OPY 10-K & 10-Q changes, risk factors and insider trading

Our results of operations have been, in the past, and/or may, in the future, be materially affected by market fluctuations due to global financial markets, economic conditions, sanctions, weather events, public health epidemics, changes to global trade policies, tax legislation and tariffstariffs, bank failures and other factors, including the level and volatility of equity, fixed income and commodity prices, the level and term structure of interest rates, inflation and currency values, and the level of other market indices. The results of our Capital Markets business segment, particularly results relating to our involvement in primary and secondary markets for all types of financial products, are subject to substantial market fluctuations due to a variety of factors that we cannot control or predict with great certainty. These fluctuations impact results by causing variations in business flows and activity and in the fair value of securities and other financial products. Fluctuations also occur due to the level of global market activity, which, among other things, affects the size, number and timing of investment banking client assignments and transactions and the realization of returns from our principal investments. The Company may incur losses and be subject to reputational harm to the extent that, for any reason, it is unable to sell at anticipated price levels securities it purchased as an underwriter. As an underwriter, the Company is subject to heightened standards regarding liability for material misstatements or omissions in prospectuses and other offering documents relating to offerings it underwrites. Any such misstatement or omission could subject the Company to enforcement action by the SEC and claims of investors, either of which could have a material adverse impact on the Company's results of operations, financial condition and reputation. As a market maker and dealer, the Company may own large positions in specific securities, and these undiversified holdings concentrate the risk of market fluctuations and may result in greater losses than would be the case if the Company's holdings were more diversified.

During periods of unfavorable market or economic conditions, the level of individual investor participation in the global markets, as well as the level of client assets, may also decrease, which would negatively impact the results of our Wealth Management business segment. Substantial market fluctuations could also cause variations in the value of our investments in our funds, the flow of investment capital into or from Assets Under Management ("AUM"), and the way customers allocate capital among money market, equity, fixed income or other investment alternatives, which could negatively impact our Wealth Management business segment. Additionally, increases in the fair value of OPY Class A non-voting common stock will likelygenerally result in higher compensation expense associated with the Oppenheimer stock appreciation rights (“OARs”) offered to certain employees as part of their compensation package.

Changes in interest rates (especially if such changes are rapid), sustained low or high interest rates or uncertainty regarding the future direction of interest rates, may create a less favorable environment for certain of the Company's businesses, particularly its fixed income business, resulting in reduced business volume and reduced revenue. Additionally, decreases in interest rates will likely result in a reduction in interest revenue available to the Company through its margin lending and also reduced profit contributions from cash sweep products such as the FDIC-insured Bank Deposit program. If interest rates continue to decrease in immediate future periods, and/or balances within our cash sweep products decrease, the Company's profitability will be negatively impacted.

Furthermore, we also incur credit and certain concentration risk in our Wealth Management business segment lending to mainly individual investors related to margin loans collateralized by securities. While Oppenheimer limits customer loans to an amount not greater than 65% of the fair value of the securities, our two largest customer accounts collectively comprise approximately 52%47.8% of the margin loans as of December 31, 2024.2025. Both accounts are significantly over collateralized.

Our liquidity could be negatively affected by our inability to raise funding in the long-term or short-term debt capital markets, our inability to access the secured lending markets, or unanticipated outflows of cash or collateral by customers or clients. We have a contingency funding plan that would guide our actions in the event the Company’s liquidity sources used in the ordinary course of business are disrupted. However, factors that we cannot control, such as disruption of the financial markets or negative views about the financial services industry generally, including concerns regarding fiscal matters in the U.S. and other geographic areas, could impair our ability to raise funding, including from our contingent funding sources. In addition, our ability to raise funding could be impaired if investors or lenders develop a negative perception of our long-term or short-term financial prospects due to factors such as an incurrence of large trading or operational losses, or a decline in the level of our business activity, if regulatory authorities take significant action against us or our industry, or we discover significant employee misconduct or illegal activity. With the increase in the value of financial assets (particularly equity securities), utilities,clearing organizations, of which we are a member, have significantly increased their deposit requirements, which are purported to reflect the risks to the financial system of members unable to meet their settlement obligations. Under some scenarios, such requirements requiredimposed even on simple agency transactions could be so significant as to be beyond the Company’s ability to fund. If we are unable to raise funding using the methods described above, we would likely need to finance or liquidate unencumbered assets, such as our investment portfolios, trading assets or corporate-ownedcompany-owned life insurance policies, to meet maturing liabilities or other obligations. The shortening of the settlement cycle of equities transactions to one day has significantly mitigated the risks of counterparty failure. We may be unable to sell some of our assets or we may have to sell assets at a discount to market value, either of which could adversely affect our results of operations, cash flows and financial condition.

