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Table of Contents

 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
 
FORM 10-Q
  
(Mark One)
☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2024
OR 
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                     
 
Commission File Number 1-12043
 
OPPENHEIMER HOLDINGS INC.
(Exact name of registrant as specified in its charter)
 
Delaware98-0080034
(State or other jurisdiction of
incorporation or organization)		(I.R.S. Employer
Identification No.)

85 Broad Street
New York, NY 10004
(Address of principal executive offices) (Zip Code)

(212) 668-8000
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last report)
 


Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Class A non-voting common stockOPYThe New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒    No  ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer", "accelerated filer", "smaller reporting company", and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer
☐
Accelerated Filer☒
Non-accelerated filer
☐
Smaller reporting company
☐
Emerging growth company
☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes  ☐    No  ☒
The number of shares of the Company's Class A non-voting common stock and Class B voting common stock (being the only classes of common stock of the Company) outstanding on April 26, 2024 was 10,229,295 and 99,665 shares, respectively.


Table of Contents
OPPENHEIMER HOLDINGS INC.
INDEX TO QUARTERLY REPORT ON FORM 10-Q

 
 Page No.
PART I
Item 1.
Item 2.
Item 3.
Item 4.
PART II
Item 1.
Item 1A.
Item 2.
Item 5.
Item 6.


Table of Contents
PART I. FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS (UNAUDITED)

OPPENHEIMER HOLDINGS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
(Expressed in thousands, except number of shares and per share amounts)March 31, 2024December 31, 2023
ASSETS
Cash and cash equivalents$27,661 $28,835 
Deposits with clearing organizations94,016 78,706 
Receivable from brokers, dealers and clearing organizations260,471 284,696 
        Receivable from customers, net of allowance for credit losses of $349 ($345 in 2023)
1,179,700 1,059,892 
Income tax receivable5,755 7,199 
Securities purchased under agreements to resell4,090 5,842 
Securities owned, including amounts pledged of $917,804 ($689,381 in 2023), at fair value
1,044,089 795,312 
Notes receivable, net66,889 62,640 
Furniture, equipment and leasehold improvements, net of accumulated depreciation of $85,301 ($82,732 in 2023)
41,489 43,874 
Right-of-use lease assets, net of accumulated amortization of $101,910 ($99,716 in 2023)
136,095 140,554 
Corporate-owned life insurance95,241 88,989 
Goodwill142,162 142,162 
Intangible assets34,264 34,340 
Other assets119,968 101,775 
Total assets$3,251,890 $2,874,816 
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Drafts payable$21,459 $9,002 
Bank call loans94,350 — 
Payable to brokers, dealers and clearing organizations497,366 361,890 
Payable to customers447,627 369,287 
Securities sold under agreements to repurchase286,455 640,382 
Securities sold but not yet purchased, at fair value520,932 31,676 
Accrued compensation161,525 256,244 
Income tax payable6,515 — 
Accounts payable and other liabilities82,852 82,810 
Lease liabilities177,336 183,273 
Senior secured notes, net of debt issuance costs of $337 ($392 in 2023)
112,713 112,658 
        Deferred tax liabilities, net of deferred tax assets of $44,537 ($45,961 in 2023)
41,238 38,355 
Total liabilities2,450,368 2,085,577 
Commitments and contingencies (Note 14)
Stockholders' equity
Common stock ($0.001 par value per share):
Class A: shares authorized: 50,000,000; shares issued and outstanding: 10,247,197 and 10,186,783 as of March 31, 2024 and December 31, 2023, respectively
Class B: shares authorized, issued and outstanding: 99,665 as of March 31, 2024 and December 31, 2023
10 10 
Additional paid-in capital20,040 31,774 
Retained earnings780,946 756,468 
Accumulated other comprehensive income 526 914 
Total Oppenheimer Holdings Inc. stockholders' equity801,522 789,166 
Noncontrolling interest (Note 2)— 73 
Total Stockholders' equity801,522 789,239 
Total Liabilities and Stockholders' Equity$3,251,890 $2,874,816 

