OPPENHEIMER HOLDINGS INC

Oppenheimer Holdings Inc. is a leading middle-market investment bank and full-service broker-dealer incorporated in Delaware, with roots tracing back to 1881. The Company is engaged in a broad range of activities in the financial services industry, including retail securities brokerage, institutional sales and trading, investment banking (both corporate and public finance), equity and fixed income research, market-making, trust services, and investment advisory and asset management services. The industry is highly competitive, with competition based on brand recognition, product quality, price, and innovation. Oppenheimer encounters intense competition from other securities firms, banks, investment banking boutiques, commercial banks, insurance companies, private equity and financial sponsors, and Fintech competitors offering online investment services. Many online firms offer free trades to all investors, which have become increasingly popular with small investors, though this competitive threat has not demonstrably impacted the Company's business as it primarily attracts smaller investors who are not a target client group for the Company.

Primary competitors include other securities firms, banks, investment banking boutiques, commercial banks, insurance companies, private equity and financial sponsors, and Fintech competitors. The Company competes principally on the basis of the quality of its advisors, services, product selection, location, and reputation in local markets. The ability to compete effectively is substantially dependent on the continuing ability to attract, retain, and motivate qualified professionals, including successful financial advisors, research analysts, investment bankers, trading professionals, portfolio managers, and other revenue-producing or specialized support personnel. The principal factors affecting competition are the quality and ability of professional personnel and relative prices of services and products offered. In some instances, competition can be impacted by the credit ratings assigned to the Firm offering services when potential clients are determining acceptable counterparties.

The Company generates revenue through a broad range of activities including retail securities brokerage, institutional sales and trading, investment banking, market-making, trust services, and investment advisory and asset management services. Revenue streams include commissions from transaction-based pricing, advisory fees from asset-based fee pricing, investment banking fees from underwriting and advisory services, bank deposit sweep income from FDIC-insured programs, interest income from margin lending and securities inventories, and principal transactions revenue from market-making and proprietary trading. The Company serves high-net-worth individuals and families, corporate executives, public and private businesses, and institutional investors including investment advisers, banks, mutual funds, insurance companies, hedge funds, and pension and profit-sharing plans.

Through its Wealth Management business, Oppenheimer provides a comprehensive array of financial services through a network of 924 ¹ financial advisors in 88 ² offices located throughout the United States. As of December 31, 2025, the Company held client assets under administration of $143.3 billion ³ and client assets under management of $55.2 billion ⁴ in fee-based programs. Wealth Management services include full-service brokerage, wealth planning, margin lending, separately managed accounts, mutual fund managed accounts, discretionary and non-discretionary advisory accounts, alternative investments, a Portfolio Enhancement Program, fixed income portfolio management through Oppenheimer Investment Advisers, institutional fixed income management through Oppenheimer Investment Management LLC, and Private Market Opportunities. The Company's asset management services are provided through Oppenheimer Asset Management Inc. and its subsidiaries, which offer proprietary and third-party investment management capabilities. Revenues for OAM are generated by investment advisory and transactional fees for advisory services and revenue from sharing arrangements with registered and private alternative investment vehicles.

The Capital Markets segment includes Investment Banking, Equities Division, and Taxable Fixed Income. Oppenheimer employs over 200 ⁵ investment banking professionals in the United States, the United Kingdom, and Israel, with industry coverage groups focusing on Consumer and Retail, Financial Institutions, Healthcare, Industrials and Energy, and Technology sectors. Investment banking services include mergers and acquisitions, equity capital markets, debt capital markets, public finance, debt advisory and restructuring, and fund placement and advisory. The Equities Division employs 36 ⁶ senior research analysts covering approximately 675 ⁷ equity securities and over 75 ⁸ dedicated equity sales and trading professionals. Oppenheimer offers fundamental equity research, execution services, equity derivatives and index options, convertible bonds, event-driven sales and trading, portfolio and electronic trading, and custody and prime services. The Taxable Fixed Income division employs over 148 ⁹ dedicated fixed income sales and trading professionals, offering capabilities in investment grade and high yield corporate bonds, mortgage-backed securities, U.S. government and Agency bonds, distressed loans, reorganization equity, trade claims, and sovereign and corporate debt of industrialized and Emerging Market countries. Oppenheimer also has 11 ¹⁰ fixed income research professionals covering high yield corporate, mortgage-backed, Emerging Market, and municipal securities.

