As of December 31, 2024, such loans with commercial banks were collateralized by the Company's securities and margin account securities with market values of approximately $ 43.0 million and $ 238.4 million, respectively. As of December 31, 2024, the Company had approximately $ 1.9 billion of customer securities under customer margin loans that are available to be pledged, of which the Company has re-pledged approximately $ 187.5 million under securities loan agreements. As of December 31, 2024, the Company had pledged $ 228.3 million of customer securities directly with the Options Clearing Corporation to secure obligations and margin requirements under option contracts written by customers. As of December 31, 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. Except as described below, repurchase and reverse repurchase agreements, principally involving U.S. Government and Agency securities, are carried at amounts at which the securities subsequently will be resold or reacquired as specified in the respective agreements and include accrued interest. 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. 87 Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements 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 December 31, 2024: (Expressed in thousands) Overnight and Open Repurchase agreements: U.S. Treasury securities $ 999,809 Securities loaned: Equity securities 235,498 Gross amount of recognized liabilities for repurchase agreements and securities loaned $ 1,235,307 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 December 31, 2024 and 2023: As of December 31, 2024 (Expressed in thousands) Gross Amounts Not Offset on the Balance Sheet Gross Amounts of Recognized Assets Gross Amounts Offset on the Balance Sheet Net Amounts of Assets Presented on the Balance Sheet Financial Instruments Cash Collateral Received Net Amount Reverse repurchase agreements $ 68,055 $ ( 68,055 ) $ — $ — $ — $ — Securities borrowed (1) 137,177 — 137,177 ( 130,568 ) — 6,609 Total $ 205,232 $ ( 68,055 ) $ 137,177 $ ( 130,568 ) $ — $ 6,609 (1) Included in receivable from brokers, dealers and clearing organizations on the consolidated balance sheet. Gross Amounts Not Offset on the Balance Sheet Gross Amounts of Recognized Liabilities Gross Amounts Offset on the Balance Sheet Net Amounts of Liabilities Presented on the Balance Sheet Financial Instruments Cash Collateral Pledged Net Amount Repurchase agreements $ 999,809 $ ( 68,055 ) $ 931,754 $ ( 931,754 ) $ — $ — Securities loaned (2) 235,498 — 235,498 ( 229,156 ) — 6,342 Total $ 1,235,307 $ ( 68,055 ) $ 1,167,252 $ ( 1,160,910 ) $ — $ 6,342 (2) Included in payable to brokers, dealers and clearing organizations on the consolidated balance sheet. As of December 31, 2023 (Expressed in thousands) Gross Amounts Not Offset on the Balance Sheet Gross Amounts of Recognized Assets Gross Amounts Offset on the Balance Sheet Net Amounts of Assets Presented on the Balance Sheet Financial Instruments Cash Collateral Received Net Amount Reverse repurchase agreements $ 8,870 $ ( 3,028 ) $ 5,842 $ — $ — $ 5,842 Securities borrowed (1) 158,612 — 158,612 ( 149,946 ) — 8,666 Total $ 167,482 $ ( 3,028 ) $ 164,454 $ ( 149,946 ) $ — $ 14,508 1) Included in receivable from brokers, dealers and clearing organizations on the consolidated balance sheet. 88 Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements Gross Amounts Not Offset on the Balance Sheet Gross Amounts of Recognized Liabilities Gross Amounts Offset on the Balance Sheet Net Amounts of Liabilities Presented on the Balance Sheet Financial Instruments Cash Collateral Pledged Net Amount Repurchase agreements $ 643,410 $ ( 3,028 ) $ 640,382 $ ( 632,521 ) $ — $ 7,861 Securities loaned (2) 284,987 — 284,987 ( 276,688 ) — 8,299 Total $ 928,397 $ ( 3,028 ) $ 925,369 $ ( 909,209 ) $ — $ 16,160 (2) Included in payable to brokers, dealers and clearing organizations on the consolidated balance sheet. 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 December 31, 2024, the fair value of securities received as collateral under securities borrowed transactions and reverse repurchase agreements was $ 131.7 million ($ 151.9 million as of December 31, 2023) and $ 68.1 million ($ 8.8 million as of December 31, 2023), respectively, of which the Company has sold and re-pledged approximately $ 39.2 million ($ 61.5 million as of December 31, 2023) under securities loaned transactions and $ 68.1 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 $ 1.0 billion, as presented on the face of the consolidated balance sheet as of December 31, 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. The Company manages market risk of repurchase agreements and securities loaned by monitoring the market value of collateral held and the market value of securities receivable from others. It is the Company's policy to request and obtain additional collateral when exposure to loss exists. 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. Credit Concentrations Credit concentrations may arise from trading, investing, underwriting and financing activities and may be impacted by changes in economic, industry or political factors. In the normal course of business, the Company may be exposed to credit risk in the event customers, counterparties including other brokers and dealers, issuers, banks, depositories or clearing organizations are unable to fulfill their contractual obligations. 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 December 31, 2024 were receivables f ro m three major U.S. broker-dealers totaling approximately $ 82.9 million. Included in receivable from customers as of December 31, 2024 were fully secured margin loans from our two largest customer accounts totaling approximately $ 666.1 million, comprising 52 % of total margin loans. 