Oppenheimer Holdings Inc.
10/30/2026 | Press release | Distributed by Public on 10/30/2026 06:19
Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
BACKGROUND
The condensed consolidated financial statements include the accounts of Oppenheimer Holdings Inc. and its consolidated subsidiaries (together, the "Company", "Firm", "Parent", "we", "our" or "us"). The Company's condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. The following discussion should be read in conjunction with the condensed consolidated financial statements and notes thereto which appear elsewhere in this Quarterly Report on Form 10-Q.
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 securities industry, including retail securities brokerage, institutional sales and trading, market-making, research, investment banking (both corporate and public finance), investment advisory and asset management services and trust services. Its principal subsidiaries are Oppenheimer & Co. Inc. ("Oppenheimer") and Oppenheimer Asset Management Inc. ("OAM"). As of September 30, 2026, we provided our services from 88 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 Company provides investment advisory services through OAM and Oppenheimer Investment Management LLC ("OIM") and Oppenheimer's financial advisor directed programs. At September 30, 2026, client assets under management ("AUM") totaled $59.6 billion. AUM includes the total market value of client investments in discretionary and non-discretionary advisory programs as well as the net asset value of private placements of alternative investments offered by and held by clients of the Company. Client assets under administration ("AUA") as of September 30, 2026 totaled $153.7 billion. AUA includes AUM and the other assets held for which the Company provides services. At September 30, 2026, the Company employed 3,009 employees, of whom 926 were financial advisors.
Outlook
We are focused on growing our wealth management business through strategic additions of experienced financial advisors in our existing branch system and employment of experienced money management personnel in our asset management business as well as deploying our capital for expansion through targeted acquisitions or new branch openings. We are also continuing to enhance our family office capabilities and related services to meet the evolving needs of high-net-worth and ultra-high-net-worth clients. In that regard, we have a plan under way to establish a platform in Switzerland for global high net worth clients interested in non-US custody and investment solutions. We are increasingly creating, sponsoring and investing in private market opportunities on our own behalf and on behalf of qualified clients as we believe these investments provide access to attractive long-term growth opportunities and expand the range of investment solutions available to our clients. We are also focused on opportunities in our capital markets businesses, including integrating new technology platforms to expand the suite of services offered to our clients and onboarding experienced personnel and/or small units that will improve our ability to attract institutional clients in both equities and fixed income without significantly raising our risk profile. In investment banking, we are committed to growing our footprint by adding experienced bankers in the U.S. and U.K. within our existing industry practices as well as new industry practices where we believe we can be successful. In addition, we are committed to training younger employees throughout the organization and provide various training programs. We find that we have overwhelming demand for entrance into each of these programs.
We continuously invest in and improve our technology platform to support client service and to remain competitive, while continuously managing expenses. We are also evaluating and selectively integrating artificial intelligence ("A.I.") solutions across our platform, with the goal of improving client service, increasing employee productivity and supporting our shared services, including our technology, risk management, accounting and compliance functions. Our approach is focused on leveraging these emerging technologies in a measured manner that aligns with our business model and regulatory obligations, while limiting the cyber risk that comes with these emerging technologies. We also continue to evaluate evolving market structure developments, including extended trading hours, developments in digital asset and tokenization frameworks and changing client expectations, and may selectively invest in our platform and capabilities where we believe such investments support our long-term strategic objectives.
The Company's long-term growth plan is to continue to expand existing offices by hiring experienced professionals as well as expand through the purchase of operating branch offices from other broker-dealers or the opening of new offices in attractive locations, including selectively in international markets, and to continue to grow and develop our existing wealth management, trading, investment banking, investment advisory and other businesses. We recognize employee work habits have changed in a
post-pandemic world. As a result, we are continuously reviewing our physical footprint on lease renewals, and in many cases reducing office size and configuration. We are committed to continuing to improve our capabilities to ensure compliance with industry regulations, support client service and expand our wealth management and capital markets capabilities. We recognize the importance of compliance with applicable regulatory requirements and are committed to performing rigorous and ongoing assessments of our compliance and risk management effort, and investing in people and programs, while providing a platform with first class investment programs and services.
The Company also reviews its full-service business model to determine the opportunities available to build or acquire closely related businesses in areas where others have shown some success. Equally important is the search for viable acquisition candidates. Our long-term intention is to pursue growth by acquisition where we can find a comfortable match in terms of corporate goals and personnel at a price that would provide our stockholders with incremental value. We review potential acquisition opportunities from time to time with the aim of fulfilling the Company's strategic goals, while evaluating and managing our existing businesses. In addition, the Company may from time to time make an acquisition of 100% of a business, acquire a controlling financial interest in a business, increase its ownership in existing minority investments, or make new minority private investments out of excess capital in allied or unrelated businesses with the goal of either syndicating the investment to eligible clients or retaining ownership because we believe such investments may offer attractive financial returns or contribute to the Company's strategic, technological, operational or infrastructure objectives.
The Interest Rate Environment and the U.S. Economy
The Federal Reserve maintained the federal funds target range at 3.50% to 3.75% throughout most of 2026 before increasing the target range by 25 basis points to 3.75% to 4.00% in September 2026. Recent Federal Reserve communications have reflected continued focus on inflationary pressures and the need to balance price stability with economic growth and overall market conditions. Recent reports indicate that inflation will continue to impact upcoming Federal Reserve decisions on interest rates. Monetary policy actions taken subsequent to September 30, 2026 may further affect interest rate expectations and market conditions.
Further changes to the federal funds rate may continue to impact our interest-based revenue. Lower rates reduce fees earned from FDIC-insured client deposits through our sweep program, though this impact may be partially offset if the cash sweep balances rise as clients encounter fewer attractive alternatives for those balances. Rate reductions also decrease the interest we charge on customer margin loans and earn on other interest-sensitive assets, negatively affecting earnings. These impacts may be partially offset by increased activity in other parts of our business, as has been the case historically. Conversely, higher rates generally increase revenue earned on client cash balances, margin lending activities and other interest-sensitive assets, although they may also increase funding costs and influence client asset allocation decisions.
Middle East Regional Conflict
Ongoing conflict in the Middle East continues to create geopolitical and economic uncertainty with potential implications for the global economy, global financial markets and our business operations. The conflict that began on October 7, 2023, when Hamas launched an attack on Israel, prompted Israeli military operations in Gaza. Despite periodic diplomatic efforts, the security environment in the region remains uncertain and subject to rapid change.
The increase in hostilities between Israel and the U.S., on the one hand, and Iran, on the other, has had a significant impact on the price of oil since February 2026 as well as refined products. Threats to the Strait of Hormuz and the Red Sea transits for oil are likely to continue to threaten the worldwide economy for the near future.
Regional tensions have contributed to uncertainty in energy markets, inflation expectations and investor sentiment and have at times increased volatility across financial markets, which may also influence monetary policy decisions and broader economic conditions. Continued or escalating hostilities could contribute to regional instability, further disrupt global trade routes and energy flows, intensify inflationary pressures, and adversely affect commodity prices, financial markets and economic activity. We continue to monitor developments closely and assess any potential impacts on client investments as well as our employees, operations and activities across the Company.