The Company has uncommitted short-term lines of credit in the form of bank call loans with multiple third-party financial institutions. All of these arrangements are secured in nature, with the Company fully collateralizing any drawdowns with marketable securities. Under these arrangements, lenders are not contractually obligated to make loans to us and may decline to fund any requested loan in their sole discretion. It is possible that our lenders exit these uncommitted relationships or reduce the amount of our available funding, which could have a material adverse effect on our available liquidity and our ability to meet short-term obligations.

Our businesses rely extensively on data processing and communications systems. In addition to better serving clients, the effective use of technology increases efficiency and enables us to reduce costs. Adapting or developing our technology systems to meet new regulatory requirements, client needs, and competitive demands is critical for our business. Introduction of new technology presents challenges on a regular basis. There are significant technical and financial costs and risks in the development of new or enhanced applications, including the risk that we might be unable to effectively use new technologies or adapt our applications to emerging industry standards. There are also risks associated with discontinuing and transitioning away from older but proven technologies, as such system migrations may experience cost overruns and involve operational disruptions, data migration challenges and increased risk of errors that could adversely affect our financial reporting and internal controls. Our continued success depends, in part, upon our ability to: (i) successfully maintain and upgrade the capability of our technology systems; (ii) address the needs of our clients by using technology to provide products and services that satisfy their demands; and (iii) retain skilled information technology employees. Failure of our technology systems, which could result from events beyond our control, or an inability to effectively upgrade those systems or implement new technology-driven products or services, could result in financial losses, liability to clients, and violations of applicable privacy and other applicable laws and regulatory sanctions.

Potential liability in the event of a security breach of client data could be significant. Depending on the circumstances giving rise to the breach, this liability may not be subject to a contractual limit or an exclusion of consequential or indirect damages. As a result of the foregoing, the Company has and is likely to incur significant costs in preparing its infrastructure and maintaining it to resist any such attacks. In addition to personnel dedicated to overseeing the infrastructure and systems to defend against cybersecurity incidents, senior management is regularly briefed on issues, preparedness and any incidents requiring response. At their regularly scheduled meetings, the Audit Committee of the Board of Directors and the Board of Directors are briefed and brought up to date on cybersecurity.

The financial services industry is continually undergoing rapid technological change with frequent introductions of new technology-driven products and services, driven by the emergence of the Fintech industry. The effective use of technology increases efficiency and enables financial institutions to better serve customers and reduce costs. The Company's future success depends, in part, upon its ability to address the needs of its customers by using technology to provide products and services that will satisfy customer demands, as well as to create additional efficiencies in the Company's operations. Many of the Company's competitors have substantially greater resources to invest in technological improvements. Failure to successfully keep pace with technological change affecting the financial services industry could have a material adverse impact on the Company's business and, in turn, the Company's financial condition and results of operations.

Our future success depends, in part, on our ability to anticipate and respond effectively to the risk of, and the opportunity presented by, digital disruption and other technology change. These may include new applications based on artificial intelligence, machine learning, quantum computing or new approaches to data mining. Risks related to artificial intelligence, including our use of third-party products incorporating artificial intelligence, include the generation of factually incorrect or biased results, also known as hallucinations, data security vulnerabilities, potential IP infringement, mishandling of confidential, proprietary, or private information, and potentially problematic third-party license terms. InSeveral addition,states thehave SECintroduced has recentlyor proposed newregulations rules ongoverning the use of artificial intelligence bywhich investmentmay adviserslimit our ability to use these technologies and/or may result in increased compliance and operational costs. It is possible that couldfederal addor other regulations may be issued in the future that are similar or potentially more restrictive, requiring significant resources to thecomply compliancewith risksapplicable laws. We continue to evaluate emerging technologies like agentic artificial intelligence for incorporation into our business. Any failure to accurately identify and burdensaddress our responsibilities and liabilities in this new environment could negatively affect any solutions we develop or deploy and could subject us to reputational harm, regulatory action or litigation, any of usingwhich thismay technology.harm our financial condition and operating results.

