Institutional Financial Markets (NYSEAMERICAN:COHN), operating as Cohen & Company, reported higher second-quarter earnings as its Cohen & Company Capital Markets investment banking business benefited from SPAC initial public offerings, de-SPAC transactions and appreciation in financial instruments received as deal consideration.
Net income attributable to Cohen & Company shareholders was $3.6 million, or $0.94 per fully diluted share, for the second quarter of 2026. That compared with $1.5 million, or $0.42 per diluted share, in the first quarter and $1.4 million, or $0.81 per diluted share, a year earlier.
Investment Banking Revenue Leads Growth
Investment banking and new issue revenue reached $54 million in the quarter, up from $45.7 million in the first quarter and $44.1 million a year earlier. Chief Financial Officer Joseph Pooler said the majority of that revenue came from the company’s CCM business.
The quarter’s results were primarily driven by SPAC mergers and SPAC IPOs, along with gains on warrants, units and other financial instruments received for investment banking and new issue services, Pooler said.
During a question-and-answer session, Pooler said CCM closed five SPAC IPOs and a number of de-SPAC transactions during the period. He also said securities received as consideration in earlier transactions increased in value as associated companies signed business-combination agreements or completed transactions shortly after quarter-end.
“The CCM business continues to do well,” Pooler said. “It continues to grow its pipeline. It’s adding to its pipeline regularly.”
Chief Executive Officer Lester Brafman said the company had not seen a material change in deal timing or activity from the broader macroeconomic environment. He described the company’s pacing as generally consistent with prior periods, though he noted activity can fluctuate between periods of heightened deal volume and slower markets.
Trading Revenue Increases; Expenses Rise With Revenue
Net trading revenue totaled $13.9 million, rising $700,000 from the prior quarter and $3.1 million from the year-earlier quarter. The sequential increase reflected higher revenue from the mortgage group as well as the SPAC equity and structured-notes trading desks. Compared with a year ago, the increase was driven by the mortgage group and the collateralized mortgage obligation, or CMO, trading desk.
The company said its gestation repo book of business was $4.1 billion as of June 30.
Asset management revenue was $1.8 million, down $600,000 sequentially and $300,000 from the prior-year quarter. Principal transactions and other revenue was a loss of $300,000, an improvement from a $3.4 million loss in the first quarter but below positive revenue of $2.8 million a year earlier.
Compensation and benefits expense increased to $48.2 million, up $6.9 million from the first quarter and $3.9 million year over year. Pooler attributed the changes primarily to revenue fluctuations and related variable incentive compensation. Headcount was 129 at quarter-end, compared with 128 at the end of March and 118 a year earlier.
SPAC Developments and Balance Sheet
Cohen & Company highlighted developments involving its sponsored SPACs. Columbus Circle Capital II signed a definitive business-combination agreement with Elroy Air Inc. on June 26. The transaction was completed in partnership with Inflection Point Asset Management, which introduced Elroy Air and has experience in de-SPAC transactions, according to Pooler.
Following the agreement, Columbus Circle Capital II will be renamed Inflection Point Acquisition Corp. VII. Cohen & Company currently has 667,000 founder shares allocated to it, though Pooler said the final number will not be established or saleable until the business combination closes, which the company anticipates in the fourth quarter of 2026.
The company’s loss from equity-method affiliates was $3 million in the second quarter, compared with losses of $500,000 in the preceding quarter and $1.4 million a year earlier. The current-quarter loss was primarily tied to Columbus Circle Capital II. Cohen & Company recorded an offsetting $2.1 million credit in net income attributable to non-convertible non-controlling interests, resulting in a net $900,000 loss related to the SPAC, mainly from forfeiting placement units.
Columbus Circle Capital III completed a $230 million IPO shortly after the quarter ended. Cohen & Company currently has 2.28 million founder shares allocated to that SPAC, subject to final determination upon completion of a business combination. CCM also used $3.6 million of its underwriting fee to purchase 360,000 placement units in the related private placement.
Total equity was $109.3 million at June 30, compared with $103.1 million at year-end. Consolidated corporate indebtedness was $28.8 million. The company declared a quarterly dividend of $0.25 per share, payable Sept. 2 to stockholders of record on Aug. 19.
Brafman said the company remains focused on executing its strategic priorities, increasing revenue and profitability, and building long-term value for stockholders.
About Institutional Financial Markets (NYSEAMERICAN:COHN)
Cohen & Co, Inc engages in fixed income markets. It operates through the following segments: Capital Markets, Asset Management, and Principal Investing. The Capital Markets segment consists of fixed income sales, trading, matched book repo financing, and new issue placements in corporate and securitized products and advisory services, operating primarily through its subsidiaries. The Asset Management segment manages assets through investment vehicles, such as collateralized debt obligations, managed accounts, and investment funds.