The accompanying notes are an integral part of these condensed consolidated financial statements.
3
Table of Contents

OPPENHEIMER HOLDINGS INC.
CONDENSED CONSOLIDATED INCOME STATEMENTS (unaudited)
For the Three Months Ended
March 31,
(Expressed in thousands, except number of shares and per share amounts)20242023
REVENUE
Commissions$95,850 $86,697 
Advisory fees114,847 100,544 
Investment banking50,537 37,965 
Bank deposit sweep income36,685 48,909 
Interest26,766 24,941 
Principal transactions, net18,234 13,490 
Other10,219 9,133 
Total revenue353,138 321,679 
EXPENSES
Compensation and related expenses221,713 206,292 
Communications and technology24,576 22,440 
Occupancy and equipment costs15,848 15,901 
Clearing and exchange fees5,842 6,263 
Interest20,548 13,142 
Other27,156 38,592 
Total expenses315,683 302,630 
Pre-tax income37,455 19,049 
Income tax provision11,711 4,585 
Net income$25,744 $14,464 
Net loss attributable to noncontrolling interest, net of tax(310)(153)
Net income attributable to Oppenheimer Holdings Inc.$26,054 $14,617 
Earnings per share attributable to Oppenheimer Holdings Inc.
Basic$2.50 $1.32 
Diluted$2.37 $1.22 
Weighted average shares outstanding
Basic10,407,454 11,092,603 
Diluted11,001,669 11,963,492 
Period end shares outstanding10,346,862 11,075,388 


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

OPPENHEIMER HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (unaudited)
For the Three Months Ended
March 31,
(Expressed in thousands)20242023
Net income$25,744 $14,464 
Other comprehensive loss, net of tax
Currency translation adjustment(388)(497)
Comprehensive income$25,356 $13,967 
Less net loss attributable to noncontrolling interests(310)(153)
Comprehensive income attributable to Oppenheimer Holdings Inc.$25,666 $14,120 
 
The accompanying notes are an integral part of these condensed consolidated financial statements.

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Table of Contents
OPPENHEIMER HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY AND REDEEMABLE NONCONTROLLING INTERESTS (unaudited)

For the Three Months Ended
March 31,
(Expressed in thousands, except per share amount)20242023
Common stock ($0.001 par value per share)
Beginning Balance$10 $11 
Issuance of Class A non-voting common stock— — 
Repurchase of Class A non-voting common stock for cancellation— — 
Ending Balance10 11 
Additional paid-in capital
Balance at beginning of period31,774 28,628 
Issuance of Class A non-voting common stock8,238 5,488 
Repurchase of Class A non-voting common stock for cancellation(8,384)(3,687)
Share-based expense3,145 3,293 
Vested employee share plan awards(14,996)(11,319)
Change in redemption value of redeemable noncontrolling interests263 (29)
Balance at end of period20,040 22,374 
Retained earnings
Balance at beginning of period756,468 764,178 
Repurchase of Class A non-voting common stock for cancellation— — 
Net income (1)
26,054 14,617 
Dividends paid(1,576)(1,674)
Balance at end of period780,946 777,121 
Accumulated other comprehensive income
Balance at beginning of period914 1,416 
Currency translation adjustment(388)(497)
Balance at end of period526 919 
Total Oppenheimer Holdings Inc. stockholders' equity$801,522 $800,425 
Noncontrolling interest
Balance at beginning of period73 722 
Net income (loss) attributable to noncontrolling interest(310)(153)
Change in redemption value of redeemable noncontrolling interests237 (136)
Balance at end of period— 433 
Total stockholders' equity$801,522 $800,858 
Redeemable Noncontrolling Interests
Balance at beginning of period— 25,466 
Redemption of redeemable noncontrolling interests— (74)
Change in redemption value of redeemable noncontrolling interests— 165 
Balance at end of period$— $25,557 
Dividends paid per share$0.15 $0.15 
(1) Attributable to Oppenheimer Holdings Inc.
The accompanying notes are an integral part of these condensed consolidated financial statements.