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 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), the Options Clearing Corporation and others. With respect to its business in reverse repurchase and repurchase agreements, substantially all open contracts as of December 31, 2024 are with the FICC . In addition, the Company clears its non-U.S. international equities business carried on by Oppenheimer Europe Ltd. through Global Prime Partners, Ltd., a global clearing financial institution located in the United Kingdom. The clearing organizations have the right to charge the Company for losses that result from a client's failure to fulfill its contractual obligations. Accordingly, the Company has credit exposures with these clearing brokers. The clearing brokers can re- 89 Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements hypothecate the securities held on behalf of the Company. 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 December 31, 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. 10. 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 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 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. The Company assesses whether it is the primary beneficiary of the hedge funds and private equity funds in which it holds a variable interest in the form of general and limited partner interests. In each instance, the Company has determined that it is not the primary beneficiary and therefore need not consolidate the hedge funds or private equity funds. The subsidiaries' general and limited partnership interests and additional capital commitments represent its maximum exposure to loss. The subsidiaries' general partnership and limited partnership interests are included in other assets on the consolidated balance sheet. In addition, the Company 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 liquidated. See note 2 for further details. The following table sets forth the total assets and liabilities of VIEs consolidated on our consolidated balance sheet: (Expressed in thousands) For the Years Ended December 31, 2024 2023 Assets Cash and cash equivalents $ — $ 94 Restricted Cash — — Other Assets — 387 Total Assets $ — $ 481 Liabilities Other Liabilities — 171 Total Liabilities $ — $ 171 90 Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements 11. Furniture, equipment and leasehold improvements (Expressed in thousands) For the Years Ended December 31, 2024 2023 Furniture, fixtures and equipment $ 65,979 $ 63,473 Leasehold improvements 64,599 63,133 Total 130,578 126,606 Less accumulated depreciation ( 92,390 ) ( 82,732 ) Total $ 38,188 $ 43,874 Depreciation and amortization expense, included in occupancy and equipment costs in the consolidated income statements was $ 10.8 million , $ 9.9 million and $ 7.6 million for the years ended December 31, 2024, 2023 and 2022, respectively. 12. Bank call loans Bank call loans, primarily payable on demand, bear interest at various rates. Details of the bank call loans are as follows: (Expressed in thousands, except percentages) 2024 2023 Year-end balance $ 252,100 $ — Weighted interest rate (at end of year) 5.12 % — % Maximum balance (at any month-end) 288,200 131,900 Average amount outstanding (during the year) 167,691 49,387 Average interest rate (during the year) 5.44 % 4.20 % Interest expense for the year ended December 31, 2024 on bank call loans was $ 9.9 million ($ 2.9 million in 2023 and $ 1.8 million in 2022). 13. Long-term debt (Expressed in thousands) Issued December 31, 2024 December 31, 2023 5.50 % Senior Secured Notes $ — $ 113,050 Unamortized Debt Issuance Cost — ( 392 ) $ — $ 112,658 5.50 % Senior Secured Notes due 2025 (the "Notes") 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. 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 (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 had a stated maturity of October 1, 2025 and bore interest at a rate of 5.50 % per annum, payable semiannually on April 1st and October 1st, respectively, of each year. 91 Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements On September 19, 2024, the Company issued a notice of redemption to the holders of its Notes stating that it intended to redeem all of the $ 113.05 million aggregate principal amount of the Notes outstanding on October 10, 2024. The Company had previously repurchased and retired $ 11.95 million of the Notes through open market purchases completed in 2022 and 2023. On October 10, 2024, the Company completed its redemption of all of the $ 113.05 million aggregate principal amount of the Notes outstanding at a redemption price equal to 100 % of the principal amount of the Notes redeemed, plus accrued and unpaid interest. Interest expense on the Notes for the year ended December 31, 2024 was $ 4.8 million ($ 6.2 million for the year ended December 31, 2023). Interest paid on the Notes for the year ended December 31, 2024 was $ 4.8 million ($ 6.2 million for the year ended December 31, 2023). 14. 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; and (c) 99,665 shares of Class B Stock, par value $ 0.001 per share. No Preferred Stock has been issued. 99,665 shares of Class B Stock have been issued and are outstanding. The Class A Stock and the Class B Stock are equal in all respects except that the Class A Stock is non-voting. The following table reflects changes in the number of shares of Class A Stock outstanding for the years indicated: 2024 2023 Class A Stock outstanding, beginning of year 10,186,783 10,868,556 Issued pursuant to share-based compensation plans (note 17) 288,759 218,745 Repurchased and canceled ( 243,806 ) ( 900,518 ) Class A Stock outstanding, end of year 10,231,736 10,186,783 Stock buy-back On February 28, 2022, the Company announced that its Board of Directors approved a share repurchase program that authorizes the Company to purchase up to 518,000 shares of the Company's Class A Stock, representing approximately 4.2 % of its 12,322,073 then issued and outstanding shares of Class A Stock. This authorization supplemented the 12,407 shares that remained authorized and available under the Company's previous share repurchase program for a total of 530,407 shares authorized and available for repurchase at February 28, 2022. On May 24, 2022, the Company announced that its Board of Directors approved a share repurchase program that authorizes the Company to purchase up to 550,000 shares of the Company's Class A Stock, representing approximately 4.6 % of its 11,863,559 then issued and outstanding shares of Class A Stock. This authorization supplemented the 71,893 shares that remained authorized and available under the Company's previous share repurchase program for a total of 621,893 shares authorized and available for repurchase at May 24, 2022. 