EXECUTIVE SUMMARY
The Firm's operating results for the third quarter reflected generally constructive market conditions, although earnings were disappointing due to lower retail trading activity, reduced investment banking volumes and higher expense associated with the increased value of stock appreciation rights resulting from the change in the Company's stock price during the quarter. Client asset levels grew, with assets under management ("AUM") ending the quarter at a record-high level, and assets under administration ("AUA") remaining above the prior year levels. However, trading activity moderated from the elevated levels experienced during the prior year and IPO activity slowed as issuers faced an uncertain reception, and investors navigated an environment marked by interest rate uncertainty, continued inflation concerns and the approaching U.S. midterm election cycle.
Our Wealth Management business benefited from record high AUM levels, which drove increased advisory fee revenues, although reduced retail trading activity resulted in lower transaction-based revenues. Our Capital Markets business was impacted by lower advisory and underwriting activity as corporate clients took a more cautious approach to strategic transactions and capital raising initiatives were largely unavailable to smaller issuers during the quarter, while pockets of volatility provided opportunities for certain of our trading businesses.
The Company ended the quarter with stockholders' equity reaching a record high and ample levels of liquidity and capital. Our financial strength provides us with the flexibility to continue investing in our businesses and our people while pursuing opportunities for growth across the Firm.
RESULTS OF OPERATIONS
The Company reported net income of $5.5 million or $0.52 basic earnings per share for the third quarter of 2026, compared with net income of $21.7 million or $2.06 basic earnings per share for the third quarter of 2025. Revenue for the third quarter of 2026 was $382.0 million, a decrease of 10.0%, compared with revenue of $424.4 million for the third quarter of 2025. Year to date revenue totaled $1,282.0 million, an increase of 10.0%, compared with $1,165.4 million for the same period in 2025. Net income for the nine months ended September 30, 2026 was $12.2 million or $1.14 basic earnings per share, compared with net income of $74.0 million or $7.05 basic earnings per share for the same period in 2025.
Third quarter 2026 results were impacted by a $21.0 million pre-tax expense associated with a long-term employee incentive compensation program for financial advisors that is directly tied to the OPY stock price, which increased by $12.42 per share of Class A Stock during the quarter (from $105.54 to $117.96), compared to an $8.14 per share increase (from $65.77 to $73.91) during the same period last year. The Company changed the program formula beginning in 2026 to reduce the number of grants awarded, although it will take several years for the impact of the revised program formula to be fully reflected. Adjusted net income (3), a non-GAAP measure which excludes the impact of this item, was $20.9 million or $1.96 adjusted basic earnings per share (3) for the third quarter of 2026, compared with $31.7 million or $3.01 adjusted basic earnings per share (3) for the third quarter of 2025. For the nine months ended September 30, 2026, adjusted net income (3), which also excludes the $70 million pre-tax legal accrual related to the settlement of the Company's "cash sweep" litigation recorded in the first quarter of 2026, was $114.1 million or $10.68 adjusted basic earnings per share (3), compared with $88.1 million or $8.39 adjusted basic earnings per share (3) for the same period in 2025. Management believes these non-GAAP measures provide supplemental insight into the Company's core operating performance.
| (Expressed in thousands, except Per Share Amounts or otherwise indicated) | |||||||||||||||||||||||
| 3Q-2026 | 3Q-2025 | Change | % Change | ||||||||||||||||||||
| Revenue | $ | 382,004 | $ | 424,438 | $ | (42,434) | (10.0) | ||||||||||||||||
| Compensation expenses | $ | 264,755 | $ | 290,222 | $ | (25,467) | (8.8) | ||||||||||||||||
| Non-compensation expenses | $ | 108,457 | $ | 102,581 | $ | 5,876 | 5.7 | ||||||||||||||||
| Pre-tax income | $ | 8,792 | $ | 31,635 | $ | (22,843) | (72.2) | ||||||||||||||||
| Income tax provision | $ | 3,388 | $ | 9,923 | $ | (6,535) | (65.9) | ||||||||||||||||
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Net income (1)
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$ | 5,459 | $ | 21,712 | $ | (16,253) | (74.9) | ||||||||||||||||
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Adjusted net income (non-GAAP) (1) (3)
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$ | 20,921 | $ | 31,679 | $ | (10,758) | (34.0) | ||||||||||||||||
|
Earnings per share (basic) (1)
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$ | 0.52 | $ | 2.06 | $ | (1.54) | (74.8) | ||||||||||||||||
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Earnings per share (diluted) (1)
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$ | 0.47 | $ | 1.90 | $ | (1.43) | (75.3) | ||||||||||||||||
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Adjusted earnings per share (basic) (non-GAAP) (1) (3)
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$ | 1.96 | $ | 3.01 | $ | (1.05) | (34.9) | ||||||||||||||||
|
Adjusted earnings per share (diluted) (non-GAAP) (1) (3)
|
$ | 1.81 | $ | 2.77 | $ | (0.96) | (34.7) | ||||||||||||||||
| Book value per share | $ | 92.53 | $ | 87.47 | $ | 5.06 | 5.8 | ||||||||||||||||
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Tangible book value per share (2)
|
$ | 75.89 | $ | 70.48 | $ | 5.41 | 7.7 | ||||||||||||||||
| Class A shares outstanding | 10,611,540 | 10,420,884 | 190,656 | 1.8 | |||||||||||||||||||
| AUA ($ billions) | $ | 153.7 | $ | 143.5 | $ | 10.2 | 7.1 | ||||||||||||||||
| AUM ($ billions) | $ | 59.6 | $ | 55.1 | $ | 4.5 | 8.2 | ||||||||||||||||
| (1) Attributable to Oppenheimer Holdings Inc. | |||||||||||||||||||||||
| (2) Represents book value less goodwill and intangible assets divided by number of shares outstanding | |||||||||||||||||||||||
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(3) Represents a non-GAAP measure; refer to the schedule on page 48 for additional explanation of non-GAAP financial measures and a reconciliation of adjusted net income and earnings per share to U.S. GAAP.