OPPENHEIMER HOLDINGS INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
FOR THE THREE MONTHS ENDED MARCH 31,

(Expressed in thousands)20242023
Cash flows from operating activities
Net income$25,744 $14,464 
Adjustments to reconcile net income to net cash used in operating activities
Non-cash items included in net income:
Depreciation and amortization of furniture, equipment and leasehold improvements2,643 1,875 
Deferred income taxes3,004 4,562 
Amortization of intangible assets76 — 
Amortization of notes receivable4,426 3,612 
Amortization of debt issuance costs55 56 
Write-off of debt issuance costs— 5 
Provision for credit losses4 (4)
Share-based compensation1,736 2,000 
Amortization of right-of-use lease assets6,478 6,843 
     Gain on repurchase of senior secured notes— (51)
Decrease (increase) in operating assets:
Deposits with clearing organizations(15,310)8,386 
Receivable from brokers, dealers and clearing organizations24,225 (154,962)
Receivable from customers(119,812)148,452 
Income tax receivable1,444 (5,374)
Securities purchased under agreements to resell1,752 — 
Securities owned(248,777)(263,560)
Notes receivable(8,675)(9,766)
Corporate-owned life insurance(6,252)(3,884)
Other assets(18,581)(34)
Increase (decrease) in operating liabilities:
Drafts payable12,457 18,024 
Payable to brokers, dealers and clearing organizations135,476 85,964 
Payable to customers78,340 2,113 
Securities sold under agreements to repurchase(353,927)119,427 
Securities sold but not yet purchased489,256 57,889 
Accrued compensation(93,310)(81,859)
Income tax payable 6,515 102 
Accounts payable and other liabilities(8,035)(40,403)
Cash used in operating activities(79,048)(86,123)
Cash flows from investing activities
Purchase of furniture, equipment and leasehold improvements(258)(3,531)
Proceeds from the settlement of Company-owned life insurance— 555 
Cash used in investing activities(258)(2,976)
Cash flows from financing activities
Cash dividends paid on Class A non-voting and Class B voting common stock(1,576)(1,674)
Repurchase of Class A non-voting common stock for cancellation(8,384)(3,687)
Payments for employee taxes withheld related to vested share-based awards(6,758)(5,832)
Redemption of redeemable noncontrolling interests 500 (74)
Repurchase of senior secured notes— (1,000)
Increase in bank call loans94,350 19,300 
Cash provided by (used in) financing activities78,132 7,033 
Net decrease in cash, cash equivalents and restricted cash(1,174)(82,066)
Cash, cash equivalents and restricted cash, beginning of period28,835 137,967 
Cash, cash equivalents and restricted cash, end of period$27,661 $55,901 
Reconciliation of cash, cash equivalents and restricted cash within the condensed consolidated balance sheets:20242023
Cash and cash equivalents$27,661 $30,320 
Restricted cash— 25,581 
Total cash and cash equivalents $27,661 $55,901 
Schedule of non-cash financing activities
Employee share plan issuance$13,368 $8,805 
Supplemental disclosure of cash flow information
Cash paid during the period for interest$21,399 $14,261 
Cash paid during the period for income taxes, net$769 $4,238 

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

6

OPPENHEIMER HOLDINGS INC.
Notes to Condensed Consolidated Financial Statements (unaudited)