In September 2025, the Company announced plans for Freedom Investments, Inc. to cease operations and formally deregister as a broker-dealer. Freedom ceased all broker-dealer activities and closed or transferred any remaining customer accounts. On December 1, 2025, Freedom submitted a Uniform Request for Broker-Dealer Withdrawal to FINRA and the SEC, and its deregistration became effective on January 30, 2026. The closing of Freedom did not have a material impact on the Company's financial position or results of operations. During the year ended December 31, 2025, the Company purchased and canceled an aggregate of 46,292 ¹¹ shares of Class A Stock for a total consideration of $3.0 million ¹² ($64.36 per share) under its share repurchase program. As of December 31, 2025, 451,601 ¹³ shares remained available to be purchased under the share repurchase program. On December 12, 2025, the Company announced a special cash dividend in the amount of $1.00 ¹⁴ per share, payable on January 9, 2026. The Company also issued $14.2 million ¹⁵ in forgivable notes to employees for the year ended December 31, 2025 as upfront or backend inducements to commence or continue employment.

Total revenue for fiscal year 2025 was $1,638.071 billion ¹⁶, an increase of 14.4% compared to $1,432.496 billion ¹⁷ in fiscal 2024. Net income attributable to Oppenheimer Holdings Inc. was $148.403 million ¹⁸ in 2025, compared to $71.557 million ¹⁹ in 2024, an increase of 107.4%. Diluted earnings per share were $13.04 ²⁰ in 2025 versus $6.37 ²¹ in 2024. Pre-tax income was $211.191 million ²² in 2025, compared to $105.757 million ²³ in 2024, an increase of 99.7%. The compensation ratio improved to 62.1% ²⁴ of revenue in 2025 from 65.4% ²⁵ in 2024. The effective tax rate for 2025 was 29.9% ²⁶ compared with 32.6% ²⁷ for the prior year.

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 businesses. The Company is focused on growing its wealth management business through strategic additions of experienced financial advisors in its existing branch system and employment of experienced money management personnel in its asset management business, as well as deploying its capital for expansion through targeted acquisitions. The Company is increasingly creating and investing in private market opportunities on its own behalf and on behalf of qualified clients. In investment banking, the Company is committed to growing its footprint by adding experienced bankers within its existing industry practices as well as new industry practices where it believes it can be successful. The Company continuously invests in and improves its technology platform to support client service and to remain competitive, while continuously managing expenses.

The Company is focused on opportunities in its capital market businesses, including integrating new technology platforms to expand the suite of services offered to its clients and onboarding experienced personnel and/or small units that will improve its ability to attract institutional clients in both equities and fixed income without significantly raising its risk profile. 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. The long-term intention is to pursue growth by acquisition where the Company can find a comfortable match in terms of corporate goals and personnel at a price that would provide stockholders with incremental value. The Company reviews potential acquisition opportunities from time to time with the aim of fulfilling the Company's strategic goals, while evaluating and managing its existing businesses. Additionally, 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 it believes them to be an attractive investment.

Compensation and related expenses as a percentage of revenue was 62.1% ²⁸ for the year ended December 31, 2025 compared with 65.4% ²⁹ for the year ended December 31, 2024. The Company continuously invests in and improves its technology platform to support client service and to remain competitive, while continuously managing expenses. The Company recognizes employee work habits have changed in a post-pandemic world and is continuously reviewing its physical footprint on lease renewals, and in many cases reducing office size and configuration. The Company is committed to continuing to improve its capabilities to ensure compliance with industry regulations, support client service, and expand its wealth management and capital markets capabilities.

The Company continuously invests in and improves its technology platform to support client service and to remain competitive. The Company is committed to continuing to improve its capabilities to ensure compliance with industry regulations, support client service, and expand its wealth management and capital markets capabilities. The Company recognizes the importance of compliance with applicable regulatory requirements and is committed to performing rigorous and ongoing assessments of its compliance and risk management effort, and investing in people and programs, while providing a platform with first class investment programs and services. The Company is also assessing its future real estate needs in light of the hybrid working environment, the existing footprint, and upcoming lease expirations.

The Company's Board of Directors declared cash dividends of $1.72 ³⁰ per share in 2025 to holders of Class A and Class B Stock. On December 12, 2025, the Company announced a special cash dividend in the amount of $1.00 ³¹ per share, payable on January 9, 2026. The Company also authorized the repurchase of shares of its Class A Stock. During the year ended December 31, 2025, the Company purchased and canceled an aggregate of 46,292 ³² shares of Class A Stock for a total consideration of $3.0 million ³³ ($64.36 per share) under its share repurchase program. As of December 31, 2025, 451,601 ³⁴ shares remained available to be purchased under the share repurchase program. The Company issued $14.2 million ³⁵ in forgivable notes to employees for the year ended December 31, 2025 ($25.4 million ³⁶ for the year ended December 31, 2024) as upfront or backend inducements to commence or continue employment.