Climate change may also have a negative impact on the financial condition of our clients, which may decrease revenues from those clients and increase the credit exposures to those clients. Additionally, our reputation and client relationships may be damaged as a result of our involvement, or our clients’ involvement, in certain industries associated with causing or exacerbating, or alleged to cause or exacerbate, climate change. ReportingRecent requirementsstate-level sustainability regulations, including California’s SB 253 and SB 261 climate disclosure laws, require large companies doing business in connectionthe withstate, climateincluding changethe Company, to report greenhouse gas emissions and climate-related financial risks. Other states, including New York, Illinois, Colorado and New Jersey, have proposed similar regulations. Such reporting requirements may place an increased burden on our businessbusiness, including adoptingrequiring the adoption of processes and procedures at increased cost to meet the data reporting measures that mayare or will be required. We also may be negatively impacted by any decisions we make to continue to conduct or change our activities in response to considerations relating to climate change. New regulations or guidance relating to climate change, as well as the perspectives of stockholders, employees and other stakeholders regarding climate change, may affect whether and on what terms and conditions we engage in certain activities or offer certain products.

Moreover, there has been increased regulatory focus on ESG-related practices of investment managers. A growing interest on the part of investors and regulators in ESG factors, and increased demand for, and scrutiny of, ESG-related disclosures by asset managers has likewise increased the risk that we could be perceived as, or accused of, making inaccurate or misleading statements regarding the investment strategies offered to our clients or of our ESG efforts or initiatives, commonly referred to as “greenwashing.” Such perceptions or accusations could damage our reputation, result in litigation or regulatory enforcement actions, and adversely affect our business. The change in administrations at the federal level mayhas significantly impactimpacted expectations around ESG policies and ourthe abilityneed to foresee necessary changes to meet societal standards. Ongoing political shifts at both federal and state levels — including elections and regulatory appointments — may abruptly alter ESG policy contours, complicating our ability to anticipate and adapt to new expectations and regulatory standards.

Firms in the financial services industry have been operating in an onerous regulatory environment. The industry has experienced increased scrutiny from a variety of regulators, including the SEC and FINRA as well as state regulators. Penalties and fines sought by regulatory authorities have increased substantially. We may be adversely affected by changes in the interpretation or enforcement of existing laws and rules by these governmental authorities and SROs. Each of the regulatory bodies with jurisdiction over us has regulatory powers dealing with many different aspects of financial services, including, but not limited to, the authority to fine us and to grant, cancel, restrict or otherwise impose conditions on the right to continue operating particular businesses. For example, the failure to comply with the obligations imposed by the Exchange Act on broker-dealers and the Advisers Act on investment advisers, including recordkeeping, registration, advertising and operating requirements, disclosure obligations and prohibitions on fraudulent activities, or by the Investment Company Act of 1940, as amended (the "1940 Act"), could result in investigations, sanctions and reputational damage. Increasingly, regulators have instituted a practice of "regulation by enforcement" where new interpretations of existing regulations are introduced by bringing enforcement actions against securities firms for activities that occurred in the past but were not then thought to be problematic. We also may be adversely affected as a result of new or revised legislation or regulations imposed by the SEC, other U.S. or foreign governmental regulatory authorities or SROs (e.g., FINRA) that supervise the financial markets. Substantial legal liability or significant regulatory action taken against us could have a material adverse effect on our business prospects including our financial condition and results of operations. Recent pronouncements by the SEC have implied that some of the aforesaid risks may be ameliorated by changes in administration and evolving policy.