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 89 retail 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, Portugal 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, primarily on a riskless principal basis; Oppenheimer Europe Ltd., based in the United Kingdom, with offices in the Isle of Jersey, Portugal, 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 accompanying condensed consolidated financial statements of the Company have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the "SEC") regarding interim financial reporting. Accordingly, they do not include all of the information and notes required by accounting principles generally accepted in the United States of America ("U.S. GAAP") and should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2023 (the "Form 10-K"). The accompanying condensed consolidated balance sheet data was derived from the audited consolidated financial statements but does not include all disclosures required by U.S. GAAP for annual financial statement purposes. The accompanying condensed consolidated financial statements reflect all adjustments that are, in the opinion of management, necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods presented. Certain reclassifications have been made to prior periods to place them on a basis comparable with current period presentation. Preparing financial statements requires management to make estimates and assumptions that affect the amounts that are reported in the financial statements and the accompanying disclosures. Although these estimates are based on management's knowledge of current events and actions that the Company may undertake in the future, actual results may differ materially from the estimates. The condensed consolidated results of operations for the three months ended March 31, 2024 are not necessarily indicative of the results to be expected for any future interim or annual period.

Oppenheimer 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 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.
7

OPPENHEIMER HOLDINGS INC.
Notes to Condensed Consolidated Financial Statements (unaudited)


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 ("SPAC") market and after having completed an extensive search, OHAA determined it would be unable to deliver and fund a high quality value enhancing transaction to stockholders despite the extension. Therefore, on December 18, 2023, OHAA determined not to further extend the term it has to complete an initial business combination and instead announced its intention to dissolve and liquidate. 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 of 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 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.
Non-controlling Interests

Non-controlling interests represents ownership interests in the Sponsor of OHAA. For the three months ended March 31, 2024 and March 31, 2023, the net loss (net of taxes) attributed to noncontrolling interests was $310,000 and $153,000, respectively.



3.    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 March 31, 2024, the Company had $66.9 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 10 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.
8

OPPENHEIMER HOLDINGS INC.
Notes to Condensed Consolidated Financial Statements (unaudited)
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 other relevant factors. For the three months ended March 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.

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

As of March 31, 2024, the uncollected balance of defaulted notes was $7.2 million and the allowance for uncollectibles was $4.1 million. The allowance for uncollectibles consisted of $2.0 million related to defaulted notes balances (five years and older) and $2.1 million (under five years).

The following table presents the disaggregation of defaulted notes by year of default as of March 31, 2024:
(Expressed in thousands)
As of March 31, 2024
2024$319 
20232,495 
2022285 
20211,645 
2020423 
2019 and prior1,999 
Total$7,166 

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

(Expressed in thousands)
For the Three Months Ended
March 31,
20242023
Beginning balance$3,869 $4,327 
      Additions and other adjustments222 (276)
Ending balance$4,091 $4,051 

4.    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 Firm 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 89 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.
9

OPPENHEIMER HOLDINGS INC.
Notes to Condensed Consolidated Financial Statements (unaudited)

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.

As of March 31, 2024, the Company had right-of-use operating lease assets of $136.1 million (net of accumulated amortization of $101.9 million) which are comprised of real estate leases of $133.5 million (net of accumulated amortization of $99.1 million) and equipment leases of $2.6 million (net of accumulated amortization of $2.8 million). As of March 31, 2024, the Company had operating lease liabilities of $177.3 million which are comprised of real estate lease liabilities of $174.8 million and equipment lease liabilities of $2.5 million. The Company had no finance leases as of March 31, 2024.

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

The following table presents the weighted average lease term and weighted average discount rate for the Company's operating leases as of March 31, 2024 and December 31, 2023, respectively:
As of
March 31, 2024
December 31, 2023
Weighted average remaining lease term (in years)6.226.35
Weighted average discount rate7.74%7.72%

The following table presents operating lease costs recognized for the three months ended March 31, 2024 and March 31, 2023, respectively, which are included in occupancy and equipment costs on the condensed consolidated income statements:    
(Expressed in thousands)
For the Three Months Ended
March 31,
20242023
Operating lease costs:
   Real estate leases - Right-of-use lease asset amortization$6,046 $6,439 
   Real estate leases - Interest expense3,323 3,209 
   Equipment leases - Right-of-use lease asset amortization431 422 
   Equipment leases - Interest expense46 46 