The Company faces headwinds from changes in short-term interest rates. After holding rates steady for the first nine months of the year, the Federal Reserve voted in favor of three consecutive 25 basis point rate cuts at its meetings in September, October, and December of 2025, with the current target range of 3.50% to 3.75%. Lower rates reduce fees earned from FDIC-insured client deposits through the sweep program, though this impact may be partially offset if cash sweep balances rise as clients encounter fewer attractive alternatives. Rate reductions also decrease the interest charged on customer margin loans and earn 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 helps reduce interest-related expenses. The Company also faces headwinds from the conflict in the Middle East, with the ceasefire between Israel and Hamas remaining fragile, and from recent changes in U.S. trade policies, including significantly increased tariffs across a broad range of imports, which could disrupt supply lines, increase inflation, and negatively impact consumer spending.

The Company faces constraints from regulatory and compliance risks, including extensive securities regulation by the SEC, FINRA, and other regulatory bodies. The Company may be adversely affected by new or revised legislation or regulations or changes in the interpretation or enforcement of existing laws and rules. The Company also faces risks related to the ability to attract, develop, and retain highly skilled and productive employees, particularly qualified financial advisors, as the Company faces intense competition for qualified employees from other businesses in the financial services industry. The Company's ability to compete effectively is substantially dependent on its continuing ability to attract, retain, and motivate qualified professionals. The Company also faces constraints from geopolitical risks, including the conflict between Russia and Ukraine, the conflict between Israel, Hamas, and Iran, and related disruptions of shipping routes, as well as military and other risks related to China's territorial claims. The U.S.'s recent aggressiveness in foreign affairs may lead to geopolitical risks that are not capable of measurement.

The Company's results of operations may be materially affected by market fluctuations and by global and economic conditions, including changes in asset values, interest rates, and the level and volatility of equity, fixed income, and commodity prices. The Company is exposed to credit risk related to third parties such as trading counterparties, depository institutions, customers, clearing agents, exchanges, clearing houses, and other financial intermediaries, as well as issuers whose securities it holds. The Company's two largest customer accounts collectively comprise approximately 47.8% ³⁷ of the margin loans as of December 31, 2025. The Company is subject to extensive securities regulation and the failure to comply could subject it to monetary penalties or sanctions; the Company estimates a range of aggregate loss in excess of amounts accrued of up to $253 million ³⁸ for legal and regulatory proceedings where there is at least a reasonable possibility that a loss may be incurred. The Company faces intense competition for qualified employees, particularly financial advisors, and the loss of key personnel could harm its business. The Company's information systems may experience an interruption or breach in security, and while no material losses have been experienced, such attacks are occurring more frequently and with increased sophistication.

Management's message emphasizes that the Firm's operating results for the fourth quarter and full year 2025 were much improved, achieving record full year and quarterly earnings per share with increased revenues driven by broad-based strength across core businesses. Both operating segments benefited from a generally favorable macroeconomic environment, including a sustained rise in equity markets, which drove all major U.S. indices to a third straight year of double-digit gains. Management states that the favorable market conditions benefited the Wealth Management business, as rising asset values underpinned increased client trading activity and lifted assets under management to record levels, resulting in higher related fees compared with the prior-year period. The Capital Markets business also performed well and continued to build on the strength and momentum seen in the third quarter, with Investment Banking experiencing a continued wave of deal activity. Management notes that revenues and earnings per share reached a new record, the balance sheet remains conservatively positioned, and stockholders' equity and book value per share metrics reached fresh highs. The solid operating results and capital position allowed the Company to return additional value to shareholders in the form of a $1.00 ³⁹ per share special dividend in early January 2026. Looking ahead, management believes that the momentum is likely to continue providing strong underpinnings to the equity markets and to results within the investment banking franchise. The strategic priorities emphasized for the period ahead include growing the wealth management business through strategic additions of experienced financial advisors and deploying capital for expansion through targeted acquisitions, focusing on opportunities in capital market businesses including integrating new technology platforms, and continuously investing in and improving the technology platform to support client service and remain competitive while continuously managing expenses.