Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Nov. 01, 2017 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Cohen & Co Inc. | |
Entity Central Index Key | 1,270,436 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Current Fiscal Year End Date | --12-31 | |
Trading Symbol | cohn | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 1,258,834 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 | |
Assets | |||
Cash and cash equivalents | $ 22,133 | $ 15,216 | |
Receivables from brokers, dealers, and clearing agencies | 108,870 | 81,178 | |
Due from related parties | 547 | 57 | |
Other receivables | 2,364 | 5,225 | |
Investments-trading | 104,262 | 157,178 | |
Other investments, at fair value | 5,814 | 8,303 | |
Receivables under resale agreements | 436,541 | 281,821 | |
Goodwill | [1] | 7,992 | 7,992 |
Other assets | 1,732 | 4,301 | |
Total assets | 690,255 | 561,271 | |
Liabilities | |||
Payables to brokers, dealers, and clearing agencies | 32,602 | 85,761 | |
Due to related parties | 50 | ||
Accounts payable and other liabilities | 20,680 | 9,618 | |
Accrued compensation | 3,598 | 4,795 | |
Trading securities sold, not yet purchased | 89,993 | 85,183 | |
Securities sold under agreement to repurchase | 448,133 | 295,445 | |
Deferred income taxes | 4,092 | 4,134 | |
Debt | 43,917 | 29,523 | |
Total liabilities | 643,015 | 514,509 | |
Commitments and contingencies (See note 16) | |||
Stockholders' Equity: | |||
Voting Non-Convertible Preferred Stock, $0.001 par value per share, 4,983,557 shares authorized, 4,983,557 shares issued and outstanding (see Note 13) | 5 | 5 | |
Common Stock, $0.01 par value per share, 100,000,000 shares authorized, 1,261,094 and 1,208,919 shares issued and outstanding, respectively, including 81,098 and 73,962 unvested or restricted share awards, respectively | 12 | 12 | |
Additional paid-in capital | 69,840 | 69,415 | |
Accumulated other comprehensive loss | (888) | (1,074) | |
Accumulated deficit | (29,769) | (29,576) | |
Total stockholders' equity | 39,200 | 38,782 | |
Non-controlling interest | 8,040 | 7,980 | |
Total equity | 47,240 | 46,762 | |
Total liabilities and equity | $ 690,255 | $ 561,271 | |
[1] | Goodwill and intangible assets as of September 30, 2017 and December 2016 are allocated to the Capital Markets and Asset Management business segments as indicated in the table above. |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2017 | Dec. 31, 2016 |
Common Stock, par value | $ 0.01 | $ 0.01 |
Common Stock, shares authorized | 100,000,000 | 100,000,000 |
Common Stock, shares issued | 1,261,094 | 1,208,919 |
Common Stock, shares outstanding | 1,261,094 | 1,208,919 |
Common Stock, unvested or restricted share awards | 81,098 | 73,962 |
Series E Preferred Stock [Member] | ||
Preferred Stock, par value | $ 0.001 | $ 0.001 |
Preferred Stock, shares authorized | 4,983,557 | 4,983,557 |
Preferred Stock, shares issued | 4,983,557 | 4,983,557 |
Preferred Stock, shares outstanding | 4,983,557 | 4,983,557 |
Consolidated Statements Of Oper
Consolidated Statements Of Operations And Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | ||
Revenues | |||||
Net trading | $ 5,988 | $ 10,486 | $ 20,158 | $ 31,973 | |
Asset management | 1,779 | 1,781 | 6,202 | 5,662 | |
New issue and advisory | 2,012 | 811 | 3,992 | 2,176 | |
Principal transactions and other income | 222 | 1,012 | 5,515 | 2,379 | |
Total revenues | 10,001 | 14,090 | 35,867 | 42,190 | |
Operating expenses | |||||
Compensation and benefits | 4,759 | 7,464 | 17,493 | 24,392 | |
Business development, occupancy, equipment | 738 | 718 | 2,021 | 2,033 | |
Subscriptions, clearing, and execution | 1,789 | 1,678 | 5,169 | 4,702 | |
Professional fee and other operating | 1,666 | 1,513 | 5,694 | 4,718 | |
Depreciation and amortization | 60 | 66 | 187 | 220 | |
Total operating expenses | 9,012 | 11,439 | 30,564 | 36,065 | |
Operating income | 989 | 2,651 | 5,303 | 6,125 | |
Non-operating income (expense) | |||||
Interest expense, net | (1,606) | (991) | (4,330) | (2,973) | |
Income (loss) before income tax expense | (617) | 1,660 | 973 | 3,152 | |
Income tax expense | 141 | 130 | 148 | 157 | |
Net income (loss) | (758) | 1,530 | 825 | 2,995 | |
Less: Net income (loss) attributable to the non-controlling interest | (211) | 489 | 274 | 925 | |
Net income (loss) attributable to Cohen & Company Inc. | $ (547) | $ 1,041 | $ 551 | $ 2,070 | |
Income (loss) per common share-basic: | |||||
Basic income (loss) per common share | $ (0.45) | $ 0.88 | $ 0.46 | $ 1.68 | |
Weighted average shares outstanding-basic | 1,212,826 | 1,180,742 | 1,209,585 | 1,232,824 | |
Income (loss) per common share-diluted: | |||||
Diluted income (loss) per common share | $ (0.45) | $ 0.87 | $ 0.45 | $ 1.67 | |
Weighted average shares outstanding-diluted | [1] | 1,745,235 | 1,726,200 | 1,755,932 | 1,774,357 |
Dividends declared per common share | $ 0.20 | $ 0.20 | $ 0.60 | $ 0.60 | |
Comprehensive income : | |||||
Net income (loss) | $ (758) | $ 1,530 | $ 825 | $ 2,995 | |
Other comprehensive income (loss) item: | |||||
Foreign currency translation adjustments, net of tax of $0 | 91 | (30) | 280 | (156) | |
Other comprehensive income (loss), net of tax of $0 | 91 | (30) | 280 | (156) | |
Comprehensive income (loss) | (667) | 1,500 | 1,105 | 2,839 | |
Less: comprehensive income (loss) attributable to the non-controlling interest | (186) | 480 | 354 | 876 | |
Comprehensive income (loss) attributable to Cohen & Company Inc. | $ (481) | $ 1,020 | $ 751 | $ 1,963 | |
[1] | For the three months ended September 30, 2017, weighted average common shares outstanding excludes (i) 14,059 shares representing restricted Operating LLC membership units, restricted Common Stock, and restricted units of Common Stock that would be anti-dilutive because of the Company's net loss, (ii) 274,917 shares from the assumed conversion of the 2013 Notes, and (iii) 1,034,483 shares from the assumed conversion of the 2017 Note because of the Company's net loss and the inclusion of the converted shares would be anti-dilutive. |
Consolidated Statements Of Ope5
Consolidated Statements Of Operations And Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Consolidated Statements of Operations And Comprehensive Income/(Loss) [Abstract] | ||||
Foreign currency translation adjustments, tax | $ 0 | $ 0 | $ 0 | $ 0 |
Other comprehensive income (loss), tax | $ 0 | $ 0 | $ 0 | $ 0 |
Consolidated Statement Of Chang
Consolidated Statement Of Changes In Equity - 9 months ended Sep. 30, 2017 - USD ($) $ in Thousands | Preferred Stock [Member] | Common Stock [Member] | Additional paid-in capital [Member] | Retained Earnings/ (Accumulated Deficit) [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Total Stockholders' Equity [Member] | Non-controlling Interest [Member] | Total |
Balance at Dec. 31, 2016 | $ 5 | $ 12 | $ 69,415 | $ (29,576) | $ (1,074) | $ 38,782 | $ 7,980 | $ 46,762 |
Net income | 551 | 551 | 274 | 825 | ||||
Other comprehensive income | 200 | 200 | 80 | 280 | ||||
Acquisition / (surrender) of additional units of consolidated subsidiary, net | 153 | (14) | 139 | (139) | ||||
Equity-based compensation and vesting of shares | 445 | 445 | 195 | 640 | ||||
Shares withheld for employee taxes | (69) | (69) | (31) | (100) | ||||
Purchase and retirement of common stock | (104) | (104) | (104) | |||||
Dividends/Distributions | (744) | (744) | (319) | (1,063) | ||||
Balance at Sep. 30, 2017 | $ 5 | $ 12 | $ 69,840 | $ (29,769) | $ (888) | $ 39,200 | $ 8,040 | $ 47,240 |
Consolidated Statements Of Cash
Consolidated Statements Of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Operating activities | ||
Net income | $ 825 | $ 2,995 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Equity-based compensation | 640 | 1,002 |
Accretion of income on other investments, at fair value | (938) | (1,005) |
Realized loss (gain) on other investments | 753 | 2,062 |
Change in unrealized (gain) loss on other investments, at fair value | (368) | (1,775) |
Depreciation and amortization | 187 | 220 |
Amortization of discount on debt | 794 | 755 |
Deferred tax provision/(benefit) | (42) | (10) |
Change in operating assets and liabilities, net: | ||
(Increase) decrease in other receivables | 2,861 | 1,567 |
(Increase) decrease in investments-trading | 52,916 | (36,265) |
(Increase) decrease in other assets | 1,855 | 98 |
(Increase) decrease in receivables under resale agreement | (154,720) | (160,275) |
Change in receivables from / payables to related parties, net | (540) | 4 |
Increase (decrease) in accrued compensation | (1,197) | 468 |
Increase (decrease) in accounts payable and other liabilities | (4) | 60 |
Increase (decrease) in trading securities sold, not yet purchased | 4,810 | 16,355 |
Change in receivables from/ payables to brokers, dealers, and clearing agencies | (80,851) | (9,052) |
Increase (decrease) in securities sold under agreement to repurchase | 152,688 | 174,887 |
Net cash provided by (used in) operating activities | (20,331) | (7,909) |
Investing activities | ||
Purchase of investments-other investments, at fair value | (237) | |
Sales and returns of principal-other investments, at fair value | 3,042 | 7,924 |
Purchase of furniture, equipment, and leasehold improvements | (73) | (210) |
Net cash provided by (used in) investing activities | 2,969 | 7,477 |
Financing activities | ||
Proceeds from issuance of convertible debt | 15,000 | |
Proceeds from redeemable financial instrument | 11,000 | |
Payments for debt issuance costs | (800) | |
Cash used to net share settle equity awards | (100) | (28) |
Purchase and retirement of Common Stock | (104) | (2,319) |
Non-controlling interest distributions | (319) | (320) |
Cohen & Company Inc. dividends | (744) | (717) |
Net cash provided by (used in) financing activities | 23,933 | (3,384) |
Effect of exchange rate on cash | 346 | (214) |
Net increase (decrease) in cash and cash equivalents | 6,917 | (4,030) |
Cash and cash equivalents, beginning of period | 15,216 | 14,115 |
Cash and cash equivalents, end of period | $ 22,133 | $ 10,085 |
Organization And Nature Of Oper
Organization And Nature Of Operations | 9 Months Ended |
Sep. 30, 2017 | |
Organization And Nature Of Operations [Abstract] | |
Organization And Nature Of Operations | 1. ORGANIZATION AND NATURE OF OPERATIONS Organizational History Cohen Brothers, LLC (“Cohen Brothers” ) was formed on October 7, 2004 by Cohen Bros. Financial, LLC (“CBF”). Cohen Brothers was established to acquire the net assets of CBF’s subsidiaries (the “Formation Transaction”): Cohen Bros. & Company, Inc.; Cohen Frères SAS; Dekania Investors, LLC; Emporia Capital Management, LLC; and the majority interest in Cohen Bros. & Toroian Investment Management, Inc. The Formation Transaction was accomplished through a series of transactions occurring between March 4, 2005 and May 31, 2005. From its formation until December 16, 2009, Cohen Brothers operated as a privately owned limited liability company. On December 16, 2009, Cohen Brothers completed its merger (the “Merger”) with a subsidiary of Alesco Financial Inc. (“AFN”) , a publicly traded real estate investment trust. As a result of the Merger, AFN contributed substantially all of its assets into Cohen Brothers in exchange for newly issued membership uni ts directly from Cohen Brothers. In addition, AFN received additional Cohen Brothers membership interests directly from its members in exchange for AFN common stock. In accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”), the Merger was accounted for as a reverse acquisition, and Cohen Brothers was deemed to be the accounting acquirer. As a result, all of AFN’s assets and liabilities were required to be revalued at fair value as of the acquisition date. The remaining membership interests of Cohen Brothers that were not held by AFN were included as a component of non-controlling interest in the consolidated balance sheet. Subsequent to the Merger, AFN was renamed Cohen & Company Inc. In January 2011, it was renamed again as Institutional F inancial Markets, Inc. (“IFMI”). E ffective January 1, 2010, the Company ceased to qualify as a real estate investment trust, or a REIT. On September 1, 2017, the Company (i) changed its name from Institutional Financial Markets, Inc. to Cohen & Company Inc. and the Company’s trading symbol on the NYSE American Stock Exchange from “IFMI” to “COHN”; (ii) effected a 1 for 10 reverse stock split; and (iii) increased the par value of the Company’s common stock from $0.001 per share to $0.01 per share. All share and per share amounts have been restated to account for this change. The Company The Company is a financial services company specializing in fixed income markets. As of September 30, 2017 , the Company had $3.55 billion in assets under management (“AUM”) of which 90.5% , or $3.22 billion , was in collateralized debt obligations (“CDOs”). In these financial statements, the “Company” refers to Cohen & Company Inc. and its subsi diaries on a consolidated basis. Cohen & Company, LLC or the “Operating LLC” refers to the main operating subsidiary of the Company. “Cohen Brothers” refers to the pre-Merger Cohen Brothers, LLC and its subsidiaries . “AFN” refers to the pre-merger Alesco Financial Inc. and its subsidiaries. “JVB Holdings” refers to J . V . B . Financial Holdings, L.P. “JVB” refers to J . V . B . Financial Group LLC, a broker dealer subsidiary. “CCFL” refers to Cohen & Company Financial Limited (formerly known as EuroDekania Management LTD), a subsidiary regulated by the Financial Conduct Authority (formerly known as Financial Services A uthority) in the United Kingdom. “EuroDekania” refers to EuroDekania (Cayman) Ltd., a Cayman Islands exempted company that is externally managed by CCFL. The Company’s business is organized into the following three business segments. Capital Markets : The Company’s Capital Markets business segment consists primarily of f ixed income sales, trading, and matched book repo financing , new issue placements in corporate and securitized products, and advisory services. The Company’s fixed income sales and trading group provides trade execution to corporate investors, institutional investors, mortgage originators, and other smaller broker-dealers. The Company specializes in a variety of products, including but not limited to: corporate bonds, asset backed securities (“ABS”), mortgage backed securities (“ MBS”), residential mortgage backed securities (“RMBS”), CDOs, collateralized loan obligations (“CLOs”), collateralized bond obligations (“CBOs”), collateralized mortgage obligations (“CMOs”), municipal securities, to-be-announced securities (“TBAs”) and other forward agency MBS contracts, Small Business Administration (“SBA”) loans, U.S. government bonds, U.S. government agency securities, brokered deposits and certificates of deposit (“ CDs ”) for small banks, and hybrid capital of financial institutions including trust preferred securities (“TruPS”), whole loans, and other structured financial instruments. The Company also offers execution and brokerage services for equity products. The Company carries out its capital market activities primarily through its subsidiaries: JVB in the United State s and CCFL in Europe. Asset Management : The Company’s Asset Management business segment manages assets within CDOs, managed accounts, and investment funds (collectively referred to as “Investment Vehicles”). A CDO is a form of secured borrowing. The borrowing is secured by different types of fixed income assets such as corporate or mortgage loans or bonds. The borrowing is in the form of a securitization, which means that the lenders are actually investing in notes backed by the assets. In the event of default, the lenders will have recourse only to the assets securing the loan. The Company’s Asset Management business segment includes its fee-based asset management operations , which include ongoing base and incentive management fees. Principal Investing : The Company’s Principal Investing business segment is comprised of investments that the Company has made using its own capital excluding investments the Company makes to support its Capital Markets business segment. These inv estments are a component of the Company’s other in vestments, at fair value in its consolidated balance sheet. The Company generates its revenue by business segment primarily through the following activities. Capital Markets · Trading activities of the Company, which include execution and brokerage services, securities lending activities, riskless trading activities as well as gains and losses (unrealized and realized) and income and expense earned on securities and derivatives classified as trading; and · New issue and advisory revenue comprised primarily of (i) new issue revenue associated with originating, arranging, and placing newly created financial instruments; and (ii) revenue from advisory services. Asset Management · Asset management f ees for the Company’s on going asset management services provided to certain Investment Vehicles, which may include fees both senior and subordinate to the secur ities in the Investment Vehicle , and incentive management fees earned based on the performance of the various Investment Vehicles. Principal Investing · Gains and losses (unrealized and realized) and income and expense earned on securities classified as other investments, at fair value. |
Basis Of Presentation
Basis Of Presentation | 9 Months Ended |
Sep. 30, 2017 | |
Organization And Nature Of Operations [Abstract] | |
Basis Of Presentation | 2. BASIS OF PRESENTATION The financial statements of the Company included herein were prepared in conformity with U.S. GAAP for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The information furnished includes all adjustments and accruals of a normal recurring nature, which, in the opinion of management, are necessary for a fair presentation of results for the interim month periods. All intercompany accounts and transactions have been eliminated in consolidation. The results for the nine months ended September 30, 2017 and 2016 are not necessarily indicative of the results for the entire year or any subsequent interim period. These financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 . Capitalized terms used herein without definition have the meanings ascribed to them in the Annual Report on Form 10-K for the year ended December 31, 2016 . |
Summary Of Significant Accounti
Summary Of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2017 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary Of Significant Accounting Policies | 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Adoption of New Accounting Standards In June 2014, the FASB issued ASU No. 2014-12, Compensation-Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide that a Performance Target could be Achieved After the Requisite Service Period , which requires a performance target that affects vesting and that could be achieved after the requisite service period be accounted for as a performance condition rather than as a non-vesting condition that affects the grant-date fair value of the award. The Company’s adoption of the provisions of ASU 2014-12 effective January 1, 2016 did not have an effect on the Company’s consolidated financial position, results of operations, or cash flows. In August 2014, the FASB issued ASU No. 2014-13, Measuring the Financial Assets and the Financial Liabilities of a Consolidated Collateralized Financing Entity , which provides a measurement alternative for an entity that consolidates collateralized financing entities. A collateralized financing entity is a variable interest entity with nominal or no equity that holds financial assets and issues beneficial interests in those financial assets. The beneficial interests, which are financial liabilities of the collateralized financing entity, have contractual recourse only to the related assets of the collateralized financing entity. If elected, the alternative method results in the reporting entity measuring both the financial assets and financial liabilities of the collateralized financing entity using the more observable of the two fair value measurements, which effectively removes measurement differences between the financial assets and financial liabilities of the collateralized financing entity previously recorded as net income (loss) attributable to non-controlling and other beneficial interests and as an adjustment to appropriated retained earnings. The reporting entity continues to measure its own beneficial interests in the collateralized financing entity (other than those that represent compensation for services) at fair value. The Company’s adoption of the provisions of ASU 2014-13 effective January 1, 2016 did not have an effect on the Company’s consolidated financial position, results of operations, or cash flows. In November 2014, the FASB issued ASU No. 2014-16, Derivatives and Hedging (Topic 815) : Determining whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share is More Akin to Debt or to Equity, which clarifies that an entity must consider all relevant terms and features when evaluating the nature of the host contract. Additionally, the amendments state that no one term or feature would define the host contract’s economic characteristics and risks. Instead, the economic characteristics and risks of the hybrid financial instrument as a whole would determine the nature of the host contract. The Company’s adoption of the provisions of ASU 2014-16 effective January 1, 2016 did not have an effect on the Company’s consolidated financial position, results of operations, or cash flows. In January 2015, the FASB issued ASU No. 2015-01, Income Statement – Extraordinary and Unusual Items (Subtopic 225-20), Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items , which eliminates from U.S. GAAP the requirement of extraordinary items to be separately classified on the income statement. The Company’s adoption of the provisions of ASU 2015-01 effective January 1, 2016 did not have an effect on the Company’s consolidated financial position, results of operations, or cash flows. In February 2015, the FASB issued ASU No. 2015-02, Consolidation (Topic 810) – Amendments to the Consolidation Analysis, which makes targeted amendments to the current consolidation guidance and ends the deferral granted to investment companies from applying the variable interest entity (“VIE”) guidance. The revised consolidation guidance, among other things, (i) modifies the evaluation of whether limited partnerships and similar legal entities are VIEs or voting interest entities, (ii) eliminates the presumption that a general partner should consolidate a limited partnership, and (iii) modifies the consolidation analysis of reporting entities that are involved with VIEs through fee arrangements and related party relationships. The Company’s adoption of the provisions of ASU 2015-02 effective January 1, 2016 did not have an effect on the Company’s consolidated financial position, results of operations, or cash flows. However, the Company previously treated its management contracts with certain securitization entities that are VIEs as variable interests. Therefore, the Company disclosed certain information related to these interests in its variable interest entity footnote. Upon adoption