Company: COHN
Filing Date: 2025-03-12
Form Type: 10-K
Source: 0001437749-25-007158
Chunk: 2831

Company: Cohen & Co Inc.
Filing Date: 2025-03-12
Form: 10-K
Item: Item 6
Chunk 2831
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 These transactions are referred to by the Company as agency gestation repo trades. 
    
   Bankruptcy of Gestation Counterparty 
    
   As of  June 30, 2022, the Company had an outstanding reverse repo balance with First Guaranty Mortgage Corporation (“FGMC”) totaling $269,228.  Effective  June 30, 2022, FGMC filed for bankruptcy.   Subsequent to  June 30, 2022, the Company issued a default notice to FGMC under the reverse repo.  The Company took possession of the collateral and began liquidating it. 
    
   As of  December 31, 2024, the Company had liquidated all of the collateral residential mortgage loans. As of  December 31, 2023, the Company held $3,113 of collateral residential mortgage loans. The loans were carried at fair value and included in investments-trading in the consolidated balance sheets.
    
   During the year ended  December 31, 2022, the Company recorded a gross loss of $5,454 in connection with the FGMC reverse repo.  Of the $5,454 loss, $5,244 was recorded as a reduction in net trading revenue and $210 was recorded in professional fees and other operating expenses in the Company's statement of operations.  The Company has filed an unsecured claim under bankruptcy proceedings related to this loss but does not expect to receive a material recovery. To the extent any recovery is received, the Company will recognize it on a cash basis as received, as a component of net trading revenue. In connection with the loss, the Company recorded a reversal of accrued incentive compensation of $1,753.  During the year ended  December 31, 2022, the net impact to earnings was $3,701. During the years ended  December 31, 2023 and 2024, the Company recorded additional losses of $1,752 and $4, respectively, which were included as a component of net trading revenue related to the decline in fair value of the remaining collateral.  
    
   Other Repo Transactions 
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   In addition to the Company’s matched book repo business, the Company  may also enter into reverse repos to acquire securities to cover short positions or as an investment. Additionally, the Company  may enter into repos to finance the Company’s securities positions held in