Company: COHN
Filing Date: 2025-08-04
Form Type: 10-Q
Source: 0001437749-25-024506
Chunk: 197

Company: Cohen & Co Inc.
Filing Date: 2025-08-04
Form: 10-Q
Item: Item 8
Chunk 197
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  June 30, 2025 and  December 31, 2024, the Company had equity derivatives included in other investments, at fair value of $73 and $73, respectively.
    
   The Company  may hedge a portion of the exposure from these equity investments by entering into short trades.  These short trades are not treated as derivatives and are carried as a component of other investments sold, not yet purchased in the Company’s consolidated balance sheets.  See note 7.
    
   TBAs and Other Forward Agency MBS Contracts 
    
   TBAs are forward contracts to purchase or sell MBS with collateral that remains “to be announced” until just prior to the trade settlement date. In addition to TBAs, the Company sometimes enters into forward purchases or sales of agency MBS where the underlying collateral has been identified.  These transactions are referred to as other forward agency MBS contracts.  TBAs and other forward agency MBS contracts are accounted for as derivatives by the Company under ASC 815.  The settlement of these transactions is not expected to have a material effect on the Company’s consolidated financial statements.
    
   In addition to TBAs and other forward agency MBS contracts as part of the Company’s broker-dealer operations, the Company  may, from time to time, enter into other securities or loan trades that do not settle within the normal securities settlement period. In those cases, the purchase or sale of the security or loan is not recorded until the settlement date.  However, from the trade date until the settlement date, the Company’s interest in the security is accounted for as a derivative as either a forward purchase commitment or forward sale commitment.  The Company will classify the related derivative either within investments-trading or other investments, at fair value, depending on where it intends to classify the investment once the trade settles.
    
   The Company enters into TBAs and other forward agency MBS transactions for three main reasons.
    
     (i)  The Company trades U.S. government agency obligations.  In connection with these activities, the Company  may be required to maintain inventory in order to facilitate customer transactions.  In order to mitigate exposure to market risk, the Company  may enter into the purchase and sale of TBAs and other forward agency MBS contracts. 
  (ii)  The Company also enters into TBAs and other forward agency MBS contracts in order to assist clients (generally small