10

OPPENHEIMER HOLDINGS INC.
Notes to Condensed Consolidated Financial Statements (unaudited)
The maturities of lease liabilities as of March 31, 2024 and December 31, 2023 are as follows:    
(Expressed in thousands)
As of
March 31, 2024
December 31, 2023
2024$32,564 $43,885 
202539,411 38,759 
202637,325 36,757 
202735,168 34,823 
202821,997 21,660 
After 202858,779 58,081 
Total lease payments$225,244 $233,965 
Less interest(47,908)(50,692)
Present value of lease liabilities$177,336 $183,273 

As of March 31, 2024, the Company had $6.5 million of additional real estate operating leases that have not yet commenced ($5.8 million as of December 31, 2023).
5.    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 two business days after trade date for equity securities and corporate bond transactions and one day for government securities, options and commodities transactions. The Company records a receivable on the trade date and receives a payment on the settlement date.
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OPPENHEIMER HOLDINGS INC.
Notes to Condensed Consolidated Financial Statements (unaudited)

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

Disaggregation of Revenue
The following presents the Company's revenue from contracts with customers disaggregated by major business activity and other sources of revenue for the three months ended March 31, 2024 and 2023:
12

OPPENHEIMER HOLDINGS INC.
Notes to Condensed Consolidated Financial Statements (unaudited)
(Expressed in thousands)
For the Three Months Ended March 31, 2024
Reportable Segments
Private ClientAsset ManagementCapital MarketsCorporate/OtherTotal
Revenue from contracts with customers:
Commissions from sales and trading$44,930 $— $43,045 $5 $87,980 
Mutual fund and insurance income7,864 — 1 5 7,870 
Advisory fees88,876 25,960 — 11 114,847 
Investment banking - capital markets3,021 — 15,627 — 18,648 
Investment banking - advisory21 — 31,868 — 31,889 
Bank deposit sweep income36,685 — — — 36,685 
Other3,416 — 320 980 4,716 
Total revenue from contracts with customers184,813 25,960 90,861 1,001 302,635 
Other sources of revenue:
Interest20,196 — 4,303 2,267 26,766 
Principal transactions, net1,736 — 16,733 (235)18,234 
Other6,288 (1,032)186 61 5,503 
Total other sources of revenue28,220 (1,032)21,222 2,093 50,503 
Total revenue$213,033 $24,928 $112,083 $3,094 $353,138 

(Expressed in thousands)
For the Three Months Ended March 31, 2023
Reportable Segments
Private ClientAsset ManagementCapital MarketsCorporate/OtherTotal
Revenue from contracts with customers:
Commissions from sales and trading$38,924 $— $40,047 $6 $78,977 
Mutual fund and insurance income7,712 — 4 4 7,720 
Advisory fees76,583 23,954 — 7 100,544 
Investment banking - capital markets1,787 — 8,241 — 10,028 
Investment banking - advisory— — 27,937 — 27,937 
Bank deposit sweep income48,909 — — — 48,909 
Other3,993 — 506 97 4,596 
Total revenue from contracts with customers177,908 23,954 76,735 114 278,711 
Other sources of revenue:
Interest20,579 — 3,029 1,333 24,941 
Principal transactions, net1,049 — 10,404 2,037 13,490 
Other3,885 5 114 533 4,537 
Total other sources of revenue25,513 5 13,547 3,903 42,968 
Total revenue$203,421 $23,959 $90,282 $4,017 $321,679 
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 $49.7 million and $39.9 million at March 31, 2024 and December 31, 2023, respectively. The Company had no significant impairments related to these receivables during the three months ended March 31, 2024.
13

OPPENHEIMER HOLDINGS INC.
Notes to Condensed Consolidated Financial Statements (unaudited)

