0000791963false00007919632024-10-252024-10-25

As filed with the Securities and Exchange Commission on October 25, 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): October 25, 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 October 25, 2024, Oppenheimer Holdings Inc. (the “Company”) issued a press release announcing its third quarter 2024 earnings. A copy of the October 25, 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 October 25, 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: October 25, 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 Third Quarter 2024 Earnings


New York, October 25, 2024 – Oppenheimer Holdings Inc. (NYSE: OPY) (the "Company" or "Firm") today reported net income of $24.5 million or $2.38 basic earnings per share for the third quarter of 2024, compared with net income of $13.9 million or $1.32 basic earnings per share for the third quarter of 2023. Revenue for the third quarter of 2024 was $373.4 million, an increase of 19.4%, compared to revenue of $312.7 million for the third quarter of 2023.

Albert G. Lowenthal, Chairman and CEO commented, "The Firm delivered strong operating results for the quarter in a still-resilient economic environment. During the third quarter, all major indices reached new highs, mostly spurred by the Federal Reserve’s long-awaited decision to reduce the Federal Funds rate by one half percent with the view that lower borrowing costs will slow the uptick in unemployment without rekindling higher inflation. Based on recent economic indicators, it appears that the U.S. economy is headed for a soft landing, amidst continued growth in the economy as we move into 2025.

The continued outperformance of the equity markets aided our Wealth Management franchise by driving better than expected retail trading volumes and related commission revenues during what is typically a seasonally slower summer trading period. The markets also propelled our assets under management (“AUM”) to our third consecutive record, resulting in higher asset-based advisory fees. Additionally, higher average margin loans drove a meaningful improvement in our interest revenues from the prior year, though our interest sensitive sweep income was somewhat reduced due to lower average sweep balances.

Our investment banking revenues also rose due to an uptick in our advisory fees, particularly in our restructuring practice. Equity underwriting fees were adversely impacted by lower issuance levels as we have seen economic uncertainty restrict issuances despite the general improvement in market breadth and market averages. We believe that that Firm is well positioned to benefit as issuance volumes improve.

Our results drove yet another fresh record in our book value per share levels and provided us with the opportunity to further strengthen our balance sheet as we announced our plans to redeem all outstanding senior secured notes ($113.05 million) at their par amounts, and retired the notes on October 10, 2024. Access to capital for expansion will continue to be available as needed. "


Summary Operating Results (Unaudited)
('000s, except per share amounts or otherwise indicated)
Firm3Q-243Q-23
Revenue$373,352 $312,667 
Compensation Expenses$237,935 $195,684 
Non-compensation Expenses$100,047 $95,396 
Pre-Tax Income $35,370 $21,587 
Income Tax Provision$10,862 $7,808 
Net Income (1)
$24,508 $13,861 
Earnings Per Share (Basic) (1)
$2.38 $1.32 
Earnings Per Share (Diluted) (1)
$2.16 $1.21 
Book Value Per Share$81.10 $75.01 
Tangible Book Value Per Share (2)
$64.03 $58.65 
Private Client
Revenue$218,787 $193,254 
Pre-Tax Income $62,894 $65,249 
Assets Under Administration (billions)$129.8 $110.7 
Asset Management
Revenue$27,262 $20,830 
Pre-Tax Income $9,121 $4,951 
Assets Under Management (billions)$49.1 $40.4 
Capital Markets
Revenue$124,030 $94,576 
Pre-Tax Loss$(6,144)$(15,254)
(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 third quarter of 2024 was primarily driven by significantly higher advisory fees attributable to a rise in billable assets under management ("AUM"), an increase in transaction-based commissions as well as improved investment banking and interest revenues
•Announced plans to further strengthen balance sheet through the redemption of all outstanding Senior Secured Notes which occurred on October 10, 2024
•Assets under administration and under management were both at record levels at September 30, 2024, benefiting from market appreciation
•Compensation expenses increased from the prior year quarter largely as a result of higher incentive compensation, deferred compensation and production-related expenses.
•Non-compensation expenses increased from the prior year quarter primarily due to higher interest and technology related expenses partially offset by lower legal costs
•Total stockholder's equity, 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 $218.8 million, 13.2% higher compared with a year ago mostly due to higher advisory fees driven by appreciation in AUM and an increase in commission revenue due to higher transactional volume. Pre-tax income of $62.9 million in the current quarter resulted in a pre-tax margin of 28.8%. Financial advisor headcount at the end of the current quarter was 928 compared to 946 at the end of the third quarter of 2023.