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Highlights
•Revenue decreased in the third quarter of 2026 primarily due to lower investment banking revenue and reduced transaction-based commissions and certain trading-related revenue, partially offset by higher advisory fees
•AUM and AUA remained above prior year levels at September 30, 2026, with AUM reaching a new record level
•Compensation expenses were lower compared with the prior year quarter primarily due to reduced incentive compensation accruals reflecting softer results, partially offset by higher stock appreciation rights expense resulting from a rise in the Company's share price
•Non-compensation expenses increased when compared with the prior year quarter, driven primarily by increases in communication and technology-related expenses
•Stockholders' equity (1) reached a record $991.1 million at September 30, 2026
BUSINESS SEGMENTS
The table below presents information about the reported revenue and pre-tax income (loss) of the Company's reportable business segments for the three and nine months ended September 30, 2026 and 2025:
| (Expressed in thousands) | |||||||||||||||||||||||||||||||||||
|
For the Three Months Ended September 30,
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For the Nine Months Ended September 30,
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| 2026 | 2025 | % Change | 2026 | 2025 | % Change | ||||||||||||||||||||||||||||||
| Revenue | |||||||||||||||||||||||||||||||||||
| Wealth Management | $ | 266,171 | $ | 259,726 | 2.5 | $ | 792,522 | $ | 748,133 | 5.9 | |||||||||||||||||||||||||
| Capital Markets | 114,032 | 162,145 | (29.7) | 482,317 | 408,387 | 18.1 | |||||||||||||||||||||||||||||
| Corporate/Other | 1,801 | 2,567 | (29.8) | 7,136 | 8,921 | (20.0) | |||||||||||||||||||||||||||||
| Total | $ | 382,004 | $ | 424,438 | (10.0) | $ | 1,281,975 | $ | 1,165,441 | 10.0 | |||||||||||||||||||||||||
| Pre-tax income (loss) | |||||||||||||||||||||||||||||||||||
| Wealth Management | $ | 55,631 | $ | 62,528 | (11.0) | $ | 154,839 | $ | 193,226 | (19.9) | |||||||||||||||||||||||||
| Capital Markets | (9,885) | 12,289 | * | 48,098 | 3,328 | 1,345.3 | |||||||||||||||||||||||||||||
| Corporate/Other | (36,954) | (43,182) | (14.4) | (181,701) | (91,333) | 98.9 | |||||||||||||||||||||||||||||
| Total | $ | 8,792 | $ | 31,635 | (72.2) | $ | 21,236 | $ | 105,221 | (79.8) | |||||||||||||||||||||||||
| * Not meaningful | |||||||||||||||||||||||||||||||||||
Wealth Management
Wealth Management reported revenue for the current quarter of $266.2 million, 2.5% higher compared with the prior year period. Pre-tax income was $55.6 million in the current quarter, a decrease of 11.0% compared with the prior year period. Financial advisor headcount at the end of the current quarter was 926, compared with 927 at the end of the third quarter of 2025.
| ('000s unless otherwise indicated) | |||||||||||||||||||||||
| 3Q-2026 | 3Q-2025 | Change | % Change | ||||||||||||||||||||
| Revenue | $ | 266,171 | $ | 259,726 | $ | 6,445 | 2.5 | ||||||||||||||||
| Commissions | $ | 53,271 | $ | 61,862 | $ | (8,591) | (13.9) | ||||||||||||||||
| Advisory fee revenue | $ | 154,937 | $ | 134,396 | $ | 20,541 | 15.3 | ||||||||||||||||
| Bank deposit sweep income | $ | 25,556 | $ | 28,349 | $ | (2,793) | (9.9) | ||||||||||||||||
| Interest | $ | 23,580 | $ | 22,381 | $ | 1,199 | 5.4 | ||||||||||||||||
| Other | $ | 8,827 | $ | 12,738 | $ | (3,911) | (30.7) | ||||||||||||||||
| Total expenses | $ | 210,540 | $ | 197,198 | $ | 13,342 | 6.8 | ||||||||||||||||
| Compensation | $ | 158,796 | $ | 148,978 | $ | 9,818 | 6.6 | ||||||||||||||||
| Non-compensation | $ | 51,744 | $ | 48,220 | $ | 3,524 | 7.3 | ||||||||||||||||
| Pre-tax income | $ | 55,631 | $ | 62,528 | $ | (6,897) | (11.0) | ||||||||||||||||
| Compensation ratio | 59.7 | % | 57.4 | % | 2.3 | % | 4.0 | ||||||||||||||||
| Non-compensation ratio | 19.4 | % | 18.6 | % | 0.8 | % | 4.3 | ||||||||||||||||
| Pre-tax margin | 20.9 | % | 24.1 | % | (3.2) | % | (13.3) | ||||||||||||||||
| AUA (billions) | $ | 153.7 | $ | 143.5 | $ | 10.2 | 7.1 | ||||||||||||||||
| AUM (billions) | $ | 59.6 | $ | 55.1 | $ | 4.5 | 8.2 | ||||||||||||||||
| Cash sweep balances (billions) | $ | 2.7 | $ | 2.8 | $ | (0.1) | (3.6) | ||||||||||||||||
•Retail commissions decreased 13.9% from the prior year period primarily due to lower retail trading activity
•Advisory fees increased 15.3% due to higher average AUM during the billing period
•Bank deposit sweep income decreased $2.8 million from a year ago due to lower average short-term interest rates compared with the prior year period
•Interest revenue increased 5.4% from a year ago primarily due to higher average margin loan balances
•Other revenue decreased $3.9 million from a year ago due primarily to lower market appreciation in the cash surrender value of Company-owned life insurance policies, which fluctuates based on changes in the fair value of the policies' underlying investments
•Compensation expenses increased 6.6% from the prior year period primarily due to higher share appreciation rights expense ($21.0 million, compared with $13.5 million in the prior year period) along with increased production-related expenses
•Non-compensation expenses increased 7.3% from the prior year period primarily due to increased communication and technology costs as well as higher interest expense
The following table provides a breakdown of the change in assets under management for the three months ended September 30, 2026:
| (Expressed in millions) | ||||||||||||||||||||||||||||||||
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For the Three Months Ended September 30, 2026
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| Fund Type | Beginning Balance | Contributions | Redemptions/Profit Distribution | Appreciation (Depreciation) | Ending Balance | |||||||||||||||||||||||||||
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Traditional (1)
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$ | 50,935 | $ | 1,646 | $ | (1,826) | $ | 193 | $ | 50,948 | ||||||||||||||||||||||
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Institutional fixed income (2)
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931 | 28 | (29) | (27) | 903 | |||||||||||||||||||||||||||
| Alternative investments: | ||||||||||||||||||||||||||||||||
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Hedge funds (3)
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5,386 | 61 | (131) | (443) | 4,873 | |||||||||||||||||||||||||||
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Private equity funds (4)
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1,925 | 220 | (65) | 209 | 2,289 | |||||||||||||||||||||||||||
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Portfolio enhancement program (5)
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266 | 9 | - | - | 275 | |||||||||||||||||||||||||||
| Other | 4 | 225 | - | 93 | 322 | |||||||||||||||||||||||||||
| $ | 59,447 | $ | 2,189 | $ | (2,051) | $ | 25 | $ | 59,610 | |||||||||||||||||||||||
(1)Traditional investments include third party advisory programs, Oppenheimer financial advisor managed and advisory programs, and Oppenheimer Asset Management taxable and tax-exempt portfolio management strategies.
(2)Institutional fixed income provides solutions to institutional investors including: Taft-Hartley Funds, Public Pension Funds, Corporate Pension Funds, and Foundations and Endowments.
(3)Hedge funds represent investments in strategies including long/short equity, global macro, event driven, merger arbitrage, multi-strategy and credit. They may be single manager or fund of funds.
(4)Private equity funds include portfolios focused on technology, infrastructure, real estate, natural resources and specific co-investment opportunities.
(5)The portfolio enhancement program sells uncovered, out-of-money puts and calls on the S&P 500 Index. The program is market neutral and uncorrelated to the index. Valuation is based on collateral requirements for a series of contracts representing the investment strategy.