Deferred revenue relates to IRA fees received annually in advance on customers' IRA accounts managed by the Company, software license fees received upfront from customers and retainer fees and other fees earned from certain advisory transactions where the performance obligations have not yet been satisfied. Total deferred revenue was $1.4 million and $1.1 million at March 31, 2024 and December 31, 2023, respectively.
The following presents the Company's receivables and deferred revenue balances from contracts with customers, which are included in other assets and other liabilities, respectively, on the consolidated balance sheet:
(Expressed in thousands)As of
March 31, 2024
December 31, 2023
Receivables
Commission (1)
$5,388 $4,554 
Mutual fund income (2)
5,479 5,365 
Advisory fees (3)
4,191 5,746 
Bank deposit sweep income (4)
4,966 5,223 
Investment banking fees (5)
21,181 12,847 
  Other8,464 6,126 
Total receivables$49,669 $39,861 
Deferred revenue (payables):
Investment Banking fees (6)
$807 $1,118 
Software license fees (7)
607 — 
$1,414 $1,118 
(1)Commission recorded on trade date but not yet settled.
(2)Mutual fund 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


6.    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.
14

OPPENHEIMER HOLDINGS INC.
Notes to Condensed Consolidated Financial Statements (unaudited)
Earnings per share have been calculated as follows:
(Expressed in thousands, except number of shares and per share amounts) 
 
For the Three Months Ended
March 31,
 20242023
Basic weighted average number of shares outstanding10,407,454 11,092,603 
Net dilutive effect of share-based awards, treasury stock method (1)
594,215 870,889 
Diluted weighted average number of shares outstanding11,001,669 11,963,492 
Net income attributable to Oppenheimer Holdings Inc.$26,054 $14,617 
Earnings per share attributable to Oppenheimer Holdings Inc.
       Basic$2.50 $1.32 
       Diluted$2.37 $1.22 

(1) For the three months ended March 31, 2024, there was no shares of Class A Stock with an anti-dilutive effect granted under share-based compensation arrangements. For the three months ended March 31, 2023, the diluted net income per share computation did not include the anti-dilutive effect of 282,360 shares of Class A Stock granted under share-based compensation arrangements.
    
7.    Receivable from and payable to brokers, dealers and clearing organizations
(Expressed in thousands)  
 As of
 March 31, 2024December 31, 2023
Receivable from brokers, dealers and clearing organizations consisting of:
Securities borrowed$147,647 $158,612 
Receivable from brokers57,579 65,639 
Clearing organizations and other 35,074 30,789 
Securities failed to deliver20,171 29,656 
Total$260,471 $284,696 
Payable to brokers, dealers and clearing organizations consisting of:
Securities loaned$298,002 $284,987 
Securities failed to receive25,573 23,809 
Payable to brokers779 447 
Clearing organizations and other (1)
173,012 52,647 
Total$497,366 $361,890 
(1) The balances are primarily related to trade/settlement date adjustment for positions in inventory.


8.    Fair value measurements
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.
Valuation Techniques
A description of the valuation techniques applied, and inputs used in measuring the fair value of the Company's financial instruments, is as follows:
15

OPPENHEIMER HOLDINGS INC.
Notes to Condensed Consolidated Financial Statements (unaudited)
U.S. Government Obligations
U.S. Treasury securities are valued using quoted market prices obtained from active market makers and inter-dealer brokers.
U.S. Agency Obligations
U.S. agency securities consist of agency issued debt securities and mortgage pass-through securities. Non-callable agency issued debt securities are generally valued using quoted market prices, quoted market prices for comparable securities or discounted cash flow models. Callable agency issued debt securities are valued by benchmarking model-derived prices to quoted market prices and trade data for identical or comparable securities. The fair value of mortgage pass-through securities are model driven with respect to spreads of the comparable to-be-announced ("TBA") security.
Sovereign Obligations
The fair value of sovereign obligations is determined based on quoted market prices when available or a valuation model that generally utilizes interest rate yield curves and credit spreads as inputs.
Corporate Debt and Other Obligations
The fair value of corporate bonds is estimated using recent transactions, broker quotations and bond spread information.

