Company: COHN
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0001437749-25-033482
Chunk: 98

Company: Cohen & Co Inc.
Filing Date: 2025-11-06
Form: 10-Q
Item: Item 1
Chunk 98
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 the volume of mortgage originations in the U.S.  Origination activity is highly sensitive to interest rates, the U.S. job market, housing starts, sale activity of existing housing stock, as well as the general health of the U.S. economy.  In addition, any new regulation that impacts U.S. government agency mortgage-backed security issuance activity, residential mortgage underwriting standards, or otherwise impacts mortgage originators will impact our business.  We have no control over these external factors and there is no effective way for us to hedge against these risks.  Our mortgage group’s volumes and profitability will be highly impacted by these external factors.

Interest Rates and Inflation

For most of the periods presented herein, interest rates were elevated versus historical lows, which negatively impacted our business in several ways:

     1. 
     Rising rates reduce the fair value of the fixed income securities that we hold on our balance sheet.

     2.
     Rising rates create instability in the equity markets, which has reduced equity financing and business combination volumes and negatively impacted CCM.

     3. 
     Rising rates reduce the volumes of new issue fixed income instruments, which has negatively impacted our CREO JV. 

     4. 
     Rising rates significantly reduce mortgage activity.  Our mortgage group's profitability is mainly impacted by the volume of mortgage activity in the U.S. (both mortgages for new home purchases as well as refinancing).  Furthermore, our mortgage group engages in repo lending to mortgage originators.  Reduced mortgage volumes impose financial pressures on mortgage originators and may increase the risk that originators default on their repo obligations to us.  See note 10 to our consolidated financial statements included in Item 1 of this Quarterly Report on Form 10-Q.

     5. 
     Rising rates may ultimately push the U.S. into recession, which may further reduce overall transaction volumes in the financial markets negatively impacting our business generally.  

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Recent Events 

Columbus Circle Capital Corp I 

On May 19, 2025, Columbus Circle Capital Corp I (NASDAQ: BRR) (the "Columbus Circle SPAC"), a blank check company incorporated as a Cayman Islands exempted company and formed for the purpose of effecting a merger, amalgamation, share exchange, asset acquisition, share purchase, reorganization, or similar business combination with one or more businesses (each a “Business Combination”), completed the sale of 25,000,000 units (the “Units”)