The Company seeks to monitor and control its risk exposure through a variety of separate but complementary financial, credit, operational, compliance and legal reporting processes and/or systems. The Company believes that it effectively evaluates and manages the market, credit, liquidity and other risks to which it is exposed. Nonetheless, the effectiveness of the Company’s ability to manage risk exposure can never be completely or accurately predicted or fully assured, and there can be no guarantee that the Company’s risk management will be successful. For example, unexpectedly large or rapid movements or disruptions in one or more markets or other unforeseen developments can have a material adverse effect on the Company’s financial condition and results of operations. The consequences of these developments can include losses due to adverse changes in securities values, decreases in the liquidity of trading positions, higher volatility in earnings, increases in the Company’s credit risk to customers as well as to third parties and increases in general systemic risk. Shortening of the equities securities settlement cycle to one day has reduced some of the counterparty risk associated with rapid changes in securities pricing. Certain of the Company’s risk management systems are subject to regulatory review and may be found to be insufficient by the Company’s regulators potentially leading to regulatory sanctions. The Company over the past several years has increased its systems of surveillance over the various risks facing its business and has instituted standing committees to regularly review both the risks themselves as well as the adequacy of the systems providing information. There can be no guarantee that the operation of these systems will allow the Company to prevent or mitigate the various risks faced by its businesses. Various regulators periodically review the companies’Company’s risk control practices, and, if found inadequate, can bring enforcement actions and seek sanctions against suchthe firms.Firm.

The Company issues two classes of shares, Class A non-voting common stock (the “Class A Stock") and Class B voting common stock (the "Class B Stock"). At December 31, 2024,2025, there were 99,665 shares of Class B Stock outstanding compared to 10,231,73610,387,575 shares of Class A Stock outstanding. The voting power associated with the Class B Stock allows holders of the Class B Stock to effectively exercise control over all matters requiring stockholder approval, including the election of all directors and approval of significant corporate transactions, and other matters affecting the Company. Approximately 98% of the Class B Stock is held by an entity controlled by Mr. Albert Lowenthal, the Chairman and CEO of the Company, which allows Mr. Lowenthal to control all matters requiring stockholder approval. Due to the lack of voting power, the holders of the Class A Stock have limited influence on corporate matters. The voting power of the holders of the Class B Stock may have the effect of depressing the price of the Company's Class A Stock, and delaying or preventing a change in control of the Company or resulting in the receipt of a "control premium" by the controlling stockholder which premium would not be received by the holders of the Class A Stock. The controlling stockholder may have potential conflicts of interest with other stockholders including the ability to determine the outcome of "say on pay" votes at the Company. The presence of the Class B stockStock may also result in the Company receiving low “ESG scores” by some parties, which could result in unforeseeable consequences to the Company.

Our Board of Directors declared cash dividends of $0.66$1.72 per share in 20242025 to holders of Class A and Class B Stock and also authorized the Company to repurchase shares of its Class A Stock. The declaration and payment of future cash dividends and authorization of future share repurchases is subject to the Board of Director’s discretion and may be impacted by a number of factors, including but not limited to our net income levels, ability to generate positive operating cash flows, sources of liquidity, subsidiary capital requirements and general financial and business conditions.

Developments in market and economic conditions have in the past adversely affected, and may in the future adversely affect, the Company's business and profitability.

U.S. markets may also be impacted by political and civil unrest occurring in the Middle East, Eastern Europe, Russia, Venezuela and Asia. Concerns about the EU, including Brexit, and the stability of the EU's sovereign debt, hasmay causedcause uncertainty and disruption for financial markets globally. Hostilities between Russia and Ukraine, the conflict between Israel, Hamas and Iran, as well as related disruptions of shipping routes in the Red Sea and related military action, and military and other risks related to China's territorial claims adversely affecting its neighbors including Taiwan,Taiwan and recent U.S. military activity in Venezuela could have unforeseen and negative impacts upon the markets and the Company and its operations. In addition, the U.S.’s recent aggressiveness in foreign affairs including the taking of oil vessels on the high seas, pronouncements concerning Greenland and the threat of involvement in the internal affairs of Iran all may lead to geopolitical risks that are not capable of measurement.

In recent years the Company has experienced, and continues to experience, significant pricing pressures on trading margins and commissions in debt and equity trading. In the fixed income market, regulatory requirements have resulted in greater price transparency, leading to increased price competition and decreased trading margins. In the equity market, the Company has experienced increased pricing pressure from institutional clients to reduce commissions, and this pressure has been augmented by the increased use of electronic and direct market access trading, which has created additional downward pressure on trading margins. The trend toward using alternative trading systems is continuing to grow, which may result in decreased commission and trading revenue, reduce the Company's participation in the trading markets and its ability to access market information, and lead to the creation of new and stronger competitors. Institutional clients also have pressured financial services firms to alter "soft dollar" practices under which brokerage firms bundle the cost of trade execution with research products and services. Some institutions are entering into arrangements that separate (or "unbundle") payments for research products or services from sales commissions. Institutions subject to MiFID II, which the Company does business with primarily through its European- based subsidiary, wereare required to unbundle such payments commencing January 3, 2018.payments.