of this ASU, these management contracts are not considered variable interests. Therefore, in cases where the Company’s only interest in certain VIEs is its management contract, the Company is no longer required to include certain disclosures related to those variable interest entities. See note 11. In April 2015, the FASB issued ASU No. 2015-03, Interest-Imputation of Interest (Subtopic 835-30), Simplifying the Presentation of Debt Issuance Costs , which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement for debt issuance costs are not affected by the amendments in this update. Upon adoption of the provisions of ASU 2015-03 effective January 1, 2016, the Company reclassified its deferred financing costs as of January 1, 2016 resulting in a reduction in other assets of $410 and a reduction in debt of $410 in the Company’s consolidated balance sheet as of December 31, 2015. In May 2015, the FASB issued ASU No. 2015-07, Fair Value Measurement (Topic 820) – Disclosures for Investments in Certain Entities that Calculate Net Asset Value per Share (or its Equivalent) . Reporting entities are permitted to use net asset value (“NAV”) as a practical expedient to measure the fair value of certain investments. Previously, investments that used the NAV practical expedient to measure fair value were categorized within the fair value hierarchy as level 2 or level 3 investments depending on their redemption attributes, which has led to diversity in practice. This ASU removes the requirement to categorize within the fair value hierarchy all investments that use the NAV practical expedient for fair value measurement purposes. The ASU removes the requirement to make certain disclosures for all investments that are eligible to be measured at fair value using the NAV practical expedient. Rather, those disclosures are limited to investments for which the entity has elected to measure the fair value using that practical expedient. The Company’s adoption of ASU 2015-07 effective January 1, 2016 did not have an effect on the Company’s consolidated financial position, results of operations, or cash flows. However, as a result of this adoption, the Company no longer classifies its investment in EuroDekania (for which it uses the practical expedient) within the fair value hierarchy. See note 7. In September 2015, the FASB issued ASU No. 2015-16, Business Combinations (Topic 805), Simplifying the Accounting for Measurement-Period Adjustments , which includes amendments that eliminate the requirement to restate prior period financial statements for measurement period adjustments following a business combination. The new guidance requires that the cumulative impact of a measurement period adjustment (including the impact on prior periods) be recognized in the reporting period in which the adjustment is identified. The prior period impact of the adjustment should be either presented separately on the face of the income statement or disclosed in the notes to the financial statements. The Company’s adoption of the provisions of ASU 2015-16 effective January 1, 2016 did not have an effect on the Company’s consolidated financial position, results of operations, or cash flows. In March 2016, the FASB issued ASU 2016-06, Derivatives and Hedging (Topic 815): Contingent Put and Call Options in Debt Instruments. This ASU clarifies what steps are required when assessing whether the economic characteristics and risks of call (put) options are clearly and closely related to the economic characteristics and risks of their debt hosts, which is one of the criteria for bifurcating an embedded derivative. Consequently, when a call (put) option is contingently exercisable, an entity does not have to assess whether the event that triggers the ability to exercise a call (put) option is related to interest rates or credit risks. The Company’s adoption of the provisions of ASU 2016-06 effective January 1, 2017 did not have an effect on the Company’s consolidated financial statements. In March 2016, the FASB issued ASU 2016-07, Investments - Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting . This ASU eliminates the requirement that when an investment qualifies for use of the equity method as a result of an increase in the level of ownership interest or degree of influence, an investor must adjust the investment, results of operations, and retained earnings retroactively on a step-by-step basis as if the equity method had been in effect during all previous periods that the investment had been held. The amendments require that the equity method investor add the cost of acquiring the additional interest in the investee to the current basis of the investor’s previously held interest and adopt the equity method of accounting as of the date the investment becomes qualified for equity method accounting. If an entity has an available-for-sale equity security that becomes qualified for the equity method of accounting, it should recognize through earnings the unrealized holding gain or loss in accumulated other comprehensive income at the date the investment becomes qualified for use of the equity method . The Company’s adoption of the provisions of ASU 2016-07 effective January 1, 2017 did not have an effect on the Company’s consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting . This ASU simplifies several aspects of the accounting for share-based payment award transactions including: (i) income tax consequences; (ii) classification of awards as either equity or liabilities; and (iii) classification on the statement of cash flows. The Company’s adoption of the provisions of ASU 2016-09 effective January 1, 2017 did not have a material impact on the Company’s consolidated financial statements. In October 2016, the FASB issued ASU 2016-17 , Consolidation (Topic 810): Interests Held through Related Parties That Are under Common Control . The amendments change the evaluation of whether a reporting entity is the primary beneficiary of a variable interest entity by changing how a reporting entity that is a single decision maker of a variable interest entity treats indirect interests in the entity held through related parties that are under common control. If a reporting entity satisfies the first characteristic of a primary beneficiary (such that it is the single decision maker of a variable interest entity), the amendments require that reporting entity, in determining whether it satisfies the second characteristic of a primary beneficiary, to include all of its direct variable interests in a variable interest entity and, on a proportionate basis, its indirect variable interests in a variable interest entity held through related parties, including related parties that are under common control with the reporting entity. The Company’s adoption of the provisions of ASU 2016-17 effective January 1, 2017 did not have an effect on the Company’s consolidated financial statements. B. Recent Accounting Developments In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) . The core principle of this ASU is to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Subsequently, the FASB issued a series of modifying ASUs that do not change the core principle of the guidance stated in ASU 2014-09. The modifying ASUs include: ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), ASU 2016-10 , Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing , and ASU 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow Scope Improvements and Practical Expedients. The Company must adopt the amendments in ASU 2016-08, ASU 2016-10, and ASU 2016-12 with the adoption of ASU 2014-09. The effective date for all of the amendments in these ASUs is for annual periods beginning after December 15, 2017, including interim reporting periods within that reporting period as amended by ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date . Early application is permitted. The Company commenced its evaluation of the impact of this ASU in 2016. This ASU excludes from its scope revenue recognition related to items the Company records as a component of net trading and principal transactions within its consolidated statement of operations. Therefore, this ASU will have no impact on these items. Furthermore, based on the Company’s review to date, the Company does not anticipate the new guidance will have a material impact on items it records as a component of asset management or other revenue. The Company will adopt the new guidance on January 1, 2018 using the modified retrospective transition method. The Company expects any cumulative effect adjustment resulting from the application of this method will be immaterial. In February 2016, the FASB issued ASU No. 2016-01, Financial Instruments-Overall (Subtopic 825-10) . The amendments in ASU 2016-01, among other things: require equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income; require public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; require separate presentation of financial assets and liabilities by measurement category and form of financial asset; and eliminate the requirement for public business entities to disclose the methods and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact of these amendments on the presentation in its consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). Under the new guidance, lessees will be required to recognize the following for all leases with the exception of short-term leases: (i) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (ii) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Lessor accounting is largely unchanged. Certain targeted improvements were made to align, where necessary, lessor accounting with the lessee accounting model and Topic 606, Revenue from Contracts with Customers. The ASU is effective for entities for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early application is permitted. The Company is currently evaluating this new guidance to determine the impact it may have on its consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . The amendments in this ASU require the measurement of all expected credit losses for financial assets held at the reporting date to be based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates. Many of the loss estimation techniques applied today will still be permitted, although the inputs to those techniques will change to reflect the full amount of expected credit losses. In addition, the ASU amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. The amendments in this ASU are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently evaluating the new guidance to determine the impact it may have on its consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments . The amendments in this ASU provide cash flow statement classification guidance on eight specific cash flow presentation issues with the objective of reducing existing diversity in practice. This ASU is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early application is permitted, including adoption in an interim period. The Company is currently evaluating the new guidance to determine the impact it may have on its consolidated financial statements. In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory . The amendments require an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. The amendments eliminate the exception of an intra-entity transfer of an asset other than inventory. This ASU is effective for fiscal years beginning after December 15, 2017, including interim reporting periods within these years. Early adoption is permitted. The Company is currently evaluating the new guidance to determine the impact it may have on its consolidated financial statements. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. The amendments in this ASU clarify the definition of a business and affect all companies and other reporting organizations that must determine whether they have acquired or sold a business. This ASU is effective for fiscal years beginning after December 15, 2017, including interim periods within those periods. Early adoption is permitted under certain circumstances. The amendments should be applied prospectively as of the beginning of the period of adoption. The Company is currently evaluating the new guidance to determine the impact it may have on its consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other: Simplifying the Test for Goodwill Impairment (Topic 350) . The amendments in this ASU eliminate Step 2 from the goodwill impairment test. The annual or interim goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. This ASU is effective for fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017 and should be applied on a prospective basis. The Company is currently evaluating the new guidance to determine the impact it may have on its consolidated financial statements. In February 2017, the FASB issued ASU 2017-05, Other Income – Gains and Losses from the Derecognition of a Nonfinancial Assets: Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets. The amendments in this ASU clarify that a financial asset within the scope of this topic may include nonfinancial assets transferred within a legal entity to counterparty. The amendments clarify that an entity should identify each distinct nonfinancial asset or in substance nonfinancial asset promised to counterparty and derecognize each asset when counterparty obtains control of it. The effective date for this ASU is for annual periods beginning after December 15, 2017. Early application is permitted. The Company is currently evaluating the new guidance to determine the impact it may have its consolidated financial statements. In March 2017, the FASB issued ASU 2017-08, Receivables – Nonrefundable Fees and Other Costs, Premium Amortization on Purchased Callable Debt Securitie s (Sub-Topic 310-20). The amendments shorten the amortization period for certain callable debt securities held at a premium. Specifically, the amendments require the premium to be amortized to the earliest call date. The amendments do not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. This ASU is effective for fiscal years beginning after December 15, 2018. Early adoption is permitted. The Company is currently evaluating the new guidance to determine the impact it may have on its consolidated financial statements. In May 2017, t he FASB issued ASU 2017-09, Compensation - Stock Compensation (Topic 718) Scope of Modification Accounting. This ASU is effective for fiscal years beginning after December 15, 201 7 , and interim periods within those fiscal years. The amendments provide guidance on determining those changes to the terms and conditions of share-based payment awards that require an entity to apply modification accounting. The Company is currently evaluating the new guidance to determine the impact it may have on its consolidated financial statements. In August 2017, the FASB issued ASI 2017-12, Derivative and H edging: Targeted Improvements to Accounting for Hedging Activities (Topic 815) . This ASU is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. The amendments refine and expand hedge accounting for both financ ial and commodity risks and it contains provisions to create more transparency and clarify how economic results are presented. T he Company is currently evaluating the new guidance to determine the impact it may have on its consolidated financial statements. C. Fair Value of Financial Instruments The following methods and assumptions were used by the Company in estimating the fair value of its financial instruments. These determinations were based on available market information and appropriate valuation methodologies. Considerable judgment is required to interpret market data to develop the estimates and, therefore, these estimates may not necessarily be indicative of the amount the Company could realize in a current market exchange. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts. Refer to note 7 for a discussion of the fair value hierarchy with respect to investments-trading; other investments, at fair value; and derivatives held by the Company. Cash and cash equivalents : Cash equivalents are carried at historical cost, which is assumed to approximate fair value. The estimated fair value measurement of cash equivalents is classified within level 1 of the valuation hierarchy. Investments-trading : These amounts are carried at fair value. The fair value is based on either quoted market prices of an active exchange, independent broker market quotations, market price quotations from third party pricing services, or valuation models when quotations are not available. Other investments, at fair value : These amounts are carried at fair value. The fair value is based on quoted market prices of an active exchange, independent broker market quotations, or valuation models when quotations are not available. In the case of investments in alternative investment funds, fair value is generally based on the reported net asset value of the underlying fund. Receivables under resale agreements : Receivables under resale agreements are carried at their contracted resale price, have short-term maturities, and are repriced frequently or bear market interest rates and, accordingly, these contracts are carried at amounts that approximate fair value. The estimated fair value measurements of receivables under resale agreements are based on observations of actual market activity and are generally classified within level 2 of the valuation hierarchy . Trading securities sold, not yet purchased : These amounts are carried at fair value. The fair value is based on quoted market prices of an active exchange, independent market quotations, market price quotations from third party pricing services, or valuation models when quotations are not available . Securities sold under agreement to repurchase : The liabilities for securities sold under agreement to repurchase are carried at their contracted repurchase price, have short-term maturities, and are repriced frequently with amounts normally due in one month or less and, accordingly, these contracts are at amounts that approximate fair value. The estimated fair value measurements of securities sold under agreement to repurchase are based on observations of actual market activity and are generally classified within level 2 of the valuation hierarchy. Debt : These amounts are carried at outstanding principal less unamortized discount and deferred financing costs. However, a substantial portion of the debt was assumed in the Merger and recorded at fair value as of that date. As of September 30, 2017 and December 31, 2016 , the fair value of the Company’s debt was estimated to be $55,396 and $37,121 , respectively. The estimated fair value measurements of the debt are generally based on discounted cash flow models prepared by the Company’s management primarily using discount rates for similar instruments issued to companies with similar credit risks to the Company and are generally classified within level 3 of the valuation hierarchy. Derivatives : These amounts are carried at fair value. Derivatives may be included as a component of investments-trading; trading securities sold, not yet purchased; and other investments, at fair value. See notes 7 and 8. The fair value is generally based on quoted market prices on an exchange that is deemed to be active for derivative instruments such as foreign currency forward contracts and Eurodollar futures. For other derivative instruments, such as TBAs, the fair value is generally based on market price quotations from third party pricing services. |
Dispositions
Dispositions | 9 Months Ended |
Sep. 30, 2017 | |
Dispositions [Abstract] | |
Dispositions | 4. DISPOSITIONS Termination of Sale of European Operations On August 19, 2014, the Company entered into an agreement (the “European Sale Agreement”) to sell its European operations to C&Co Europe Acquisition LLC, an entity controlled by Daniel G. Cohen, the president and chief executive of the Company’s European operations and vice chairman of the Company’s board of directors, for approximately $8,700 . The transaction was subject to customary closing conditions and regulatory approval from the United Kingdom Financial Conduct Authority (“FCA”). The European Sale Agreement originally had a termination date of March 31, 2015, which date was extended on two separate occasions, the last time to December 31, 2015. After December 31, 2015, either party had the right to terminate the transaction. In connection with the final extension of the European Sale Agreement’s termination date, the parties to the transaction agreed that upon a termination of the European Sale Agreement by either party, Mr. Cohen’s employment agreement would be amended to reduce the payment the Company was required to pay to Mr. Cohen in the event his employment was terminated without “cause” or for “good reason” (as such terms are defined in Mr. Cohen’s employment agreement) from $3,000 to $1,000 . In addition, the parties agreed that upon a termination of the European Sale Agreement by either party, Mr. Cohen would be required to pay to the Company $600 representing a portion of the transaction costs incurred by the Company (the “Termination Fee”). See note 18. On March 10, 2017, the Operating LLC issued a convertible senior secured promissory note (the “2017 Convertible Note”) in the aggregate principal amount of $15,000 to DGC Family Fintech Trust, a trust established by Mr. Cohen. The convertible note was issued in exchange for $15,000 in cash. See note 12 for the details regarding the 2017 Convertible Note. The Company agreed to pay to DGC Family Fintech Trust a $600 transaction fee (the “Transaction Fee”) pursuant to the 2017 Convertible Note. On March 10, 2017, C&Co Europe Acquisition LLC terminated the European Sale Agreement. In connection with the issuance of the 2017 Convertible Note and the termination of the European Sale Agreement, the Company agreed that Mr. Cohen’s obligation to pay the Termination Fee was offset in its entirety by the Company’s obligation to pay the Transaction Fee. However, the amendment to Mr. Cohen’s employment agreement described above became effective on March 10, 2017. |
Receivables From And Payables T
Receivables From And Payables To Brokers, Dealers, And Clearing Agencies | 9 Months Ended |
Sep. 30, 2017 | |
Receivables From And Payables To Brokers, Dealers, And Clearing Agencies [Abstract] | |