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. On December 13, 2022, the Company's Board of Directors approved a share repurchase program that authorizes the Company to purchase up to 543,000 shares of the Company's Class A Stock, representing approximately 5.0 % of its 10,867,660 then issued and outstanding shares of Class A Stock. This authorization supplemented the 144,034 shares that remained authorized and available under the Company's previous share repurchase program for a total of 687,034 shares authorized. On May 31, 2023, the Company announced the commencement of a modified “Dutch Auction” tender offer to purchase up to $ 30.0 million of its Class A Stock at a price not less than $ 34.00 per share or more than $ 40.00 per share. The Company completed its repurchases pursuant to the tender offer on July 6, 2023, when it successfully repurchased and cancelled 437,183 92 Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements shares of Class A Stock at $ 40.00 per share for an aggregate purchase price of $ 17.49 million. As a result, the Company had 10,447,392 shares outstanding on July 6, 2023 after the purchase. During the year ended December 31, 2023, the Company purchased and canceled an aggregate of 1,684,287 shares of Class A Stock for a total consideration of $ 60.6 million ($ 36.00 per share) under its share repurchase program. As of December 31, 2023, 223,699 shares remained available to be purchased under the share repurchase program. On March 1, 2024, the Company's Board of Directors approved a share repurchase program that authorizes the Company to purchase up to 518,000 shares of the Company's Class A Stock, representing approximately 5.0 % of its 10,357,376 then issued and outstanding shares of Class A Stock. During the year ended December 31, 2024, the Company purchased and canceled an aggregate of 243,806 shares of Class A Stock for a total consideration of $ 9.6 million ($ 39.39 per share) under its share repurchase program. As of December 31, 2024, 497,893 shares remained available to be purchased under its 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. All shares purchased will be canceled. The share repurchase program is expected to continue indefinitely. 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 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. Dividends The Company paid cash dividends of $ 0.66 per share in 2024 to holders of Class A Stock and Class B Stock, in the aggregate amount of $ 6.8 million. The Company paid cash dividends of $ 0.60 per share in 2023 in the aggregate amount of $ 6.5 million. In 2022, the Company paid cash dividends of $ 0.60 per share in the aggregate amount of $ 7.0 million. On January 31, 2025, the Company announced a quarterly dividend in the amount of $ 0.18 per share, payable on February 28, 2025 to holders of Class A Stock and Class B Stock of record on February 14, 2025. 15. Earnings per share Basic earnings per share is computed by dividing net income over the weighted average number of shares of Class A Stock and Class B Stock outstanding. Diluted earnings per share includes the weighted average number of shares of Class A Stock and Class B Stock outstanding and options to purchase Class A Stock and unvested restricted stock awards of Class A Stock using the treasury stock method. Earnings per share have been calculated as follows: (Expressed in thousands, except number of shares and per share amounts) For the Years Ended December 31, 2024 2023 2022 Basic weighted average number of shares outstanding 10,349,803 10,736,166 11,666,194 Net dilutive effect of share-based awards, treasury stock method (1) 880,204 909,542 941,558 Diluted weighted average number of shares outstanding 11,230,007 11,645,708 12,607,752 Net income attributable to Oppenheimer Holdings Inc. $ 71,557 $ 30,179 $ 32,351 Earnings per share attributable to Oppenheimer Holdings Inc. Basic $ 6.91 $ 2.81 $ 2.77 Diluted $ 6.37 $ 2.59 $ 2.57 93 Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements (1) For the year ended December 31, 2024, there were no shares of Class A Stock with an anti-dilutive effect granted under share-based compensation arrangements. For the year ended December 31, 2023, the diluted net income per share computation did not include the anti-dilutive effect of 115,950 shares of Class A Stock granted under share-based compensation arrangements. For the year ended December 31, 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. 