Institutional Financial Markets NYSEAMERICAN: COHN reported first-quarter 2026 results on its earnings call, highlighting continued growth in its capital markets platform and an expanding gestation repo business, while results declined sequentially following a prior-quarter gain tied to a SPAC business combination.
Management highlights growth initiatives and SPAC activity
Chief Executive Officer Lester Brafman said the company delivered “another strong quarter” driven by the “ongoing expansion of our client franchise,” particularly at Cohen & Company Capital Markets (CCM), which he described as the firm’s “full-service boutique investment bank.” He said CCM continued to generate positive results with a focus on “frontier technologies, including digital assets, energy transition, and natural resources.”
Brafman also pointed to growth in the company’s gestation repo business, which ended the quarter with a book size of $3.9 billion. In addition, he noted that the firm’s sponsored SPAC, Columbus Circle Capital Corp. II, completed a $230 million IPO during the quarter.
“We are encouraged by the momentum we have built as we look for opportunities to further grow our top-line revenue and profitability,” Brafman said, adding that the company remains committed to “enhancing long-term sustained value” for stockholders, including through its quarterly dividend.
Net income and adjusted pre-tax income decline from prior quarter
During the prepared financial remarks, the company reported net income attributable to shareholders of $1.5 million, or $0.42 per fully diluted share. That compared with net income of $8.1 million, or $1.48 per fully diluted share, in the prior quarter and net income of $300,000, or $0.19 per fully diluted share, in the year-ago quarter.
Adjusted pre-tax income was $4.0 million, down from $18.3 million in the prior quarter and up from $1.3 million in the prior-year quarter. The company described adjusted pre-tax income as a key metric because it incorporates enterprise earnings attributable to a convertible non-controlling interest that is “substantially held” by Founder and Chairman Daniel Cohen through Cohen & Company, LLC.
Revenue mix led by investment banking and trading
Investment banking and new issue revenue totaled $45.7 million in the first quarter, compared with $54.7 million in the prior quarter and $20.2 million in the year-ago period. The company said all investment banking and new issue revenue in the quarter came from CCM and was “primarily driven by SPAC M&A and SPAC IPO transactions.”
Net trading revenue was $13.2 million, down $600,000 sequentially and up $4.0 million year over year. The company attributed the year-over-year increase primarily to higher trading revenue from its mortgage, SPAC equity, CMO, and preferred equity trading groups.
Asset management revenue was $2.4 million for the quarter.
Principal transactions and other revenue was negative $3.4 million, compared with positive $31.5 million in the prior quarter and negative $2.7 million in the prior-year quarter. Management emphasized that the prior quarter included a major one-time benefit tied to the closing of the ProCap Financial, Inc. business combination, which generated $33 million of principal transactions revenue, including a markup of consolidated founder and placement shares held by the sponsor of the Columbus Circle I SPAC.
Expenses, headcount, and other items
Compensation and benefits expense was $41.3 million, representing 71% of revenue. That figure was down $16.5 million from the prior quarter and up $19.6 million from the year-ago quarter. The company said the sequential decline primarily reflected the absence of $16.5 million in compensation and benefits expense related to founder shares allocable to employees upon the closing of the ProCap Financial and Columbus Circle I SPAC business combination in the prior quarter. The year-over-year increase was attributed mainly to “normal fluctuations in revenue and the related variable incentive compensation expense.”
Headcount was 128 employees at quarter-end, compared with 126 at year-end and 117 at the end of the prior-year quarter.
Net interest expense was $1.3 million, including $1.2 million tied to trust preferred debt securities. The company also said it repaid $4.5 million of senior promissory notes during the quarter.
Loss from equity method affiliates was $500,000, compared with a $5.1 million loss in the prior quarter and $2.4 million of income in the year-ago quarter.
Balance sheet, SPAC details, and dividend
On the balance sheet, total equity was $100.1 million at quarter-end, compared with $103.1 million at the end of the year. Non-convertible, non-controlling interest was $2.4 million, compared with $400,000 at year-end, and total enterprise equity excluding that component was $97.8 million, a $4.9 million decrease from $102.6 million at year-end. Consolidated corporate indebtedness was carried at $28.6 million at quarter-end.
The company also provided additional detail on Columbus Circle Capital Corp. II’s IPO, which closed Feb. 12, 2026. Management said the number of the SPAC’s founder shares currently allocated to the company is 2.4 million, though the final number will not be determined until a business combination is consummated. The company added that CCM used its $3.6 million underwriting fee from the IPO to purchase 360,000 placement units in the related private placement.
Cohen & Company declared a quarterly dividend of $0.25 per share payable June 2 to stockholders of record as of May 18. Management said the board will evaluate the dividend policy each quarter and that future dividend decisions may be affected by quarterly operating results and capital needs.
No analyst questions were asked during the Q&A portion of the call. In closing remarks, Brafman said the company remains confident in its ability to execute on strategic priorities and “enhance long-term value for stockholders.”
About Institutional Financial Markets NYSEAMERICAN: COHN
Cohen & Co, Inc engages in fixed income markets. It operates through the following segments: Capital Markets, Asset Management, and Principal Investing. The Capital Markets segment consists of fixed income sales, trading, matched book repo financing, and new issue placements in corporate and securitized products and advisory services, operating primarily through its subsidiaries. The Asset Management segment manages assets through investment vehicles, such as collateralized debt obligations, managed accounts, and investment funds.
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