PHILADELPHIA and NEW YORK, Aug. 05, 2024 (GLOBE NEWSWIRE) -- Cohen & Company Inc. (NYSE:COHN), a financial services firm specializing in an expanding range of capital markets and asset management services, today reported financial results for its second quarter ended June 30, 2024. Summary Operating Results       Three Months Ended   Six Months Ended ($ in thousands) 6/30/24   3/31/24   6/30/23   6/30/24   6/30/23                     Net trading $ 8,798     $ 9,848     $ 7,416     $ 18,646     $ 15,626   Asset management   2,078       2,717       1,605       4,795       3,630   New issue and advisory   6,500       24,388       1,395       30,888       2,295   Principal transactions and other revenue   (6,578 )     (18,389 )     12,156       (24,967 )     9,845   Total revenues   10,798       18,564       22,572       29,362       31,396                                           Compensation and benefits   10,699       14,839       10,001       25,538       20,538   Non-compensation operating expenses   6,466       7,100       5,572       13,566       11,342   Operating income (loss)   (6,367 )     (3,375 )     6,999       (9,742 )     (484 )                                         Interest expense, net   (1,425 )     (1,666 )     (1,630 )     (3,091 )     (3,222 ) Income (loss) from equity method affiliates   (5,996 )     29,045       (511 )     23,049       (906 ) Income (loss) before income tax expense (benefit)   (13,788 )     24,004       4,858       10,216       (4,612 )                                         Income tax expense (benefit)   (205 )     498       5,550       293       6,134   Net income (loss)   (13,583 )     23,506       (692 )     9,923       (10,746 ) Less: Net income (loss) attributable to the non-convertible non-controlling interest   (5,206 )     16,270       6,503       11,064       6,600   Enterprise net income (loss)   (8,377 )     7,236       (7,195 )     (1,141 )     (17,346 ) Less: Net income (loss) attributable to the convertible non-controlling interest   (6,028 )     5,213       (594 )     (815 )     (8,108 ) Net income (loss) attributable to Cohen & Company Inc. $ (2,349 )   $ 2,023     $ (6,601 )   $ (326 )   $ (9,238 ) Fully diluted net income (loss) per share $ (1.47 )   $ 1.28     $ (4.34 )   $ (0.20 )   $ (6.14 )                     Adjusted pre-tax income (loss) (1) $ (8,582 )   $ 7,734     $ (1,645 )   $ (848 )   $ (11,212 ) Fully diluted adjusted pre-tax income (loss) per share $ (1.51 )   $ 1.37     $ (0.30 )   $ (0.15 )   $ (2.03 )                                         (1)   Adjusted pre-tax income (loss) is not a measure recognized under U.S. generally accepted accounting principles ("GAAP"). See Note 1 below.Lester Brafman, Chief Executive Officer of Cohen & Company, said, "We were pleased with the performance of our full-service boutique investment banking operation, Cohen & Company Capital Markets ("CCM"), which generated $6.4 million of advisory revenue and acted as lead bookrunner on two SPAC IPOs. CCM has grown to 24 professionals, and we intend to continue to opportunistically add investment banking professionals to our CCM team. We are optimistic about CCM's pipeline and look forward to consistent CCM production through the end of the year. While our second quarter results were weakened by the impact of ongoing unfavorable mark-to-market adjustments on our principal investing portfolio, we are pleased to have improved the Company's performance at the adjusted pre-tax loss line by $10.4 million year-to-date versus 2023. We remain confident about our future earnings potential and are focused on enhancing long-term, sustained value for our stockholders, including through continued payment of our quarterly dividend." Financial Highlights Net loss attributable to Cohen & Company Inc. was $2.3 million, or $1.47 per diluted share, for the three months ended June 30, 2024, compared to net income of $2.0 million, or $1.28 per diluted share, for the three months ended March 31, 2024, and net loss of $6.6 million, or $4.34 per diluted share, for the three months ended June 30, 2023. Adjusted pre-tax loss was $8.6 million, or $1.51 per diluted share, for the three months ended June 30, 2024, compared to adjusted pre-tax income of $7.7 million, or $1.37 per diluted share, for the three months ended March 31, 2024, and adjusted pre-tax loss of $1.6 million, or $0.30 per diluted share, for the three months ended June 30, 2023. Adjusted pre-tax income (loss) and adjusted pre-tax income (loss) per diluted share are not measures recognized under GAAP. See Note 1 below. Revenues were $10.8 million for the three months ended June 30, 2024, compared to $18.6 million for the prior quarter and $22.6 million for the prior year quarter. Net trading revenue was $8.8 million for the