16. Income taxes Income tax expenses shown in the consolidated income statements are reconciled to amounts of tax that would have been payable from the application of the federal tax rate to pre-tax profit, as follows: (Expressed in thousands) For the Years Ended December 31, 2024 2023 2022 Amount Percentage Amount Percentage Amount Percentage U.S. federal statutory income tax $ 22,194 21.0 % $ 9,806 21.0 % $ 9,497 21.0 % U.S. state and local income taxes, net of U.S. federal income tax benefits 6,837 6.5 % 4,150 8.9 % 3,110 6.8 % Unrecognized tax benefit 15 — % 45 0.1 % 180 0.4 % Valuation allowance 2,079 2.0 % 964 2.1 % 1,054 2.3 % Non-taxable income ( 1,094 ) ( 1.0 ) % ( 964 ) ( 2.1 ) % ( 1,083 ) ( 2.4 ) % Provision to return adjustments ( 95 ) ( 0.1 ) % ( 812 ) ( 1.7 ) % ( 316 ) ( 0.7 ) % Change in state and foreign tax rates 451 0.4 % ( 514 ) ( 1.1 ) % ( 660 ) ( 1.4 ) % Foreign tax rate differentials ( 339 ) ( 0.3 ) % ( 146 ) ( 0.3 ) % ( 285 ) ( 0.6 ) % Excess tax benefits from share-based awards ( 647 ) ( 0.6 ) % ( 1,378 ) ( 2.9 ) % ( 471 ) ( 1.0 ) % Non-deductible executive compensation 2,747 2.6 % 1,514 3.2 % 1,605 3.5 % Other non-deductible expenses 2,362 2.1 % 3,833 8.1 % 813 1.6 % Total income taxes $ 34,510 32.6 % $ 16,498 35.3 % $ 13,444 29.5 % Income tax expenses included in the consolidated income statements represent the following: (Expressed in thousands) For the Years Ended December 31, 2024 2023 2022 Current: U.S. federal tax $ 22,249 $ 6,967 $ 18,862 State and local tax 7,459 2,137 8,068 Non-U.S. operations 1,250 937 1,129 Total Current 30,958 10,041 28,059 Deferred: U.S. federal tax 2,323 5,207 ( 10,420 ) State and local tax 1,262 919 ( 4,538 ) Non-U.S. operations ( 33 ) 331 343 Total Deferred 3,552 6,457 ( 14,615 ) Total $ 34,510 $ 16,498 $ 13,444 Pre-tax loss with respect to non-U.S. operations was $ 1.2 million for the year ended December 31, 2024. Pre-tax income with respect to non-U.S. operations was $ 4.8 million for the year ended December 31, 2023. Pre-tax loss with respect to non-U.S. operations was $ 7.7 million for the year ended December 31, 2022. 94 Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements The effective income tax rate for the year ended December 31, 2024 was 32.6 % compared with 35.3 % for the year ended December 31, 2023. The higher tax rate in the 2024 year was primarily due to the absence of the non-deductible of $ 13.0 million regulatory settlement, which was recorded in 2023. Deferred income taxes reflect the net tax effects of temporary differences between the financial reporting and tax bases of assets and liabilities and are measured using enacted tax rates and laws that will be in effect when such differences are expected to reverse. Significant components of the Company's deferred tax assets and liabilities as of December 31, 2024 and 2023 were as follows: (Expressed in thousands) As of December 31, 2024 2023 Deferred tax assets: Deferred compensation $ 35,846 $ 27,780 Deferred rent and lease incentives 7,504 8,772 Net operating losses and credits 13,822 12,124 Receivable reserves 925 1,259 Accrued expenses 1,284 4,762 Auction rate securities reserves — 62 Involuntary conversion 1,696 1,671 Other 1,028 981 Total deferred tax assets 62,105 57,411 Valuation allowance ( 11,516 ) ( 9,581 ) Deferred tax assets after valuation allowance 50,589 47,830 Deferred tax liabilities: Goodwill 41,560 40,984 Partnership investments 28,967 27,181 Corporate-owned life insurance 16,619 14,180 Depreciation 3,151 1,517 Other 198 303 Total deferred tax liabilities 90,495 84,165 Deferred tax liabilities, net $ ( 39,906 ) $ ( 36,335 ) The Company recognized deferred tax assets of $ 1.9 million at December 31, 2024 within other assets arising from net operating losses incurred by Oppenheimer Israel (OPCO) Ltd. The Company believes that realization of the deferred tax assets is more likely than not based on expectations of future taxable income in Israel. These net operating losses carry forward indefinitely and are not subject to expiration, provided that these subsidiaries and their underlying businesses continue operating normally (as is anticipated). As of December 31, 2024, the Company had deferred tax assets of $ 10.6 million arising from net operating losses incurred by Oppenheimer Europe Ltd. and had recorded full valuation allowances. Although the net operating losses carry forward indefinitely, the Company believes it is more likely than not that the Company will not be able to realize its deferred tax assets in the future. The net change during the year in the total valuation allowance is $ 1.7 million . The Company and one or more of its subsidiaries files income tax returns in the U.S. federal jurisdiction and in various states and foreign jurisdictions. The Company has closed tax years through 2017 in the U.S. federal jurisdiction. The Company has unrecognized tax benefits of $ 1.3 million , $ 1.2 million and $ 1.1 million as of December 31, 2024, 2023 and 2022, respectively (as shown on the table below). Included in the balance of unrecognized tax benefits as of December 31, 2024 and 2023 were $ 994,000 and $ 977,000 , respectively, of tax benefits for either year that, if recognized, would affect the effective tax rate. 95 Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements During the year ended December 31, 2024, the Company adde d $ 0.2 million and released $ 0.2 million related to state and local tax matters. The Company does not believe any unrecognized tax benefit will significantly increase or decrease within twelve months. A reconciliation of the beginning and ending amount of unrecognized tax benefit follows: (Expressed in thousands) 2024 2023 2022 Balance at beginning of year $ 1,236 $ 1,072 $ 343 Additions for tax positions of prior years 217 224 729 Lapse in statute of limitations ( 136 ) — — Settlements with taxing authorities ( 59 ) ( 60 ) — Balance at end of year $ 1,258 $ 1,236 $ 1,072 In its consolidated income statements, the Company records interest and penalties accruing on unrecognized tax benefits in pre-tax income as interest expense and other expense, respectively. For the year ended December 31, 2024, the Company added tax-related interest expense of $ 3,000 , and for the years ended December 2023 and 2022, the Company released tax-related interest expense of $ 107,000 and $ 173,000 , respectively, in its consolidated income statement. As of December 31, 2024 and 2023, the Company had an income tax-related interest payable of $ 325,000 and $ 322,000 , respectively, on its consolidated balance sheets. 