The Company's success is dependent in large part upon the services of its senior executives and employees. Any loss of service of the chief executive officer ("CEO") and/or Chairman may adversely affect the business and operations of the Company. The Company maintains key man insurance on the life of its CEO.Chairman. Approximately 98% of the shares of Class B Stock are held by Phase II Financial Inc. ("Phase II"), a Delaware corporation controlled by Mr. Albert Lowenthal, the Chairman and CEO of the Company. In the event of Mr. Lowenthal's death or incapacity, control of Phase II would pass to Mr. Lowenthal's spouse. If the Company's senior executives or employees terminate their employment and the Company is unable to find suitable replacements in relatively short periods of time, its operations may be materially and adversely affected.

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 December 31, 2024,2025, we provided our services from 88 offices in 25 states located throughout the United States, 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 December 31, 2024,2025, client assets under management ("AUM") totaled $49.4$55.2 billion. AUM includes the total market value of client investments in discretionary and non-discretionary advisory programs and as well as the net asset value of private placement of alternative investments offered by and held by clients of the firm.Firm. Client assets under administration ("CAUA") as of December 31, 20242025 totaled $129.5$143.3 billion. CAUA includes AUM and the other assets for which the firmFirm provides services. We also provide trust services and products through Oppenheimer Trust Company of Delaware Inc. and discount brokerage services through Freedom Investments, Inc. ("Freedom").Inc.. Through OPY Credit Corp., we conduct secondary trading activities related to the purchase and sale of loans and trade claims, primarily on a riskless principal basis. At December 31, 2024,2025, the Company employed 3,0182,947 employees (2,9772,906 full-time and 41 part-time), of whom 931924 were financial advisors.

We continuously invest in and improve our technology platform to support client service and to remain competitive, while continuously managing expenses. 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 branch offices in attractive locations, and to continue to grow and develop the existing trading, investment banking, investment advisory and other divisions.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.

PotentialFurther decreaseschanges to the federal funds rate may continue to impact our interest-based revenues. While decreases in interestLower rates will lowerreduce fees the Company earnsearned from FDIC-insured client deposits of clients through aour programsweep offeredprogram, bythough thethis Company, such decreasesimpact may be partially offset to a degree if the cash sweep balances increaserise as clients findencounter fewer higher-yieldingattractive alternatives to deploy these balances. FutureRate rate decreases willreductions also reducedecrease the ratesinterest thewe Company chargescharge on customer margin loans and earnsearn on other interest-sensitive assets, negatively affecting earnings. The Company may enjoy an offset to such reduced interest revenues by increased activities in other parts of its business as has traditionally been the case. Additionally, lower rates may also reduce the Company's short-term borrowing costs, which willhelps havereduce ainterest-related negative impact on our earnings.expenses.

On October 7, 2023, Hamas initiated an unprovoked invasion of Israel from the Gaza Strip, resulting in thousands of casualties. Israel formally declared war on Hamas in response to the attack and initiated several military operations in an effort to clear militants from the area.area, Theincluding warhostilities hasagainst nowHezbollah, finished its second yearSyria and hasIran. seenIn aOctober significant escalation in a longstanding conflict between2025, Israel and Hezbollah,Hamas theannounced Lebanese-baseda militanttentative group.ceasefire and hostage release agreement, under which Hamas committed to release remaining hostages and Israel agreed to halt military operations. The conflictceasefire wasremains furtherfragile, intensifiedwith in 2024 by the direct entryreports of Iran,violations whichand launchedhumanitarian achallenges missileraising attackconcerns onabout Israel.its Despitedurability. aIf recentlyunrest announcedpersists ceasefire,or escalates, there remains a risk that thesethe conflictsconflict could expandbroaden into a wider regional warwar, whichpotentially coulddisrupting haveglobal an adverse impact on the worldwide economy,trade, financial markets and thus on our business. AtWe continue to monitor for any adverse impacts of this time, these conflicts have not yet had a material impactconflict on our business operations and financial performance in Israel or elsewhere.