Capital Markets
Capital Markets reported revenue for the current quarter of $114.0 million, 29.7% lower when compared with the prior year period. Pre-tax loss was $9.9 million compared with pre-tax income of $12.3 million in the prior year period.
| ('000s) | 3Q-2026 | 3Q-2025 | Change | % Change | |||||||||||||||||||
| Revenue | $ | 114,032 | $ | 162,145 | $ | (48,113) | (29.7) | ||||||||||||||||
| Investment Banking | $ | 29,782 | $ | 75,045 | $ | (45,263) | (60.3) | ||||||||||||||||
| Advisory fees | $ | 20,033 | $ | 21,865 | $ | (1,832) | (8.4) | ||||||||||||||||
| Equities underwriting | $ | 8,708 | $ | 48,326 | $ | (39,618) | (82.0) | ||||||||||||||||
| Fixed income underwriting | $ | 739 | $ | 3,818 | $ | (3,079) | (80.6) | ||||||||||||||||
| Other | $ | 302 | $ | 1,036 | $ | (734) | (70.8) | ||||||||||||||||
| Sales and Trading | $ | 83,129 | $ | 86,753 | $ | (3,624) | (4.2) | ||||||||||||||||
| Equities | $ | 50,645 | $ | 44,139 | $ | 6,506 | 14.7 | ||||||||||||||||
| Fixed income | $ | 32,484 | $ | 42,614 | $ | (10,130) | (23.8) | ||||||||||||||||
| Other | $ | 1,121 | $ | 347 | $ | 774 | 223.1 | ||||||||||||||||
| Total expenses | $ | 123,917 | $ | 149,856 | $ | (25,939) | (17.3) | ||||||||||||||||
| Compensation | $ | 79,628 | $ | 106,245 | $ | (26,617) | (25.1) | ||||||||||||||||
| Non-compensation | $ | 44,289 | $ | 43,611 | $ | 678 | 1.6 | ||||||||||||||||
| Pre-tax income (loss) | $ | (9,885) | $ | 12,289 | $ | (22,174) | * | ||||||||||||||||
| Compensation ratio | 69.8 | % | 65.5 | % | 4.3 | % | 6.6 | ||||||||||||||||
| Non-compensation ratio | 38.8 | % | 26.9 | % | 11.9 | % | 44.2 | ||||||||||||||||
| Pre-tax margin | (8.7) | % | 7.6 | % | (16.3) | % | (214.5) | ||||||||||||||||
| * Not meaningful | |||||||||||||||||||||||
•Advisory fees earned from investment banking activities decreased 8.4% from the prior year period primarily due to fewer M&A transactions
•Equities underwriting fees decreased 82.0% from the prior year period primarily due to fewer transactions and higher fees associated with completed transactions in the prior year period
•Fixed income underwriting revenue declined primarily due to lower contribution from municipal underwriting activity
•Equities sales and trading revenue increased 14.7% compared with the prior year period mostly due to higher trading volumes and growth in options-related commission revenue
•Fixed income sales and trading revenue decreased 23.8% from the prior year period primarily due to the impact of lower activity levels and the impact of falling valuations on inventory due to changes in the interest rate environment
•Compensation expenses decreased 25.1% from the prior year period largely due to lower production expenses and incentive compensation accruals
•Non-compensation expenses were flat compared with the prior year period
Impacts of Changes in Oppenheimer Holdings Inc.'s Class A Stock Price
Under the Oppenheimer Holdings Inc. Stock Appreciation Right Plan, the Company awards stock appreciation rights ("OARs") to certain financial advisors in the Wealth Management segment as part of their compensation package based on a formula that considers gross revenue production and length of service. These awards are granted annually in January with respect to the prior year's revenue contribution. The OARs vest five years from the grant date and settle in cash upon vesting. The awardee must be continuously employed throughout the period and on the payment date upon vesting. The program was developed many years ago as a retention program for valued employees.
Our OARs obligations are recognized as a liability at fair value with any period-over-period changes in fair value recognized in current compensation expense. We determine the fair value of OARs using the Black-Scholes model as of each reporting date. Key inputs and assumptions used to estimate the fair value include the period-end price of Class A Stock, expected term and the expected volatility of the Company's Class A Stock over the term of the award.
In recent periods, increases in both the market price and expected volatility of Class A Stock have significantly increased the fair value of outstanding OARs awards and the related compensation expense. The upward movement in the share price of the Company's Class A Stock over recent periods has been significantly above the Company's historical experience, and has resulted in a significant negative impact upon current earnings. Because OARs are remeasured at fair value each reporting period, future changes in the market price of Class A Stock, expected volatility and other valuation assumptions may result in potentially significant increases or decreases in future compensation expense
The liability related to our OARs obligations was $95.0 million and $49.3 million as of September 30, 2026 and December 31, 2025, respectively. In the third quarter of 2026, the Company included $21.0 million, compared with $13.5 million in the prior year period, in compensation expense in its consolidated income statements relating to OARs awards. In the nine months ended September 30, 2026, the Company included $68.1 million, compared with $19.0 million for the same period in the prior year, in compensation expense in its consolidated income statements relating to OARs awards. Management also evaluates operating performance excluding the impact of OARs-related compensation expense. See "Explanation of Non-GAAP Financial Measures" for further discussion and a reconciliation of adjusted results.
The following table summarizes the status of the Company's outstanding OARs awards as of September 30, 2026:
| Grant Date |
Number of OARs Outstanding |
Strike Price |
Remaining Contractual Life |
Fair value as of September 30, 2026
|
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| January 7, 2022 | 529,727 | $ | 49.57 | 98 days | $ | 68.73 | ||||||||||||||||||||
| January 6, 2023 | 455,140 | 45.33 | 1.3 years | 74.30 | ||||||||||||||||||||||
| January 5, 2024 | 439,650 | 40.78 | 2.3 years | 79.76 | ||||||||||||||||||||||
| January 6, 2025 | 597,730 | 64.48 | 3.3 years | 62.14 | ||||||||||||||||||||||
|
January 9, 2026 (1)
|
353,840 | 73.97 | 4.3 years | 58.94 | ||||||||||||||||||||||
| Total OARs outstanding | 2,376,087 | |||||||||||||||||||||||||
| Total weighted average values | $ | 54.52 | 3.0 years | $ | 68.72 | |||||||||||||||||||||
(1) In January 2026, management revised the methodology for determining OARs grants, which resulted in a lower number of OARs granted.
Explanation of Non-GAAP Financial Measures
The Company included certain non-GAAP financial measures within Management's Discussion and Analysis to supplement the U.S. Generally Accepted Accounting Principles ("GAAP") financial information. Adjusted results begin with information prepared in accordance with U.S. GAAP, and such results are adjusted to exclude, or include, certain items. Specifically, we included non-GAAP measures that adjust the Company's net income and earnings per share to exclude compensation expense related to the recurring, mark-to-market re-measurement of cash-settled, liability-based stock appreciation rights from net income and earnings per share because the period-to-period variability in this expense is largely driven by factors outside the Company's direct control, including changes in the fair value of and underlying volatility levels in Oppenheimer Holdings Inc.'s Class A common stock (OPY) price. Because these awards are remeasured each period, the amount of expense recognized primarily reflects movements in the Company's share price rather than operating decisions made by management or the underlying performance of the Company's businesses, and can vary significantly from period to period without a corresponding change in the Company's operations.
The non-GAAP measures presented also exclude the expense associated with the settlement of the class action "cash sweep" litigation in the first quarter of 2026 because management does not view this as ordinary-course litigation for the Company given the nature of the claims and the manner in which the action was brought.