17. Employee compensation plans The Company maintains various employee compensation plans for the benefit of its employees. Two types of employee compensation are granted under share-based compensation and cash-based compensation plans. Share-based Compensation Plans Oppenheimer Holdings Inc. Incentive Plan On February 26, 2014, the Company adopted the Oppenheimer Holdings Inc. 2014 Incentive Plan (the 2014 "OIP"). Pursuant to the 2014 OIP, the Compensation Committee of the Board of Directors of the Company (the "Committee") was permitted to grant options to purchase Class A Stock ("stock options"), Class A Stock awards and restricted Class A Stock (collectively "restricted stock awards") to or for the benefit of employees and non-employee directors of the Company and its subsidiaries as part of their compensation. Restricted stock awards were generally awarded for a three or five year term and fully vest at the end of the term. Restricted stock - The Company has granted restricted stock awards pursuant to the 2014 OIP. The following table summarizes the status of the Company's non-vested restricted Class A Stock awards under the 2014 OIP for the year ended December 31, 2024: Number of Class A Shares Subject to Restricted Stock Awards Weighted Average Fair Value Per Share Weighted Average Remaining Contractual Life Nonvested at beginning of year 1,589,414 $ 32.92 1.6 years Granted 330,140 37.86 2.7 years Vested ( 463,175 ) 28.44 — Forfeited ( 21,411 ) 38.44 — Nonvested at end of year 1,434,968 $ 35.42 1.6 years As of December 31, 2024, all outstanding restricted Class A Stock awards were non-vested. The aggregate intrinsic value of restricted Class A Stock awards outstanding as of December 31, 2024 was $ 92.0 million. During the year ended December 31, 96 Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements 2024, the Company included $ 12.9 million ($ 13.1 million in 2023 and $ 11.5 million in 2022) of compensation expense in its consolidated income statements relating to restricted Class A Stock awards. As of December 31, 2024, there was $ 20.3 million of total unrecognized compensation cost related to unvested restricted Class A Stock awards. The cost is expected to be recognized over a weighted average period of 1.6 years. On March 1, 2024, the Company adopted the Oppenheimer Holdings Inc. 2024 Incentive Plan (the "2024 OIP"). The 2024 OIP received stockholder approval at the Company's Annual Meeting of Stockholders on May 6, 2024. The 2024 OIP replaced the 2014 OIP, which expired by its terms on February 26, 2024. Holders of the Class B Stock of the Company approved for registration 1,000,000 shares of Class A Stock under the 2024 OIP. As of December 31, 2024, the number of shares of Class A Stock available under the 2024 plan, but not yet awarded, was 999,000 . On January 29, 2025, the Company awarded a total of 203,375 restricted shares of Class A Stock to current employees pursuant to the 2024 OIP. Of these restricted shares, 105,675 shares will cliff vest in three years and 97,700 shares will cliff vest in five years . These awards will be expensed over the applicable three or five year vesting period. Stock options - The Company has granted stock options pursuant to the 2014 OIP. There were 0 and 2,447 options outstanding as of December 31, 2024 and 2023, respectively. During the year ended December 31, 2024, the Company included $ 2,550 ($ 8,195 in 2023 and $ 15,702 in 2022) of compensation expense in its consolidated income statement relating to the expensing of stock options. Oppenheimer Holdings Inc. Stock Appreciation Right Plan Under the Oppenheimer Holdings Inc. Stock Appreciation Right Plan, the Company awards stock appreciation rights ("OARs") to certain employees as part of their compensation package based on a formula reflecting gross production and length of service. These awards are granted once per year in January with respect to the prior year's production. The OARs vest five years from grant date and settle in cash at vesting. OARs - The Company has awarded OARs pursuant to the Oppenheimer Holdings Inc. Stock Appreciation Right Plan. The following table summarizes the status of the Company's outstanding OARs awards as of December 31, 2024: Grant Date Number of OARs Outstanding Strike Price Remaining Contractual Life Fair Value as of December 31, 2024 January 10, 2020 478,680 $ 27.54 9 days $ 36.57 January 11, 2021 573,329 32.16 1 year 32.57 January 7, 2022 605,087 49.57 2 years 18.87 January 6, 2023 506,170 45.33 3 years 25.00 January 5, 2024 479,470 40.78 4 years 29.48 Total OARs outstanding 2,642,736 Total weighted average values $ — 3.0 years $ — The fair value as of December 31, 2024 for each of the OARs was estimated using the Black-Scholes model with the following assumptions: Grant Date January 10, 2020 January 11, 2021 January 7, 2022 January 6, 2023 January 5, 2024 Expected term (1) 9 days 1 year 2 years 3 years 4 years Expected volatility factor (2) 22.353 % 26.966 % 24.353 % 30.793 % 31.158 % Risk-free interest rate (3) 4.314 % 4.183 % 4.228 % 4.261 % 4.319 % (1) The expected term was determined based on the remaining life of the actual awards. (2) The volatility factor was measured using the weighted average of historical daily price changes of the 97 Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements Company's Class A Stock over a historical period commensurate to the expected term of the awards. (3) The risk-free interest rate was based on periods equal to the expected term of the awards based on the U.S. Treasury yield curve in effect at December 31, 2024. As of December 31, 2024, 2,642,736 of outstanding OARs were unvested. As of December 31, 2024, the aggregate intrinsic value of OARs outstanding was $ 65.3 million. In the year ended December 31, 2024, the Company included $ 32.6 million ($ 3.9 million in 2023 and $ 4.4 million in 2022) in compensation expense in its