0000791963false00007919632022-04-292022-04-29

As filed with the Securities and Exchange Commission on July 26, 2024
___________________________________________________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

Date of report (Date of earliest event reported): July 26, 2024

OPPENHEIMER HOLDINGS INC.
(Exact name of registrant as specified in its charter)

Commission File Number 1-12043
Delaware 98-0080034
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
85 Broad Street
New York, New York 10004
(Address of principal executive offices) (Zip Code)
(212) 668-8000
(Registrant's telephone number, including area code)

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2.):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CRF 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐

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



SECTION 2 – FINANCIAL INFORMATION

ITEM 2.02. Results of Operations and Financial Condition.

(a)On July 26, 2024, Oppenheimer Holdings Inc. (the “Company”) issued a press release announcing its second quarter 2024 earnings. A copy of the July 26, 2024 press release is furnished as Exhibit 99.1 to this Report and is incorporated herein by reference.

The information contained in this Item 2.02 and the related exhibit attached hereto shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall such information or such exhibit be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing. The information set forth in this Item 2.02 or any exhibit related to this Item 2.02 on this Form 8-K shall not be deemed an admission as to the materiality of any information in the referenced items.


SECTION 9 – FINANCIAL STATEMENTS AND EXHIBITS

ITEM 9.01. Financial Statements and Exhibits.

(d)Exhibits:

The following exhibit is furnished (not filed) with this Current Report on Form 8-K:

99.1 Oppenheimer Holdings Inc.'s Press Release dated July 26, 2024
2



SIGNATURES

    Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.


Oppenheimer Holdings Inc.
Date: July 26, 2024

By: /s/ Brad M. Watkins
---------------------------------
Brad M. Watkins
Chief Financial Officer
(Duly Authorized Officer)

3



EXHIBIT INDEX

4

Exhibit 99.1

Oppenheimer Holdings Inc. Reports Second Quarter 2024 Earnings


New York, July 26, 2024 – Oppenheimer Holdings Inc. (NYSE: OPY) (the "Company" or "Firm") today reported net income of $10.3 million or $0.99 basic earnings per share for the second quarter of 2024, compared with a net loss of $(9.4) million or $(0.85) basic earnings per share for the second quarter of 2023. Revenue for the second quarter of 2024 was $330.6 million, an increase of 8.0%, compared to revenue of $306.2 million for the second quarter of 2023.

Albert G. Lowenthal, Chairman and CEO commented, "The Firm was profitable for the second quarter during a mostly favorable business environment. During the quarter, continued investor interest in artificial intelligence ("AI") stocks allowed all major indices to reach fresh records, despite continuing concerns about high interest rates and weakening employment data. Strong equity markets provided a backdrop for greater retail trading activity and drove our AUM to yet another new record, benefiting both our transaction driven revenues and AUM-based advisory fees.

The elevated interest rate environment resulted in improved interest revenue though the high interest rates also contributed to a significant decline in our FDIC sweep balances and related fees as clients sought higher returns elsewhere. The environment was also less favorable for our investment banking business, which saw less capital market activity when compared to the first quarter.

While we are somewhat disappointed in our earnings for the quarter, they were particularly impacted by the lack of follow through in underwriting revenue after a strong first quarter. We continue to believe that our investment in senior personnel will pay off in future quarters as those markets strongly re-open. Results from the Wealth Management business continue to be strong amidst the background of a very strong equity market.

The Company ended the quarter with a strong balance sheet and record book value per share levels. We remain focused on both attracting new financial advisors and retaining existing advisors while concurrently attracting qualified professionals to our investment banking platform and building our Equity and Fixed Income groups in order to position us well for growth as we move into the second half of 2024."