The Company believes that these non-GAAP financial measures provide additional useful information for investors because they permit investors to view the Company's financial performance measures on a basis consistent with how management views the operating performance of the Company. These non-GAAP financial measures, when presented in conjunction with comparable U.S. GAAP measures, are also useful to investors when comparing the Company's results across different financial reporting periods on a consistent basis. However, these non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation from, or as a substitute for, or superior to, the analysis of the Company's results as reported under U.S. GAAP. Other companies may calculate similarly titled non-GAAP measures differently, which may limit their usefulness for comparative purposes. Investors are encouraged to review the reconciliation of these non-GAAP financial measures to their most directly comparable U.S. GAAP measures included in this Quarterly Report on Form 10-Q.
The following tables reconcile our non-GAAP financial measures to their respective U.S. GAAP measures.
Net Income Attributable to Oppenheimer Holdings Inc. and Earnings Per Share U.S. GAAP Reconciliation
Reconciliation of net income attributable to Oppenheimer Holdings Inc. to adjusted net income attributable to Oppenheimer Holdings Inc., reconciliation of basic earnings per share to adjusted basic earnings per share, and reconciliation of diluted earnings per share to adjusted diluted earnings per share are as follows:
| ('000s, except number of shares and per share amounts) | For the Three Months Ended |
For the Nine Months Ended
|
|||||||||||||||||||||
|
September 30, 2026
|
September 30, 2025
|
September 30, 2026
|
September 30, 2025
|
||||||||||||||||||||
| Net income attributable to Oppenheimer Holdings Inc. (U.S. GAAP) | $ | 5,459 | $ | 21,712 | $ | 12,232 | $ | 74,041 | |||||||||||||||
| Non-GAAP adjustments: | |||||||||||||||||||||||
| Class action sweep litigation settlement | - | - | 70,000 | - | |||||||||||||||||||
|
Liability-based stock appreciation rights expense (OARs)
|
20,963 | 13,474 | 68,142 | 19,013 | |||||||||||||||||||
|
Tax impact of non-GAAP adjustments (1)
|
(5,501) | (3,507) | (36,248) | (4,949) | |||||||||||||||||||
| Adjusted net income attributable to Oppenheimer Holdings Inc. (Non-GAAP) | $ | 20,921 | $ | 31,679 | $ | 114,126 | $ | 88,105 | |||||||||||||||
| Basic earnings per share (U.S. GAAP) | $ | 0.52 | $ | 2.06 | $ | 1.14 | $ | 7.05 | |||||||||||||||
| Impact of non-GAAP adjustments | 1.44 | 0.95 | 9.54 | 1.34 | |||||||||||||||||||
| Adjusted basic earnings per share (Non-GAAP) | $ | 1.96 | $ | 3.01 | $ | 10.68 | $ | 8.39 | |||||||||||||||
| Diluted earnings per share (U.S. GAAP) | $ | 0.47 | $ | 1.90 | $ | 1.07 | $ | 6.53 | |||||||||||||||
| Impact of non-GAAP adjustments | 1.34 | 0.87 | 8.90 | 1.23 | |||||||||||||||||||
| Adjusted diluted earnings per share (Non-GAAP) | $ | 1.81 | $ | 2.77 | $ | 9.97 | $ | 7.76 | |||||||||||||||
| Weighted average shares outstanding | |||||||||||||||||||||||
| Basic (U.S. GAAP and Non-GAAP) | 10,709,025 | 10,519,722 | 10,686,888 | 10,502,101 | |||||||||||||||||||
| Diluted (U.S. GAAP and Non-GAAP) | 11,586,145 | 11,450,346 | 11,450,030 | 11,349,801 | |||||||||||||||||||
(1) The tax impact is estimated using the statutory rates for the applicable entities
CRITICAL ACCOUNTING POLICIES
The Company's condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. Reference is also made to the Company's consolidated financial statements and notes thereto found in its Annual Report on Form 10-K for the year ended December 31, 2025.
The Company's accounting policies are important to understanding and interpreting its financial condition and results of operations. The significant accounting policies used in the preparation of the Company's condensed consolidated financial statements are summarized in Note 2 to those statements and the notes thereto found in the Company's Annual Report on Form 10-K for the year ended December 31, 2025. Certain of those policies are considered to be particularly important to the presentation of the Company's financial results because they require management to make difficult, complex or subjective judgments, often as a result of matters that are inherently uncertain.
During the nine months ended September 30, 2026, there were no material changes to the Company's critical accounting estimates and assumptions from those disclosed in Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" of the Company's Annual Report on Form 10-K for the year ended December 31, 2025.
New Accounting Pronouncements
The following Accounting Standards Update ("ASU") issued by the Financial Accounting Standards Board ("FASB") has not yet been adopted by the Company:
ASU 2024-03 - Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses
The FASB issued this ASU in November of 2024 that will require public business entities to disclose specified information about certain costs and expenses, including employee compensation, depreciation and intangible asset amortization at each interim and annual reporting period. The new guidance, which becomes effective for the Company beginning in 2027, will not have an impact on our financial position or results of operations because it requires only additional disclosures.
LIQUIDITY AND CAPITAL RESOURCES
At September 30, 2026, total assets increased by 9.8% from December 31, 2025. The Company satisfies its need for financing from internally generated funds and collateralized and uncollateralized borrowings, consisting primarily of bank call loans, stock loans, and uncommitted lines of credit. We finance our trading in government securities through the use of securities sold under repurchase agreements. Oppenheimer has uncommitted arrangements with banks for borrowings on a fully collateralized basis. The amount of Oppenheimer's bank borrowings fluctuates in response to changes in the level of the Company's securities inventories and customer margin debt, changes in notes receivable from employees, investment in furniture, equipment and leasehold improvements, and changes in stock loan balances and financing through repurchase agreements. At September 30, 2026, the Company had an outstanding bank call loan balance of $222.3 million compared to $76.8 million at December 31, 2025. The Company also has some availability of uncommitted short-term bank financing on an unsecured basis.
The Company's overseas subsidiaries, Oppenheimer Europe Ltd. and Oppenheimer Investments Asia Limited, are subject to local regulatory capital requirements that restrict our ability to utilize their capital for other purposes. The regulatory capital requirements for Oppenheimer Europe Ltd. and Oppenheimer Investments Asia Limited were $8.5 million and $382,320, respectively, at September 30, 2026. The liquid assets at Oppenheimer Europe Ltd. are primarily comprised of cash deposits in bank accounts. The liquid assets at Oppenheimer Investments Asia Limited are primarily comprised of investments in U.S. Treasuries and cash deposits in bank accounts. Any transfer of these liquid assets from Oppenheimer Europe Ltd. and Oppenheimer Investments Asia Limited to the Company or its other subsidiaries would be limited by regulatory capital requirements.
The Company permanently reinvests eligible earnings of its foreign subsidiaries and, accordingly, does not accrue any U.S. income taxes that would arise if these earnings were repatriated. The unrecognized deferred tax liability associated with the outside basis difference of its foreign subsidiaries is estimated at $4.3 million for those subsidiaries. We have continued to reinvest permanently the excess earnings of Oppenheimer Israel (OPCO) Ltd. in its own business and in the businesses in
Europe and Asia to support business initiatives in those regions. We will continue to review our historical treatment of these earnings to determine whether our historical practice will continue or whether a change is warranted.