consolidated income statements relating to OARs awards. The liability related to the OARs was $ 46.9 million as of December 31, 2024. As of December 31, 2024, there was $ 27.5 million of total unrecognized compensation cost related to unvested OARs. The cost is expected to be recognized over a weighted average period of 3.0 years. On January 6, 2025, 654,280 OARs were awarded to Oppenheimer employees related to fiscal 2024 performance. These OARs will be expensed over 5 years (the vesting period). Cash-based Compensation Plans Defined Contribution Plan The Company, through its subsidiaries, maintains a defined contribution plan covering substantially all full-time U.S. employees. The Oppenheimer & Co. Inc. 401(k) Plan provides that Oppenheimer may make discretionary contributions. Eligible Oppenheimer employees can make voluntary contributions which cannot exceed $ 23,000 , $ 22,500 and $ 20,500 per annum in 2024, 2023 and 2022, respectively, unless they are also eligible to make "catch up" contributions. The Company made contributions to the 401(k) Plan of $ 4.9 million, $ 4.4 million and $ 4.3 million in 2024, 2023 and 2022, respectively. Deferred Compensation Plans On October 26, 2023, the Company terminated the DIP. All deferrals made prior to October 26, 2023 survive the termination of the DIP. The Company maintains an Executive Deferred Compensation Plan ("EDCP") and a Deferred Incentive Plan ("DIP") in order to offer certain qualified high-performing financial advisors a bonus based upon a formula reflecting years of service, production, net commissions and a valuation of their clients' assets. The bonus amounts resulted in deferrals for fiscal 2024 of $ 12.1 million ($ 10.1 million for 2023 and $ 11.1 million for 2022). These deferrals normally vest after five years . The liability is being recognized over the vesting period. The EDCP also includes voluntary deferrals by senior executives that are not subject to vesting. The Company maintains a Corporate-owned life insurance policy, which is designed to hedge a portion of the EDCP obligation. The EDCP liability is being tracked against the value of a benchmark investment portfolio held for this purpose. Additionally, the Company maintains the Oppenheimer & Co. Inc. Investment Banking and Capital Markets Deferred Compensation Plan ("CMDP") for eligible employees in the Capital Markets business segment. As of December 31, 2024, the Company's liability with respect to the EDCP, DIP and CMDP described below totaled $ 77.8 million and is included in accrued compensation on the consolidated balance sheet as of December 31, 2024. The Company also maintains a deferred compensation plan on behalf of certain employees who were formerly employed by CIBC World Markets. The Company hedges this deferred compensation obligation with a portfolio of mutual fund investments. As of December 31, 2024, the Company's liability with respect to this plan totaled $ 22.4 million. An employee is eligible to participate in the CMDP if the employee (i) is an Investment Banking Division employee of Oppenheimer with a title of Associate or above whose previous year’s salary and bonus exceeded $ 200,000 , or (ii) is a professional working in the Oppenheimer Capital Markets Division (but not the Investment Banking Division) who is designated by the Plan Administrator (in its sole discretion) as eligible to participate in the Plan. The CMDP has both mandatory and elective contributions. The amount of compensation subject to mandatory deferral (“Bonus Deferral Credit”) is based on a schedule maintained by the Plan Administrator from time to time. The Bonus Deferral Credit vests ratably over a period of three years and is distributed upon vesting. For the elective portion, a participant is eligible if his or her base salary and bonus exceed $ 500,000 and he or she may elect to defer up to 50 % of the total of his or her base salary and bonus amounts (“Elective Deferral Credit”) for a 5 -year or 10 -year period. The Elective Deferral Credit is 100 % vested at all times. The Company provides a Matching Credit of 10 % of the Elective Deferral Credit which vests on last day of the Performance Year 98 Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements (as defined in the CMDP) attributable to the Matching Credit. The Elective Deferral Credit and the Matching Credit are distributed in lump sums in the year following the fifth or tenth anniversary of the last day of the Performance Year (as defined in the CMDP), depending on the participant’s election. For fiscal 2024, the Company’s deferral related to the CMDP totaled $ 13.4 million which is comprised of Bonus Deferral Credits. Eligibility for Elective Deferral Credits began in 2023 for elections made by December 31, 2021. The total amount expensed in 2024 for the Company's deferred compensation plans was $ 38.7 million ($ 33.6 million in 2023 and $ 5.3 million in 2022). 18. Commitments and contingencies Commitments The Company had capital commitments of $ 1.3 million with respect to unfunded obligation in private equity funds sponsored by the Company and $ 6.9 million of commitments related to additional operating leases that have not yet commenced. As of December 31, 2024, the Company had no collateralized or uncollateralized letters of credit outstanding. Contingencies Many aspects of the Company's business involve substantial risks of liability. In the normal course of business, the Company has been named as defendant or co-defendant in various legal actions, including arbitrations, class actions and other litigation, creating substantial exposure and periodic expenses. Certain of the actual or threatened legal matters include claims for substantial compensatory and/or punitive damages or claims for indeterminate amounts of damages. These proceedings arise primarily from securities brokerage, asset management and investment banking activities. The Company