•Commission revenue was $409.7 million for the year ended December 31, 2024, an increase of 17.3% compared with $349.2 million for the year ended December 31, 2023 due to higher overall client activity.activity

•Advisory fees were $483.4 million for the year ended December 31, 2024, an increase of 16.3% compared with $415.7 million for the year ended December 31, 2023 due to higher management fees from advisory programs attributable to record billable AUM levels.levels

•Investment banking revenue was $176.4 million for the year ended December 31, 2024, an increase of 50.0% compared with $117.7 million for the year ended December 31, 2023 due to higher transaction and new issuance volumes.volumes

•Bank deposit sweep income was $138.8 million for the year ended December 31, 2024, a decrease of 19.7% compared with $172.8 million for the year ended December 31, 2023 due to lower cash sweep balances and lower short-term interest rates.rates

•Interest revenue was $135.5 million for the year ended December 31, 2024, an increase of 29.6% compared with $104.6 million for the year ended December 31, 2023 primarily due to higher average margin loan balances and security inventories.inventories

•Principal transactions revenue was $54.7 million for the year ended December 31, 2024, a decrease of 16.3% compared with $65.3 million for the year ended December 31, 2023 primarily due to lower realized and unrealized gains from government securities trading activities.activities

•Other revenue was $33.9 million for the year ended December 31, 2024, an increase of 44.1% compared to $23.5 million for the year ended December 31, 2023 primarily due to higher death benefit proceeds.proceeds

•Compensation and related expenses totaled $936.8 million during the year ended December 31, 2024, an increase of 19.7% compared with the year ended December 31, 2023 primarily due to higher salary expense, production-related expenses, incentive compensation costs and elevated expenses associated with Oppenheimer stock appreciation rights (“OARs”), which were adversely impacted by the significant increase in the OPY Class A ShareStock price. Compensation and related expenses as a percentage of revenue was 65.4% for the year ended December 31, 2024 compared with 62.7% for the year ended December 31, 2023.2023

•Non-compensation expenses were $389.9 million during the year ended December 31, 2024, a decrease of 7.1% compared with $419.7 million during the year ended December 31, 2023 largely due to the absence of significant legal and regulatory costs, partially offset by an increase in interest expense.expense

The table below presents information about the reported revenue and pre-tax income (loss) of the Company's reportable business segments for the three months and years ended December 31, 20242025 and 2023.2024. Effective in the fourth quarter of 2024, the Company combined the former Private Client and Asset Management business segments to form the Wealth Management segment. Our Capital Markets and Corporate/Other segments were not impacted by these changes. To provide historical information on a basis consistent with the revised segment presentation, the Company recast prior period segment results.

•Retail commissions increased significantly6.2% from the prior yearyear, duereaching toa record high, driven by higher overallretail clienttransaction activity.volumes

•Advisory fees increased 16.4%14.9% from the prior yearyear, setting a new record, due to higher billable AUM duringand theincreased year.incentive fees from alternative investments

•Bank deposit sweep income for the full year decreased $34.0$24.0 million or 19.7%17.3% from the prior year due to lower average cash sweep balances and lower short-term interest rates and lower cash sweep balances.

During the three months ended MarchJune 31,30, 2026, there were no material changes to the information contained in Part I, Item 1A of the Company's Annual Report on Form 10-K for the year ended December 31, 2025.

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 quarterlyQuarterly report.Report on Form 10-Q.

Oppenheimer Holdings Inc., through its operating subsidiaries, is a leading middle market investment bank and full servicefull-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 MarchJune 31,30, 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 MarchJune 31,30, 2026, client assets under management ("AUM") totaled $54.1$59.4 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 MarchJune 31,30, 2026 totaled $139.8$154.7 billion. AUA includes AUM and the other assets held for which the Company provides services. We also provide trust services and products through Oppenheimer Trust Company of Delaware. Through OPY Credit Corp., we conduct secondary trading activities related to the purchase and sale of loans and trade claims, primarily on a riskless principal basis. At MarchJune 31,30, 2026, the Company employed 2,9583,062 employees (2,920 full-time and 38 part-time),employees, of whom 932934 were financial advisors.

