Release Date: March 10, 2025

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

Positive Points

• Cohen & Co Inc (COHN) saw significant growth in its Capital Markets division, with full-year revenue nearly doubling from $21.9 million in 2023 to $38.9 million in 2024.
• The company successfully expanded its market share as an adviser and agent, and ventured into underwriting initial public offerings.
• Despite elevated mortgage rates, Cohen & Co Inc (COHN) grew its mortgage business, ending the year with a gestation repo book of $2.7 billion, up more than 30% from December 2023.
• Trading revenue increased by $1.1 million from the fourth quarter of 2023, reaching $8.9 million in the fourth quarter of 2024.
• The company declared a quarterly dividend of $0.25 per share, demonstrating a commitment to returning value to shareholders.

Negative Points

• Cohen & Co Inc (COHN) reported a net loss of $2 million for the fourth quarter of 2024, compared to a net income of $2.2 million in the previous quarter.
• Adjusted pre-tax loss was $7.7 million for the quarter, a significant decline from the adjusted pre-tax income of $7.7 million in the prior quarter.
• New issue and advisory revenue decreased by $12.4 million from the third quarter and $8.6 million from the year-ago quarter, highlighting volatility in this revenue stream.
• The company faced $22.6 million in negative principal transactions revenue during 2024 due to losses on investment assets received as consideration.
• Equity value post-business combinations continued to decline, negatively impacting the value of shares received and contributing to volatility in operating results.

Q & A Highlights

• Warning! GuruFocus has detected 3 Warning Sign with COHN.

Q: Can you provide an overview of Cohen & Company's performance in 2024, particularly in the Capital Markets division? A: Lester Brafman, CEO, highlighted that Cohen & Company Capital Markets (CCM) continued to grow its market share as an adviser and agent, expanding into underwriting initial public offerings. Despite a decline in revenue compared to the third quarter of 2024, CCM generated full-year revenue of $38.9 million, nearly doubling the $21.9 million from 2023.

Q: How did the mortgage business perform in 2024 given the elevated mortgage rates? A: The company managed to grow its mortgage business, ending the year with a gestation repo book of $2.7 billion, which is more than a 30% increase from December 2023, despite the challenging environment of elevated mortgage rates and lower origination levels.

Q: What were the financial results for the fourth quarter of 2024? A: Joseph Pooler, CFO, reported a net loss attributable to Cohen & Company Inc. of $2 million for the quarter, or $1.21 per fully-diluted share. This compares to a net income of $2.2 million in the prior quarter and $4.5 million in the same quarter of the previous year.

Q: What factors contributed to the volatility in revenue from new issue and advisory services? A: Revenue from new issue and advisory services was $10 million in the fourth quarter, a decrease from previous quarters. The volatility is attributed to the limited number of engagements and the timing of transaction closings, which can cause fluctuations in revenue recognition.

Q: How did the company's investment portfolio impact financial results? A: The principal transactions revenue was negatively impacted by losses on investment assets received as consideration, with a total of $22.6 million in negative principal transactions revenue during 2024. The equity value of post-business combination companies declined, affecting the value of shares received and impacting both equity method and principal transactions line items.

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