is also involved, from time to time, in other reviews, investigations and proceedings (both formal and informal) by governmental and self-regulatory agencies regarding the Company's business, which may result in expenses, adverse judgments, settlements, fines, penalties, injunctions or other relief. The investigations include inquiries from the SEC, the Financial Industry Regulatory Authority ("FINRA") and other regulators. The Company accrues for estimated loss contingencies related to legal and regulatory matters within Other Expenses in the 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. In addition, even where a loss is possible or an exposure to loss exists in excess of the liability already accrued with respect to a previously recognized loss contingency, it is often not possible to reasonably estimate the size of the possible loss or range of loss or possible additional losses or range of additional losses. For certain legal and regulatory proceedings, the Company cannot reasonably estimate such losses, particularly for proceedings that are in their early stages of development or where plaintiffs seek substantial, indeterminate or special damages. Counsel may be required to review, analyze and resolve numerous issues, including through potentially lengthy discovery and determination of important factual matters, and by addressing novel or unsettled legal questions relevant to the proceedings in question, before the Company can reasonably estimate a loss or range of loss or additional loss for the proceeding. Even after lengthy review and analysis, the Company, in many legal and regulatory proceedings, may not be able to reasonably estimate possible losses or range of losses. 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 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 up to $ 12 million. This estimated aggregate range is based upon currently available information for those legal proceedings in which the Company is involved, 99 Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements where the Company can make an estimate for such losses. For certain cases, the Company does not believe that it can make an estimate. The foregoing aggregate estimate is based on various factors, including the varying stages of the proceedings (including the fact that some are currently in preliminary stages), the numerous yet-unresolved issues in many of the proceedings and the attendant uncertainty of the various potential outcomes of such proceedings. Accordingly, the Company's estimate will change from time to time, and actual losses may be more than the current estimate. Beginning on or about August 31, 2021, Oppenheimer was named as a respondent in numerous 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 from any of the investors prior to the SEC bringing a complaint against Woods and his co-conspirators in 2021. Oppenheimer has settled or an award has been rendered and paid in all but one of the Horizon-related arbitrations. In addition, in June and August of 2023, Oppenheimer was served with two Horizon-related complaints in Georgia State Court, by plaintiffs, virtually all of whom were never Oppenheimer customers, alleging unspecified losses. In 2024, each of those complaints was dismissed by the trial court. Plaintiffs in each case subsequently filed an appeal of the court’s order dismissing the cases, each of which is currently pending. On June 30, 2022, 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 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 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. The settlement is subject to Oppenheimer obtaining a waiver of certain statutory disqualifications. 19. Regulatory requirements 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 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 December 31, 2024, the net capital of Oppenheimer as calculated under the Rule was $ 381.4 million or 32.48 % of Oppenheimer's aggregate debit items. This was $ 357.9 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 December 31, 2024, Freedom had net capital of $ 3.8 million, which was $ 3.7 million in excess of the $ 100,000 required to be maintained at that date. As of December 31, 2024, the capital required and held under the Financial Conduct Authority's Investment Firms' Prudential Regime ("IFPR") for Oppenheimer Europe Ltd. was as follows: • Common Equity Tier 1 ratio 182.0 % (required 56.0 %); • Tier 1 Capital ratio 182.0 % (required 75.0 %); and • Total Capital ratio 243.0 % (required 100.0 %). As of December 31, 2024, Oppenheimer Europe Ltd. was in compliance with its regulatory requirements. 100 Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements As of December 31, 2024, the regulatory capital of Oppenheimer Investments Asia Limited was $ 3.3 million, which was $ 2.9 million in excess of the $ 386,200 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 December 31, 2024, Oppenheimer Investment Asia Limited was in compliance with its regulatory requirements. As of December 31, 2024, Oppenheimer Trust is required to maintain minimal capital of $ 4.15 million. Oppenheimer Trust is currently in compliance with its capital requirements. 