Receivables from and Payables to Brokers, Dealers, and Clearing Agencies | 5. RECEIVABLES FROM AND PAYABLES TO BROKERS, DEALERS , AND CLEARING AGENCIES Amounts receivable from brokers, dealers, and clearing agencies consisted of the following . RECEIVABLES FROM BROKERS, DEALERS, AND CLEARING AGENCIES (Dollars in Thousands) September 30, 2017 December 31, 2016 Deposits with clearing agencies $ 750 $ 750 Unsettled regular way trades, net 14,520 3,337 Receivables from clearing agencies 93,600 77,091 Receivables from brokers, dealers, and clearing agencies $ 108,870 $ 81,178 Amounts payable to brokers, dealers, and clearing agencies consisted of the following . PAYABLES TO BROKERS, DEALERS, AND CLEARING AGENCIES (Dollars in Thousands) September 30, 2017 December 31, 2016 Margin payable $ 32,602 $ 85,761 Payables to brokers, dealers, and clearing agencies $ 32,602 $ 85,761 Deposits with clearing agencies represent contractual amounts the Company is required to deposit with its clearing agents. Securities transactions that settle in the regular way are recorded on the trade date, as if they had settled. The related amounts receivable and payable for unsettled securities transactions are recorded net in receivables from or payables to brokers, dealers, and clearing agencies on the Company’s consolidated balance sheet. Receivables from clearing agencies are primarily comprised of cash received by the Company upon execution of short trades that is restricted from withdrawal by the clearing agency. Margin payable represents amounts borrowed from Pershing, LLC to finance the Company’s trading portfolio . Effectively, all of the Company’s investments- trading , deposits with clearing agencies , and receivables from clearing agencies serve as collateral for the margin payable. These assets are held by the Company’s clearing agency , Pershing, LLC . The Company incurre d interest on margin payable of $517 and $450 for the nine months ended September 30, 2017 and 2016 , respectively , and $161 and $171 for the three months ended September 30, 2017 and 2016 , respectively. Interest incurred on margin payable is included as a component of net trading in the consolidate statement of operations. |
Financial Instruments
Financial Instruments | 9 Months Ended |
Sep. 30, 2017 | |
Financial Instruments [Abstract] | |
Financial Instruments | 6. FINANCIAL INSTRUMENTS Investments—Trading Investments-trading consisted of the following. INVESTMENTS - TRADING (Dollars in Thousands) September 30, 2017 December 31, 2016 U.S. government agency MBS and CMOs $ 955 $ 9,539 U.S. government agency debt securities 19,311 30,681 RMBS 21 70 U.S. Treasury securities 4,971 - ABS 1 1 SBA loans 11,404 18,416 Corporate bonds and redeemable preferred stock 30,924 45,271 Foreign government bonds 1,112 339 Municipal bonds 28,299 43,759 Certificates of deposit 1,087 240 Derivatives 2,713 8,763 Equity securities 3,464 99 Investments-trading $ 104,262 $ 157,178 Trading Securities Sold, Not Yet Purchased Trading securities sold, not yet purchased consisted of the following. TRADING SECURITIES SOLD, NOT YET PURCHASED (Dollars in Thousands) September 30, 2017 December 31, 2016 U.S. Treasury securities $ 56,166 $ 56,329 Corporate bonds and redeemable preferred stock 32,410 18,552 Municipal bonds 21 20 Derivatives 1,396 10,282 Trading securities sold, not yet purchased $ 89,993 $ 85,183 The Company tries to manage its exposure to changes in interest rates for the interest rate sensitive securities it holds by entering into offsetting short positions for similar fixed rate securities. The Company included the change in unrealized gains (losses) of investments – trading and trading securities sold, not yet purchased in the amount of $ 1,562 and $ 1,262 for the nine months ended September 30, 2017 and 2016 , respectively, in net trading revenue in the Company’s consolidated statements of operations. The Company included the change in unrealized gains (losses) of investments – trading and trading securities sold, not yet purchased in the amount of $181 and $1,319 for the three months ended September 30, 2017 and 2016 , respectively, in net trading revenue in the Company’s consolidated statements of operations. Other Investments, at fair value Other investments, at fair value, consisted of the following. OTHER INVESTMENTS, AT FAIR VALUE (Dollars in Thousands) September 30, 2017 Amortized Cost Carrying Value Unrealized Gain / (Loss) CLOs $ 4,636 $ 4,590 $ (46) CDOs 188 25 (163) EuroDekania 4,797 828 (3,969) Residential loans 82 354 272 Foreign currency forward contracts - 17 17 Other investments, at fair value $ 9,703 $ 5,814 $ (3,889) December 31, 2016 Amortized Cost Carrying Value Unrealized Gain / (Loss) CLOs $ 7,312 $ 6,733 $ (579) CDOs 191 28 (163) EuroDekania 4,969 1,165 (3,804) Residential loans 88 360 272 Foreign currency forward contracts - 17 17 Other investments, at fair value $ 12,560 $ 8,303 $ (4,257) |
Fair Value Disclosures
Fair Value Disclosures | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Disclosures | 7. FAIR VALUE DISCLOSURES Fair Value Option The Company has elected to account for certain of its other financial assets at fair value under the fair value option provisions of FASB ASC 825. The primary reason for electing the fair value option was to reduce the burden of monitoring the differences between the cost and the fair value of the Company’s investments, previously classified as available for sale securities, including the assessment as to whether the declines are temporary in nature and to further remove an element of management judgment . Such financial assets accounted for at fair value include: · securities that would otherwise qualify for available for sale treatment; · investments in equity method affiliates where the affiliate has all of the attributes in FASB ASC 946-10-15-2 (commonly referred to as investment companies); and · investments in residential loans. The changes in fair value (realized and unrealized gains and losses) of these instruments for which the Company has elected the fair value option are recorded in principal transactions and other income in the consolidated statements of operations. All of the investments for which the Company has elected the fair value option are included as a component of other investments, at fair value in the consolidated balance sheets. The Company recognized net gains (losses) of $ (385) and $(287) related to changes in fair value of investments that are included as a component of other investments, at fair value during the nine months ended September 30, 2017 and 2016 , respectively. The Company recognized net gains (losses) of $(107) and $281 related to changes in fair value of investments that are included as a component of other investments, at fair value during the three months ended September 30, 2017 and 2016 , respectively . Fair Value Measurements In accordance with FASB ASC 820, the Company has categorized its financial instruments, based on the priority of the inputs to the valuation technique, into a three level fair value hierarchy. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurement) and the lowest priority to unobservable inputs (level 3 measurement). The three levels of the hierarchy under FASB ASC 820 are described below. Level 1 Financial assets and liabilities whose values are based on unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. Level 2 Financial assets and liabilities whose values are based on one or more of the following: 1. Quoted prices for similar assets or liabilities in active markets; 2. Quoted prices for identical or similar assets or liabilities in non-active markets; 3. Pricing models whose inputs, other than quoted prices, are observable for substantially the full term of the asset or liability; or 4. Pricing models whose inputs are derived principally from or corroborated by observable market data through correlation or other means for substantially the full term of the asset or liability. Level 3 Financial assets and liabilities whose values are based on prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable. These inputs reflect management’s own assumptions about the assumptions a market participant would use in pricing the asset or liability. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the asset or liability. Both observable and unobservable inputs may be used to determine the fair value of positions that the Company has classified within the level 3 category. As a result, the unrealized gains and losses for assets and liabilities within the level 3 category presented in the tables below may include changes in fair value that were attributable to both observable (e.g., changes in market interest rates) and unobservable (e.g., changes in unobservable long-dated volatilities) inputs. A review of the fair value hierarchy classifications is conducted on a quarterly basis. Changes in the type of inputs may result in a reclassification for certain financial assets or liabilities . There were no transfers between level 1 and level 2 of the fair value hierarchy during the nine months ended September 30, 2017 and 2016 . Reclassifications between levels of the fair value hierarchy are reported as transfers in or transfers out as of the beginning of the quarter in which reclassifications occur. The following table s present information about the Company’s assets and liabilities measured at fair value on a recurring basis as of September 30, 2017 and December 31, 2016 , and indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value. FAIR VALUE MEASUREMENTS ON A RECURRING BASIS September 30, 2017 (Dollars in Thousands) Significant Significant Quoted Prices in Other Observable Unobservable Active Markets Inputs Inputs Assets Fair Value (Level 1) (Level 2) (Level 3) Investments-trading: U.S. government agency MBS and CMOs $ 955 $ - $ 955 $ - U.S. government agency debt securities 19,311 - 19,311 - RMBS 21 - 21 - U.S. Treasury securities 4,971 4,971 - - ABS 1 - 1 - SBA loans 11,404 - 11,404 - Corporate bonds and redeemable preferred stock 30,924 - 30,924 - Foreign government bonds 1,112 - 1,112 - Municipal bonds 28,299 - 28,299 - Certificates of deposit 1,087 - 1,087 - Derivatives 2,713 - 2,713 - Equity securities 3,464 36 3,428 - Total investments - trading $ 104,262 $ 5,007 $ 99,255 $ - Other investments, at fair value: CLOs $ 4,590 $ - $ - $ 4,590 CDOs 25 - - 25 Residential loans 354 - 354 - Foreign currency forward contracts 17 17 - - 4,986 $ 17 $ 354 $ 4,615 EuroDekania (1) 828 Total other investments, at fair value $ 5,814 Liabilities Trading securities sold, not yet purchased: U.S. Treasury securities $ 56,166 $ 56,166 $ - $ - Corporate bonds 32,410 - 32,410 - Municipal bonds 21 - 21 - Derivatives 1,396 4 1,392 - Total trading securities sold, not yet purchased $ 89,993 $ 56,170 $ 33,823 $ - (1) Hybrid Securities Fund—European. FAIR VALUE MEASUREMENTS ON A RECURRING BASIS December 31, 2016 (Dollars in Thousands) Significant Significant Quoted Prices in Other Observable Unobservable Active Markets Inputs Inputs Assets Fair Value (Level 1) (Level 2) (Level 3) Investments-trading: U.S. government agency MBS and CMOs $ 9,539 $ - $ 9,539 $ - U.S. government agency debt securities 30,681 - 30,681 - RMBS 70 - 70 - ABS 1 - 1 - SBA loans 18,416 - 18,416 - Corporate bonds and redeemable preferred stock 45,271 - 45,271 - Foreign government bonds 339 - 339 - Municipal bonds 43,759 - 43,759 - Certificates of deposit 240 - 240 - Derivatives 8,763 - 8,763 - Equity securities 99 99 - - Total investments - trading $ 157,178 $ 99 $ 157,079 $ - Other investments, at fair value: CLOs $ 6,733 $ - $ - $ 6,733 CDOs 28 - - 28 Residential loans 360 - 360 - Foreign currency forward contracts 17 17 - - 7,138 $ 17 $ 360 $ 6,761 EuroDekania (1) 1,165 - Total other investments, at fair value $ 8,303 Liabilities Trading securities sold, not yet purchased: U.S. Treasury securities $ 56,329 $ 56,329 $ - $ - Corporate bonds and redeemable preferred stock 18,552 - 18,552 - Municipal bonds 20 - 20 - Derivatives 10,282 - 10,282 - Total trading securities sold, not yet purchased $ 85,183 $ 56,329 $ 28,854 $ - (1) Hybrid Securities Fund—European. The following provides a brief description of the types of financial instruments the Company holds ; the methodology for estimat ing fair value; and the level within the hierarchy of the estimate. The discussion that follows applies regardless of whether the instrument is included in investments-trading; other investments, at fair value; or trading securities sold, not yet purchased. U.S. Government Agency MBS and CMOs : These are securities that are generally traded over-the-counter. The Company generally values these securities using third party quotations such as unadjusted broker-dealer quoted prices or market price quotations from third party pricing services. These valuations are based on a market approach. These are classified within level 2 of the valuation hierarchy. U.S. Government Agency Debt Securities : Callable and non-callable U.S. government agency debt securities are measured primarily based on quoted market prices obtained from third party pricing services. Non-callable U.S. government agency debt securities are generally classified within level 1 and callable U.S. government agency debt securities are classified within level 2 of the valuation hierarchy. RMBS : The Company generally values these securities using third party quotations such as unadjusted broker-dealer quoted prices or market price quotations from third party pricing services. These valuations are based on a market approach. Th e Company generally classifies these securities within level 2 of the valuation hierarchy. U.S. Treasury Securities : U.S. Treasury securities include U.S. Treasury bonds and notes and the fair values of the U.S. Treasury securities are based on quoted prices or market activity in active markets. Valuation adjustments are not applied. The Company generally classifies these securities within level 1 of the valuation hierarchy. CLOs, CDOs, and ABS : CLOs, CDOs, and ABS are interests in securitizations. ABS may include, but are not limited to, securities backed by auto loans, credit card receivables, or student loans. Where the Company is able to obtain independent market quotations from at least two broker-dealers and where a price within the range of at least two broker-dealers is used or market price quotations from third party pricing services is used, these interests in securitizations will generally be classified as level 2 of the valuation hierarchy. These valuations are based on a market approach. The independent market quotations from broker-dealers are generally nonbinding. The Company seeks quotations from broker-dealers that historically have actively traded, monitored, issued, and been knowledgeable about the interests in securitizations. The Company generally believes that to the extent that it (1) receives two quotations in a similar range from broker-dealers knowledgeable about these interests in securitizations, and (2) believes the broker-dealers gather and utilize observable market information such as new issue activity in the primary market, trading activity in the secondary market, credit spreads versus historical levels, bid-ask spreads, and price consensus among market participants and sources, t hen classification within level 2 of the valuation hierarchy is appropriate. In the absence of two broker-dealer market quotations, a single broker-dealer market quotation may be used without corroboration of the quote in which case the Company generally classifies the fair value within level 3 of the valuation hierarchy. If quotations are unavailable, prices observed by the Company for recently executed market transactions may be used or valuation models prepared by the Company’s management may be used, which are based on an income approach. These models prepared by the Company’s management include estimates, and the valuations derived from them could differ materially from amounts realizable in an open market exchange. Each CLO and CDO position is evaluated independently taking into consideration available comparable market levels, underlying collateral performance and pricing, deal structures, and liquidity. Fair values based on internal valuation models prepared by the Company’s management are generally classified within level 3 of the valuation hierarchy. Establishing fair value is inherently subjective (given the volatile and sometimes illiquid markets for certain interests in securitizations) and requires management to make a number of assumptions, including assumptions about the future of interest rates, discount rates, and the timing of cash flows. The assumptions the Company applies are specific to each security. Although the Company may rely on internal calculations to compute the fair value of certain interest in securitizations, the Company requests and considers indications of fair value from third party pricing services to assist in the valuation process. SBA Loans : SBA loans include loans and SBA interest only strips. In the case of loans, the Company generally values these securities using third party quotations such as unadjusted broker-dealer quoted prices, internal valuation models using observable inputs, or market price quotations from third party pricing services. The Company generally classifies these investments within level 2 of the valuation hierarchy. These valuations are based on a market approach. SBA interest only strips do not trade in an active market with readily available prices. Accordingly, the Company generally uses valuation models to determine fair value and classifies the fair value of the SBA interes t only strips within level 2 or level 3 of the valuation hierarchy depending on if the model inputs are observable or not. Corporate Bonds and Redeemable Preferred Stock : The Company uses recently executed transactions or third party quotations from independent pricing services to arrive at the fair value of its investments in corporate bonds and redeemable preferred stock. These valuations are based on a market approach. The Company generally classifies the fair value of these bonds within level 2 of the valuation hierarchy. In instances where the fair values of securities are based on quoted prices in active markets (for example with redeemable preferred stock), the Company classifies the fair value of these securities within level 1 of the valuation hierarchy. Foreign Government Bonds : The fair value of foreign government bonds is estimated using valuations provided by third party pricing services and are classified within level 2 of the valuation hierarchy. Municipal Bonds : Municipal bonds, which include obligations of U.S. states, municipalities, and political subdivisions, primarily include bonds or notes issued by U.S. municipalities. The Company generally values these securities using third party quotations such as market price quotations from third party pricing services. The Company generally classifies the fair value of these bonds within level 2 of the valuation hierarchy. The valuations are based on a market approach. In instances where the Company is unable to obtain reliable market price quotations from third party pricing services, the Company will use its own internal valuation models. In these cases, the Company will classify such securities within level 3 of the valuation hierarchy until it is able to obtain third party pricing. Certificates of Deposit : The fair value of certificates of deposit is estimated using valuations provided by third party pricing services. Certificates of deposit are generally classified within level 2 of the valuation hierarchy. Residential Loans : Management utilizes home price indices or market indications to value the residential loans. These are generally classified within level 2 of the valuation hierarchy. Equity Securities : The fair value of equity securities that represent investments in publicly traded companies (common or preferred shares, options, warrants, and other equity investments) is determined using the closing price of the security as of the reporting date. These are securities that are traded on a recognized liquid exchange. This is classified within level 1 of the valuation hierarchy. In some cases, the Company has owned options or warrants in newly publicly traded companies when the option or warrant itself is not publicly traded. In those cases, the Company used an internal valuation model and classified the investment within level 3 of the valuation hierarchy. The non-exchange traded equity options and warrants were measured using the Black-Scholes model with key inputs impacting the valuation including the underlying security price, implied volatility, dividend yield, interest rate curve, strike price, and maturity date. Once the securities underlying the options or warrants (not the options or warrants themselves) have quoted prices available in an active market, the Company attributes a value to the warrants using the Black-Scholes model based on the respective price of the options or warrants and the quoted prices of the securities underlying the options or warrants and key observable inputs. In this case, the Company will generally classify the options or warrants as level 2 within the valuation hierarchy because the inputs to the valuation model are now observable. If the option or warrant itself begins to trade on a liquid exchange, the Company will discontinue using a valuation model and will begin to use the public exchange price at whic h point it will be classified within level 1 of the valuation hierarchy. In other cases, the Company has owned investments in investment funds having the attributes of investment companies as described in FASB ASC 946-15-2. The Company estimates the fair value of these entities using the reported net asset value per share as of the reporting date in accordance with the “practical expedient” provisions related to investments in certain entities that calculate net asset value per share (or its equivalent) included in FASB ASC 820 for all entities. The Company does not classify these investments within the fair value hierarchy. Finally, the Company has from time to time owned an equity interest in a non-public company or a company that is public but with limited trading. In those cases, the Company will generally determine fair value based on a model using the market approach. If the inputs to the model are observable, the Company will classify these investments within level 2 of the valuation hierarchy. If the inputs are unobservable, the Company will classify this as level 3 of the valuation hierarchy. Derivatives Foreign Currency Forward Contracts Foreign currency forward contracts are exchange-traded derivatives, which transact on an exchange that is deemed to be active. The fair value of the foreign currency forward contracts is based on current quoted market prices. Valuation adjustments are not applied. These are classified within level 1 within the valuation hierarchy. See note 8. TBAs and Other Forward Agency MBS C ontracts The Company generally values these securities using third party quotations such as unadjusted broker-dealer quoted prices or market price quotations from third party pricing services. TBAs and other forward agency MBS contracts are generally classified within level 2 of the fair value hierarchy. If there is limited transaction activity or less transparency to observe market based inputs to valuation models, TBAs and other forward agency MBS contracts are classified with in level 3 of the valuation hie rarchy. Unrealized gains on TBAs and other forward agency MBS contracts are included in investments-trading on the Company’s consolidated balance sheets and unrealized losses on TBAs and other forward agency MBS contracts are included in trading securities sold, not yet purchased on the Company’s consolidated balance sheets. See note 8. Other Extended Settlement Trades When the Company buys or sells a financial instrument that will not settle in the regular time frame, the Company will account for that purchase and 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 a