Mortgage and Other Asset-Backed Securities
The Company values non-agency securities collateralized by home equity and various other types of collateral based on external pricing and spread data provided by independent pricing services. When specific external pricing is not observable, the valuation is based on yields and spreads for comparable bonds.
Municipal Obligations
The fair value of municipal obligations is estimated using recently executed transactions, broker quotations, and bond spread information.
Convertible Bonds
The fair value of convertible bonds is estimated using recently executed transactions and dollar-neutral price quotations, where observable. When observable price quotations are not available, fair value is determined based on cash flow models using yield curves and bond spreads as key inputs.
Corporate Equities
Equity securities and options are generally valued based on quoted prices from the exchange or market where traded. To the extent quoted prices are not available, fair values are generally derived using bid/ask spreads.
Loans

The fair value of loans is estimated using recently executed transactions and current price quotations, which are usually observable. In rare occurrences when observable pricing information is not available, fair value is generally determined based on cash flow models using discounted cash flow models, competitor comparable data and other valuation metrics.

Auction Rate Securities ("ARS")
As of March 31, 2024, the Company owned $2.7 million of ARS. This represents the amount that the Company holds as a result of ARS buybacks in previous years. 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. The fair value of ARS is particularly sensitive to movements in interest rates. However, an increase or decrease in short-term interest rates may or may not result in a higher or lower tender offer in the future or the tender offer price may not provide a reasonable estimate of the fair value of the securities. In such cases, other valuation techniques might be necessary. As of March 31, 2024, the Company had a valuation allowance totaling $0.2 million relating to ARS owned (which is included as a reduction to securities owned on the condensed consolidated balance sheet).
16

OPPENHEIMER HOLDINGS INC.
Notes to Condensed Consolidated Financial Statements (unaudited)

Investments    
In its role as general partner in certain hedge funds and private equity funds, the Company, through its subsidiaries, holds direct investments in such funds. The Company 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 March 31, 2024:
(Expressed in thousands)    
 Fair ValueUnfunded
Commitments		Redemption
Frequency		Redemption
Notice Period
Hedge funds (1)
$378 $— Quarterly - Annually
30 - 120 Days
Private equity funds (2)
4,527 1,619 N/AN/A
$4,905 $1,619 
(1) Includes investments in hedge funds and hedge fund of funds that pursue long/short, event-driven, and activist strategies.
(2) Includes private equity funds and private equity fund of funds with diversified portfolios focusing on but not limited to technology companies, venture capital and global natural resources.

The following table provides information about the Company's investments in Company-sponsored funds as of December 31, 2023:

(Expressed in thousands)    
 Fair ValueUnfunded
Commitments		Redemption
Frequency		Redemption
Notice Period
Hedge funds (1)
$446 $— Quarterly - Annually
30 - 120 Days
Private equity funds (2)
5,072 2,367 N/AN/A
$5,518 $2,367 
(1) Includes investments in hedge funds and hedge fund of funds that pursue long/short, event-driven, and activist strategies.
(2) Includes private equity funds and private equity fund of funds with diversified portfolios focusing on but not limited to technology companies, venture capital and global natural resources.