three months ended June 30, 2024, down $1.1 million from the prior quarter and up $1.4 million from the prior year quarter. The decrease from the prior quarter was due primarily to lower trading revenue from our corporate group, partially offset by higher trading revenue from our mortgage and new middle markets groups. The increase from the prior year quarter was due primarily to higher trading revenue from our agency, mortgage, and new middle markets groups. Asset management revenue was $2.1 million for the three months ended June 30, 2024, down $0.6 million from the prior quarter and up $0.5 million from the prior year quarter. The change from both prior quarters was related primarily to deferred performance fees in one of our European funds. New issue and advisory revenue was $6.5 million for the three months ended June 30, 2024, down $17.9 million from the prior quarter and up $5.1 million from the prior year quarter. Principal transactions and other revenue was negative $6.6 million for the three months ended June 30, 2024, compared to negative $18.4 million in the prior quarter and positive $12.2 million in the prior year quarter. In all quarters presented, the principal transactions and other revenue was primarily due to mark-to-market adjustments on the Company's principal investment portfolio. Compensation and benefits expense during the three months ended June 30, 2024 decreased $4.1 million from the prior quarter and increased $0.7 million from the prior year quarter. The number of Company employees was 121 as of June 30, 2024, compared to 116 as of March 31, 2024, and 117 as of June 30, 2023. Interest expense during the three months ended June 30, 2024 was down $0.2 million from both the prior periods. The decrease from the prior quarter was primarily due to lower interest on our redeemable financial instrument, and the decrease from the prior year quarter was primarily due to lower interest on our trust preferred securities debt and our bank credit facility. Loss from equity method affiliates for the three months ended June 30, 2024 was $6.0 million, compared to income from equity method affiliates of $29.0 million for the prior quarter and loss from equity method affiliates of $0.5 million for the prior year quarter. Income (loss) from equity method affiliates fluctuates primarily depending on the timing of the closing of the business combinations by the Company's equity method investees that are sponsors of SPACs, which typically results in changes to the value of founder shares allocable to the Company by the SPAC sponsors. Income tax benefit for the three months ended June 30, 2024 was $0.2 million, compared to income tax expense of $0.5 million in the prior quarter, and income tax expense of $5.6 million in the prior year quarter. The Company will continue to evaluate its operations on a quarterly basis and may adjust the valuation allowance applied against the Company's net operating loss and net capital loss tax assets. Future adjustments could be material and may result in additional tax benefit or tax expense. Total Equity and Dividend Declaration As of June 30, 2024, total equity was $95.6 million, compared to $91.8 million as of December 31, 2023; the non-convertible non-controlling interest component of total equity was $17.1 million as of June 30, 2024 and $9.6 million as of December 31, 2023. Thus, the total equity excluding the non-convertible non-controlling interest component was $78.5 million as of June 30, 2024, a $3.7 million decrease from $82.2 million as of December 31, 2023. The Company's Board of Directors has declared a quarterly dividend of $0.25 per share, payable on September 5, 2024, to stockholders of record as of August 22, 2024. The Board of Directors will continue to evaluate the dividend policy each quarter, and future decisions regarding dividends may be impacted by quarterly operating results and the Company's capital needs. Conference Call The Company will host a conference call at 11:00 a.m. Eastern Time (ET), today, August 5, 2024, to discuss these results. The conference call will be available via webcast. Interested parties can access the webcast by clicking the webcast link on the Company's homepage at www.cohenandcompany.com. Those wishing to listen to the conference call with operator assistance can dial (877) 524-8416 (domestic) or +1 (412) 902-1028 (international). A replay of the call will be available for three days following the call by dialing (877) 660-6853 or (201) 612-7415, with participant passcode 13748222. About Cohen & Company Cohen & Company is a financial services company specializing in an expanding range of capital markets and asset management services. Cohen & Company's operating segments are Capital Markets, Asset Management, and Principal Investing. The Capital Markets segment consists of fixed income sales, trading, and gestation repo financing as well as new issue placements in corporate and securitized products, and advisory services, operating primarily through Cohen & Company's subsidiaries, J.V.B. Financial Group, LLC in the United States and Cohen & Company Financial (Europe) S.A. in Europe. A division of JVB, Cohen & Company Capital Markets is the Company's leading boutique investment bank that provides innovative strategic and financial advice in M&A, capital markets, and SPAC advisory. The Asset Management segment manages assets through collateralized debt obligations, managed accounts, and investment funds. As of June 30, 2024, the Company managed approximately $2.3 billion in primarily fixed income assets in a variety of asset classes including US and European trust preferred securities, subordinated debt, and corporate loans. The Principal Investing segment is comprised primarily of investments the Company holds related to its SPAC franchise and other investments the Company has made for the purpose of earning an investment return rather than investments made to support its trading or other capital markets business activity. For more information, please visit www.cohenandcompany.com. Note 1: Adjusted pre-tax income (loss) and adjusted pre-tax income (loss) per share are non-GAAP measures of performance. Please see the discussion under "Non-GAAP Measures" below. Also see the tables below for the reconciliations of non-GAAP measures of performance to their corresponding GAAP measures of performance. Forward-looking Statements This communication contains certain statements, estimates, and forecasts with respect to future performance and events. These statements, estimates, and forecasts are "forward-looking statements." In some cases, forward-looking statements can be identified by the use of forward-looking terminology such as "may," "might," "will," "should," "expect," "plan," "anticipate," "believe," "estimate," "predict," "potential," "seek," or "continue" or the negatives thereof or variations thereon or similar terminology. All statements other than statements of historical fact included in this communication are forward-looking statements and are based on various underlying assumptions and expectations and are subject to known and unknown risks, uncertainties, and assumptions, and may include projections of our future financial performance based on our growth strategies and anticipated trends in our business. These statements are based on our current expectations and projections about future events. There are important factors that could cause our actual results, level of activity, performance, or achievements to differ materially from the results, level of activity, performance, or achievements expressed or implied in the forward-looking statements including, but not limited to, those discussed under the heading "Risk Factors" and "Management's Discussion and Analysis of Financial Condition" in our filings with the Securities and Exchange Commission ("SEC"), which are available at the SEC's website at www.sec.gov and our website at www.cohenandcompany.com/investor-relations/sec-filings. Such risk factors include the following: (a) a decline in general economic conditions or the global financial markets, including those caused by inflation, raising interest rates, and the current geopolitical situation, (b) losses caused by financial or other problems experienced by third parties, (c) losses due to unidentified or unanticipated risks, (d) a lack of liquidity, i.e., ready access to funds for use in our businesses, (e) the ability to attract and retain personnel, (f) litigation and regulatory issues, (g) competitive pressure, (h) an inability to generate incremental income from new or expanded businesses, (i) unanticipated market closures or effects due to inclement weather or other disasters, (j) losses (whether realized or unrealized) on our principal investments, (k) the possibility that payments to the Company of subordinated management fees from its CDOs will continue to be deferred or will be discontinued, (l) the possibility that the Company's stockholder rights plan may fail to preserve the value of the Company's deferred tax assets, whether as a result of the acquisition by a person of 5% of the Company's common stock or otherwise, (m) the Company's reduction in the volume of its investments into SPACs, (n) the difficulty in identifying potential business combinations as a result of increased competition in the SPAC market, (o) the value of the Company's holdings of founders shares in post-business combination companies is volatile and may decline and the possibility that significant portions of the founder shares may ...