Liquidity
For the most part, the Company's assets consist of cash and cash equivalents and assets that it can readily convert into cash. The receivables from brokers, dealers and clearing organizations represent deposits for securities borrowed transactions, margin deposits and current transactions awaiting settlement. The receivables from customers represent margin balances and amounts due on transactions awaiting settlement. Our receivables are, for the most part, collateralized by marketable securities. Our collateral maintenance policies and procedures are designed to limit our exposure to credit risk. Securities owned are mainly comprised of actively traded readily marketable securities. We issued $4.2 million in forgivable notes, net of notes forgiven or written off (which are inherently illiquid) to employees during the three months ended September 30, 2026 ($5.5 million for the three months ended September 30, 2025) as upfront or backend inducements to commence or continue employment as the case may be. The amount of funds allocated to such inducements will vary with hiring activity and retention initiatives.
We satisfy our liquidity needs through internally generated funds and a diversified funding strategy that includes collateralized and uncollateralized bank borrowings, securities lending arrangements and repurchase agreements. Bank borrowings are uncommitted in nature and, in most cases, collateralized by firm and customer securities.
We obtain short-term borrowings primarily through bank call loans, securities loaned and repurchase transactions. Bank call loans are generally payable on demand, uncommitted in nature and bear interest at various rates. At September 30, 2026, the Company had $222.3 million of bank call loans ($76.8 million at December 31, 2025). The average daily bank loan balance outstanding for the three and nine months ended September 30, 2026 was $221.9 million and $189.8 million, respectively ($235.6 million and $279.4 million for the three and nine months ended September 30, 2025, respectively). The largest daily bank loan balance outstanding for the three and nine months ended September 30, 2026 was $447.2 million ($373.7 million and $491.7 million for the three and nine months ended September 30, 2025, respectively).
In connection with both its trading and brokerage activities, Oppenheimer borrows securities to cover short sales and to complete transactions in which customers have failed to deliver securities by the required settlement date and lends securities to other brokers and dealers for similar purposes. Oppenheimer earns interest on its cash collateral provided and pays interest on the cash collateral received less a rebate earned for lending securities.
At September 30, 2026, securities loan balances totaled $539.7 million ($370.3 million at December 31, 2025 and $286.7 million at September 30, 2025). The average daily securities loan balances outstanding for the three and nine months ended September 30, 2026 were $544.9 million and $467.3 million ($379.8 million and $384.3 million for the three and nine months ended September 30, 2025, respectively). The largest daily stock loan balances for the three and nine months ended September 30, 2026 were $615.9 million ($435.8 million and $502.9 million for the three and nine months ended September 30, 2025, respectively).
We finance our government trading operations through the use of securities purchased under reverse repurchase agreements and securities sold under agreements to repurchase. Repurchase and reverse repurchase agreements, primarily involving government and agency securities, are carried at amounts at which securities subsequently will be resold or reacquired as specified in the respective agreements and include accrued interest.
Repurchase and reverse repurchase agreements are presented on a net-by-counterparty basis, when the repurchase 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 and reverse repurchase agreements exist in "book entry" form and certain other requirements are met.
At September 30, 2026, the gross balances of reverse repurchase agreements and repurchase agreements were $130.5 million and $1,152.1 million, respectively. The following table presents the average daily balance and the largest outstanding balance of reverse repurchase agreements and repurchase agreements on a gross basis for the three and nine months ended September 30, 2026 and September 30, 2025.
| (Expressed in millions) | |||||||||||||||||||||||
|
For the Three Months Ended
September 30,
|
For the Nine Months Ended
September 30,
|
||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
| Average daily balance | |||||||||||||||||||||||
| Reverse repurchase agreements | $ | 276.8 | $ | 233.6 | $ | 317.0 | $ | 339.3 | |||||||||||||||
| Repurchase agreements | 1,214.4 | 1,143.6 | 1,201.2 | 1,068.0 | |||||||||||||||||||
| Largest outstanding balance | |||||||||||||||||||||||
| Reverse repurchase agreements | $ | 565.7 | $ | 466.9 | $ | 734.4 | $ | 658.5 | |||||||||||||||
| Repurchase agreements | 1,297.1 | 1,405.8 | 1,325.4 | 1,405.8 | |||||||||||||||||||
Liquidity Management
We manage our need for liquidity on a daily basis to ensure compliance with regulatory requirements. Our liquidity needs may be affected by market conditions, increased inventory positions or trading activity, business expansion or contraction, clearinghouse margin requirements and other unanticipated occurrences. In the event that existing financial resources do not satisfy our liquidity needs, we may have to seek additional external financing. The availability of such additional external financing may depend on market factors outside our control. Management believes that the Company maintained sufficient liquidity throughout the period and remains well positioned to meet its regulatory, operational and contractual obligations.
We have company-owned life insurance policies which are utilized to fund certain non-qualified deferred compensation plans. A portion of the assets underlying these policies are invested in mutual funds that match those offered within the deferred compensation plans. As such, increases in deferred compensation costs recognized within Compensation and related expenses may be offset to a degree by increases in the cash surrender value of the Company-owned life insurance policies recognized within Other revenue and vice versa. Certain policies which could provide additional liquidity if needed had a cash surrender value of $116.2 million as of September 30, 2026.
We regularly review our sources of liquidity and financing and conduct internal stress analysis to determine the impact on the Company of events that could remove sources of liquidity or financing and to plan actions the Company could take in the case of such an eventuality. Our reviews have resulted in a contingency funding plan that we believe would result in a reduction of assets through liquidation that would significantly reduce the Company's need for external financing.
Our primary long-term cash requirements include $171.4 million of operating lease obligations. The total cash requirement for operating lease obligations is estimated to be approximately $11.2 million for the remainder of 2026. Subsequent to September 30, 2026, the Company completed a portion of an additional investment in a financial technologies company in which it currently holds a noncontrolling ownership interest. The investment is in a company which provides substantial amounts of operating software utilized in Oppenheimer's clearing operations. It is believed that the business offers substantial growth potential by providing essential software to banks and broker-dealers at compelling value.
Under the transaction structure, in October 2026, the Company invested C$1.0 million ($0.7 million) directly in the investee through the purchase of newly issued shares and purchased approximately C$7.3 million ($5.2 million) of shares directly from certain existing shareholders in connection with a general offer to provide liquidity to long-term holders. The investee acted as the Company's agent in administering the purchases from existing shareholders. A second closing is expected to occur in January 2027, pursuant to which the Company expects to purchase approximately C$338,000 of additional shares directly from existing shareholders, funded using available cash resources. The transactions will result in a significant increase in the Company's ownership interest, to approximately 44%. Depending on the ultimate ownership interest acquired and related governance rights, completion of the transactions could result in consolidation of the investee. The ultimate amount invested and resulting ownership interest remain subject to completion of the second closing and other applicable conditions. Based on the Company's current liquidity position, available cash resources and capital levels, management does not expect completion of the remaining transaction to have a material adverse effect on the Company's liquidity, capital resources or financial condition.
