Asset Management - As of September 30, 2024, the company had approximately 2,365,525 as of September 30, 2024, compared to 352,153 [373] - The mortgage group's revenue is highly dependent on U.S. mortgage origination volumes, which are influenced by interest rates and the overall health of the U.S. economy [357] Revenue and Income - Revenues increased by 61,057 for the nine months ended September 30, 2024, compared to 4,345, or 19%, to 23,117 for the same period in 2023 [368] - Asset management fees increased by 6,942 for the nine months ended September 30, 2024, compared to 43,805, or 459%, to 9,542 for the same period in 2023 [364] - Net income attributable to Cohen & Company Inc. was 9,661 for the same period in 2023, representing a change of 22,366 for the nine months ended September 30, 2024, compared to a loss of 23,974 [366] Operating Expenses - Operating expenses totaled 10,472, or 20%, from 7,696, or 22%, to 35,757 for the same period in 2023 [392] - Business development, occupancy, and equipment expenses increased by 4,599 for the nine months ended September 30, 2024, compared to 1,987, or 32%, to 6,151 for the same period in 2023 [395] Market Conditions - The company has not completed a new securitization since 2008, leading to a decline in asset management revenue from historical highs due to asset maturities and defaults [349] - Margin pressures in the fixed income brokerage business have increased due to heightened competition and declining market activity, leading to expectations of continued margin compression [355] - Rising interest rates have created instability in equity markets, negatively impacting equity financing and business combination volumes [358] Trading Activities - The company’s trading activities are sensitive to market movements, with revenue generated from proprietary trading and riskless trades [346] - The principal investing segment has been significantly impacted by declines in equity prices of SPACs, resulting in substantial principal transaction losses during 2023 and the first nine months of 2024 [353] - The SPAC market activities have become a significant part of the principal investing segment, with the company sponsoring multiple SPACs since 2018 [351] Cash Flow and Capital Management - Cash flow from operating activities for the nine months ended September 30, 2024, was (36,177) in the same period of 2023 [476] - Cash and cash equivalents increased to 10,650 at the end of 2023, reflecting an increase of $3,640 [479] - The company has seven primary uses for capital, including funding operations, expansion, investments, mergers, dividends, stock repurchases, and debt repayment [477] Risk Management - The company is subject to counterparty risk primarily in collateralized securities transactions and TBA activities [530] - The company faces general settlement risk in its fixed income and equity trading activities, which may lead to losses if a counterparty fails to settle a trade [532] - The company emphasizes the importance of liquidity management in its trading operations to safeguard against settlement risks [532] - Ongoing evaluations of counterparty creditworthiness are crucial for maintaining trading integrity and minimizing losses [532]
en & pany (COHN) - 2024 Q3 - Quarterly Report