XML 40 R17.htm IDEA: XBRL DOCUMENT

Fair value measurements

12 Months Ended

Dec. 31, 2024

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

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.

(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.

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.

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.

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.


(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.


(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.

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.

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

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

TBAs

Principal transactions revenue

2,933

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References

Reference 1: http://www.xbrl.org/2003/role/exampleRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 55
-Paragraph 107
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482078/820-10-55-107

Reference 2: http://www.xbrl.org/2003/role/exampleRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 55
-Paragraph 100
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482078/820-10-55-100

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)(3)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-2

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6A
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2E
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-2E

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6A
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6A
-Subparagraph (f)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6A
-Subparagraph (e)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6A
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-2

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (g)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482106/820-10-50-2

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 940
-SubTopic 820
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147478119/940-820-50-1

+ Details