Revenue:
•Retail commissions increased 23.6% from a year ago primarily due to higher retail trading activity
•Advisory fees increased 13.8% due to higher AUM during the billing period for the current quarter when compared to the third quarter of last year
•Bank deposit sweep income decreased $7.4 million from a year ago due to lower cash sweep balances
•Interest revenue increased 14.5% from the prior year period due to higher interest earned from margin loans
•Other revenue increased from a year ago primarily due to increases 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 28.5% from a year ago primarily due to higher production related expenses and deferred compensation costs
•Non-compensation expenses increased 4.5% from a year ago primarily due to higher interest expense


('000s, except otherwise indicated)
3Q-243Q-23
Revenue$218,787 $193,254 
Commissions$54,872 $44,385 
Advisory Fees $94,187 $82,774 
Bank Deposit Sweep Income$34,875 $42,304 
Interest$24,331 $21,248 
Other$10,522 $2,543 
Total Expenses$155,893 $128,005 
Compensation$118,674 $92,383 
Non-compensation$37,219 $35,622 
Pre-Tax Income$62,894 $65,249 
Compensation Ratio54.2 %47.8 %
Non-compensation Ratio17.0 %18.4 %
Pre-Tax Margin28.8 %33.8 %
Assets Under Administration (billions)$129.8 $110.7 
Cash Sweep Balances (billions)$2.8 $3.5 

Asset Management

Asset Management reported revenue for the current quarter of $27.3 million, 30.9% higher compared with a year ago. Pre-tax income was $9.1 million, an increase of 84.2% compared with the prior year period.

Revenue:
•Advisory fee revenue increased 8.9% 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 $49.1 billion at September 30, 2024, the third consecutive record high, which is the basis for advisory fee billings for October 2024
▪The increase in AUM was comprised of higher asset values of $9.4 billion on existing client holdings, partially offset by payments of $0.7 billion
Total Expenses:
•Compensation expenses were up 18.1% from a year ago primarily resulting from increases in incentive compensation
•Non-compensation expenses were up 12.2% 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)
3Q-243Q-23
Revenue$27,262 $20,830 
Advisory Fees$27,432 $25,188 
Other$(170)$(4,358)
Total Expenses$18,141 $15,879 
Compensation$6,596 $5,585 
Non-compensation$11,545 $10,294 
Pre-Tax Income$9,121 $4,951 
Compensation Ratio24.2 %26.8 %
Non-compensation Ratio42.3 %49.4 %
Pre-Tax Margin33.5 %23.8 %
AUM (billions)$49.1 $40.4 

2





Capital Markets

Capital Markets reported revenue for the current quarter of $124.0 million, 31.1% higher when compared with the prior year period. Pre-tax loss was $6.1 million compared with a pre-tax loss of $15.3 million a year ago.

Revenue:
Investment Banking
•Advisory fees earned from investment banking activities increased 82.2% compared with a year ago primarily due to higher restructuring-related transaction activity
•Equity underwriting fees decreased 17.4% when compared with a year ago due to lower new issuance levels
•Fixed income underwriting fees were modestly higher than the prior year period
Sales and Trading
•Equities sales and trading revenue increased 7.5% compared with the prior year period mostly due to higher volumes
•Fixed income sales and trading revenue increased 45.5% 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 20.2% compared with a year ago largely due to costs associated with opportunistic new hires and higher incentive compensation
•Non-compensation expenses were 15.3% higher than a year ago primarily due to an increase in interest expense in financing trading inventories


