Company: COHN
Filing Date: 2025-05-02
Form Type: 10-Q
Source: 0001437749-25-014235
Chunk: 162

Company: Cohen & Co Inc.
Filing Date: 2025-05-02
Form: 10-Q
Item: Item 8
Chunk 162
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 agency MBS   Revenue-net trading  $432  $1,354 
 Equity derivatives   Principal transactions and other income (loss)   -   (564)
 Share forward liabilities   Principal transactions and other income (loss)   -   7,550 
    $432  $8,340 

   The share forward liabilities offset certain long positions included as a component of other investments, at fair value.  The offsetting long positions had income / (loss) of $0 and ($8,963) for the three months ended  March 31, 2025 and 2024, respectively. 

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   10. COLLATERALIZED SECURITIES TRANSACTIONS 
    
   Gestation Repo
    
   Gestation repo involves entering into repo and reverse repo transactions where the underlying collateral security represents a pool of newly issued mortgage loans. The borrowers (the reverse repo counterparties) are generally mortgage originators. The lenders (the repo counterparties) are a diverse group of counterparties comprised of banks, insurance companies, and other financial institutions. The Company self-clears its gestation repo transactions.
    
   Gestation trades can be structured in two ways:
    
   On Balance Sheet: The Company executes a reverse repo with the borrower and a matching repo (with the same collateral and maturity date) with the lender. In this case, the Company is a principal to each trade and is borrowing from one counterparty and lending to another and earning net interest margin. These transactions are referred to by the Company as on balance sheet gestation repo trades.
    
   Agency Repo: Similar to the on balance sheet repo, the Company first executes a reverse repo with the borrower and a matching repo (with the same collateral and maturity date) with the lender. However, in this case, all three parties (the borrower, the lender, and the Company) simultaneously enter into an assignment agreement. The effect of this assignment is to remove the Company as principal to the reverse repo and repo and have the lender and borrower directly face each other in a repo trade. The Company receives a fee for its role in arranging the financing. These transactions are referred to by the Company as agency gestation repo trades.
    
   Other Repo Transactions 
    
   In addition to the Company’s gestation repo business, the Company  may also enter into reverse repos to acquire securities to cover short positions or as an investment.  Additionally