OPPENHEIMER HOLDINGS INCOPY
OPPENHEIMER HOLDINGS INC Income Taxes Disclosure
Income taxes
(*) The amount of income taxes paid during this year does not meet the 5% disaggregation threshold for this jurisdiction
Income tax expenses shown in the consolidated income statements are reconciled to amounts of tax that would have been payable from the application of the federal tax rate to pre-tax profit, as follows:
| (Expressed in thousands) | |||||||||||||||||||||||||||||||||||
| For the Years Ended December 31, | |||||||||||||||||||||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||||||||||||||||||||
| Amount | Percentage | Amount | Percentage | Amount | Percentage | ||||||||||||||||||||||||||||||
| U.S. federal statutory income tax | $ | 44,344 | 21.0 | % | $ | 22,194 | 21.0 | % | $ | 9,806 | 21.0 | % | |||||||||||||||||||||||
U.S. state and local income taxes, net of U.S. federal income tax benefits (1) | 12,351 | 5.8 | % | 7,062 | 6.6 | % | 1,805 | 3.9 | % | ||||||||||||||||||||||||||
| Foreign tax effects | |||||||||||||||||||||||||||||||||||
| United Kingdom | |||||||||||||||||||||||||||||||||||
| Changes in valuation allowances | 2,638 | 1.2 | % | 1,869 | 1.8 | % | 1,945 | 4.2 | % | ||||||||||||||||||||||||||
| Statutory tax rate difference between United Kingdom and U.S. | (500) | (0.2) | % | (370) | (0.3) | % | (203) | (0.4) | % | ||||||||||||||||||||||||||
| Other | 102 | 0.0 | % | 592 | 0.5 | % | (358) | (0.8) | % | ||||||||||||||||||||||||||
| Other foreign jurisdictions | 295 | 0.1 | % | 257 | 0.2 | % | (159) | (0.3) | % | ||||||||||||||||||||||||||
| Non-taxable or non-deductible items | |||||||||||||||||||||||||||||||||||
| Executive compensation | 4,910 | 2.4 | % | 2,747 | 2.6 | % | 1,514 | 3.2 | % | ||||||||||||||||||||||||||
| Meals and entertainment expenses | 974 | 0.5 | % | 853 | 0.8 | % | 726 | 1.6 | % | ||||||||||||||||||||||||||
| Fine and penalties | — | — | % | 364 | 0.3 | % | 2,859 | 6.1 | % | ||||||||||||||||||||||||||
| Transit and parking expenses | 505 | 0.2 | % | 492 | 0.5 | % | 501 | 1.1 | % | ||||||||||||||||||||||||||
| Insurance proceeds | (664) | (0.3) | % | (885) | (0.8) | % | (511) | (1.1) | % | ||||||||||||||||||||||||||
| Interest income | (222) | (0.1) | % | (209) | (0.2) | % | (453) | (1.0) | % | ||||||||||||||||||||||||||
| Other | 74 | 0.0 | % | 68 | 0.1 | % | 28 | (0.1) | % | ||||||||||||||||||||||||||
| Excess tax benefits from share-based awards | (1,547) | (0.7) | % | (671) | (0.6) | % | (1,317) | (2.8) | % | ||||||||||||||||||||||||||
| Other adjustments | (28) | 0.0 | % | 147 | 0.1 | % | 315 | 0.7 | % | ||||||||||||||||||||||||||
| Total income taxes | $ | 63,232 | 29.9 | % | $ | 34,510 | 32.6 | % | $ | 16,498 | 35.3 | % | |||||||||||||||||||||||
(1)State and local taxes in New York, California, Florida, Pennsylvania and New Jersey comprised the majority (greater than 50 percent) of the tax effect in this category
The effective income tax rate for the year ended December 31, 2025 was 29.9% compared with 32.6% for the year ended December 31, 2024. The tax rate in the 2025 year improved as the impact of certain unfavorable permanent items and nondeductible foreign losses was reduced due to higher income levels in the current period.
