Release Date: November 04, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Cohen & Co Inc (COHN) reported a significant improvement in net income, achieving $2.2 million for the quarter compared to a net loss in the previous quarter.
• The company's adjusted pretax income showed a positive turnaround, reaching $7.7 million compared to losses in both the prior quarter and the same quarter last year.
• Cohen & Co Inc (COHN) experienced a substantial increase in new issue and advisory revenue, which rose by $16 million from the second quarter.
• The company's capital markets division, CCCM, generated $21.4 million in advisory revenue and acted as lead bookrunner on a SPAC IPO, indicating strong performance.
• Cohen & Co Inc (COHN) declared a quarterly dividend of 25 per share, demonstrating a commitment to returning value to shareholders.

Negative Points

• The company faced ongoing unfavorable mark-to-market adjustments in its principal investing portfolio, impacting overall earnings.
• Revenue from new issue and advisory services is volatile, with fluctuations due to the limited number of engagements and timing of transaction closings.
• Principal transactions and other revenue were negative, primarily due to declining equity values in post-business combination SPACs.
• Compensation and benefits expenses increased, driven by fluctuations in revenue and variable incentive compensation.
• The company's net interest expense was $1.3 million for the quarter, reflecting costs associated with its debt instruments.

Q & A Highlights

• Warning! GuruFocus has detected 3 Warning Sign with COHN.
• High Yield Dividend Stocks in Gurus' Portfolio
• This Powerful Chart Made Peter Lynch 29% A Year For 13 Years
• How to calculate the intrinsic value of a stock?

Q: Can you provide an overview of Cohen & Company Inc's financial performance for the third quarter of 2024? A: Joseph W. Pooler, Chief Financial Officer, reported a net income attributable to Cohen & Company Inc of $2.2 million for the quarter, or $1.31 per fully diluted share. This is a significant improvement compared to a net loss of $2.3 million in the prior quarter. The adjusted pretax income was $7.7 million, showing a positive turnaround from the previous quarter's adjusted pretax loss of $8.6 million.

Q: How did the company's advisory revenue perform in the third quarter? A: Joseph W. Pooler noted that new issue and advisory revenue was $22.5 million, marking an increase of $16 million from the second quarter and $15.2 million from the same quarter last year. However, he cautioned that this revenue is volatile due to the limited number of engagements and the timing of transaction closings.

Q: What were the key factors affecting the principal transactions and other revenue? A: Joseph W. Pooler explained that principal transactions and other revenue were negative $1.7 million, primarily due to mark-to-market adjustments on principal investments related to the SPAC market. The decline in equity value of post-business combination SPACs negatively impacted the company's holdings, leading to decreased value in founder shares.

Q: Can you discuss the company's trading revenue and its components? A: Joseph W. Pooler stated that net trading revenue was $8.8 million in the third quarter, comparable to the second quarter and up $1.3 million from the previous year. The increase was mainly driven by higher trading revenue from the agency group, mortgage group, and the new Middle Markets Group.

Q: What is the company's current dividend policy? A: Joseph W. Pooler announced a quarterly dividend of 25 cents per share, payable on December 5, 2024, to stockholders of record as of November 20, 2024. The board will continue to evaluate the dividend policy each quarter, considering the company's operating results and capital needs.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.