('000s)
3Q-243Q-23
Revenue$124,030 $94,576 
Investment Banking$50,098 $36,000 
Advisory Fees $32,798 $18,001 
Equities Underwriting$12,588 $15,246 
Fixed Income Underwriting$4,390 $2,049 
Other$322 $704 
Sales and Trading$72,755 $58,102 
Equities$33,303 $30,985 
Fixed Income$39,452 $27,117 
Other$1,177 $474 
Total Expenses$130,174 $109,830 
Compensation$87,649 $72,933 
Non-compensation$42,525 $36,897 
Pre-Tax Loss$(6,144)$(15,254)
Compensation Ratio70.7 %77.1 %
Non-compensation Ratio34.3 %39.0 %
Pre-Tax Margin(5.0)%(16.1)%


Other Matters

•The Board of Directors announced a quarterly dividend to $0.18 per share payable on November 22, 2024 to holders of Class A non-voting and Class B voting common stock of record on November 8, 2024
•Compensation expense as a percentage of revenue at 63.7% was relatively flat with the same period last year
•On October 10, 2024, the Company completed its redemption of all Senior Secured Notes outstanding ($113.05 million) at their par amounts plus accrued and unpaid interest
•The effective tax rate for the current period was 30.7% compared with 36.2% for the prior year period. The effective tax rate for the third quarter of 2024 was positively impacted by fewer non-deductible expenses when compared to the prior year period.



(In millions, except number of shares and per share amounts)
3Q-243Q-23
Capital
Stockholders' Equity (1)
$837.8 $779.3 
Regulatory Net Capital (2)
$487.5 $437.1 
Regulatory Excess Net Capital (2)
$464.6 $415.4 
Common Stock Repurchases
Repurchases$0.3 $6.5 
Number of Shares 5,981 168,904 
Average Price$49.30 $38.30 
Period End Shares10,331,40110,388,898
Effective Tax Rate30.7 %36.2 %
(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 89 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
September 30,		For the Nine Months Ended
September 30,
20242023% Change20242023% Change
REVENUE
Commissions$103,079 $83,933 22.8$295,984 $259,174 14.2
Advisory fees121,631 107,969 12.7353,675 310,214 14.0
Investment banking52,185 37,411 39.5131,841 95,354 38.3
Bank deposit sweep income34,875 42,304 (17.6)106,406 135,273 (21.3)
Interest38,034 26,430 43.999,605 78,691 26.6
Principal transactions, net14,364 16,892 (15.0)42,672 46,635 (8.5)
Other9,184 (2,272)*26,896 15,195 77.0
Total revenue373,352 312,667 19.41,057,079 940,536 12.4
EXPENSES
Compensation and related expenses237,935 195,684 21.6680,375 589,200 15.5
Communications and technology24,602 22,590 8.973,860 67,813 8.9
Occupancy and equipment costs16,240 17,281 (6.0)47,604 49,622 (4.1)
Clearing and exchange fees7,125 6,051 17.719,747 18,241 8.3
Interest24,103 19,744 22.166,631 50,353 32.3
Other27,977 29,730 (5.9)80,172 136,369 (41.2)
Total expenses337,982 291,080 16.1968,389 911,598 6.2
Pre-Tax Income35,370 21,587 63.888,690 28,938 206.5
Income tax provision 10,862 7,808 39.128,172 10,262 174.5
Net Income$24,508 $13,779 77.9$60,518 $18,676 224.0
Less: Net loss attributable to non-controlling interest, net of tax— (82)*(310)(403)*
Net income attributable to Oppenheimer Holdings Inc.$24,508 $13,861 76.8$60,828 $19,079 218.8
Earnings per share attributable to Oppenheimer Holdings Inc.
Basic$2.38 $1.32 80.3$5.87 $1.75 235.4
Diluted$2.16 $1.21 78.5$5.45 $1.62 236.4
Weighted average number of common shares outstanding
Basic10,332,927 10,519,431 (1.8)10,355,982 10,874,055 (4.8)
Diluted11,277,865 11,440,229 (1.4)11,156,536 11,746,337 (5.0)
Period end number of common shares outstanding10,331,401 10,388,898 (0.6)10,331,40110,388,898(0.6)
* Percentage not meaningful
5


v3.24.3
Cover
Oct. 25, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date Oct. 25, 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
Written Communications false
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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