Summary Operating Results (Unaudited)
('000s, except per share amounts or otherwise indicated)
Firm2Q-242Q-23
Revenue$330,589 $306,189 
Compensation Expenses$220,727 $187,224 
Non-compensation Expenses$93,997 $130,664 
Pre-Tax Income (Loss)$15,865 $(11,699)
Income Tax Provision (Benefit)$5,599 $(2,131)
Net Income (Loss) (1)
$10,266 $(9,400)
Earnings Per Share (Basic) (1)
$0.99 $(0.85)
Earnings Per Share (Diluted) (1)
$0.92 $(0.85)
Book Value Per Share$78.63 $71.77 
Tangible Book Value Per Share (2)
$61.56 $56.29 
Private Client
Revenue$208,701 $201,245 
Pre-Tax Income $55,537 $20,794 
Assets Under Administration (billions)$126.0 $113.2 
Asset Management
Revenue$25,826 $22,198 
Pre-Tax Income $8,694 $6,534 
Assets Under Management (billions)$47.5 $41.2 
Capital Markets
Revenue$92,141 $79,582 
Pre-Tax Loss$(21,775)$(14,051)
(1) Attributable to Oppenheimer Holdings Inc.
(2) Represents book value less goodwill and intangible assets divided by number of shares outstanding.







Highlights

•Increased revenue for the second quarter of 2024 was primarily driven by significantly higher advisory fees attributable to a rise in billable assets under management ("AUM") as well as improved investment banking and interest revenues
•Assets under administration and under management were both at record levels at June 30, 2024, benefiting from market appreciation and positive net asset flows
•Compensation expenses increased from the prior year quarter largely as a result of higher incentive compensation expenses, share-based compensation costs and production-related expenses
•Non-compensation expenses decreased from the prior year quarter primarily due to lower legal costs partially offset by higher interest expense
•Book value and tangible book value per share reached new record highs as a result of positive earnings
1



Private Client
Private Client reported revenue for the current quarter of $208.7 million, 3.7% higher compared with a year ago mostly due to higher advisory fees driven by appreciation in AUM and an increase in commission revenue. Pre-tax income of $55.5 million in the current quarter resulted in a pre-tax margin of 26.6%. Financial advisor headcount at the end of the current quarter was 934 compared to 964 at the end of the second quarter of 2023.

Revenue:
•Retail commissions increased 16.5% from a year ago primarily due to higher retail trading activity
•Advisory fees increased 15.4% due to higher AUM during the billing period for the current quarter when compared to the second quarter of last year
•Bank deposit sweep income decreased $9.2 million from a year ago due to lower cash sweep balances
•Interest revenue decreased modestly from the prior year period due to lower stock borrow income
•Other revenue decreased from a year ago primarily due to smaller movements 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
Total Expenses:
•Compensation expenses increased 18.0% from a year ago primarily due to higher production related and share-based compensation expenses
•Non-compensation expenses decreased 55.8% from a year ago primarily due to lower legal costs


('000s, except otherwise indicated)
2Q-242Q-23
Revenue$208,701 $201,245 
Commissions$52,872 $45,377 
Advisory Fees $90,946 $78,811 
Bank Deposit Sweep Income$34,847 $44,060 
Interest$21,626 $22,403 
Other$8,410 $10,594 
Total Expenses$153,164 $180,451 
Compensation$117,419 $99,528 
Non-compensation$35,745 $80,923 
Pre-Tax Income$55,537 $20,794 
Compensation Ratio56.3 %49.5 %
Non-compensation Ratio17.1 %40.2 %
Pre-Tax Margin26.6 %10.3 %
Assets Under Administration (billions)$126.0 $113.2 
Cash Sweep Balances (billions)$2.9 $3.9 

Asset Management

Asset Management reported revenue for the current quarter of $25.8 million, 16.3% higher compared with a year ago. Pre-tax income was $8.7 million, an increase of 33.1% compared with the prior year period.

Revenue:
•Advisory fee revenue increased 18.2% from a year ago due to increased management fees resulting from the higher net value of billable AUM during the current quarter
Assets under Management (AUM):
▪AUM increased to $47.5 billion at June 30, 2024, a new record high, which is the basis for advisory fee billings for July 2024
▪The increase in AUM was comprised of higher asset values of $6.1 billion on existing client holdings and a net contribution of $0.2 billion in new client assets
Total Expenses:
•Compensation expenses were down 2.6% from a year ago primarily resulting from decreases in incentive compensation
•Non-compensation expenses were up 17.4% when compared to the prior year period mostly due to higher external portfolio management costs which are directly related to the increase in AUM




('000s, except otherwise indicated)
2Q-242Q-23
Revenue$25,826 $22,198 
Advisory Fees$26,241 $22,196 
Other$(415)$2 
Total Expenses$17,132 $15,664 
Compensation$6,120 $6,283 
Non-compensation$11,012 $9,381 
Pre-Tax Income$8,694 $6,534 
Compensation Ratio23.7 %28.3 %
Non-compensation Ratio42.6 %42.3 %
Pre-Tax Margin33.7 %29.4 %
AUM (billions)$47.5 $41.2 

2



Capital Markets

Capital Markets reported revenue for the current quarter of $92.1 million, 15.8% higher when compared with the prior year period. Pre-tax loss was $21.8 million compared with a pre-tax loss of $14.1 million a year ago.

Revenue:
Investment Banking
•Advisory fees earned from investment banking activities increased 12.3% compared with a year ago due to higher M&A volumes
•Equity underwriting fees increased 104.6% when compared with a year ago due to higher new issuance volumes
•Fixed income underwriting fees were modestly higher than the prior year period
Sales and Trading
•Equities sales and trading revenue was relatively flat when compared with the prior year period
•Fixed income sales and trading revenue increased 22.3% compared with a year ago primarily due to an increase in trading income attributable to higher interest rates and volumes

Total Expenses:
•Compensation expenses increased 19.6% compared with a year ago primarily due to costs associated with opportunistic new hires and higher incentive compensation
•Non-compensation expenses were 25.5% higher than a year ago primarily due to an increase in interest expense in financing trading inventories


('000s)
2Q-242Q-23
Revenue$92,141 $79,582 
Investment Banking$26,699 $18,749 
Advisory Fees $12,290 $10,945 
Equities Underwriting$11,208 $5,478 
Fixed Income Underwriting$2,815 $1,867 
Other$386 $459 
Sales and Trading$64,766 $60,216 
Equities$33,250 $34,453 
Fixed Income$31,516 $25,763 
Other$676 $617 
Total Expenses$113,916 $93,633 
Compensation$73,290 $61,255 
Non-compensation$40,626 $32,378 
Pre-Tax Loss$(21,775)$(14,051)
Compensation Ratio79.5 %77.0 %
Non-compensation Ratio44.1 %40.7 %
Pre-Tax Margin(23.6)%(17.7)%


Other Matters

•The Board of Directors announced a $0.03, or 20% increase in the quarterly dividend to $0.18 per share effective for the second quarter of 2024 payable on August 23, 2024 to holders of Class A non-voting and Class B voting common stock of record on August 9, 2024
•Compensation expense as a percentage of revenue was higher at 66.8% during the current period versus 61.1% during the same period last year due to opportunistic new hires and increased share based compensation costs
•The effective tax rate for the current period was 35.3% compared with 18.2% for the prior year period. The effective tax rate for the second quarter of 2024 was negatively impacted by permanent items and non-deductible losses in non-U.S. businesses.



(In millions, except number of shares and per share amounts)
2Q-242Q-23
Capital
Stockholders' Equity (1)
$812.1 $788.3 
Regulatory Net Capital (2)
$460.7 $417.5 
Regulatory Excess Net Capital (2)
$439.7 $394.7 
Common Stock Repurchases
Repurchases$0.9 $3.6 
Number of Shares 23,102 96,135 
Average Price$40.01 $37.43 
Period End Shares10,327,51010,984,240
Effective Tax Rate35.3 %18.2 %
(1) Attributable to Oppenheimer Holdings Inc.
(2) Attributable to Oppenheimer & Co. Inc. broker-dealer
3



Company Information

Oppenheimer Holdings Inc., through its operating subsidiaries, is a leading middle market investment bank and full service broker-dealer that is engaged in a broad range of activities in the financial services industry, including retail securities brokerage, institutional sales and trading, investment banking (corporate and public finance), equity and fixed income research, market-making, trust services, and investment advisory and asset management services. With roots tracing back to 1881, the Company is headquartered in New York and has 88 retail branch offices in the United States and institutional businesses located in London, Tel Aviv, and Hong Kong.

Forward-Looking Statements

This press release includes certain "forward-looking statements" relating to anticipated future performance. For a discussion of the factors that could cause future performance to be different than anticipated, reference is made to Factors Affecting "Forward-Looking Statements" and Part 1A – Risk Factors in the Company's Annual Report on Form 10-K for the year ended December 31, 2023.

4



Oppenheimer Holdings Inc.
Consolidated Income Statements (Unaudited)
('000s, except number of shares and per share amounts)
For the Three Months Ended
June 30,		For the Six Months Ended
June 30,
20242023% Change20242023% Change
REVENUE
Commissions$97,055 $88,544 9.6$192,905 $175,241 10.1
Advisory fees117,197 101,015 16.0232,044 201,559 15.1
Investment banking29,119 19,978 45.879,656 57,943 37.5
Bank deposit sweep income34,846 44,060 (20.9)71,531 92,969 (23.1)
Interest34,805 27,320 27.461,571 52,261 17.8
Principal transactions, net10,074 16,253 (38.0)28,308 29,743 (4.8)
Other7,493 9,019 (16.9)17,712 18,152 (2.4)
Total revenue330,589 306,189 8.0683,727 627,868 8.9
EXPENSES
Compensation and related expenses220,727 187,224 17.9442,440 393,516 12.4
Communications and technology24,682 22,783 8.349,258 45,223 8.9
Occupancy and equipment costs15,516 16,440 (5.6)31,364 32,341 (3.0)
Clearing and exchange fees6,780 5,927 14.412,622 12,190 3.5
Interest21,980 17,467 25.842,528 30,609 38.9
Other25,039 68,047 (63.2)52,195 106,639 (51.1)
Total expenses314,724 317,888 (1.0)630,407 620,518 1.6
Pre-Tax Income (Loss)15,865 (11,699)*53,320 7,350 625.4
Income tax provision (benefit)5,599 (2,131)*17,310 2,454 605.4
Net Income (Loss)$10,266 $(9,568)*$36,010 $4,896 635.5
Less: Net loss attributable to non-controlling interest, net of tax— (168)*(310)(321)*
Net income (loss) attributable to Oppenheimer Holdings Inc.$10,266 $(9,400)*$36,320 $5,217 596.2
Earnings (loss) per share attributable to Oppenheimer Holdings Inc.
Basic$0.99 $(0.85)*$3.49 $0.47 642.6
Diluted$0.92 $(0.85)*$3.29 $0.44 647.7
Weighted average number of common shares outstanding
Basic10,327,818 11,016,430 (6.3)10,367,636 11,054,306 (6.2)
Diluted11,111,903 11,016,430 0.911,083,422 11,911,379 (7.0)
Period end number of common shares outstanding10,327,510 10,984,240 (6.0)10,327,510 10,984,240(6.0)
* Percentage not meaningful
5


v3.24.2
Cover
Apr. 29, 2022
Cover [Abstract]  
Document Type 8-K
Document Period End Date Jul. 26, 2024
Entity Registrant Name OPPENHEIMER HOLDINGS INC.
Entity Central Index Key 0000791963
Amendment Flag false
Entity Incorporation, State or Country Code DE
Entity File Number 1-12043
Entity Tax Identification Number 98-0080034
Entity Address, Address Line One 85 Broad Street
Entity Address, City or Town New York
Entity Address, State or Province NY
Entity Address, Postal Zip Code 10004
City Area Code 212
Local Phone Number 668-8000
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Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Class A non-voting common stock
Trading Symbol OPY
Security Exchange Name NYSE
Entity Emerging Growth Company false
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