Corporate Headquarters
In October 2026, the Company elected not to exercise its renewal option for its existing corporate headquarters at 85 Broad Street in New York City and will therefore need to relocate its headquarters upon expiration of the existing lease in February 2028. The Company is currently in advanced negotiations for a lease for a new corporate headquarters in New York City. The proposed premises are expected to have a smaller footprint than the Company's existing headquarters, with occupancy costs expected to be generally consistent with those of the existing headquarters. If an agreement is reached, the Company currently expects to occupy the new premises in phases beginning in 2028.
The potential lease remains subject to the negotiation and execution of definitive documentation, and there can be no assurance that a lease will be entered into on the terms currently contemplated or at all. If completed, the relocation is expected to require significant capital expenditures and result in the recognition of a material right-of-use asset and corresponding lease liability. The Company expects to fund its anticipated capital requirements from existing liquidity and cash generated from operations and does not currently expect the potential lease to have a material adverse effect on its liquidity or capital resources.
Funding Risk
| (Expressed in thousands) | |||||||||||
|
For the Nine Months Ended September 30,
|
|||||||||||
| 2026 | 2025 | ||||||||||
| Cash (used in)/provided by operating activities (*) | $ | (112,652) | $ | 11,752 | |||||||
| Cash used in investing activities | (3,492) | (618) | |||||||||
| Cash provided by/(used in) financing activities | 115,746 | (5,996) | |||||||||
| Net (decrease)/increase in cash and cash equivalents | $ | (398) | $ | 5,138 | |||||||
(*) Includes the $70 million payment made in June of 2026 associated with the Company's settlement of the "cash sweep" class action litigation announced on April 24, 2026
Management believes that funds from operations, combined with our capital base and available credit facilities, are sufficient for our liquidity needs for the foreseeable future. Under some circumstances, banks including those on whom we rely may back away from providing funding to the securities industry. Such a development might impact our ability to finance our day-to-day activities or increase the costs to acquire funding. We may or may not be able to pass such increased funding costs on to our clients.
During periods of high volatility, we may see increased calls for deposits of collateral to offset perceived risk between the Company's settlement liability to industry clearinghouses such as the Depository Trust Company ("DTC"), Options Clearing Corporation ("OCC") and National Securities Clearing Corp. ("NSCC") as well as more stringent collateral arrangements with our bank lenders. The U.S. securities industry currently operates under a T+1 settlement cycle, which has generally reduced settlement exposures and related operational risks. All such requirements have been and will be met in the ordinary course with available collateral or short-term borrowings.
CYBERSECURITY
Cybersecurity presents significant challenges to the business community in general, including to the financial services industry. Increasingly, bad actors, both domestic and international, attempt to steal personal data and/or interrupt the normal functioning of businesses through accessing individuals' and companies' files and equipment connected to the internet. The arrival of A.I. has made it easier for such actors to launch and successfully effectuate their desire to impact business operations or steal monetary assets. Recent incidents have reflected the increasing sophistication of intruders and their intent to steal personally identifiable information as well as funds and securities. These intruders sometimes use instructions that are seemingly from authorized parties but, in fact are from entities intent on attempting to steal. In other instances, these intruders attempt to bypass normal safeguards and disrupt or steal significant amounts of information and then either release it to the Internet or hold it for ransom. Regulators are increasingly requiring companies to provide heightened levels of defense. The Company maintains processes and systems with an aim to preventing any such attack from disrupting its services to clients as well as to prevent any loss of client or Company funds or data concerning its clients, their financial affairs, as well as Company-privileged information.
Our management is actively involved in the oversight of our cybersecurity risk management program. We have devoted significant financial and personnel resources to implement and maintain security measures to meet regulatory requirements and customer expectations. We have incorporated cybersecurity processes to assess, identify and manage risks from cybersecurity threats into our overall risk assessment process. The Company maintains a cybersecurity program that is designed to identify, protect from, detect, respond to, and recover from cybersecurity threats and risks, and protect the confidentiality, integrity, and availability of its information systems, including the information residing on such systems. The National Institute of Standards and Technology Cybersecurity Framework helps the Company inform its cybersecurity agenda and prioritize its cybersecurity activities. The Company takes a risk-based approach to cybersecurity, which begins with the identification and evaluation of cybersecurity risks or threats that could affect the Company's operations, finances, legal or regulatory compliance, or reputation. The Company has processes in place for assessing, identifying and managing material risks from cybersecurity threats along with risk assessment procedures designed to allow such processes to remain responsive to emerging risks. Our processes include, but are not limited to, the following:
•we engage third-party cybersecurity firms and tools to assist with network monitoring, endpoint protection, vulnerability assessments and penetration testing;
•we engage cyber security consultants and auditors to perform tabletop exercises and evaluate our cyber processes including an assessment of our incident response procedures. Identified risks are formally tracked until mitigated or eliminated;
•we perform regular scanning of our systems to identify and resolve critical vulnerabilities;
•we provide periodic training and testing, including phishing tests, to help our employees understand cybersecurity risks and their responsibility in mitigating those risks; and
•we insure against potential losses from cyber incidents by maintaining cybersecurity insurance.
We have a written incident response plan that identifies the steps to be taken in response to a cybersecurity incident that includes investigation, escalation and remediation provisions. The Incident Response Plan includes processes for reporting and escalating cybersecurity incidents to senior management, regulators and criminal enforcement to the extent warranted.
We have processes to evaluate third party service providers and vendors that have access to sensitive systems and Company and customer data, which includes the use of cybersecurity questionnaires and due diligence procedures such as assessments of that service provider's cybersecurity posture.
Management's Role
Management has implemented risk management structures, policies and procedures, and manages our risk exposure on a day-to-day basis. The Company has a dedicated cybersecurity organization within its technology department that focuses on current and emerging cybersecurity matters. The Company's cybersecurity function is led by the Company's Chief Information Officer ("CIO") and the Company's Chief Information Security Officer ("CISO"), who reports to the Company's CIO. The CIO and his direct reports, including the CISO, discuss action items related to risks at a standing monthly meeting. Risk reporting is provided at monthly meetings of the Company's cross-business Cybersecurity Committee and periodic presentations to the Company's Risk Management Committee, at which many members of the Company's senior management are present.
The CEO meets regularly with the CIO to discuss cybersecurity threats and existing and potentially new technology systems including those related to cybersecurity. The CIO and CISO have a standing monthly meeting with the CEO and General Counsel to discuss potential vulnerabilities in the cyber environment.
Board Oversight
The Board of Directors, both directly and through the Audit Committee, oversees management's responsibility of ensuring proper functioning of our cybersecurity risk management program. In particular, the Audit Committee assists the Board in its oversight of management's responsibility to assess, manage and mitigate cybersecurity risks. Each of the Board of Directors and Audit Committee includes a member with significant cybersecurity experience. The Audit Committee receives a cybersecurity update at each regular meeting of the Board covering cybersecurity risks, cybersecurity staffing and staff development including certifications and training. These updates are given either in person by the CIO and CISO or in written presentations created by them.
As of the date of this filing, the Company has not identified any cybersecurity threats that have materially affected or are reasonably anticipated to have a material effect on the Company's business strategy, results of operations or financial condition.
Although the Company has not experienced cybersecurity incidents that are individually, or in the aggregate, material, the Company has experienced cyberattacks in the past, which the Company believes have thus far been mitigated by preventative, detective, and responsive measures put in place by the Company. Given the continuing reports of cyber incidents in general, we believe that the Company will most likely continue to be a target of cybersecurity attacks by bad actors.