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

17

OPPENHEIMER HOLDINGS INC.
Notes to Condensed Consolidated Financial Statements (unaudited)

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

Assets and liabilities measured at fair value on a recurring basis as of March 31, 2024:
(Expressed in thousands)    
 
Fair Value Measurements as of March 31, 2024
 Level 1Level 2Level 3Total
Assets
Deposits with clearing organizations$35,225 $— $— $35,225 
Securities owned:
U.S. Treasury securities927,933 — — 927,933 
U.S. Agency securities— 8,419 — 8,419 
Corporate debt and other obligations— 11,707 — 11,707 
Mortgage and other asset-backed securities— 2,981 — 2,981 
Municipal obligations— 47,374 — 47,374 
Convertible bonds— 14,393 — 14,393 
Corporate equities28,319 — — 28,319 
Money markets— 250 — 250 
Auction rate securities— — 2,713 2,713 
Securities owned, at fair value956,252 85,124 2,713 1,044,089 
Investments (1)
1,715 16,445 — 18,160 
Loans(1)
— 2,485 — 2,485 
Derivative contracts:
TBAs— 185 — 185 
Derivative contracts, total— 185 — 185 
Total$993,192 $104,239 $2,713 $1,100,144 
Liabilities
Securities sold but not yet purchased:
U.S. Treasury securities$488,901 $— $— $488,901 
U.S. Agency securities— 1 — 1 
Corporate debt and other obligations— 10,577 — 10,577 
Mortgage and other asset-backed securities— — — — 
Convertible bonds— 11,687 — 11,687 
Corporate equities9,766 — — 9,766 
Securities sold but not yet purchased, at fair value498,667 22,265 — 520,932 
Derivative contracts:
Futures1,714 — — 1,714 
TBAs— 177 — 177 
Derivative contracts, total1,714 177 — 1,891 
Total$500,381 $22,442 $— $522,823 
(1) Included in other assets on the consolidated balance sheet.


18

OPPENHEIMER HOLDINGS INC.
Notes to Condensed Consolidated Financial Statements (unaudited)
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 1Level 2Level 3Total
Assets
Deposits with clearing organizations$34,789 $— $— $34,789 
Securities owned:
U.S. Treasury securities695,346 — — 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 equities27,170 — — 27,170 
Money markets5,400 217 — 5,617 
Auction rate securities— — 2,713 2,713 
Securities owned, at fair value727,916 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:
Futures2 — — 2 
TBAs— 11 — 11 
Derivative contracts, total2 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 equities13,427 — — 13,427 
Securities sold but not yet purchased, at fair value28,030 3,646 — 31,676 
Derivative contracts:
Futures735 — — 735 
TBAs— 2 — 2 
Derivative contracts, total735 2 — 737 
Total$28,765 $3,648 $— $32,413 
(1) Included in other assets on the consolidated balance sheet.    















19

OPPENHEIMER HOLDINGS INC.
Notes to Condensed Consolidated Financial Statements (unaudited)

The following tables present changes in Level 3 assets and liabilities measured at fair value on a recurring basis for the three and months ended March 31, 2024 and 2023:
(Expressed in thousands)
Level 3 Assets and Liabilities
For the Three Months Ended March 31, 2024
Total Realized
Beginningand UnrealizedPurchasesSales andTransfersEnding
BalanceGainand IssuancesSettlementsIn (Out)Balance
Assets
Auction rate securities (1)
$2,713 $— $— $— $— $2,713 
(1) Represents auction rate securities that failed in the auction rate market.

(Expressed in thousands)
Level 3 Assets and Liabilities
For the Three Months Ended March 31, 2023
Total Realized
Beginningand UnrealizedPurchasesSales andTransfersEnding
Balance
Losses
and IssuancesSettlementsIn (Out)Balance
Assets
Auction rate securities (1)
31,776 — — — — 31,776 
(1) Represents auction rate securities that failed in the auction rate market.

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.

20

OPPENHEIMER HOLDINGS INC.
Notes to Condensed Consolidated Financial Statements (unaudited)
Assets and liabilities not measured at fair value as of March 31, 2024:
(Expressed in thousands) Fair Value Measurement: Assets
 Carrying ValueLevel 1Level 2Level 3Total
Cash and cash equivalents$27,661 $27,661 $— $— $27,661 
Deposits with clearing organizations58,791 58,791 — — 58,791 
Receivable from brokers, dealers and clearing organizations: