Cohen & Company Inc. (COHN) on Q2 2021 Results - Earnings Call Transcript

Company Representatives: Lester Brafman - Chief Executive Officer Joe Pooler - Chief Financial Officer Operator: Good morning ladies and gentlemen, and welcome to the Cohen & Company, Second Quarter 2021 Earnings Call. My name is Leo and I will be your operator for today. Before we begin, Cohen & Company would like to remind everyone that some of the statements the company makes during this call may contain forward-looking statements under the applicable securities laws. These statements may involve risks and uncertainties that could cause the company’s actual results to differ materially from the results discussed in such forward-looking statements. The forward-looking statements made during this call are made only as of the date of the call, and the company undertakes no obligation to update such forward-looking statements to reflect subsequent events or circumstances. Cohen & Company advises you to read the cautionary note regarding forward-looking statements and its earnings release, and the most recent annual report on Form 10-K filed with the SEC. Lester Brafman: Thank you, Leo, and thank you everybody for joining us for our second quarter 2021 earnings call. With me on the call is Joe Pooler, our CFO. Our strategic initiatives and asset management SPACs and Gestational repo trading continue to favorably impact our results. Although our second quarter revenue was impacted by a negative mark-to-market adjustments on the company's principal investments. Two sponsors in which we have equity method investment, closely related business combinations generate $5.5 million of income for the company during the quarter. Our investment banking pipeline is picking up, and we recently hired a group of experienced professionals to launch a commercial real-estate origination in the securitization business. In addition, we are pleased to announce the reinstatement of the quarterly cash dividend which will allow us to return capital to our shareholders, while continuing to invest in the company's growth initiatives. We continue to believe that the initiatives underway will generate long term value for our shareholders and we remain focused on enhancing stockholder value. Now I'll turn the call over to Joe to walk through this quarter's financial highlights in more detail. Joe Pooler : Thank you, Lester. We'll start with our statement of operations. Our net income attributable to Cohen & Company Inc. shareholders was $1.7 million for the quarter or $1.21 per fully diluted share, compared to $9.4 million for the prior quarter or $6.98 per fully diluted share and $900.000 for the prior year quarter or $0.69 per diluted share. Our adjusted pre-tax income was $3.7 million for the quarter compared to $37.6 million for the period quarter and $4.4 million for the prior year quarter. Note that adjusted pre-tax income is not a measure recognized under U.S. Generally Accepted Accounting Principles. See our disclosures, calculations and reconciliations surrounding adjusted pre-tax income in our earnings release. The changes in our second quarter 2021 earnings measurements and revenues compared to first quarter 2021 were significantly impacted by the closing of our second sponsored SPAC business combination in the first quarter, the Metromile Insurance SPAC II merger which closed in February of ‘21. Net trading revenue came in at $18.4 million in the second quarter, down $800,000 from the first quarter and down $1.6 million from the second quarter of ’20. The decreases were primarily the result of decreased trading from our wholesale, corporate and in GCF Repo Trading Groups. On a favorable note our Gestational repo revenue continued to grow with quarterly revenue of $11.8 million on quarter ending repo balances of $3.8 billion. Lester Brafman: Thank you, Joe, and thank you all for joining our call today. Please direct any offline investor questions to Joe Pooler at (215) 701-8952 or via email at investorrelations@cohencompany.com. The contact information can also be found at the bottom of our earnings release. Operator, you can now open the call lines for questions and thank you all for joining us today. Operator: Lester Brafman: Okay great. Thanks guys for joining the call today, and we look forward to speaking to you next quarter. Have a good day! Operator: This does conclude today's conference. You may now disconnect your lines and everyone have a good day.
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