For additional information on how risks from cybersecurity threats may adversely affect the Company, see "Item 1A. Risk Factors-Risks Related to Our Business" in the Company's Annual Report on Form 10-K for the year ended December 31, 2025.
REGULATORY AND TAXATION MATTERS AND DEVELOPMENTS
See the discussion of the regulatory environment in which we operate and the impact on our operations of certain rules and regulations in Item 1 "Business - Regulation" in the Company's Annual Report on Form 10-K for the year ended December 31, 2025 for additional information.
Regulatory Capital Requirements
Oppenheimer and many of its affiliates are each subject to various regulatory capital requirements. As of September 30, 2026, all of our active regulated domestic and international subsidiaries had net capital in excess of minimum requirements. See Note 14 to the condensed consolidated financial statements in Item 1 for further information on regulatory capital requirements.
Limitations on Tax Deductions for Compensation Paid to Certain Executives and Officers
Internal Revenue Code Section 162(m) ("Section 162(m)") currently limits a public company's tax deduction for compensation above $1 million paid to "covered employees," which includes the Chief Executive Officer, Chief Financial Officer and the next three highest paid officers. Amendments to Section 162(m) included in the American Rescue Plan Act of 2021, which become effective on January 1, 2027, expand the definition of "covered employees" to include five additional highly compensated employees who are not otherwise covered under the existing rules.
If there are no further changes or amendments to Section 162(m), or if the definition of "covered employees" is further expanded, we expect the Company's operating results to be adversely impacted due to anticipated increases in the Company's income tax expense and effective tax rate. Based on our current assessment of compensation arrangements and employee populations that would be subject to the expanded definition of covered employees, had the amendments been effective during fiscal 2025, we estimate that the resulting reduction in deductible compensation would have increased income tax expense by approximately $7 million. The actual impact beginning in 2027 will depend on future compensation levels, business performance, equity award vesting outcomes and other factors, and therefore could differ materially from this estimate.
Frequency of Reporting Requirements for Public Companies
The SEC has proposed rulemaking that would permit public companies, in certain circumstances, to file semiannual reports in lieu of quarterly reports on Form 10-Q. The proposal is intended to provide issuers, including the Company, with greater flexibility in determining the frequency of interim reporting. If adopted, the proposed changes could affect the timing and content of the Company's periodic reporting obligations. The Company currently intends to continue reporting results on a quarterly basis subject to its review of any final rule and any related regulatory requirements.
Current Filer Status and Proposed SEC Amendments to Issuer Status and Disclosure Requirements
As of the June 30, 2026 measurement date for determining SEC filer status, the Company's public float exceeded the $700 million threshold for large accelerated filer classification for the first time. As a result, under currently applicable SEC rules, the Company would be deemed a large accelerated filer for purposes of its Annual Report on Form 10-K for the fiscal year ending December 31, 2026, to be filed in February 2027. Compared to accelerated filer status, large accelerated filer status is subject to more stringent reporting requirements, including a shorter deadline for the filing of the annual report on Form 10-K.
On May 19, 2026, the SEC proposed amendments to the definitions of filer status and related disclosure requirements, which, if adopted, could affect the classification of certain issuers, including the Company, as well as the timing, content and extent of their periodic reporting and proxy-related disclosures. Depending on the scope and timing of any final rules, these amendments could alter the thresholds or criteria applicable to the Company and, as a result, may change the Company's filer status and related reporting obligations that would otherwise apply under current rules. The proposed amendments could result in
modifications to the Company's financial reporting requirements, internal control over financial reporting obligations and the scope and timing of proxy disclosures. As a result, such changes could impact compliance costs, resource allocation and reporting processes. As the rulemaking process remains ongoing, the ultimate impact of any final rules on the Company will depend on the scope and timing of adoption. The Company continues to monitor developments and assess the potential implications for its reporting and compliance processes.
FACTORS AFFECTING "FORWARD-LOOKING STATEMENTS"
From time to time, the Company may publish or make oral statements that constitute "forward-looking statements" under the Private Securities Litigation Reform Act of 1995 which provides a safe harbor for forward-looking statements. These forward-looking statements may relate to such matters as anticipated financial performance, future revenue, earnings, liabilities or expenses, business prospects, projected ventures, new products, anticipated market performance, and similar matters. The Company cautions readers that a variety of factors could cause the Company's actual results to differ materially from the anticipated results or other expectations expressed in the Company's forward-looking statements. These risks and uncertainties, many of which are beyond the Company's control, include, but are not limited to: (i) transaction volume in the securities markets, including the level of retail trading activity and investment banking, underwriting and advisory activity, (ii) the volatility of the securities markets and changes in the value of client assets under management and administration, (iii) changes in interest rates, (iv) changes in regulatory requirements or taxation policy that could affect the cost and method of doing business, (v) general economic conditions, both domestic and international, including inflation, recession, stagflation, and changes in consumer confidence and spending, (vi) competition from existing financial institutions, new entrants and other participants in the securities markets and financial services industry, (vii) potential cybersecurity threats and attacks, (viii) legal developments affecting the litigation experience of the securities industry and the Company, (ix) changes in foreign, federal and state tax laws that could affect the popularity of products sold by the Company or impose taxes on securities transactions, (x) the adoption and implementation of the SEC's "Regulation Best Interest" and other regulations adopted in recent years, (xi) war, terrorist acts, geopolitical conflicts, political unrest and international sanctions, including developments in the Middle East, the conflict between Russia and Ukraine, disruptions to global energy markets, trade routes and supply chains, and related impacts on commodity prices, inflation and financial markets, (xii) the Company's ability to achieve its business plan and to attract and retain key personnel, including financial advisors, (xiii) the effects of the economy on the Company's ability to find and maintain financing options and liquidity, (xiv) credit, operational, legal and regulatory risks, (xv) risks related to foreign operations, (xvi) the effect of technological innovation, evolving market structure developments and changes in client expectations on the financial services industry and securities business, including risks associated with the development, adoption and use of artificial intelligence, digital assets and tokenization initiatives, (xvii) risks related to election results, Congressional gridlock, political and social unrest, government shutdowns and investigations, government spending, inflation, immigration, tariffs, trade policy changes and trade disputes, bank failures, changes in or uncertainty surrounding regulation, and the potential for default by the U.S. government on the nation's debt, (xviii) risks related to changes in capital requirements under international standards that may cause banks to back away from providing funding to the securities industry, (xix) economic, market, political and social impact of, and uncertainty relating to, any catastrophic events, including pandemics, epidemics or other outbreaks of disease, climate-related risks such as natural disasters and extreme weather events, and (xx) volatility in the price of the Company's Class A Stock, which directly affects compensation expense associated with the Company's liability-based stock appreciation rights and other stock price-linked incentive compensation programs, and the timing and extent to which changes to such programs reduce that expense. There can be no assurance that the Company has correctly or completely identified and assessed all of the factors affecting the Company's business. See "Risk Factors" in Part I, Item 1A of the Company's Annual Report on Form 10-K for the year ended December 31, 2025.
Oppenheimer Holdings Inc. published this content on October 30, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on October 30, 2026 at 12:19 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]