Pre-tax income from continuing operations included in the consolidated income statements represent the following:
| (Expressed in thousands) | |||||||||||||||||
| For the Years Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Pre-tax income from continuing operations | |||||||||||||||||
| U.S. | $ | 214,443 | $ | 106,969 | $ | 41,926 | |||||||||||
| Foreign | (3,251) | (1,212) | 4,844 | ||||||||||||||
| Total pre-tax income from continuing operations | $ | 211,192 | $ | 105,757 | $ | 46,770 | |||||||||||
Income tax expenses included in the consolidated income statements represent the following:
| (Expressed in thousands) | |||||||||||||||||
| For the Years Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Current tax expense | |||||||||||||||||
| U.S. federal tax | $ | 42,943 | $ | 22,249 | $ | 6,967 | |||||||||||
| State and local tax | 14,330 | 7,459 | 2,137 | ||||||||||||||
| Foreign | 1,127 | 1,250 | 937 | ||||||||||||||
| Total current tax expense | 58,400 | 30,958 | 10,041 | ||||||||||||||
| Deferred tax expenses (benefit) | |||||||||||||||||
| U.S. federal tax | 3,524 | 2,323 | 5,207 | ||||||||||||||
| State and local tax | 1,676 | 1,262 | 919 | ||||||||||||||
| Foreign | (368) | (33) | 331 | ||||||||||||||
| Total deferred tax expense (benefit) | 4,832 | 3,552 | 6,457 | ||||||||||||||
| Total income tax expense (benefit) | $ | 63,232 | $ | 34,510 | $ | 16,498 | |||||||||||
Deferred income taxes reflect the net tax effects of temporary differences between the financial reporting and tax bases of assets and liabilities and are measured using enacted tax rates and laws that will be in effect when such differences are expected to reverse. Significant components of the Company's deferred tax assets and liabilities as of December 31, 2025 and 2024 were as follows:
| (Expressed in thousands) | |||||||||||
| As of December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| Deferred tax assets: | |||||||||||
| Deferred compensation | $ | 37,320 | $ | 35,846 | |||||||
| Deferred rent and lease incentives | 8,805 | 7,504 | |||||||||
| Net operating losses and credits | 17,130 | 13,822 | |||||||||
| Receivables reserves | 679 | 925 | |||||||||
| Accrued expenses | 297 | 1,284 | |||||||||
| Involuntary conversion | 1,693 | 1,696 | |||||||||
| Other | 980 | 1,028 | |||||||||
| Total deferred tax assets | 66,904 | 62,105 | |||||||||
| Valuation allowance | (14,335) | (11,516) | |||||||||
| Deferred tax assets after valuation allowance | 52,569 | 50,589 | |||||||||
| Deferred tax liabilities: | |||||||||||
| Goodwill | 41,569 | 41,560 | |||||||||
| Partnership investments | 31,390 | 28,967 | |||||||||
| Company-owned life insurance | 19,450 | 16,619 | |||||||||
| Depreciation | 4,238 | 3,151 | |||||||||
| Other | 342 | 198 | |||||||||
| Total deferred tax liabilities | 96,989 | 90,495 | |||||||||
| Deferred tax liabilities, net | $ | (44,420) | $ | (39,906) | |||||||
The Company recognized deferred tax assets of $2.7 million at December 31, 2025 within other assets arising from net operating losses incurred by Oppenheimer Israel (OPCO) Ltd. The Company believes that realization of the deferred tax assets is more likely than not based on expectations of future taxable income in Israel. These net operating losses carry forward indefinitely and are not subject to expiration, provided that these subsidiaries and their underlying businesses continue operating normally (as is anticipated).
As of December 31, 2025, the Company had deferred tax assets of $13.1 million arising from net operating losses incurred by Oppenheimer Europe Ltd. and had recorded full valuation allowances. Although the net operating losses carry forward indefinitely, the Company believes it is more likely than not that the Company will not be able to realize its deferred tax assets in the future. The net change during the year in the total valuation allowance is $2.5 million.
The Company and one or more of its subsidiaries files income tax returns in the U.S. federal jurisdiction and in various states and foreign jurisdictions. The Company has closed tax years through 2019 in the U.S. federal jurisdiction.
The Company has unrecognized tax benefits of $1.5 million, $1.3 million and $1.2 million as of December 31, 2025, 2024 and 2023, respectively (as shown on the table below). Included in the balance of unrecognized tax benefits as of December 31, 2025 and 2024 were $1.2 million and $994,000, respectively, of tax benefits for either year that, if recognized, would affect the effective tax rate.
During the year ended December 31, 2025, the Company added $0.8 million and released $0.6 million related to state and local tax matters. A reconciliation of the beginning and ending amount of unrecognized tax benefit follows:
| (Expressed in thousands) | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Balance at beginning of year | $ | 1,258 | $ | 1,236 | $ | 1,072 | |||||||||||
| Additions for tax positions of prior years | 823 | 217 | 224 | ||||||||||||||
| Lapse in statute of limitations | (411) | (136) | — | ||||||||||||||
| Settlements with taxing authorities | (140) | (59) | (60) | ||||||||||||||
| Balance at end of year | $ | 1,530 | $ | 1,258 | $ | 1,236 | |||||||||||
In its consolidated income statements, the Company records interest and penalties accruing on unrecognized tax benefits in pre-tax income as interest expense and other expense, respectively. For the year ended December 31, 2025, the Company added tax-related interest expense of $55,000, and for the years ended December 2024 and 2023, the Company released tax-related interest expense of $3,000 and $107,000, respectively, in its consolidated income statement. As of December 31, 2025 and 2024, the Company had an income tax-related interest payable of $269,000 and $325,000, respectively, on its consolidated balance sheets.
Income taxes paid during the year included in the consolidated statement of cash flows represent the following:
| (Expressed in thousands) | |||||||||||||||||
| For the Years Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Federal | $ | 34,364 | $ | 18,717 | $ | 11,520 | |||||||||||
| State | |||||||||||||||||
| New York State | 2,883 | * | 3,530 | ||||||||||||||
| New York City | * | * | 2,499 | ||||||||||||||
| Others | 7,219 | 1,430 | 1,798 | ||||||||||||||
| 10,102 | 1,430 | 7,827 | |||||||||||||||
| Foreign | 1,675 | 1,125 | 1,229 | ||||||||||||||
| Total | $ | 46,141 | $ | 21,272 | $ | 20,576 | |||||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Feb 27, 2025 | |
| 2023 | Mar 1, 2024 | |
| 2022 | Feb 28, 2023 | |
| 2021 | Feb 28, 2022 | |
| 2020 | Mar 1, 2021 | |
| 2019 | Mar 2, 2020 | |
| 2018 | Mar 1, 2019 | |
| 2017 | Mar 2, 2018 | |
| 2016 | Mar 3, 2017 | |
| 2015 | Mar 4, 2016 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.