Financial Instruments and Other Inventory Positions

12 Months Ended

Dec. 31, 2025

Financial Instruments Owned and Sold, Not yet Purchased [Abstract]

Financial Instruments and Other Inventory Positions Owned and Financial Instruments and Other Inventory Positions Sold, but Not Yet Purchased

FINANCIAL INSTRUMENTS AND OTHER INVENTORY POSITIONS


	December 31,		December 31,
(Amounts in thousands)	2025		2024
Financial instruments and other inventory positions owned
Corporate securities:
Convertible securities	$	140,306	$	136,176
Equity securities	—		2
Fixed income securities	2,831		1,583
Municipal securities:
Taxable securities	33,021		21,171
Tax-exempt securities	125,419		126,945
Short-term securities	19,531		1,075
Asset-backed securities	92,472		50,188
U.S. government agency securities	82,666		78,256
U.S. government securities	201		4,633
Derivative contracts	5,823		5,699
Total financial instruments and other inventory positions owned	$	502,270	$	425,728

Financial instruments and other inventory positions sold, but not yet purchased
Corporate securities:
Equity securities	$	—	$	19,740
Fixed income securities	3,300		614


U.S. government securities	43,403		54,249
Derivative contracts	1,811		2,379
Total financial instruments and other inventory positions sold, but not yet purchased	$	48,514	$	76,982

At December 31, 2025 and 2024, financial instruments and other inventory positions owned in the amount of $67.1 million and $74.6 million, respectively, had been pledged as collateral for short-term financing arrangements.

Financial instruments and other inventory positions sold, but not yet purchased represent obligations of the Company to deliver the specified security at the contracted price, thereby creating a liability to purchase the security in the market at prevailing prices. The Company is obligated to acquire the securities sold short at prevailing market prices, which may exceed the amount reflected on the consolidated statements of financial condition. The Company economically hedges changes in the market value of its financial instruments and other inventory positions owned using inventory positions sold, but not yet purchased, interest rate derivatives, U.S. treasury bond futures and options, and equity option contracts.

Derivative Contract Financial Instruments

Customer Matched-Book Derivatives

The Company enters into interest rate derivative contracts in a principal capacity as a dealer to satisfy the financial needs of its customers. The Company simultaneously enters into an interest rate derivative contract with a third party for the same notional amount to hedge the interest rate and credit risk of the initial client interest rate derivative contract. In certain instances, the Company has only hedged interest rate risk with a third party, and retains uncollateralized credit risk as described below. These instruments use rates based upon the Secured Overnight Financing Rate ("SOFR") index, the MMD index or the Securities Industry and Financial Markets Association ("SIFMA") index.

Trading Securities Derivatives

The Company enters into interest rate derivative contracts and uses U.S. treasury bond futures and options to hedge interest rate and market value risks primarily associated with its fixed income securities. These instruments use rates based upon the MMD index. The Company also enters into equity option contracts to hedge market value risk associated with its convertible securities. The Company may enter into credit default swap contracts to hedge credit spread risk associated with the debt instruments held in our trading inventory. These instruments use rates based upon the Credit Default Swap Index ("CDX").

Derivatives are reported on a net basis by counterparty (i.e., the net payable or receivable for derivative assets and liabilities for a given counterparty) when a legal right of offset exists and on a net basis by cross product when applicable provisions are stated in master netting agreements. Cash collateral received or paid is netted on a counterparty basis, provided a legal right of offset exists. The total absolute notional contract amount, representing the absolute value of the sum of gross long and short derivative contracts, provides an indication of the volume of the Company's derivative activity and does not represent gains and losses. The following table presents the gross fair market value and the total absolute notional contract amount of the Company's outstanding derivative instruments, prior to counterparty netting, by asset or liability position:


	December 31, 2025						December 31, 2024
(Amounts in thousands)	Derivative		Derivative		Notional		Derivative		Derivative		Notional
Derivative Category	Assets (1)		Liabilities (2)		Amount		Assets (1)		Liabilities (2)		Amount
Interest rate:
Customer matched-book	$	7,033	$	4,878	$	355,129	$	10,906	$	8,629	$	393,860
Trading securities	1,063		5,695		236,400		1,098		442		171,333






	$	8,096	$	10,573	$	591,529	$	12,004	$	9,071	$	565,193

(1)Derivative assets are included within financial instruments and other inventory positions owned on the consolidated statements of financial condition.

(2)Derivative liabilities are included within financial instruments and other inventory positions sold, but not yet purchased on the consolidated statements of financial condition.

The Company's derivative contracts do not qualify for hedge accounting; therefore, unrealized gains and losses are recorded on the consolidated statements of operations. The gains and losses on the related economically hedged inventory positions are not disclosed below as they are not in qualifying hedging relationships. The following table presents the Company's unrealized gains/(losses) on derivative instruments:



(Amounts in thousands)		Year Ended December 31,
Derivative Category	Operations Category		2025		2024		2023
Interest rate derivative contract	Investment banking		$	(108)	$	(3,361)	$	(426)
Interest rate derivative contract	Institutional brokerage		(5,132)		2,963		(5,790)



			$	(5,240)	$	(398)	$	(6,216)

Credit risk associated with the Company's derivatives is the risk that a derivative counterparty will not perform in accordance with the terms of the applicable derivative contract. Credit exposure associated with the Company's derivatives is driven by uncollateralized market movements in the fair value of the contracts with counterparties and is monitored regularly by the Company's financial risk committee. The Company considers counterparty credit risk in determining derivative contract fair value. The Company's derivative contracts are generally collateralized by its counterparties, who are major financial institutions. As of December 31, 2025, the Company had $4.7 million of uncollateralized credit exposure with three counterparties (notional contract amount of $72.4 million), including $4.1 million of uncollateralized credit exposure with one counterparty.