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.acquisitions or new branch openings. We are increasingly creating and investing in private market opportunities on our own behalf and on behalf of qualified clients.clients as we believe this provides access to the fastest growth areas in the U.S. economy. We are also focused on opportunities in our capital market 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. 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 branch 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 likely to relocate our corporate headquarters into a smaller footprint upon the expiration of our current lease in 2028. 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 servicefull-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 or make 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 them to be an attractive investment.

Further changes to the federal funds rate may continue to impact our interest-based revenues. 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 to deploy these balances. Rate reductions also decrease the interest we charge on customer margin loans and earn on other interest-sensitive assets, negatively affecting earnings. TheThese Companyimpacts may enjoybe anpartially offset to such reduced interest revenues by increased activitiesactivity in other parts of itsour businessbusiness, as has traditionally been the case.case historically. Additionally, lower rates may also reduce the Company's short-term borrowing costs, which helps reduce interest-related expenses. We would generally expect that a return to higher rates would positively impact our interest revenues and profits.

GazaMiddle and IranEast Regional Conflict

Ongoing conflict in the Middle East continues to create geopolitical and economic uncertainty with potential implications for the global economy as well as global 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. Although Israel and Hamas reached a tentative ceasefire and hostage-release agreement in October 2025, the situation remains unstable, with persistent humanitarian and security concerns.concerns subject to change.

In early 2026, the regional security environment deteriorated furthersignificantly as hostilities expanded to include direct conflictescalated between Israel and the United States onand theIran. oneThe hand,United States has conducted sustained military strikes against Iranian targets over recent weeks, and has reimposed a naval blockade against Iran, while Iran and betweenits Israelregional andproxies Lebanon.have U.S.engaged andin Israeliretaliatory forces began strikes on Iran on February 28, 2026, targeting military infrastructure and key leadership, including a strike that killed Iran’s supreme leader.actions. These actionshostilities triggeredhave widespreaddisrupted retaliation,transit including the closure ofthrough the Strait of Hormuz,Hormuz whichand significantlymaterially disruptedimpacted global energy supply chains, contributing to a sharp increase in oil prices and gaselevated supply.volatility across commodity and financial markets. While tensionsdiplomatic haveefforts beguncontinue, toconditions easeremain followinghighly uncertain, and there can be no assurance that the recentlyconflict announcedwill ceasefire,not suchescalate ceasefirefurther.. remainsAny fragile.prolonged Aor renewedexpanded conflict could leadcontribute to broader regional instabilityinstability, affectingfurther disrupt global trade routes,routes and energy flows, intensify inflationary pressures, and adversely affect commodity pricesprices, financial markets and financialinvestor markets.sentiment. We continue to monitor developments closely and assess any potential impacts on client investments as well as our employees, operations and our activities across the Company.

The Company reported a net lossincome of $20.6$27.4 million or $(1.93)$2.55 basic earnings per share (basic and diluted) for the firstsecond quarter of 2026, compared with net income of $30.7$21.7 million or $2.93$2.06 basic earnings per share for the firstsecond quarter of 2025. Revenue for the firstsecond quarter of 2026 was $445.1$454.9 million, an increase of 21.0%,21.9%, compared towith revenue of $367.8$373.2 million for the firstsecond quarter of 2025. Year to date revenue totaled $900.0 million, compared with $741.0 million for the same period in 2025. Net income for the six months ended June 30, 2026 was $6.8 million or $0.63 basic earnings per share, compared with net income of $52.3 million or $4.99 basic earnings per share for the same period in 2025.

FirstSecond quarter 2026 results were adversely affectedimpacted by a $70$24.9 million (pre-tax) legal accrual for the settlement of the “cash sweep” program litigation announced on April 24, 2026 and a $22.3 million (pre-tax) expense associated with a recurring liability-basedan employee compensation award program for financial advisors that is directly tied to ourthe OPY stock price, which increased by $16.90$16.35 per share of Class A shareStock during the quarter (from $72.29$89.19 to $89.19$105.54). 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 thesethis items,item, was $47.5$45.7 million or $4.46$4.27 adjusted basic earnings per share for the firstsecond quarter of 2026, compared with adjusted net income of $28.6$27.8 million or $2.74$2.64 adjusted basic earnings per share for the second quarter of 2025. For the six months ended June 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 $93.2 million or $8.73 adjusted basic earnings per share, compared with $56.4 million or $5.38 adjusted basic earnings per share for the same period in 2025. Management believes these non-GAAP measures provide supplemental insight into the Firm’sCompany’s core operating performance.

