Company: COHN
Filing Date: 2025-08-04
Form Type: 10-Q
Source: 0001437749-25-024506
Chunk: 40

Company: Cohen & Co Inc.
Filing Date: 2025-08-04
Form: 10-Q
Item: Item 1
Chunk 40
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. 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 to mid-size mortgage loan originators) in hedging the interest rate risk associated with the mortgages owned by these clients. 
  (iii)  Finally, the Company  may enter into TBAs and other forward agency MBS contracts on a speculative basis. 

   The Company carries TBAs and other forward agency MBS contracts at fair value and includes them as a component of investments-trading or trading securities sold, not yet purchased in the Company’s consolidated balance sheets. At  June 30, 2025, the Company had open TBAs and other forward MBS purchase agreements in the notional amount of $1,372,550 and open TBAs and other forward MBS sale agreements in the notional amount of $1,447,917. At  December 31, 2024, the Company had open TBAs and other forward agency MBS purchase agreements in the notional amount of $852,450 and open TBAs and other forward agency MBS sale agreements in the notional amount of $883,900.

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   Other Extended Settlement Trades  
    
   When the Company buys or sells a financial instrument that will not be settled in the regular timeframe, the Company will account for that purchase or sale on the settlement date rather than the trade date.  In those cases, the Company accounts for the transaction between trade date and settlement date as either a forward purchase commitment or a forward