20. Goodwill and intangibles Goodwill The Company's goodwill of $ 143.6 million resides in reporting units with its Wealth Management ($ 137.9 million) and Corporate/Other ($ 5.7 million) reportable segments. The Company performed its annual test for goodwill impairment for both reporting units as of December 31, 2024, which did not result in any impairment charges. Both reporting units had fair values that were substantially in excess of their respective carrying values. Goodwill within the Corporate/Other reporting unit relates to the Company’s acquisition of BondWave LLC and Bitvore. Intangible assets are primarily comprised of trademarks, trade names and an Internet domain name, carried on the balance sheet at $ 35.7 million. Indefinite intangible assets are subject to at least an annual test for impairment to determine if the estimated fair value is less than their carrying amount. Trademarks and trade names recorded as of December 31, 2024 and 2023 have been tested for impairment and it has been determined that no impairment has occurred. At each annual intangible assets impairment testing date, the trademarks and trade names had a fair value that was substantially in excess of their carrying value. Defined-lived intangible assets are comprised of software licenses, developed technology and customer relationships. These intangible assets carried at $ 2.9 million are amortized over their estimated lives and are periodically evaluated for impairment whenever events or circumstances indicate that the carrying amount may not be recoverable from future undiscounted cash flows. 21. Segment information The Company has determined its reportable segments based on the Company's method of internal reporting, which disaggregates its retail business by branch and its proprietary and investment banking businesses by product. The Company’s chief operating decision maker (“CODM”) is the chief executive officer. The CODM evaluates the performance of the Company’s reportable segments based on their year-over-year revenue and pre-tax profit or loss and uses this measure to allocate resources (including employee, financial and/or capital resources), largely in conjunction with monthly and/or quarterly reviews of segment financial performance. The CODM also uses segment profit or loss in evaluating the incentive and other compensation of segment employees as well as capital investment for facilities and information technology development. Effective in the fourth quarter of 2024, the Company combined the former Private Client and Asset Management business segments to form the Wealth Management segment. The revised segment structure is aligned with how the CODM and senior management view the performance and operations of our retail focused business. Our Capital Markets and Corporate/Other segments were not impacted by these changes. To provide historical information on a basis consistent with the revised segment presentation, the Company recast prior period segment results. The Company's reportable segments are: Wealth Management — includes commissions and 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; 101 Table of Contents OPPENHEIMER HOLDINGS INC. Notes to Consolidated Financial Statements 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. The Company does not allocate costs associated with certain infrastructure support groups that are centrally managed for its reportable segments. These areas include, but are not limited to, legal, compliance, operations, accounting, and internal audit. Costs associated with these groups are separately reported in a Corporate/Other category and primarily include compensation and benefits. The costs of certain centralized or shared functions are allocated based on methodologies that reflect utilization. The Company also includes activities associated with BondWave, LLC in Corporate/Other. The tables below present information about the Company’s reported segment revenues, segment pre-tax income or loss, compensation expenses, and other segment items for the years ended December 31, 2024, 2023 and 2022. There are no adjustments or reconciling items for any of the years presented. Asset information by reportable segment is not reported, since the Company does not produce such information for internal use by the CODM. (Expressed in thousands) For the Years Ended December 31, 2024 Wealth Management Capital markets Corporate/Other Total Revenue $ 972,052 $ 447,579 $ 12,865 $ 1,432,496 Less : Compensation Expenses 514,227 323,612 98,974 936,813 Other Segment Items (1) 192,086 163,563 34,277 389,926 Pre-Tax Income (Loss) $ 265,739 $( 39,596 ) $( 120,386 ) $ 105,757 (1) Other segment items include communication and technology expenses, occupancy and equipment costs, clearing and exchange fees, interest and other expenses. (Expressed in thousands) For the Years Ended December 31, 2023 Wealth Management Capital markets Corporate/Other Total Revenue $ 890,187 $ 345,897 $ 12,741 $ 1,248,825 Less : Compensation Expenses 424,031 269,330 89,035 782,396 Other Segment Items (1) 247,621 139,528 32,510 419,659 Pre-Tax Income (Loss) $ 218,535 $( 62,961 ) $( 108,804 ) $ 46,770 (1) Other segment items include communication and technology expenses, occupancy and equipment costs, clearing and exchange fees, interest and other expenses. (Expressed in thousands) For the Years Ended December 31, 2022 Wealth management Capital markets Corporate/Other Total Revenue $ 774,922 $ 337,821 $( 1,802 ) $ 1,110,941 Less : Compensation Expenses 401,932 260,974 77,921 740,827 Other Segment Items (1) 194,987 102,543 27,030 324,560 Pre-Tax Income (Loss) $ 178,003 $( 25,696 ) $( 106,753 ) $ 45,554 (1) Other segment items include communication and technology expenses, occupancy and equipment costs, clearing and exchange fees, interest and other expenses. 102 Table of Contents Revenue, classified by the major geographic areas in which it was earned for the years ended December 31, 2024, 2023 and 2022 was as follows: (Expressed in thousands) For the Years Ended December 31, 2024 2023 2022 Americas $ 1,376,254 $ 1,199,558 $ 1,058,188 Europe/Middle East 52,513 46,490 47,080 Asia 3,729 2,777 5,673 Total $ 1,432,496 $ 1,248,825 $ 1,110,941 22. Subsequent events The Company has performed an evaluation of events that occurred since December 31, 2024 and through the date on which the consolidated financial statements were issued, and determined t here are no events that have occurred that would require recognition or additional disclosure except as disclosed in Note 14 and Note 17. 103 Table of Contents Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.