•HigherRevenue revenueincreased in the firstsecond quarter of 2026 was driven primarily bydue significantlyto higherstronger investment banking performance, driven by advisory fees, along with increased transaction-based commissions and higher advisory fees reflectingattributable to growth in billable assets under management ("AUM")

•Compensation expenses roseincreased fromcompared with the prior year quarter primarily due mainly to elevated costs associated withhigher stock appreciation rights tiedexpense toresulting from a rise in the Company's share price,price as well as higher production-related costs and greater incentive compensation accruals

•Non-compensation expenses significantly increased frommodestly when compared with the prior year quarterquarter, driven primarily dueby toincreases higherin legal costsfees associatedand withtechnology-related our settlement of the “cash sweep” class action litigationexpenses

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 six months ended MarchJune 31,30, 2026 and 2025:

Wealth Management reported revenue for the current quarter of $253.7$272.7 million, 4.8%10.7% higher compared with the prior year period. Pre-tax income was $43.6$55.7 million in the current quarter, a decrease of 35.8%11.4% compared with athe prior year ago.period. Financial advisor headcount at the end of the current quarter was 932, flat when934, compared towith 933927 at the end of the firstsecond quarter of 2025.

•Retail commissions increased 6.1%8.3% from the prior year period primarily due to higherelevated retail transactiontrading volumesactivity

•Advisory fees increased 10.0% from a year ago15.9% due to higher AUM during the billing period

•Compensation expenses increased 30.2%24.4% from the prior year period primarily due to elevatedhigher expensesproduction associatedrelated withcosts stockand increased share appreciation rights expense ($22.3$24.9 million, compared with $8.3 million forin the three-months-endedprior Marchyear 31, 2026period) and higher production-related costs

•Non-compensation expenses increased modestly compared to the prior year period The following table provides a breakdown of the change in assets under management for the three months ended MarchJune 31,30, 2026:

Capital Markets reported revenue for the current quarter of $189.1$179.2 million, 53.4%45.7% higher when compared with the prior year period. Pre-tax income was $35.4$22.5 million compared with a pre-tax loss of $5.1$3.9 million ain the prior year ago.period.

•Advisory fees earned from investment banking activities increased 142.7%158.5% compared with the prior year period primarily due to higher placement fees inreflecting the technologysuccessful sectorclosing and an increase in completed sell-side M&Aof transactions with larger associated fees in the financial institutions sector that carried larger associated fees as well as an increase in overall transaction closings

•Equities underwriting fees increased 107.7%46.0% when compared with the prior year period,period drivendue to higher underwriting volumes, led by higherstrong new issuance volumesactivity in the financial institutionshealthcare sector

•Fixed income underwriting fees decreased by 49.2%20.9% from athe prior year agoperiod, primarily duedriven toby lower publicsovereign financeissuance transaction revenuevolumes

•Equities sales and trading revenue increased 9.2%37.8% compared with the prior year period mostly due to higher overall trading volumes,volumes includingand greatergrowth in options-related commissionscommission revenue

•Fixed income sales and trading revenue increased 39.4%modestly compared with athe prior year agoperiod largelyprimarily due to higher levels of market volatility levels

•Compensation expenses increased 29.0%36.3% compared with the prior year period largely due to higher incentive compensation accruals and production-related costs

•Non-compensation expenses were flat year-over-yearcompared with the prior year period

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 excludeexclude, or include, certain items. Specifically, we included non-GAAP measures that adjust the Company’s net income and earnings per share to exclude,exclude orcompensation include,expense related to the expenserecurring, associatedmark-to-market withre-measurement of liability-based stock appreciation rights from net income and earnings per share because the settlementperiod-to-period variability in this expense is largely driven by factors outside the Company’s direct control, including changes in the fair value of the class action “cash sweep” litigation because management does not view this as ordinary-course litigation for the Company given the nature of the claims and theunderlying mannervolatility levels in whichOppenheimer theHoldings actionInc.’s wasClass brought.A common stock (OPY) price.

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 Firm.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. These non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation from, as a substitute for, or superior to, the analysis of U.S. GAAP financial measures.