derivative (as either a purchase commitment or sale commitment). The Company will record an unrealized gain or unrealized loss on the derivative for the difference between the fair value of the underlying financial instrument as of the reporting date and the agreed upon transaction price. The Company will determine the fair value of the financial instrument using the methodologies described above. Level 3 Financial Assets and Liabilities Financial Instruments Measured at Fair Value on a Recurring Basis The following tables present additional information about assets and liabilities measured at fair value on a recurring basis and for which the Company has utilized level 3 inputs to determine fair value. LEVEL 3 ROLLFORWARD Nine Months Ended September 30, 2017 (Dollars in Thousands) December 31, 2016 Net trading Gains and losses (1) Transfers into Level 3 Transfers out of level 3 Accretion of income (1) Purchases Sales and returns of capital September 30, 2017 Change in unrealized gains /(losses) (2) Assets Other investments, at fair value CLOs $ 6,733 $ - $ (88) $ - $ - $ 938 $ - $ (2,993) $ 4,590 $ 608 CDOs 28 - - - - - - (3) 25 - Total other investments, fair value $ 6,761 $ - $ (88) $ - $ - $ 938 $ - $ (2,996) $ 4,615 $ 608 (1) Recorded as a component of principal transactions and other income in the consolidated statement of operations. (2) Represents the change in unrealized gains and losses for the period included in principal transactions and other income for assets held at the end of the reporting period. LEVEL 3 ROLLFORWARD Nine Months Ended September 30, 2016 (Dollars in Thousands) December 31, 2015 Net trading Gains and losses (1) Transfers into Level 3 Transfers out of level 3 Accretion of income (1) Purchases Sales and returns of capital September 30, 2016 Change in unrealized gains /(losses) (2) Assets Other investments, at fair value CLOs $ 11,569 $ - $ 746 $ - $ - $ 1,005 $ - $ (7,091) $ 6,229 $ 872 CDOs 34 - (4) - - - - (2) 28 (4) Total other investments, fair value $ 11,603 $ - $ 742 $ - $ - $ 1,005 $ - $ (7,093) $ 6,257 $ 868 (1) Recorded as a component of principal transactions and other income in the consolidated statement of operations. (2) Represents the change in unrealized gains and losses for the period included in principal transactions and other income for assets held at the end of the reporting period. LEVEL 3 ROLLFORWARD Three Months Ended September 30, 2017 (Dollars in Thousands) June 30, 2017 Net trading Gains and losses (1) Transfers into Level 3 Transfers out of level 3 Accretion of income (1) Purchases Sales and returns of capital September 30, 2017 Change in unrealized gains /(losses) (2) Assets Other investments, at fair value CLOs $ 4,828 $ - $ (103) $ - $ - $ 169 $ - $ (304) $ 4,590 $ 187 CDOs 27 - - - - - - (2) 25 - Total other investments, fair value $ 4,855 $ - $ (103) $ - $ - $ 169 $ - $ (306) $ 4,615 $ 187 (1) Recorded as a component of principal transactions and other income in the consolidated statement of operations. (2) Represents the change in unrealized gains and losses for the period included in principal transactions and other income for assets held at the end of the reporting period. LEVEL 3 ROLLFORWARD Three Months Ended September 30, 2016 (Dollars in Thousands) June 30, 2016 Net trading Gains and losses (1) Transfers into Level 3 Transfers out of level 3 Accretion of income (1) Purchases Sales and returns of capital September 30, 2016 Change in unrealized gains /(losses) (2) Assets Other investments, at fair value CLOs $ 8,028 $ - $ 392 $ - $ - $ 250 $ - $ (2,441) $ 6,229 $ 580 CDOs 30 - - - - - - (2) 28 - Total other investments, fair value $ 8,058 $ - $ 392 $ - $ - $ 250 $ - $ (2,443) $ 6,257 $ 580 (1) Recorded as a component of principal transactions and other income in the consolidated statement of operations. (2) Represents the change in unrealized gains and losses for the period included in principal transactions and other income for assets held at the end of the reporting period. The circumstances that would result in transferring certain financial instruments from level 2 to level 3 of the valuation hierarchy would typically include what the Company believes to be a decrease in the availability, utility, and reliability of observable market information such as new issue activity in the primary market, trading activity in the secondary market, credit spreads versus historical levels, bid-ask spreads, and price consensus among market participants and sources. During the nine and three months ended September 30, 2017 and 2016 , there were no transfers into or out of level 3 of the valuation hierarchy. The following tables provide the quantitative information about level 3 fair value measurements as of September 30, 2017 and December 31, 2016 . QUANTITATIVE INFORMATION ABOUT LEVEL 3 FAIR VALUE MEASUREMENTS (Dollars in Thousands) Significant Range of Fair Value Valuation Unobservable Weighted Significant September 30, 2017 Technique Inputs Average Inputs Assets Other investments, at fair value CLOs $ 4,590 Discounted Cash Flow Model Yield 15.6% 12.8% - 23.9% Duration (years) 5.7 4.8 - 6.8 Default rate 2.0% 2.0% QUANTITATIVE INFORMATION ABOUT LEVEL 3 FAIR VALUE MEASUREMENTS (Dollars in Thousands) Significant Range of Fair Value Valuation Unobservable Weighted Significant December 31, 2016 Technique Inputs Average Inputs Assets Other investments, at fair value CLOs $ 6,733 Discounted Cash Flow Model Yield 16.1% 11.8 - 25.0% Duration (years) 5.8 5.3 - 6.6 Default rate 2.0% 2.0% Sensitivity of Fair Value to Changes in Significant Unobservable Inputs For recurring fair value measurements categorized within level 3 of the fair value hierarchy, the sensitivity of the fair value measurement to changes in significant unobservable inputs and interrelationships between those unobservable inputs (if any) are described below. · CLOs : The Company uses a discounted cash flow model to determine the fair value of its investments in CLOs. Changes in the yield, duration, and default rate assumptions would impact the fair value determined. The longer the duration, the lower the fair value of the investment. The higher the yield, the lower the fair value of the investment. The higher the default rate, the lower the fair value of the investment. Investments in Certain Entities that Calculate Net Asset Value Per Share (or its Equivalent) The following table presents additional information about investments in certain entities that calculate net asset value per share (regardless of whether the “practical expedient” provisions of FASB ASC 820 have been applied), which are measured at fair value on a recurring basis at September 30, 2017 and December 31, 2016 . FAIR VALUE MEASUREMENTS OF INVESTMENTS IN CERTAIN ENTITIES THAT CALCULATE NET ASSET VALUE PER SHARE (OR ITS EQUIVALENT) (Dollars in Thousands) Fair Value September 30, 2017 Unfunded Commitments Redemption Frequency Redemption Notice Period Other investments, at fair value EuroDekania (a) $ 828 N/A N/A N/A $ 828 Fair Value December 31, 2016 Unfunded Commitments Redemption Frequency Redemption Notice Period Other investments, at fair value EuroDekania (a) $ 1,165 N/A N/A N/A $ 1,165 N/A Not applicable. (a) EuroDekania owns investments in hybrid capital securities that have attributes of debt and equity, primarily in the form of subordinated debt issued by insurance companies, banks , and bank holding companies based primarily in Western Europe; widely syndicated leveraged loans issued by European corporations; CMBS, including subordinated interests in first mortgage real e state loans; and RMBS and ABS backed by consumer and commercial receivables. The majority of the assets are denominated in Euros and U.K. Pounds Sterling. The fair value of the investment in this category has been estimated using the NAV per share of the investment in accordance with the “practical expedient” provisions of FASB ASC 820. |
Derivative Financial Instrument
Derivative Financial Instruments | 9 Months Ended |
Sep. 30, 2017 | |
Derivative Financial Instruments [Abstract] | |
Derivative Financial Instruments | 8. DERIVATIVE FINANCIAL INSTRUMENTS FASB ASC 815, Derivatives and Hedging (“FASB ASC 815”), provides for optional hedge accounting. When a derivative is deemed to be a hedge and certain documentation and effectiveness testing requirements are met, reporting entities are allowed to record all or a portion of the change in the fair value of a designated hedge as an adjustment to other comprehensive income (“OCI”) rather than as a gain or loss in the statements of operations. To date, the Company has not designated any derivatives as hedges under the provisions included in FASB ASC 815. Derivative financial instruments are recorded at fair value. If the derivative was entered into as part of the Company’s broker-dealer operations, it will be included as a component of investments-trading or trading securities sold, not yet purchased. If it is entered into to hedge for another financial instrument included in other investments, at fair value then the derivative will be included as a component of other investments, at fair value. The Company may, from time to time, enter into derivatives to manage its risk exposures (i) arising from fluctuations in foreign currency rates with respect to the Company’s investments in foreign currency denominated investments; (ii) arising from the Company’s investments in interest sensitive investments; and (iii) arising from the Company’s facilitation of mortgage-backed trading. Derivatives entered into by the Company, from time to time, may include (i) foreign currency forward contracts; (ii) purchase and sale agreements of TBAs and other forward agency MBS contracts; and (iii) other extended settlement trades. TBAs are forward contracts to purchase or sell MBS whose collateral remain “to be announced” until just prior to the trade settlement. 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 FASB 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. Derivatives involve varying degrees of off-balance sheet risk, whereby changes in the level or volatility of interest rates or market values of the underlying financial instruments may result in changes in the value of a particular financial instrument in excess of its carrying amount. Depending on the Company’s investment strategy, realized and unrealized gains and losses are recognized in principal transactions and other income or in net trading in the Company’s consolidated statements of operations on a trade date basis. The Company may, from time to time, enter into the following derivative instruments. Foreign Currency Forward Contracts The Company invests in foreign currency denominated investments that expose it to fluctuations in foreign currency rates, and, therefore, the Company may, from time to time, hedge such exposure by using foreign currency forward contracts. The Company carries the foreign currency forward contracts at fair value and includes them as a component of other investments, at fair value in the Company’s consolidated balance sheets . As of September 30, 2017 and December 31, 2016 , the Company had outstanding foreign currency forward contracts with a notional amount of 1.000 million Euros and 1.625 million Euros, respectively. EuroDollar Futures The Company invests in floating rate investments that expose it to fluctuations in interest rates and, therefore, the Company may, from time to time, hedge such exposure using EuroDollar futures. The Company carries such EuroDollar future 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. As of September 30, 2017 and December 31, 201 6 , the Company had no outstanding EuroDollar future contracts. TBAs and Other Forward Agency MBS Contracts 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 the 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 September 30, 2017 , the Company had open TBA and other forward MBS purchase agreements in the notional amount of $ 1,378,275 and open TBA and other forward MBS sale agreements in the notional amount of $ 1,378,275 . At December 31, 2016 , the Company had open TBA and other forward agency MBS purchase agreements in the notional amount of $ 1,045,384 and open TBA and other forward agency MBS sale agreements in the notional amount of $ 1,045,384 . Other Extended Settlement Trades When the Company buys or sells a financial instrument that will not settle in the regular time frame, the Company will account for that purchase and 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 a derivative as either a forward purchase commitment or a forward sale commitment , both considered derivatives . The Company will record an unrealized gain or unrealized loss on the derivative for the difference between the fair value of the underlying financial instrument as of the reporting date and the agreed upon transaction price. At September 30, 2017 , the Company had open forward purchase commitments of $4,838 and open forward sale commitments of $0 . At December 31, 2016 , the Company had no open forward purchase or sale commitments. The following table presents the Company’s derivative financial instruments and the amount and location of the fair value (unrealized gain / (loss)) recognized in the consolidated balance sheets as of September 30, 2017 and December 31, 2016 . DERIVATIVE FINANCIAL INSTRUMENTS-BALANCE SHEET INFORMATION (Dollars in Thousands) Derivative Financial Instruments Not Designated as Hedging Instruments Under FASB ASC 815 Balance Sheet Classification September 30, 2017 December 31, 2016 TBAs and other forward agency MBS Investments-trading $ 2,712 $ 8,763 Other extended settlement trades Investments-trading 1 - Foreign currency forward contracts Other investments, at fair value 17 17 TBAs and other forward agency MBS Trading securities sold, not yet purchased (1,376) (10,282) Other extended settlement trades Trading securities sold, not yet purchased (20) - $ 1,334 $ (1,502) The following table presents the Company’s derivative financial instruments and the amount and location of the net gain (loss) recognized in the consolidated statement of operations. DERIVATIVE FINANCIAL INSTRUMENTS-STATEMENT OF OPERATIONS INFORMATION (Dollars in Thousands) Derivative Financial Instruments Not Designated as Hedging Instruments Under FASB ASC 815 Income Statement Classification Nine Months Ended September 30, 2017 Nine Months Ended September 30, 2016 Foreign currency forward contracts Revenue-principal transactions and other income $ (132) $ (83) Other extended settlement trades Revenue-net trading (15) (3) TBAs and other forward agency MBS Revenue-net trading 5,516 6,286 $ 5,369 $ 6,200 DERIVATIVE FINANCIAL INSTRUMENTS-STATEMENT OF OPERATIONS INFORMATION (Dollars in Thousands) Derivative Financial Instruments Not Designated as Hedging Instruments Under FASB ASC 815 Income Statement Classification Three Months Ended September 30, 2017 Three Months Ended September 30, 2016 Foreign currency forward contracts Revenue-principal transactions and other income $ (34) $ (30) Other extended settlement trades Revenue-net trading 4 (3) TBAs and other forward agency MBS Revenue-net trading 1,584 2,075 $ 1,554 $ 2,042 |
Collateralized Securities Trans
Collateralized Securities Transactions | 9 Months Ended |
Sep. 30, 2017 | |
Collateralized Securities Transactions [Abstract] | |
Collateralized Securities Transactions | 9. COLLATERALIZED SECURITIES TRANSACTIONS Reverse repurchase agreements and r epurchase agreements, principally U.S. government and federal agency obligations and MBS, are treated as collateralized financing transactions and are recorded at their contracted resale or repurchase amounts plus accrued interest. The resulting interest income and expense are included in net tradin g in the consolidated statement of operations. In the normal course of business, the Company enters into reverse repurchase agreements that permit it to re-pledge or resell the pledged securities to others. The Company enters into reverse repurchase agreements as part of its matched book repo financing business, to acquire securities to cover short positions, or as an investment. The Company enters into repurchase agreements as part of its matched book repo financing business or to finance the Company’s securities positions held in inventory. At September 30, 2017 and December 31, 2016 , the Company held reverse repurchase agreements of $ 436,541 and $ 281,821 , respectively, and the fair value of securities received as collateral under reverse repurchase agreements was $ 454,635 and $ 294,516 , respectively. As of September 30, 2017 , the reverse repurchase agreement balance was comprised o f receivables collateralized by 13 securities with four counterpart ies . As of December 31, 2016, the reverse repurchase balance was comprised of receivables collateralized by eight securities with three counterparties. At September 30, 2017 and December 31, 2016 , the Company had repurchase agreements of $ 448,133 and $ 295,445 , respectively, and the fair value of securities pledged as collateral under repurchase agreements was $ 466,958 and $ 309,256 , respectively. These amounts include collateral for reverse repurchase agreements that were re-pledged as collateral for repurchase agreements. Because of the limited number of counterparties, the Company considers its matched book repo business to be subject to significant concentration risk. The Company earned net revenue from its matched book repo business during the three months ended September 30, 2017 and 2016 of $1,091 and $962 , respectively. The Company earned net revenue from its matched book repo business during the nine months ended September 30, 2017 and 2016 of $2,633 and $2,213 , respectively. The Company includes the net revenue earned from its matched book repo business in net trading in in its consolidated statement of operations. The following table is a summary of the remaining contractual maturity of the gross obligations under repurchase agreements accounted for as secured borrowings segregated by the underlying collateral pledged as of each date shown . REPURCHASE AGREEMENTS ACCOUNTED FOR AS SECURED BORROWINGS (Dollars in Thousands) September 30, 2017 Remaining Contractual Maturity of the Agreements Overnight and Continuous Up to 30 days 30 - 90 days Greater than 90 days Total U.S. government agency MBS $ - $ 436,616 $ - $ - $ 436,616 SBA Loans 11,517 - - - 11,517 $ 11,517 $ 436,616 $ - $ - $ 448,133 Amount recognized $ 448,133 REPURCHASE AGREEMENTS ACCOUNTED FOR AS SECURED BORROWINGS (Dollars in Thousands) December 31, 2016 Remaining Contractual Maturity of the Agreements Overnight and Continuous Up to 30 days 30 - 90 days Greater than 90 days Total U.S. government agency MBS $ - $ 281,670 $ - $ - $ 281,670 SBA Loans 13,775 - - - 13,775 $ 13,775 $ 281,670 $ - $ - $ 295,445 Amount recognized $ 295,445 |
Other Assets and Accounts Payab
Other Assets and Accounts Payable and Other Liabilities | 9 Months Ended |
Sep. 30, 2017 | |
Other Assets and Accounts Payable and Other Liabilities [Abstract] | |
Other Assets And Accounts Payable And Other Liabilities | 10. OTHER ASSETS AND ACCOUNTS PAYABLE AND OTHER LIABILITIES Other assets are comprised of the following. OTHER ASSETS (Dollars in Thousands) September 30, 2017 December 31, 2016 Deferred costs $ - $ 600 Prepaid expenses 852 976 Prepaid income taxes - 99 Security deposits 285 1,799 Miscellaneous other assets 20 138 Cost method investment 25 25 Furniture, equipment, and leasehold improvements, net 384 498 Intangible assets 166 166 Other assets $ 1,732 $ 4,301 Accounts payable and other liabilities are comprised of the following. ACCOUNTS PAYABLE AND OTHER LIABILITIES (Dollars in Thousands) September 30, 2017 December 31, 2016 Accounts payable $ 314 $ 326 Redeemable financial instrument - JKD Capital Partners l LTD 6,941 6,761 Redeemable financial instrument - DGC Family Fintech Trust/CBF 10,000 - Rent payable 13 54 Accrued interest payable 626 305 Accrued interest on securities sold, not yet purchased 688 512 Payroll taxes payable 584 576 Other general accrued expenses 1,514 1,084 Accounts payable and other liabilities $ 20,680 $ 9,618 Redeemable Financial Instrument – JKD Capital Partners I LTD Redeemable financial instrument – JKD Capital Partners I LTD represents an investment in the Operating LLC made by JKD Capital Partners I LTD (“JKD”). JKD is owned by Jack DiMaio, the chairman of the Company’s board of directors and his spouse. During the nine months ended September 30, 2017 , the JKD made an additional investment of $1,000 . Pursuant to the investment agreement, the Company recorded net interest expense of $465 for the nine months ending September 30, 2017 and $210 for the three months ended September 30, 2017 . See note 19. For a more detailed description of the terms and conditions of the redeemable financial instrument see note 13 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2016. Redeemable Financial Instrument – DGC Family Fintech Trust/CBF On September 29, 2017, the Operating LLC, entered into two investment agreements (the “Investment Agreements’) with each of CBF and the DGC Family Fintech Trust (together, the “Investors”) respectively and Cohen & Company, LLC. Daniel G. Cohen, the Vice Chairman of the Company’s board of directors and the Operating Company’s board of managers and the Company’s largest stockholder, is the sole member of CBF. Mr. Cohen is neither a trustee nor a named beneficiary of the DGC Family Fintech Trust and does not have any voting or dispositive control of securities held by the trust. Pursuant to the Investment Agreements, the Investors agreed to invest an aggregate of $10,000 (the “Investment Amount”) into Cohen & Company LLC (the “Investment”), all of which was paid on September 29, 2017. In exchange for the Investment, Cohen & Company, LLC agreed to pay to the Investors, in arrears following each calendar month during the term of the Investment Agreements, an amount equal to the aggregate Investment Return for such calendar month (each such monthly payment, an “Investment Return Payment’), as calculated in accordance with the terms of the Investment Agreements. Under the Investment Agreements, the term “Investment Return” is defined as an annual return, in the aggregate, equal to: 1. for any 365-day period beginning on September 29, 2017 or any anniversary of September 29, 2017 (each an “Annual Period”) and ending on or before the third anniversary of September 29, 2017, 3.2% of the Investment Amount, plus (x) 15% of the revenue of the matched book repurchase transactions business (the “Revenue of the Business”) of JVB, for any Annual Period in which the Revenue of the Business is greater than zero but less than or equal to $5,333 , (y) $800 for any Annual Period in which the Revenue of the Business is greater than $5,333 but less than or equal to $8,000 , or (z) 10% of the Revenue of the Business for any Annual Period in which the Revenue of the Business is greater than $8,000 ; or 2. for any Annual Period following the third anniversary of September 29, 2017, (x) for any Annual Period in which the Revenue of the Business is greater than zero , the greater of 20% of the Investment Amount or 20% of the Revenue of the Business, or (y) for any Annual Period in which the Revenue of the Business is zero or less than zero , 3.2% of the Investment Amount. The term of the Investment Agreements commenced on September 29, 2017 and will continue until a Redemption (as defined below) occurs, unless the Investment Agreements are earlier terminated. Prior to the third anniversary of the Effective Date, the Operating Company may terminate the Investment Agreements upon 90 days’ prior written notice to the Investors. At any time following the third anniversary of the Effective Date, the Investors or the Operating Company may, upon 60 days’ notice to the other party, cause the Operating Company to pay to the Investors an amount equal the “Investment Balance”(as defined in the Investment Agreement) plus an amount equal to any accrued but unpaid Investment Return. Upon termination of the Investment Agreements, the Operating Company will, within 30 days following such termination pay to Investors an amount in cash equal to the greater of the sum of: (a) the Investment Amount plus (b) all accrued and unpaid Investment Return monthly payments as of the date of termination plus (c) an amount equal to an annualized 15% return on the Investment Amount from the effective date through the date of termination, minus (d) the aggregate amount of all Investment Return payments previously paid by the Operating Company to the Investors, and (a) the Investment Amount plus (b) all accrued and unpaid Investment Return monthly payments as of the date of termination. See note 19. |
Variable Interest Entities
Variable Interest Entities | 9 Months Ended |
Sep. 30, 2017 | |
Variable Interest Entities [Abstract] | |
Variable Interest Entities | 11. VARIABLE INTEREST ENTITIES As a general matter, a reporting entity must consolidate a VIE when it is deemed to be the primary beneficiary. The primary beneficiary is the entity that has both (a) the power to direct the matters that most significantly impact the VIE ’ s financial performance and (b) a significant variable interest in the VIE. For the reporting periods present ed herein, the Company has determined that it is not the primary beneficiary of, and therefore has not consolidated, a VIE. The Company’s Principal Investing Portfolio For each investment made within the principal investing portfolio, the Company assesses whether the investee is a VIE and if the Company is the primary beneficiary. As of September 30, 2017 , the Company had variable interests in various securitization VIEs, but determined that it was not the primary beneficiary, and, therefore, was not consolidating the securitization VIEs. The maximum potential financ ial statement loss the Company w ould incur if the securitization vehicles were to defaul t on all of their obligations would be the loss of value of the interests in securitizations that the Company holds in its inventory a t the time. The Company did not provide financial support to these VIEs during the nine months ended September 30, 2017 and 2016 and had no liabilities, contingent liabilities, or guarantees (implicit or explicit) related to these VIEs at September 30, 2017 and December 31, 2016 . The Company’s Asset Management Activities For each investment management contract entered into by the Company, the Company assesses whether the entity being managed is a VIE and if the Company is the primary beneficiary. The Company serves as collateral asset manager to certain securitizations that are VIEs. Under the current guidance of ASU 2015-02, the Company has concluded that its asset management cont racts should not be considered variable interest s . Currently, the Company has no other interests in entities it manages that are considered variable interests. Therefor e, the Company is not the primary beneficiary of any securitizations that it manages. The Company’s Trading Portfolio From time to time, the Company may have an interest in a VIE through the investments it makes as part of its trading activities. Because of the high volume of trading activity the Company experiences, the Company does not perform a formal assessment of each individual investment within its trading portfolio to determine if t he investee is a VIE and if the Company is a primary beneficiary. Even if the Company were to obtain a variable interest in a VIE through its trading portfolio, the Company would not be deemed to be the primary beneficiary for two main reasons: (a) the Company does not usually obtain the power to direct activities that most significantly impact any i nvestee’s financial performance and (b) a scope exception exists within the consolidation guidance for cases where the reporting entity is a broker- dealer and any control (either as the primary beneficiary of a VIE or through a controlling interest i n a voting interest entity) was deemed to be temporary. In the unlikely case that the Company somehow obtained the power to direct activities and obtained a significant variab le interest in an investee in its trading portfolio that was a VIE, any such control would be deemed to be temporary due to the rapid turnover within the trading portfolio. The table below presents the carrying amounts of the assets in the Company’s consolidated balance sheets that relate t o the Company’s variable intere st s in identified VIEs with the exception of (i) the two trust VIEs that hold the Company’s junior subordinated notes (see note 12) and (ii) any security that represents an interest in a VIE that is included in investments-trading or securities sold but not yet purchased in the Company’s consolidated balance sheets. The table below shows the Company’s maximum exposure to loss associated with these identified nonconsolidated VIEs in which it holds variable interests at September 30, 2017 and December 31, 2016 . CARRYING VALUE OF VARIABLE INTERESTS IN NON-CONSOLIDATED VARIABLE INTEREST ENTITIES (Dollars in Thousands) September 30, 2017 December 31, 2016 Other Investments, at fair value $ 4,615 $ 6,761 Maximum Exposure $ 4,615 $ 6,761 |
Debt
Debt | 9 Months Ended |
Sep. 30, 2017 | |
Debt [Abstract] | |
Debt | 12. DEBT The Company had the following debt outstanding . DETAIL OF DEBT (Dollars in Thousands) Description Current Outstanding Par September 30, 2017 December 31, 2016 Interest Rate Terms Interest (4) Maturity Convertible senior notes: 8.00% convertible senior notes (the "2017 Convertible Note") $ 15,000 $ 15,000 $ - Fixed 8.00 % March 2022 (1) 8.00% convertible senior notes (the "2013 Convertible Notes") 8,248 8,248 8,248 Fixed 8.00 % September 2018 (2) Less unamortized debt issuance costs (1,440) (274) 23,248 21,808 7,974 Junior subordinated notes: Alesco Capital Trust I 28,125 (3) 12,904 12,577 Variable 5.31 % July 2037 Sunset Financial Statutory Trust I 20,000 (3) 9,205 8,972 Variable 5.49 % March 2035 48,125 22,109 21,549 Total $ 71,373 $ 43,917 $ 29,523 (1) The holder of the 2017 Convertible Note may convert all or any part of the outstanding principal amount of the 2017 Convertible Note at any time prior to maturity into units of the Operating LLC at a conversion price of $1.45 per unit, subject to customary anti-dilution adjustments. Units of the Operating LLC not held by Cohen & Company Inc. may, with certain restrictions, be redeemed and exchanged into shares of the Company o n a ten-for-one basis. Therefore, the 2017 Convertible Note can be converted into Operating LLC units and then redeemed and exchanged into Common Stock at an effective conversion price of $14.50 . See discussion below and note 18 to our Annual Report on Form 10-K for the year ended December 31, 2016. (2) The holders of the 2013 Convertible Notes may convert all or any part of the outstanding principal amount of the 2013 Convertible Notes at any time prior to maturity into shares of the Company’s common stock, par value $0.01 per share (“Common Stock”) at a conversion price of $30.00 per share, subject to customary anti-dilution adjustments. (3) The junior subordinated notes listed represent debt the Company owes to the two trusts noted above. The total par amount owed by the Company to the trusts is $49,614 . However, the Company owns the common stock of the trusts in a total par amount of $1,489 . The Company pays interest (and at maturity, principal) to the trusts on the entire $49,614 junior notes outstanding. The Company receives back from the trusts the pro rata share of interest and principal on the common stock the Company holds of $1,489. Accordingly, the Company shows the net par value not held by it as $48,125 in the table above. These trusts are VIEs and the Company does not consolidate them even though the Company holds common stock. The Company carries the common stock on its balance sheet at a value of $0. (4) Represents the interest rate in effect as of the last day of the reporting period. Issuance of 2017 Convertible Note On March 10, 2017 (the “Closing Date”), the Operating LLC entered into a Securities Purchase Agreement (the “Purchase Agreement”), by and among the Operating LLC and DGC Family Fintech Trust, a trust established by Daniel G. Cohen, and solely for purposes of Article VI and Sections 7.3, 7.4, 7.5, and 7.6 thereof, the Company. Mr. Cohen is the vice chairman of the Company’s board of directors and vice chairman of the board of managers of the Operating LLC, president and chief executive of the Company’s European Business, and president, a director, and the chief investment officer of CCFL. Pursuant to the Purchase Agreement, the DGC Family Fintech Trust agreed to purchase from the Operating LLC, and the Operating LLC agreed to issue and to sell to the DGC Family Fintech Trust, a convertible senior secured promissory note (the “2017 Convertible Note”) in the aggregate principal amount of $15,000 . On the Closing Date, the DGC Family Fintech Trust paid to the Operating LLC $15,000 in cash in consideration for the 2017 Convertible Note. In addition, pursuant to the Purchase Agreement, on the Closing Date, the Operating LLC was required to pay to the DGC Family Fintech Trust the $600 Transaction Fee, which obligation was offset in full by Mr. Cohen’s obligation to pay the Termination Fee for the Europe Sale Agreement (see note 4) to the Operating LLC. Under the Purchase Agreement, the Operating LLC and the DGC Family Fintech Trust offer customary indemnifications. Further, the Operating LLC and the DGC Family Fintech Trust provide each other with customary representations and warranties, the Company provides limited representations and warranties to the DGC Family Fintech Trust, and each of the Operating LLC and the Company make customary affirmative covenants. Pursuant to the Purchase Agreement, the Company agreed to execute an amendment (the “LLC Agreement Amendment”) to the Amended and Restated Limited Liability Company Agreement of the Operating LLC dated as of December 16, 2009, by and among the Operating LLC and its members, as amended (the “LLC Agreement”) at such time in the future as all of the other members execute the LLC Agreement Amendment. The LLC Agreement Amendment provides, among other things, that the Board of Managers will initially consist of Daniel G. Cohen, as chairman of the Operating LLC’s board of managers, Lester R. Brafman (the Company’s current chief executive officer), and Joseph W. Pooler, Jr. (the Company’s current executive vice president, chief financial officer, and treasurer). The LLC Agreement Amendment also provides that Mr. Cohen will not be able to be removed from the Operating LLC’s board of managers or as chairman of the Operating LLC’s board of managers other than for cause or under certain limited circumstances. The LLC Agreement Amendment was not executed as of September 30, 2017. The outstanding principal amount under the 2017 Convertible Note is due and payable on the fifth anniversary of the Closing Date, provided that the Operating LLC may, in its sole discretion, extend the maturity date for an additional one -year period, in each case unless the 2017 Convertible Note is earlier converted (in the manner described below). The 2017 Convertible Note accrues interest at a rate of 8% per year, payable quarterly. Provided that no event of default has occurred under the 2017 Convertible Note, if dividends of less than $0.20 per share are paid on the Common Stock in any fiscal quarter prior to an interest payment date, then the Operating LLC may pay one -half of the interest payable on such date in cash, and the remaining one -half of the interest otherwise payable will be added to the principal amount of the 2017 Convertible Note then outstanding. The 2017 Convertible Note contains customary “Events of Default.” Upon the occurrence or existence of any Event of Default under the 2017 Convertible Note, the outstanding principal amount is immediately accelerated in certain limited instances and may be accelerated in all other instances upon notice by the holder of the 2017 Convertible Note to the Operating LLC. Further, upon the occurrence of any Event of Default under the 2017 Convertible Note and for so long as such Event of Default continues, all principal, interest, and other amounts payable under the 2017 Convertible Note will bear interest at a rate equal to 9% per year. The 2017 Convertible Note may not be prepaid in whole or in part prior to the maturity date without the prior written consent of the holder thereof (which may be granted or withheld in its sole discretion). The 2017 Convertible Note is secured by the equity interests held by the Operating LLC in all of its subsidiaries. At any time following the Closing Date, all or any portion of the outstanding principal amount of the 2017 Convertible Note may be converted by the holder thereof into units of membership interests of the Operating LLC (“LLC Units”) at a conversion rate equal to $1.45 per unit, subject to customary anti-dilution adjustments. Units of the Operating LLC not held by Cohen & Company Inc. may, with certain restrictions, be redeemed and exchanged into shares of the Company o n a ten -for-one basis. Therefore, the 2017 Convertible Note can be converted into Operating LLC units and then redeemed and exchanged into Common Stock at an effective conversion price of $14.50 . Under the Purchase Agreement, the Company submitted a proposal to the Company’s stockholders at its 2017 annual meeting of stockholders to approve the Company’s issuance, if any, of Common Stock upon any redemption of the LLC Units and the Company’s board of directors agreed to recommend that the Company’s stockholders vote to approve such proposal. The proposal was approved at the Company’s 2017 annual meeting. Following any conversion of the 2017 Convertible Note into LLC Units, the holder of such LLC Units will have the same rights of redemption, if any, held by the holders of LLC Units as set forth in the LLC Agreement; provided that the holder will have no such redemption rights with respect to such LLC Units if the Company’s board of directors determines in good faith that satisfaction of such redemption by the Company with shares of its Common Stock would (i) jeopardize or endanger the availability to the Company of its net operating loss and net capital loss carryforwards and certain other tax benefits under Section 382 of the Internal Revenue Code of 1986, or (ii) constitute a “Change of Control” under the Junior Subordinated Indenture, dated as of June 25, 2007, between the Company (formerly Alesco Financial Inc.) and Wells Fargo Bank, N.A., as trustee. Under the 2017 Convertible Note, if following any conversion of the 2017 Convertible Note into LLC Units, for so long as the Company owns a number of LLC Units representing less than a majority of the voting control of the Operating LLC, each holder of any LLC Units issued as a result of the conversion of the 2017 Convertible Note (regardless of how such LLC Units were acquired by such holder) is obligated to grant and appoint the Company as such holder’s proxy and attorney-in-fact to vote (i) the number of LLC Units owned by each such holder that, if voted by the Company, would give the Company a majority of the voting control of the Operating LLC, or (ii) if such holder holds less than such number of LLC Units, all such holder’s LLC Units. The 2017 Convertible Note provides that it is senior to all indebtedness of the Operating LLC incurred following the Closing Date, and is senior to any subordinated or junior subordinated indebtedness of the Operating LLC outstanding as of the Closing Date. Refer to note 17 to the Company’s consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016, for a discussion of the Company’s other debt . |
Equity
Equity | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
Equity | 13. EQUITY Stockholders’ Equity On September 1, 2017, the Company effected a 1- for- 10 reverse stock split and increased the par value of the Company’s common stock from $0.001 per share to $ 0 .01 per share. All share and per share amounts, and exercise and conversion prices for all periods presented herein reflect the reverse split as if it had occurred at the beginning of the first period presented. No fractional shares were issued in connection with the reverse stock split. Instead, a stockholder who otherwise would have been entitled to receive fractional shares of common stock as a result of the reverse stock split became entitled to receive from the Company cash in lieu of such fractional shares. The total cash payment for shares was $4 . Immediately after the reverse stock split there were 1,262,584 of common shares outstanding, which included 81,098 of unvested and restricted stock. Common Equity : The following table reflects the activity for the nine months ended September 30, 2017 related to the number of shares of unrestricted Common Stock that the Company had issued . Common Stock Shares December 31, 2016 1,134,957 Vesting of shares 61,616 Shares withheld for employee taxes (7,699) Retirement of Common Stock (8,878) September 30, 2017 1,179,996 Series E Voting Non-Convertible Preferred Stock : Each share of the Company’s Series E Voting Non-Convertible Preferred Stock (“Series E Preferred Stock”) has no economic rights but entitles the holders thereof , to vote the Series E Preferred Stock on all matters presented to the Company’s stockholders. F or every 10 shares of Series E Preferred Stock , the holders thereof are entitled to one vote on any such matter . Mr. Cohen, the Company’s vice chairman, is the sole holder of all 4,983,557 shares of Series E Preferred Stock outstanding as of September 30, 2017 . The Preferred Stock held by Mr. Cohen give him the same voting rights he would have if all of the Operating LLC membership units held by him were exchanged for Common Stock . For a more detailed description of these share s see note 18 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 . Acquisition and Surrender of Additional Units of the Operating LLC, net : Effective January 1, 2011, Cohen and Company Inc. and the Operating LLC entered into a Unit Issuance and Surrender Agreement (the “UIS Agre ement”), which was approved by Cohen & Company Inc. ’s board of directors and the board of managers of the Operating LLC. In an effort to maintain a 1 :10 ratio of Common Stock to the number of membership units Cohen & Company, Inc. holds in the Operating LLC, the UIS Agreement calls for the issuance of additional membership units of the Operating LLC to Cohen & Company Inc. when Cohen & Company Inc. issues its Common Stock to employees under existing equity compensation plans. In certain cases, the UIS Agreement calls for Cohen & Company Inc. to surrender units to the Operating LLC when certain restricted shares are forfeited by the employee or repurchased. During the nine months ended September 30, 2017 , Cohen & Company Inc. received and surrendered units of the Operating LLC. The following table displays the amount of units received (net of surrenders) by Cohen & Company Inc . Operating LLC Membership Units Units related to UIS Agreement 398,741 Units surrendered from retirement of Common Stock (88,829) Total 309,912 The Company recognized a net increase in additional paid in capital of $153 and a net decrease in accumulated other comprehensive income of $14 with an offsetting decrease in non-controlling interest of $139 in connection with the acquisition and surrender of additional units of the Operating LLC. The following schedule presents the effects of changes in Cohen & Company Inc.’s ownership interest in the Operating LLC on the equity attributable to Cohen & Company Inc. for the nine months ended September 30, 2017 and 2016. September 30, 2017 September 30, 2016 Net income / (loss) attributable to Cohen & Company Inc. $ 551 $ 2,070 Transfers (to) from the non-controlling interest: Increase / (decrease) in Cohen & Company Inc. paid in capital for the acquisition / (surrender) of additional units in consolidated subsidiary, net 153 (552) Changes from net income / (loss) attributable to Cohen & Company Inc. and transfers (to) from the non-controlling interest $ 704 $ 1,518 Repurchases of Common Stock On March 17, 2017 and 2016, the Company entered into letter agreements (together, the “10b5-1 Plan”) with Sandler O’Neill & Partners, L.P. (“Agent”). The 2016 letter agreement was in effect from March 17, 2016 until December 15, 2016. The 2017 letter agreement is in effect from March 17, 2017 until March 17, 2018. The 2016 letter called for the Agent to use its commercially reasonable efforts to purchase, on the Company’s behalf, up to an aggregate maximum of $1,000 of Common Stock on any day that the NYSE American Stock Exchange is open for business. The 2017 letter agreement calls for the Agent to purchase up to an aggregate maximum of $2,000 of the shares of Common Stock. Pursuant to the 10b5-1 Plan, purchases of Common Stock may be made in public and private transactions and must comply with Rule 10b-18 under the Exchange Act. The 10b5-1 Plan is designed to comply with Rule 10b5-1 under the Exchange Act. Pursuant to the 10b5-1 Plan, the Company repurchased 5,720 shares in the open market for a total purchase price of $66 during the nine months ended September 30, 2017 and 5,440 for a total purchase price of $63 for three months ended September 30, 2017 . Pursuant to the 10b5-1 Plan and prior to the plan being in effect, the Company repurchased 21,448 shares in the open market for a total purchase price of $201 during the nine months ended September 30, 20 16 and 8,040 shares for a total purchase price of $79 , during the three months ended September 30, 2016. In addition, on May 25, 2017, the Company purchased 2,774 shares in a privately negotiated transaction from an employee of the Company for an aggregate purchase price of $33 or $12 per share. In addition, on March 21, 2016, the Company (i) repurchased 65,000 shares of Common Stock, from an unrelated third-party in a privately negotiated transaction for an aggregate purchase price of $813 , which represents a per share price of $12.50 , and (ii) repurchased an aggregate of 104,400 shares of C ommon Stock from an investment manager representing certain stockholders that are unrelated to the Company in a separate privately negotiated transaction for an aggregate purchase price of $1,305 , which represents a per share price of $12.50 . All of the repurchases noted above were completed using cash on hand. |
Net Capital Requirements
Net Capital Requirements | 9 Months Ended |
Sep. 30, 2017 | |
Net Capital Requirements [Abstract] | |
Net Capital Requirements | 14 . NET CAPITAL REQUIREMENTS JVB is subject to the net capital provision of Rule 15c3-1 under the Exchange Act, which requires the maintenance of minimum net capital, as defined therein. As of September 30, 2017 , JVB’s adjusted net capital was $ 61,730 , which exceeded the minimum requirements by $61,480 . CCFL, a subsidiary of the Company regulated by the United Kingdom FCA , is subject to the net liquid capital provision of the Financial Services and Markets Act 2000, GENPRU 2.140R to 2.1.57R, relating to financial prudence with regards to the European Investment Services Directive and the European Capital Adequacy Directive, which requires the maintenance of minimum liquid capital, as defined therein. As of September 30, 2017 , the total minimum required net liquid capital was $ 1,138 , an d net liquid capital in CCFL was $1,991 , which exceeded the minimum requirements by $ 853 and was in compliance with the net liquid capital provisions. |
Earnings _ (Loss) Per Common Sh
Earnings / (Loss) Per Common Share | 9 Months Ended |
Sep. 30, 2017 | |
Earnings / (Loss) Per Common Share [Abstract] | |
Earnings / (Loss) Per Common Share | 15 . EAR NINGS / (Loss) PER COMMON SHARE . The following table presents a reconciliation of basic and diluted earnings / (loss) per common share for the periods indicated. EARNINGS / (LOSS) PER COMMON SHARE (Dollars in Thousands, except share or per share information) Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Net income / (loss) attributable to Cohen & Company $ (547) $ 1,041 $ 551 $ 2,070 Income / (loss) attributable to non-controlling interest attributable to Operating LLC membership units exchangeable into Cohen & Company shares (1) (211) 489 274 925 Add / (deduct): Adjustment (2) (30) (23) (29) (33) Net income / (loss) on a fully converted basis $ (788) $ 1,507 $ 796 $ 2,962 Weighted average common shares outstanding - Basic 1,212,826 1,180,742 1,209,585 1,232,824 Unrestricted Operating LLC membership units exchangeable into Cohen & Company shares (1) 532,409 532,409 532,409 532,409 Restricted units or shares - 13,049 13,938 9,124 Weighted average common shares outstanding - Diluted (3) 1,745,235 1,726,200 1,755,932 1,774,357 Net income / (loss) per common share - Basic $ (0.45) $ 0.88 $ 0.46 $ 1.68 Net income / (loss) per common share - Diluted $ (0.45) $ 0.87 $ 0.45 $ 1.67 (1) The Operating LLC membership units not held by Cohen & Company Inc. (that is, those held by the non-controlling interest for the nine months ended September 30, 2017 and 2016) may be redeemed and exchanged int o shares of the Company on a ten -for-one basis . The Operating LLC membership units not held by Cohen & Company Inc. are redeemable, at any time, for (i) cash in an amount equal to one tenth of the average of the per share closing prices of Common Stock for the ten consecutive trading days immediately preceding the date the Company receives the member’s redemption notice, or (ii) at the Company’s option, one tenth of a share of Common Stock, subject, in each case, to appropriate adjustment upon the occurrence of an issuance of additional shares of Common Stock as a dividend or other distribution on the outstanding Common Stock, or a further subdivision or combination of the outstanding shares of Common Stock. These membership units enter into the computation of diluted net income / (loss) per common share when the effect is not anti-dilutive using the if-converted method. (2 ) An adjustment is included for income tax expense. If the Operating LLC membership units had been converted at the beginning of the period, the Company would have incurred a higher income tax expense or realized a higher income tax benefit, as applicable. (3) For the three months ended September 30, 2017, weighted average common shares outstanding exclude s (i) 14,059 shares representing restricted Operating LLC membership units, restricted Common Stock, and restricted units of Common Stock that would be anti-dilutive because of the Company’s net loss, (ii) 274,917 shares from the assumed conversion of the 2013 Notes, and (iii) 1,034,483 shares from the assumed conversion of the 2017 Note because of the Company’s net loss and the inclusion of the converted shares would be anti-dilutive. For the nine months ended September 30, 2017, weighted average common shares outstanding excludes (i) 274,917 from the assumed conversion of the 2013 Notes and (ii) 773,947 shares from the assumed conversion of the 2017 Note because the inclusion of the converted shares would be anti-dilutive. For the three and nine months ended September 30, 2016, the weighted average common shares outstanding excluded 274,917 shares from the assumed conversion of the 2013 Notes because the inclusion of these shares would be antidilutive. |
Commitments And Contingencies
Commitments And Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
Commitments And Contingencies [Abstract] | |
Commitments And Contingencies | 16. COMMITMENTS AND CONTINGENCIES Legal and Regulatory Proceedings In October 2013, the Company received a Pennsylvania corporate net income tax assessment from the Pennsylvania Department of Revenue in the amount of $4,683 (including penalties) plus interest related to a subsidiary of AFN for the 2009 tax year. The assessment denied this subsidiary’s Keystone Opportunity Zone (“KOZ”) credit for that year. The Company filed an administrative appeal of this assessment with the Pennsylvania Department of Revenue Board of Appeals, which was denied in June 2014. The Company filed an appeal with the Pennsylvania Board of Finance and Revenue, which was also denied in May 2015. The Company has filed an appeal with the Pennsylvania Commonwealth Court. At a status conference held on October 3, 2017, the Commonwealth requested a 120 day extension of the deadline to file certain documents and/or set a date for trial. The Company consented to this request and the Court granted the extension. The Company has evaluated the assessment in accordance with the provisions of ASC 740 and determined not to record any reserve for this assessment. In addition to the matters set forth above, the Company is a party to various routine legal proceedings, claims, and regulatory inquiries arising out of the ordinary course of the Company’s business. Management believes that the results of these routine legal proceedings, claims, and regulatory matters will not have a material adverse effect on the Company’s financial condition, or on the Company’s operations and cash flows. However, the Company cannot estimate the legal fees and expenses to be incurred in connection with these routine matters and, therefore, is unable to determine whether these future legal fees and expenses will have a material impact on the Company’s operations and cash flows. It is the Company’s policy to expense legal and other fees as incurred. |
Segment And Geographic Informat
Segment And Geographic Information | 9 Months Ended |
Sep. 30, 2017 | |
Segment and Geographic Information [Abstract] | |
Segment And Geographic Information | 17. SEGMENT AND GEOGRAPHIC INFORMATION Segment Information The Company operates within three business segments: Capital Markets, Asset Management, and Principal Investing . See note 1. The Company’s business segment information was prepared using the following methodologies and generally represents the information that is relied upon by management in its decision making processes: (a) Revenues and expenses directly associated with each business segment are included in determining net income / (loss) by segment; and (b) Indirect expenses (such as general and administrative expenses including executive and indirect overhead costs) not directly associated with specific business segments are not allocated to the business segments’ statements of operations. Accordingly, the Company presents segment information consistent with internal management reporting. See note (1) in the table below for more detail on unallocated items. The following tables present the financial information for the Company’s segments for the periods indicated. SEGMENT INFORMATION Statement of Operations Information Nine Months Ended September 30, 2017 Capital Asset Principal Segment Unallocated Markets Management Investing Total (1) Total Net trading $ 20,158 $ - $ - $ 20,158 $ - $ 20,158 Asset management - 6,202 - 6,202 - 6,202 New issue and advisory 3,992 - - 3,992 - 3,992 Principal transactions and other income 4 4,995 516 5,515 - 5,515 Total revenues 24,154 11,197 516 35,867 - 35,867 Total operating expenses 20,576 3,521 286 24,383 6,181 30,564 Operating income (loss) 3,578 7,676 230 11,484 (6,181) 5,303 Interest expense - - - - (4,330) (4,330) Income (loss) before income taxes 3,578 7,676 230 11,484 (10,511) 973 Income tax expense (benefit) - - - - 148 148 Net income (loss) 3,578 7,676 230 11,484 (10,659) 825 Less: Net income (loss) attributable to the non-controlling interest - - - - 274 274 Net income (loss) attributable to Cohen & Company Inc. $ 3,578 $ 7,676 $ 230 $ 11,484 $ (10,933) $ 551 Other statement of operations data Depreciation and amortization (included in total operating expense) $ 51 $ 3 $ - $ 54 $ 133 $ 187 SEGMENT INFORMATION Statement of Operations Information Nine Months Ended September 30, 2016 Capital Asset Principal Segment Unallocated Markets Management Investing Total (1) Total Net trading $ 31,973 $ - $ - $ 31,973 $ - $ 31,973 Asset management - 5,662 - 5,662 - 5,662 New issue and advisory 2,176 - - 2,176 - 2,176 Principal transactions and other income 140 1,541 698 2,379 - 2,379 Total revenues 34,289 7,203 698 42,190 - 42,190 Total operating expenses 26,662 2,394 369 29,425 6,640 36,065 Operating income (loss) 7,627 4,809 329 12,765 (6,640) 6,125 Interest expense - - - - (2,973) (2,973) Income (loss) before income taxes 7,627 4,809 329 12,765 (9,613) 3,152 Income tax expense (benefit) - - - - 157 157 Net income (loss) 7,627 4,809 329 12,765 (9,770) 2,995 Less: Net income (loss) attributable to the non-controlling interest - - - - 925 925 Net income (loss) attributable to Cohen & Company Inc. $ 7,627 $ 4,809 $ 329 $ 12,765 $ (10,695) $ 2,070 Other statement of operations data Depreciation and amortization (included in total operating expense) $ 90 $ 2 $ - $ 92 $ 128 $ 220 SEGMENT INFORMATION Statement of Operations Information Three Months Ended September 30, 2017 Capital Asset Principal Segment Unallocated Markets Management Investing Total (1) Total Net trading $ 5,988 $ - $ - $ 5,988 $ - $ 5,988 Asset management - 1,779 - 1,779 - 1,779 New issue and advisory 2,012 - - 2,012 - 2,012 Principal transactions and other income (2) 230 (6) 222 - 222 Total revenues 7,998 2,009 (6) 10,001 - 10,001 Total operating expenses 6,053 1,042 95 7,190 1,822 9,012 Operating income (loss) 1,945 967 (101) 2,811 (1,822) 989 Interest expense - - - - (1,606) (1,606) Income (loss) before income taxes 1,945 967 (101) 2,811 (3,428) (617) Income tax expense (benefit) - - - - 141 141 Net income (loss) 1,945 967 (101) 2,811 (3,569) (758) Less: Net income (loss) attributable to the non-controlling interest - - - - (211) (211) Net income (loss) attributable to Cohen & Company Inc. $ 1,945 $ 967 $ (101) $ 2,811 $ (3,358) $ (547) Other statement of operations data Depreciation and amortization (included in total operating expense) $ 16 $ 1 $ - $ 17 $ 43 $ 60 SEGMENT INFORMATION Statement of Operations Information Three Months Ended September 30, 2016 Capital Asset Principal Segment Unallocated Markets Management Investing Total (1) Total Net trading $ 10,486 $ - $ - $ 10,486 $ - $ 10,486 Asset management - 1,781 - 1,781 - 1,781 New issue and advisory 811 - - 811 - 811 Principal transactions and other income 30 441 541 1,012 - 1,012 Total revenues 11,327 2,222 541 14,090 - 14,090 Total operating expenses 8,556 779 117 9,452 1,987 11,439 Operating income (loss) 2,771 1,443 424 4,638 (1,987) 2,651 Interest expense - - - - (991) (991) Income (loss) before income taxes 2,771 1,443 424 4,638 (2,978) 1,660 Income tax expense (benefit) - - - - 130 130 Net income (loss) 2,771 1,443 424 4,638 (3,108) 1,530 Less: Net income (loss) attributable to the non-controlling interest - - - - 489 489 Net income (loss) attributable to Cohen & Company, Inc. $ 2,771 $ 1,443 $ 424 $ 4,638 $ (3,597) $ 1,041 Other statement of operations data Depreciation and amortization (included in total operating expense) $ 20 $ 1 $ - $ 21 $ 45 $ 66 (1) Unallocated includes certain expenses incurred by indirect overhead and support departments (such as the executive, finance, legal, information technology, human resources, risk, compliance, and other similar overhead and support departments). Some of the items not allocated include: (1) operating expenses (such as cash compensation and benefits, equity-based compensation expense, professional fees, travel and entertainment, consulting fees, and rent) related to support departments excluding certain departments that directly support the Capital Markets business segment; (2) interest expense on debt; and (3) income taxes. Management does not consider these items necessary for an understanding of the operating results of these business segments and such amounts are excluded in business segment reporting to the chief operating decision maker. BALANCE SHEET DATA As of September 30, 2017 (Dollars in Thousands) Capital Asset Principal Segment Unallocated Markets Management Investing Total (1) Total Total Assets $ 665,216 $ 2,682 $ 5,814 $ 673,712 $ 16,543 $ 690,255 Included within total assets: Goodwill (2) $ 7,937 $ 55 $ - $ 7,992 $ - $ 7,992 Intangible assets (2) $ 166 $ - $ - $ 166 $ - $ 166 BALANCE SHEET DATA December 31, 2016 (Dollars in Thousands) Capital Asset Principal Segment Unallocated Markets Management Investing Total (1) Total Total Assets $ 542,364 $ 4,973 $ 8,441 $ 555,778 $ 5,493 $ 561,271 Included within total assets: Goodwill (2) $ 7,937 $ 55 $ - $ 7,992 $ - $ 7,992 Intangible assets (2) $ 166 $ - $ - $ 166 $ - $ 166 (1) Unallocated assets primarily include: (1) amounts due from related parties other than receivables from employees which are allocated ; (2) furniture and equipment, net; and (3) other assets that are not considered necessary for an understan ding of business segment assets. S uch amounts are excluded in business segment reporting to the chief operating decision maker. (2) Goodwill and intangible assets as of September 30, 2017 and December 2016 are allocated to the Capital Markets and Asset Management business segments as indicated in the table above. Geographic Information The Company conducts its business activities through offices in the following locations: (1) United States and (2) United Kingdom and other. Total revenues by geographic area are summarized as follows. GEOGRAPHIC DATA (Dollars in Thousands) Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Total Revenues: United States $ 7,604 $ 12,758 $ 29,499 $ 38,309 United Kingdom & Other 2,397 1,332 6,368 3,881 Total $ 10,001 $ 14,090 $ 35,867 $ 42,190 Long-lived assets attributable to an individual country, other than the United States, are not material. |
Supplemental Cash Flow Disclosu
Supplemental Cash Flow Disclosure | 9 Months Ended |
Sep. 30, 2017 | |
Supplemental Cash Flow Disclosure [Abstract] | |
Supplemental Cash Flow Disclosure | 18 . SUPPLEMENTAL CASH FLOW DISCLOSURE Cash paid for interest by the Company on its debt and redeemable financial instrument was $ 3,919 and $ 2,079 for the nine months ended September 30, 2017 and 2016 , respectively. The Company paid income taxes of $ 47 and $ 276 for the nine months ended September 30, 2017 and 2016 , respectively. The Company received income tax refunds of $83 and $16 for the nine months ended September 30, 2017 and 2016 For the nine months ended September 30, 2017 , the Company had the following significant non-cash transactions that are not reflected on the statement of cash flows: · The Company net surrendered units of the Operating LLC . The Company recognized a net increase in additional paid-in capital of $ 153 , a net decrease of $ 14 in accumulated other comprehensive income, and a decrease of $ 139 in non -controlling interest. See note 13. · As a result of the European Sale Agreement, Mr. Cohen was required to pay to the Company the $600 Termination Fee. Accordingly, the Company had deferred $600 of transaction costs it had paid in conjunction with the European Sale Agreement, which were included as a component of other assets. With the issuance of the $15,000 convertible note, the Company agreed to pay to DGC Family Fintech Trust the $600 Transaction Fee. The Company agreed that Mr. Cohen’s obligation to pay the Termination Fee was offset in its entirety by the Company’s obligation to pay the Transaction Fee. Accordingly, $600 was reclassified from other assets to discount on debt. (See note 4) For the nine months ended September 30, 2016 , the Company had the following significant non-cash transactions that are not reflected on the statement of cash flows: · The Company net surrendered units of the Operating LLC. The Company recognized a net decrease in additional paid-in capital of $552 , a net increase of $49 in accumulated other comprehensive income, and a net increase of $503 in non-controlling interest. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 1 9 . RELATED PARTY TRANSACTIONS The Company has identified the following related party transactions for the nine months ended September 30, 2017 and 2016 . The transactions are listed by related party and, unless otherwise noted in the text of the description, the amounts are disclosed in the tables at the end of this section. A. The Bancorp, Inc. (“TBBK”) TBBK is identified as a related party because Mr. Cohen is TBBK’s chairman. TBBK maintained deposits for the Company in the amount of $115 and $43 as of September 30, 2017 and December 31, 2016, respectively. These amounts are not disclosed in the tables at the end of this section. As part of the Company’s broker-dealer operations, the Company from time to time purchases securities from third parties and sells those securities to TBBK. The Company may purchase securities from TBBK and ultimately sell those securities to third parties. In either of the cases listed above, the Company includes the trading revenue earned (i.e. the gain or loss realized, or commission earned) by the Company for the entire transaction in the amounts disclosed as part of net trading in the table at the end of this section. From time to time, the Company will enter into repurchase agreements with TBBK as its counterparty. As of September 30, 2017 and December 31, 2016, the Company had repurchase agreements with TBBK as the counterparty of $65,131 and $39,221 , respectively. As of September 30, 2017 and December 31, 2016, the fair value of the collateral provided to TBBK by the Company relating to these repurchase agreements was $67,888 and $41,177 , respectively. These amounts are included as a component of securities sold under agreement to repurchase in the Company’s consolidated balance sheets. The Company incurred interest expense related to repurchase agreements with TBBK as its counterparty in the amounts of $930 and $370 for the nine and three months ended September 30, 2017 , respectively, and $301 and $146 for the nine and three month s ended September 30, 2016, respectively, which were included as a component of net trading revenue in the Company’s consolidated statements of operations. These amounts are not disclosed in the tables at the end this section. B. Cohen Bros. Financial, LLC (“CBF”) and EBC 2013 Family Trust (“EBC”) CBF has been identified as a related party because (i) CBF is a non-controlling interest of the Company and (ii) CBF is wholly owned by Mr. Cohen. In September 2013, EBC, as an assignee of CBF, made a $4,000 investment in the Company. Mr. Cohen is a trustee of EBC. The Company issued $2,400 in principal amount of the 2013 Convertible Notes, and $1,600 of Common Stock to EBC. See notes 4 and 17 to the Company’s consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016. The Company incurred interest expense on this debt, which is disclosed as part of interest expense incurred in the table at the end of this section. On September 29, 2017, CBF also invested $8,000 of the $10,000 total investment in the Company’s Redeemable Financial Instrument – DGC Family Fintech Trust / CBF. See note 10. No interest was incurred on this instrument for the three or nine months ended September 30, 2017. The balance of the redeemable financial instrument is included as a component of accounts payable and other liabilities in the Company’s consolidated balance sheet. See note 10. C. The Edward E. Cohen IRA On August 28, 2015, $4,386 in principal amount of the 2013 Convertible Notes originally issued to Mead Park Capital in September 2013 was purchased by the Edward E. Cohen IRA of which Edward E. Cohen is the benefactor. Edward E. Cohen is the father of Daniel G. Cohen. The Company incurred interest expense on this debt, which is disclosed as part of interest expense incurred in the tables at the end of this section. See notes 4 and 17 to the Company’s consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016. D. JKD Capital Partners I LTD JKD Capital Partners I LTD (“JKD”) is an entity owned by Jack J. DiMaio, the chairman of the Company’s board of directors, and his spouse. On October 3, 2016, the Operating LLC and JKD entered into an investment agreement. Pursuant to such investment agreement, JKD agreed to invest up to $12,000 into the Operating LLC, $6,000 of which was invested in October 2016. An additional $1,000 was invested by JKD in the Operating LLC in January 2017. For a more detailed description of the terms and conditions of the redeemable financial instrument see note 13 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2016. The interest expense incurred on this transaction is disclosed in the table at the end of this section. The balance of the redeemable financial instrument is included as a component of accounts payable and other liabilities in the Company’s consolidated balance sheet. See note 10. E. CDO Sub-Advisory Agreement with Mead Park Advisors, LLC In July 2014, Cohen & Company Inc.’s subsidiaries, Cohen & Company Financial Management LLC (“CCFM”) and Dekania Capital Management, LLC (“DCM”), entered into a CDO sub-advisory agreement with Mead Park Advisors, LLC (“Mead Park Advisors”) whereby Mead Park Advisors rendered investment advice and provided assistance to CCFM and DCM with respect to their management of certain CDOs. The Company incurred consulting fee expense related to this sub-advisory agreement, which is disclosed as part of professional fee and other operating in the tables at the end of this section. Mead Park Advisors is a related party of the Company because Mr. DiMaio maintains an ownership interest in it. The CDO sub-advisory agreement was terminated by the Company on March 30, 2017. F. DGC Family Fintech Trust DGC Family Fintech Trust was established by Daniel G. Cohen, the president and chief executive of the Company’s European operations and vice chairman of the Company’s board of directors. Mr. Cohen does not have any voting or dispositive control of securities held in the interest of the trust. The Company considers DGC Family Fintech Trust a related party because it was established by Daniel G. Cohen. In March 2017, t he DGC Family Fintech Trust purchased the 2017 Convertible Note (See notes 4 and 12) . The Company incurred interest expense on the 2017 Convertible Note, which is disclosed as part of interest expense incurred in the table at the end of this section. On September 29, 2017, the DGC Family Fintech Trust also invested $2,000 of the $10,000 total investment in the Company’s Redeemable Financial Instrument – DGC Family Fintech Trust / CBF. See note 10. No interest was incurred on this instrument for the three or nine months ended September 30, 2017. The balance of the redeemable financial instrument is included as a component of accounts payable and other liabilities in the Company’s consolidated balance sheet. See note 10. G . Fin Tech Acquisition Corp. II In July 2017, the Operating LLC entered into an agreement with Fin Tech Acquisition Corp. II. Fin Tech Acquisition Corp. II is a related party because Daniel G. Cohen , the Company’s vice chairman, is the Chief Executiv e Officer of Fin Tech Acquisition Corp. II, Betsy Cohen, Mr. Cohen’s mother , is the c hairman of the b oard of directors of Fin Tech Acquisition Corp. II , and James J. McEntee, a member of the Company’s board of directors is the president and c hief f inancial o fficer of Fin Tech Acquisition Corp. II . The agreement provides that Cohen & Company Inc. will provide accounting and support services to Fin Tech Acquisition Corp. II for a period not longer than 24 months. The revenue recorded for this arrangement is included as a component of other revenue and included in the table below. T he following tables display the routine transactions recognized in the statements of operations from the identified related parties that are described above. RELATED PARTY TRANSACTIONS Nine Months Ended September 30, 2017 (Dollars in Thousands) Management fee revenue Net trading Principal transactions Other revenue Professional fee and other operating Interest expense incurred Bancorp (TBBK) $ - $ 13 $ - $ - $ - $ - EBC - - - - - 176 Edward E. Cohen IRA - - - - - 322 JDK Capital Partners 1, Ltd - - - - - 465 DGC Fintech Family Trust - - - - - 794 Fintech Acquisition Corp II - - - 1 - - Mead Park Advisors, LLC - - - - 50 - $ - $ 13 $ - $ 1 $ 50 $ 1,757 RELATED PARTY TRANSACTIONS Nine Months Ended September 30, 2016 (Dollars in Thousands) Management fee revenue Net trading Principal transactions Other revenue Professional fee and other operating Interest expense incurred EBC $ - $ - $ - $ - $ - $ 173 Edward E. Cohen IRA - - - - - 317 Mead Park Advisors, LLC - - - - 150 - $ - $ - $ - $ - $ 150 $ 490 RELATED PARTY TRANSACTIONS Three Months Ended September 30, 2017 (Dollars in Thousands) Management fee revenue Net trading Principal transactions Other revenue Professional fee and other operating Interest expense(income) incurred TBBK $ - $ - $ - $ - $ - $ - EBC - - - - - 59 Edward E. Cohen IRA - - - - - 109 JDK Capital Partners 1, Ltd - - - - - 210 DGC Fintech Family Trust - - - - - 359 Fintech Acquisition Corp II - - - 1 - - $ - $ - $ - $ 1 $ - $ 737 RELATED PARTY TRANSACTIONS Three Months Ended September 30, 2016 (Dollars in Thousands) Management fee revenue Net trading Principal transactions Other revenue Professional fee and other operating Interest expense incurred EBC $ - $ - $ - $ - $ - $ 58 Edward E. Cohen IRA - - - - - 107 Mead Park Advisors, LLC - - - - 50 - $ - $ - $ - $ - $ 50 $ 165 The following related party transactions are non-routine and are not included in the tables above. H. Directors and Employees The Company has entered into employment agreements with Daniel G. Cohen, its vice chairman, and Joseph W. Pooler, Jr., its chief financial officer. The Company has entered into its standard indemnification agreement with each of its directors and executive officers. The Company ha d a sublease agreement for certain office space with Jack DiMaio, the Company’s chairman of the board. The Company received payments under this agreement. The payments were recorded as a reduction in the related rent and utility expenses. The Company recorded a reduction in the rent and utility expenses in the amount of $11 and $0 for the nine and three months ended September 30, 2017, respectively, and $16 and $6 for the nine and three months ended September 30, 2016 , respectively. This sublease agreement terminated May 31, 2017. Subsequent to the termination of the sublease agreement, the Company agreed to lease office space from the Corporate High Yield Investment Group of Zucker Moore, LLC . The Company recorded $41 of rent expense for the nine months ended September 30, 2017 and $31 for the three months ended September 30, 2017 . The Company maintains a 401(k) savings plan covering substantially all of its employees. The Company matches 50% of employee contributions for all participants not to exceed 3% of their salary. Contributions made on behalf of the Company were $177 and $41 for the nine and three months ended September 30, 2017 , respectively, and $188 and $40 for the nine and three months ended September 30, 2016 , respectively. |
Due From _ Due To Related Parti
Due From / Due To Related Parties | 9 Months Ended |
Sep. 30, 2017 | |
Due From / Due To Related Parties [Abstract] | |
Due From / Due To Related Parties | 20 . DUE FROM / DUE TO RELATED PARTIES The following table summarizes the outstanding due from / to related parties. These amounts may result from normal operating advances or from timing differences between the transactions disclosed in note 19 and final settlement of those transactions in cash. All amounts are primarily non-interest bearing. DUE FROM/DUE TO RELATED PARTIES (Dollars in Thousands) September 30, 2017 December 31, 2016 Employees & other $ 547 $ 57 Due from Related Parties $ 547 $ 57 Mead Park $ - $ 50 Due to Related Parties $ - $ 50 |
Summary Of Significant Accoun28
Summary Of Significant Accounting Policies (Policy) | 9 Months Ended |
Sep. 30, 2017 | |
Summary of Significant Accounting Policies [Abstract] | |
Adoption Of New Accounting Standards | A. Adoption of New Accounting Standards In June 2014, the FASB issued ASU No. 2014-12, Compensation-Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide that a Performance Target could be Achieved After the Requisite Service Period , which requires a performance target that affects vesting and that could be achieved after the requisite service period be accounted for as a performance condition rather than as a non-vesting condition that affects the grant-date fair value of the award. The Company’s adoption of the provisions of ASU 2014-12 effective January 1, 2016 did not have an effect on the Company’s consolidated financial position, results of operations, or cash flows. In August 2014, the FASB issued ASU No. 2014-13, Measuring the Financial Assets and the Financial Liabilities of a Consolidated Collateralized Financing Entity , which provides a measurement alternative for an entity that consolidates collateralized financing entities. A collateralized financing entity is a variable interest entity with nominal or no equity that holds financial assets and issues beneficial interests in those financial assets. The beneficial interests, which are financial liabilities of the collateralized financing entity, have contractual recourse only to the related assets of the collateralized financing entity. If elected, the alternative method results in the reporting entity measuring both the financial assets and financial liabilities of the collateralized financing entity using the more observable of the two fair value measurements, which effectively removes measurement differences between the financial assets and financial liabilities of the collateralized financing entity previously recorded as net income (loss) attributable to non-controlling and other beneficial interests and as an adjustment to appropriated retained earnings. The reporting entity continues to measure its own beneficial interests in the collateralized financing entity (other than those that represent compensation for services) at fair value. The Company’s adoption of the provisions of ASU 2014-13 effective January 1, 2016 did not have an effect on the Company’s consolidated financial position, results of operations, or cash flows. In November 2014, the FASB issued ASU No. 2014-16, Derivatives and Hedging (Topic 815) : Determining whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share is More Akin to Debt or to Equity, which clarifies that an entity must consider all relevant terms and features when evaluating the nature of the host contract. Additionally, the amendments state that no one term or feature would define the host contract’s economic characteristics and risks. Instead, the economic characteristics and risks of the hybrid financial instrument as a whole would determine the nature of the host contract. The Company’s adoption of the provisions of ASU 2014-16 effective January 1, 2016 did not have an effect on the Company’s consolidated financial position, results of operations, or cash flows. In January 2015, the FASB issued ASU No. 2015-01, Income Statement – Extraordinary and Unusual Items (Subtopic 225-20), Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items , which eliminates from U.S. GAAP the requirement of extraordinary items to be separately classified on the income statement. The Company’s adoption of the provisions of ASU 2015-01 effective January 1, 2016 did not have an effect on the Company’s consolidated financial position, results of operations, or cash flows. In February 2015, the FASB issued ASU No. 2015-02, Consolidation (Topic 810) – Amendments to the Consolidation Analysis, which makes targeted amendments to the current consolidation guidance and ends the deferral granted to investment companies from applying the variable interest entity (“VIE”) guidance. The revised consolidation guidance, among other things, (i) modifies the evaluation of whether limited partnerships and similar legal entities are VIEs or voting interest entities, (ii) eliminates the presumption that a general partner should consolidate a limited partnership, and (iii) modifies the consolidation analysis of reporting entities that are involved with VIEs through fee arrangements and related party relationships. The Company’s adoption of the provisions of ASU 2015-02 effective January 1, 2016 did not have an effect on the Company’s consolidated financial position, results of operations, or cash flows. However, the Company previously treated its management contracts with certain securitization entities that are VIEs as variable interests. Therefore, the Company disclosed certain information related to these interests in its variable interest entity footnote. Upon adoption of this ASU, these management contracts are not considered variable interests. Therefore, in cases where the Company’s only interest in certain VIEs is its management contract, the Company is no longer required to include certain disclosures related to those variable interest entities. See note 11. In April 2015, the FASB issued ASU No. 2015-03, Interest-Imputation of Interest (Subtopic 835-30), Simplifying the Presentation of Debt Issuance Costs , which requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement for debt issuance costs are not affected by the amendments in this update. Upon adoption of the provisions of ASU 2015-03 effective January 1, 2016, the Company reclassified its deferred financing costs as of January 1, 2016 resulting in a reduction in other assets of $410 and a reduction in debt of $410 in the Company’s consolidated balance sheet as of December 31, 2015. In May 2015, the FASB issued ASU No. 2015-07, Fair Value Measurement (Topic 820) – Disclosures for Investments in Certain Entities that Calculate Net Asset Value per Share (or its Equivalent) . Reporting entities are permitted to use net asset value (“NAV”) as a practical expedient to measure the fair value of certain investments. Previously, investments that used the NAV practical expedient to measure fair value were categorized within the fair value hierarchy as level 2 or level 3 investments depending on their redemption attributes, which has led to diversity in practice. This ASU removes the requirement to categorize within the fair value hierarchy all investments that use the NAV practical expedient for fair value measurement purposes. The ASU removes the requirement to make certain disclosures for all investments that are eligible to be measured at fair value using the NAV practical expedient. Rather, those disclosures are limited to investments for which the entity has elected to measure the fair value using that practical expedient. The Company’s adoption of ASU 2015-07 effective January 1, 2016 did not have an effect on the Company’s consolidated financial position, results of operations, or cash flows. However, as a result of this adoption, the Company no longer classifies its investment in EuroDekania (for which it uses the practical expedient) within the fair value hierarchy. See note 7. In September 2015, the FASB issued ASU No. 2015-16, Business Combinations (Topic 805), Simplifying the Accounting for Measurement-Period Adjustments , which includes amendments that eliminate the requirement to restate prior period financial statements for measurement period adjustments following a business combination. The new guidance requires that the cumulative impact of a measurement period adjustment (including the impact on prior periods) be recognized in the reporting period in which the adjustment is identified. The prior period impact of the adjustment should be either presented separately on the face of the income statement or disclosed in the notes to the financial statements. The Company’s adoption of the provisions of ASU 2015-16 effective January 1, 2016 did not have an effect on the Company’s consolidated financial position, results of operations, or cash flows. In March 2016, the FASB issued ASU 2016-06, Derivatives and Hedging (Topic 815): Contingent Put and Call Options in Debt Instruments. This ASU clarifies what steps are required when assessing whether the economic characteristics and risks of call (put) options are clearly and closely related to the economic characteristics and risks of their debt hosts, which is one of the criteria for bifurcating an embedded derivative. Consequently, when a call (put) option is contingently exercisable, an entity does not have to assess whether the event that triggers the ability to exercise a call (put) option is related to interest rates or credit risks. The Company’s adoption of the provisions of ASU 2016-06 effective January 1, 2017 did not have an effect on the Company’s consolidated financial statements. In March 2016, the FASB issued ASU 2016-07, Investments - Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting . This ASU eliminates the requirement that when an investment qualifies for use of the equity method as a result of an increase in the level of ownership interest or degree of influence, an investor must adjust the investment, results of operations, and retained earnings retroactively on a step-by-step basis as if the equity method had been in effect during all previous periods that the investment had been held. The amendments require that the equity method investor add the cost of acquiring the additional interest in the investee to the current basis of the investor’s previously held interest and adopt the equity method of accounting as of the date the investment becomes qualified for equity method accounting. If an entity has an available-for-sale equity security that becomes qualified for the equity method of accounting, it should recognize through earnings the unrealized holding gain or loss in accumulated other comprehensive income at the date the investment becomes qualified for use of the equity method . The Company’s adoption of the provisions of ASU 2016-07 effective January 1, 2017 did not have an effect on the Company’s consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting . This ASU simplifies several aspects of the accounting for share-based payment award transactions including: (i) income tax consequences; (ii) classification of awards as either equity or liabilities; and (iii) classification on the statement of cash flows. The Company’s adoption of the provisions of ASU 2016-09 effective January 1, 2017 did not have a material impact on the Company’s consolidated financial statements. In October 2016, the FASB issued ASU 2016-17 , Consolidation (Topic 810): Interests Held through Related Parties That Are under Common Control . The amendments change the evaluation of whether a reporting entity is the primary beneficiary of a variable interest entity by changing how a reporting entity that is a single decision maker of a variable interest entity treats indirect interests in the entity held through related parties that are under common control. If a reporting entity satisfies the first characteristic of a primary beneficiary (such that it is the single decision maker of a variable interest entity), the amendments require that reporting entity, in determining whether it satisfies the second characteristic of a primary beneficiary, to include all of its direct variable interests in a variable interest entity and, on a proportionate basis, its indirect variable interests in a variable interest entity held through related parties, including related parties that are under common control with the reporting entity. The Company’s adoption of the provisions of ASU 2016-17 effective January 1, 2017 did not have an effect on the Company’s consolidated financial statements. |
Recent Accounting Developments | B. Recent Accounting Developments In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) . The core principle of this ASU is to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Subsequently, the FASB issued a series of modifying ASUs that do not change the core principle of the guidance stated in ASU 2014-09. The modifying ASUs include: ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), ASU 2016-10 , Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing , and ASU 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow Scope Improvements and Practical Expedients. The Company must adopt the amendments in ASU 2016-08, ASU 2016-10, and ASU 2016-12 with the adoption of ASU 2014-09. The effective date for all of the amendments in these ASUs is for annual periods beginning after December 15, 2017, including interim reporting periods within that reporting period as amended by ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date . Early application is permitted. The Company commenced its evaluation of the impact of this ASU in 2016. This ASU excludes from its scope revenue recognition related to items the Company records as a component of net trading and principal transactions within its consolidated statement of operations. Therefore, this ASU will have no impact on these items. Furthermore, based on the Company’s review to date, the Company does not anticipate the new guidance will have a material impact on items it records as a component of asset management or other revenue. The Company will adopt the new guidance on January 1, 2018 using the modified retrospective transition method. The Company expects any cumulative effect adjustment resulting from the application of this method will be immaterial. In February 2016, the FASB issued ASU No. 2016-01, Financial Instruments-Overall (Subtopic 825-10) . The amendments in ASU 2016-01, among other things: require equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income; require public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; require separate presentation of financial assets and liabilities by measurement category and form of financial asset; and eliminate the requirement for public business entities to disclose the methods and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact of these amendments on the presentation in its consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). Under the new guidance, lessees will be required to recognize the following for all leases with the exception of short-term leases: (i) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (ii) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Lessor accounting is largely unchanged. Certain targeted improvements were made to align, where necessary, lessor accounting with the lessee accounting model and Topic 606, Revenue from Contracts with Customers. The ASU is effective for entities for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early application is permitted. The Company is currently evaluating this new guidance to determine the impact it may have on its consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments . The amendments in this ASU require the measurement of all expected credit losses for financial assets held at the reporting date to be based on historical experience, current conditions, and reasonable and supportable forecasts. Financial institutions and other organizations will now use forward-looking information to better inform their credit loss estimates. Many of the loss estimation techniques applied today will still be permitted, although the inputs to those techniques will change to reflect the full amount of expected credit losses. In addition, the ASU amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. The amendments in this ASU are effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently evaluating the new guidance to determine the impact it may have on its consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments . The amendments in this ASU provide cash flow statement classification guidance on eight specific cash flow presentation issues with the objective of reducing existing diversity in practice. This ASU is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Early application is permitted, including adoption in an interim period. The Company is currently evaluating the new guidance to determine the impact it may have on its consolidated financial statements. In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory . The amendments require an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. The amendments eliminate the exception of an intra-entity transfer of an asset other than inventory. This ASU is effective for fiscal years beginning after December 15, 2017, including interim reporting periods within these years. Early adoption is permitted. The Company is currently evaluating the new guidance to determine the impact it may have on its consolidated financial statements. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business. The amendments in this ASU clarify the definition of a business and affect all companies and other reporting organizations that must determine whether they have acquired or sold a business. This ASU is effective for fiscal years beginning after December 15, 2017, including interim periods within those periods. Early adoption is permitted under certain circumstances. The amendments should be applied prospectively as of the beginning of the period of adoption. The Company is currently evaluating the new guidance to determine the impact it may have on its consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other: Simplifying the Test for Goodwill Impairment (Topic 350) . The amendments in this ASU eliminate Step 2 from the goodwill impairment test. The annual or interim goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. This ASU is effective for fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017 and should be applied on a prospective basis. The Company is currently evaluating the new guidance to determine the impact it may have on its consolidated financial statements. In February 2017, the FASB issued ASU 2017-05, Other Income – Gains and Losses from the Derecognition of a Nonfinancial Assets: Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets. The amendments in this ASU clarify that a financial asset within the scope of this topic may include nonfinancial assets transferred within a legal entity to counterparty. The amendments clarify that an entity should identify each distinct nonfinancial asset or in substance nonfinancial asset promised to counterparty and derecognize each asset when counterparty obtains control of it. The effective date for this ASU is for annual periods beginning after December 15, 2017. Early application is permitted. The Company is currently evaluating the new guidance to determine the impact it may have its consolidated financial statements. In March 2017, the FASB issued ASU 2017-08, Receivables – Nonrefundable Fees and Other Costs, Premium Amortization on Purchased Callable Debt Securitie s (Sub-Topic 310-20). The amendments shorten the amortization period for certain callable debt securities held at a premium. Specifically, the amendments require the premium to be amortized to the earliest call date. The amendments do not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. This ASU is effective for fiscal years beginning after December 15, 2018. Early adoption is permitted. The Company is currently evaluating the new guidance to determine the impact it may have on its consolidated financial statements. In May 2017, t he FASB issued ASU 2017-09, Compensation - Stock Compensation (Topic 718) Scope of Modification Accounting. This ASU is effective for fiscal years beginning after December 15, 201 7 , and interim periods within those fiscal years. The amendments provide guidance on determining those changes to the terms and conditions of share-based payment awards that require an entity to apply modification accounting. The Company is currently evaluating the new guidance to determine the impact it may have on its consolidated financial statements. In August 2017, the FASB issued ASI 2017-12, Derivative and H edging: Targeted Improvements to Accounting for Hedging Activities (Topic 815) . This ASU is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. The amendments refine and expand hedge accounting for both financ ial and commodity risks and it contains provisions to create more transparency and clarify how economic results are presented. T he Company is currently evaluating the new guidance to determine the impact it may have on its consolidated financial statements. |
Fair Value of Financial Instruments | C. Fair Value of Financial Instruments The following methods and assumptions were used by the Company in estimating the fair value of its financial instruments. These determinations were based on available market information and appropriate valuation methodologies. Considerable judgment is required to interpret market data to develop the estimates and, therefore, these estimates may not necessarily be indicative of the amount the Company could realize in a current market exchange. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts. Refer to note 7 for a discussion of the fair value hierarchy with respect to investments-trading; other investments, at fair value; and derivatives held by the Company. Cash and cash equivalents : Cash equivalents are carried at historical cost, which is assumed to approximate fair value. The estimated fair value measurement of cash equivalents is classified within level 1 of the valuation hierarchy. Investments-trading : These amounts are carried at fair value. The fair value is based on either quoted market prices of an active exchange, independent broker market quotations, market price quotations from third party pricing services, or valuation models when quotations are not available. Other investments, at fair value : These amounts are carried at fair value. The fair value is based on quoted market prices of an active exchange, independent broker market quotations, or valuation models when quotations are not available. In the case of investments in alternative investment funds, fair value is generally based on the reported net asset value of the underlying fund. Receivables under resale agreements : Receivables under resale agreements are carried at their contracted resale price, have short-term maturities, and are repriced frequently or bear market interest rates and, accordingly, these contracts are carried at amounts that approximate fair value. The estimated fair value measurements of receivables under resale agreements are based on observations of actual market activity and are generally classified within level 2 of the valuation hierarchy . Trading securities sold, not yet purchased : These amounts are carried at fair value. The fair value is based on quoted market prices of an active exchange, independent market quotations, market price quotations from third party pricing services, or valuation models when quotations are not available . Securities sold under agreement to repurchase : The liabilities for securities sold under agreement to repurchase are carried at their contracted repurchase price, have short-term maturities, and are repriced frequently with amounts normally due in one month or less and, accordingly, these contracts are at amounts that approximate fair value. The estimated fair value measurements of securities sold under agreement to repurchase are based on observations of actual market activity and are generally classified within level 2 of the valuation hierarchy. Debt : These amounts are carried at outstanding principal less unamortized discount and deferred financing costs. However, a substantial portion of the debt was assumed in the Merger and recorded at fair value as of that date. As of September 30, 2017 and December 31, 2016 , the fair value of the Company’s debt was estimated to be $55,396 and $37,121 , respectively. The estimated fair value measurements of the debt are generally based on discounted cash flow models prepared by the Company’s management primarily using discount rates for similar instruments issued to companies with similar credit risks to the Company and are generally classified within level 3 of the valuation hierarchy. Derivatives : These amounts are carried at fair value. Derivatives may be included as a component of investments-trading; trading securities sold, not yet purchased; and other investments, at fair value. See notes 7 and 8. The fair value is generally based on quoted market prices on an exchange that is deemed to be active for derivative instruments such as foreign currency forward contracts and Eurodollar futures. For other derivative instruments, such as TBAs, the fair value is generally based on market price quotations from third party pricing services. |
Receivables From And Payables29
Receivables From And Payables To Brokers, Dealers, And Clearing Agencies (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Receivables From And Payables To Brokers, Dealers, And Clearing Agencies [Abstract] | |
Schedule Of Due To (From) Broker-Dealers And Clearing Organizations | Amounts receivable from brokers, dealers, and clearing agencies consisted of the following . RECEIVABLES FROM BROKERS, DEALERS, AND CLEARING AGENCIES (Dollars in Thousands) September 30, 2017 December 31, 2016 Deposits with clearing agencies $ 750 $ 750 Unsettled regular way trades, net 14,520 3,337 Receivables from clearing agencies 93,600 77,091 Receivables from brokers, dealers, and clearing agencies $ 108,870 $ 81,178 Amounts payable to brokers, dealers, and clearing agencies consisted of the following . PAYABLES TO BROKERS, DEALERS, AND CLEARING AGENCIES (Dollars in Thousands) September 30, 2017 December 31, 2016 Margin payable $ 32,602 $ 85,761 Payables to brokers, dealers, and clearing agencies $ 32,602 $ 85,761 |
Financial Instruments (Tables)
Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Financial Instruments [Abstract] | |
Schedule Of Trading Securities | INVESTMENTS - TRADING (Dollars in Thousands) September 30, 2017 December 31, 2016 U.S. government agency MBS and CMOs $ 955 $ 9,539 U.S. government agency debt securities 19,311 30,681 RMBS 21 70 U.S. Treasury securities 4,971 - ABS 1 1 SBA loans 11,404 18,416 Corporate bonds and redeemable preferred stock 30,924 45,271 Foreign government bonds 1,112 339 Municipal bonds 28,299 43,759 Certificates of deposit 1,087 240 Derivatives 2,713 8,763 Equity securities 3,464 99 Investments-trading $ 104,262 $ 157,178 |
Schedule Of Trading Securities Sold, Not Yet Purchased | TRADING SECURITIES SOLD, NOT YET PURCHASED (Dollars in Thousands) September 30, 2017 December 31, 2016 U.S. Treasury securities $ 56,166 $ 56,329 Corporate bonds and redeemable preferred stock 32,410 18,552 Municipal bonds 21 20 Derivatives 1,396 10,282 Trading securities sold, not yet purchased $ 89,993 $ 85,183 |
Schedule Of Other Investments | OTHER INVESTMENTS, AT FAIR VALUE (Dollars in Thousands) September 30, 2017 Amortized Cost Carrying Value Unrealized Gain / (Loss) CLOs $ 4,636 $ 4,590 $ (46) CDOs 188 25 (163) EuroDekania 4,797 828 (3,969) Residential loans 82 354 272 Foreign currency forward contracts - 17 17 Other investments, at fair value $ 9,703 $ 5,814 $ (3,889) December 31, 2016 Amortized Cost Carrying Value Unrealized Gain / (Loss) CLOs $ 7,312 $ 6,733 $ (579) CDOs 191 28 (163) EuroDekania 4,969 1,165 (3,804) Residential loans 88 360 272 Foreign currency forward contracts - 17 17 Other investments, at fair value $ 12,560 $ 8,303 $ (4,257) |
Fair Value Disclosures (Tables)
Fair Value Disclosures (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule Of Assets And Liabilities Measured At Fair Value On A Recurring Basis | FAIR VALUE MEASUREMENTS ON A RECURRING BASIS September 30, 2017 (Dollars in Thousands) Significant Significant Quoted Prices in Other Observable Unobservable Active Markets Inputs Inputs Assets Fair Value (Level 1) (Level 2) (Level 3) Investments-trading: U.S. government agency MBS and CMOs $ 955 $ - $ 955 $ - U.S. government agency debt securities 19,311 - 19,311 - RMBS 21 - 21 - U.S. Treasury securities 4,971 4,971 - - ABS 1 - 1 - SBA loans 11,404 - 11,404 - Corporate bonds and redeemable preferred stock 30,924 - 30,924 - Foreign government bonds 1,112 - 1,112 - Municipal bonds 28,299 - 28,299 - Certificates of deposit 1,087 - 1,087 - Derivatives 2,713 - 2,713 - Equity securities 3,464 36 3,428 - Total investments - trading $ 104,262 $ 5,007 $ 99,255 $ - Other investments, at fair value: CLOs $ 4,590 $ - $ - $ 4,590 CDOs 25 - - 25 Residential loans 354 - 354 - Foreign currency forward contracts 17 17 - - 4,986 $ 17 $ 354 $ 4,615 EuroDekania (1) 828 Total other investments, at fair value $ 5,814 Liabilities Trading securities sold, not yet purchased: U.S. Treasury securities $ 56,166 $ 56,166 $ - $ - Corporate bonds 32,410 - 32,410 - Municipal bonds 21 - 21 - Derivatives 1,396 4 1,392 - Total trading securities sold, not yet purchased $ 89,993 $ 56,170 $ 33,823 $ - (1) Hybrid Securities Fund—European. FAIR VALUE MEASUREMENTS ON A RECURRING BASIS December 31, 2016 (Dollars in Thousands) Significant Significant Quoted Prices in Other Observable Unobservable Active Markets Inputs Inputs Assets Fair Value (Level 1) (Level 2) (Level 3) Investments-trading: U.S. government agency MBS and CMOs $ 9,539 $ - $ 9,539 $ - U.S. government agency debt securities 30,681 - 30,681 - RMBS 70 - 70 - ABS 1 - 1 - SBA loans 18,416 - 18,416 - Corporate bonds and redeemable preferred stock 45,271 - 45,271 - Foreign government bonds 339 - 339 - Municipal bonds 43,759 - 43,759 - Certificates of deposit 240 - 240 - Derivatives 8,763 - 8,763 - Equity securities 99 99 - - Total investments - trading $ 157,178 $ 99 $ 157,079 $ - Other investments, at fair value: CLOs $ 6,733 $ - $ - $ 6,733 CDOs 28 - - 28 Residential loans 360 - 360 - Foreign currency forward contracts 17 17 - - 7,138 $ 17 $ 360 $ 6,761 EuroDekania (1) 1,165 - Total other investments, at fair value $ 8,303 Liabilities Trading securities sold, not yet purchased: U.S. Treasury securities $ 56,329 $ 56,329 $ - $ - Corporate bonds and redeemable preferred stock 18,552 - 18,552 - Municipal bonds 20 - 20 - Derivatives 10,282 - 10,282 - Total trading securities sold, not yet purchased $ 85,183 $ 56,329 $ 28,854 $ - (1) Hybrid Securities Fund—European. |
Schedule Of Assets And Liabilities Measured With Level 3 Inputs | LEVEL 3 ROLLFORWARD Nine Months Ended September 30, 2017 (Dollars in Thousands) December 31, 2016 Net trading Gains and losses (1) Transfers into Level 3 Transfers out of level 3 Accretion of income (1) Purchases Sales and returns of capital September 30, 2017 Change in unrealized gains /(losses) (2) Assets Other investments, at fair value CLOs $ 6,733 $ - $ (88) $ - $ - $ 938 $ - $ (2,993) $ 4,590 $ 608 CDOs 28 - - - - - - (3) 25 - Total other investments, fair value $ 6,761 $ - $ (88) $ - $ - $ 938 $ - $ (2,996) $ 4,615 $ 608 (1) Recorded as a component of principal transactions and other income in the consolidated statement of operations. (2) Represents the change in unrealized gains and losses for the period included in principal transactions and other income for assets held at the end of the reporting period. LEVEL 3 ROLLFORWARD Nine Months Ended September 30, 2016 (Dollars in Thousands) December 31, 2015 Net trading Gains and losses (1) Transfers into Level 3 Transfers out of level 3 Accretion of income (1) Purchases Sales and returns of capital September 30, 2016 Change in unrealized gains /(losses) (2) Assets Other investments, at fair value CLOs $ 11,569 $ - $ 746 $ - $ - $ 1,005 $ - $ (7,091) $ 6,229 $ 872 CDOs 34 - (4) - - - - (2) 28 (4) Total other investments, fair value $ 11,603 $ - $ 742 $ - $ - $ 1,005 $ - $ (7,093) $ 6,257 $ 868 (1) Recorded as a component of principal transactions and other income in the consolidated statement of operations. (2) Represents the change in unrealized gains and losses for the period included in principal transactions and other income for assets held at the end of the reporting period. LEVEL 3 ROLLFORWARD Three Months Ended September 30, 2017 (Dollars in Thousands) June 30, 2017 Net trading Gains and losses (1) Transfers into Level 3 Transfers out of level 3 Accretion of income (1) Purchases Sales and returns of capital September 30, 2017 Change in unrealized gains /(losses) (2) Assets Other investments, at fair value CLOs $ 4,828 $ - $ (103) $ - $ - $ 169 $ - $ (304) $ 4,590 $ 187 CDOs 27 - - - - - - (2) 25 - Total other investments, fair value $ 4,855 $ - $ (103) $ - $ - $ 169 $ - $ (306) $ 4,615 $ 187 (1) Recorded as a component of principal transactions and other income in the consolidated statement of operations. (2) Represents the change in unrealized gains and losses for the period included in principal transactions and other income for assets held at the end of the reporting period. LEVEL 3 ROLLFORWARD Three Months Ended September 30, 2016 (Dollars in Thousands) June 30, 2016 Net trading Gains and losses (1) Transfers into Level 3 Transfers out of level 3 Accretion of income (1) Purchases Sales and returns of capital September 30, 2016 Change in unrealized gains /(losses) (2) Assets Other investments, at fair value CLOs $ 8,028 $ - $ 392 $ - $ - $ 250 $ - $ (2,441) $ 6,229 $ 580 CDOs 30 - - - - - - (2) 28 - Total other investments, fair value $ 8,058 $ - $ 392 $ - $ - $ 250 $ - $ (2,443) $ 6,257 $ 580 (1) Recorded as a component of principal transactions and other income in the consolidated statement of operations. (2) Represents the change in unrealized gains and losses for the period included in principal transactions and other income for assets held at the end of the reporting period. |
Quantitative Information About Level 3 Fair Value Measurements | QUANTITATIVE INFORMATION ABOUT LEVEL 3 FAIR VALUE MEASUREMENTS (Dollars in Thousands) Significant Range of Fair Value Valuation Unobservable Weighted Significant September 30, 2017 Technique Inputs Average Inputs Assets Other investments, at fair value CLOs $ 4,590 Discounted Cash Flow Model Yield 15.6% 12.8% - 23.9% Duration (years) 5.7 4.8 - 6.8 Default rate 2.0% 2.0% QUANTITATIVE INFORMATION ABOUT LEVEL 3 FAIR VALUE MEASUREMENTS (Dollars in Thousands) Significant Range of Fair Value Valuation Unobservable Weighted Significant December 31, 2016 Technique Inputs Average Inputs Assets Other investments, at fair value CLOs $ 6,733 Discounted Cash Flow Model Yield 16.1% 11.8 - 25.0% Duration (years) 5.8 5.3 - 6.6 Default rate 2.0% 2.0% |
Fair Value, Investments, Entities That Calculate Net Asset Value Per Share | FAIR VALUE MEASUREMENTS OF INVESTMENTS IN CERTAIN ENTITIES THAT CALCULATE NET ASSET VALUE PER SHARE (OR ITS EQUIVALENT) (Dollars in Thousands) Fair Value September 30, 2017 Unfunded Commitments Redemption Frequency Redemption Notice Period Other investments, at fair value EuroDekania (a) $ 828 N/A N/A N/A $ 828 Fair Value December 31, 2016 Unfunded Commitments Redemption Frequency Redemption Notice Period Other investments, at fair value EuroDekania (a) $ 1,165 N/A N/A N/A $ 1,165 N/A Not applicable. (a) EuroDekania owns investments in hybrid capital securities that have attributes of debt and equity, primarily in the form of subordinated debt issued by insurance companies, banks , and bank holding companies based primarily in Western Europe; widely syndicated leveraged loans issued by European corporations; CMBS, including subordinated interests in first mortgage real e state loans; and RMBS and ABS backed by consumer and commercial receivables. The majority of the assets are denominated in Euros and U.K. Pounds Sterling. The fair value of the investment in this category has been estimated using the NAV per share of the investment in accordance with the “practical expedient” provisions of FASB ASC 820. |
Derivative Financial Instrume32
Derivative Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Derivative Financial Instruments [Abstract] | |
Balance Sheet Information | DERIVATIVE FINANCIAL INSTRUMENTS-BALANCE SHEET INFORMATION (Dollars in Thousands) Derivative Financial Instruments Not Designated as Hedging Instruments Under FASB ASC 815 Balance Sheet Classification September 30, 2017 December 31, 2016 TBAs and other forward agency MBS Investments-trading $ 2,712 $ 8,763 Other extended settlement trades Investments-trading 1 - Foreign currency forward contracts Other investments, at fair value 17 17 TBAs and other forward agency MBS Trading securities sold, not yet purchased (1,376) (10,282) Other extended settlement trades Trading securities sold, not yet purchased (20) - $ 1,334 $ (1,502) |
Statement Of Operations Information | DERIVATIVE FINANCIAL INSTRUMENTS-STATEMENT OF OPERATIONS INFORMATION (Dollars in Thousands) Derivative Financial Instruments Not Designated as Hedging Instruments Under FASB ASC 815 Income Statement Classification Nine Months Ended September 30, 2017 Nine Months Ended September 30, 2016 Foreign currency forward contracts Revenue-principal transactions and other income $ (132) $ (83) Other extended settlement trades Revenue-net trading (15) (3) TBAs and other forward agency MBS Revenue-net trading 5,516 6,286 $ 5,369 $ 6,200 DERIVATIVE FINANCIAL INSTRUMENTS-STATEMENT OF OPERATIONS INFORMATION (Dollars in Thousands) Derivative Financial Instruments Not Designated as Hedging Instruments Under FASB ASC 815 Income Statement Classification Three Months Ended September 30, 2017 Three Months Ended September 30, 2016 Foreign currency forward contracts Revenue-principal transactions and other income $ (34) $ (30) Other extended settlement trades Revenue-net trading 4 (3) TBAs and other forward agency MBS Revenue-net trading 1,584 2,075 $ 1,554 $ 2,042 |
Collateralized Securities Tra33
Collateralized Securities Transactions (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Collateralized Securities Transactions [Abstract] | |
Schedule Of Repurchase Agreements Accounted For As Secured Borrowings | REPURCHASE AGREEMENTS ACCOUNTED FOR AS SECURED BORROWINGS (Dollars in Thousands) September 30, 2017 Remaining Contractual Maturity of the Agreements Overnight and Continuous Up to 30 days 30 - 90 days Greater than 90 days Total U.S. government agency MBS $ - $ 436,616 $ - $ - $ 436,616 SBA Loans 11,517 - - - 11,517 $ 11,517 $ 436,616 $ - $ - $ 448,133 Amount recognized $ 448,133 REPURCHASE AGREEMENTS ACCOUNTED FOR AS SECURED BORROWINGS (Dollars in Thousands) December 31, 2016 Remaining Contractual Maturity of the Agreements Overnight and Continuous Up to 30 days 30 - 90 days Greater than 90 days Total U.S. government agency MBS $ - $ 281,670 $ - $ - $ 281,670 SBA Loans 13,775 - - - 13,775 $ 13,775 $ 281,670 $ - $ - $ 295,445 Amount recognized $ 295,445 |
Other Assets and Accounts Pay34
Other Assets and Accounts Payable and Other Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Other Assets and Accounts Payable and Other Liabilities [Abstract] | |
Schedule Of Other Assets | OTHER ASSETS (Dollars in Thousands) September 30, 2017 December 31, 2016 Deferred costs $ - $ 600 Prepaid expenses 852 976 Prepaid income taxes - 99 Security deposits 285 1,799 Miscellaneous other assets 20 138 Cost method investment 25 25 Furniture, equipment, and leasehold improvements, net 384 498 Intangible assets 166 166 Other assets $ 1,732 $ 4,301 |
Schedule Of Accounts Payable And Other Liabilities | ACCOUNTS PAYABLE AND OTHER LIABILITIES (Dollars in Thousands) September 30, 2017 December 31, 2016 Accounts payable $ 314 $ 326 Redeemable financial instrument - JKD Capital Partners l LTD 6,941 6,761 Redeemable financial instrument - DGC Family Fintech Trust/CBF 10,000 - Rent payable 13 54 Accrued interest payable 626 305 Accrued interest on securities sold, not yet purchased 688 512 Payroll taxes payable 584 576 Other general accrued expenses 1,514 1,084 Accounts payable and other liabilities $ 20,680 $ 9,618 |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Variable Interest Entities [Abstract] | |
Schedule Of Variable Interest Entities | CARRYING VALUE OF VARIABLE INTERESTS IN NON-CONSOLIDATED VARIABLE INTEREST ENTITIES (Dollars in Thousands) September 30, 2017 December 31, 2016 Other Investments, at fair value $ 4,615 $ 6,761 Maximum Exposure $ 4,615 $ 6,761 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Debt [Abstract] | |
Debt Outstanding | DETAIL OF DEBT (Dollars in Thousands) Description Current Outstanding Par September 30, 2017 December 31, 2016 Interest Rate Terms Interest (4) Maturity Convertible senior notes: 8.00% convertible senior notes (the "2017 Convertible Note") $ 15,000 $ 15,000 $ - Fixed 8.00 % March 2022 (1) 8.00% convertible senior notes (the "2013 Convertible Notes") 8,248 8,248 8,248 Fixed 8.00 % September 2018 (2) Less unamortized debt issuance costs (1,440) (274) 23,248 21,808 7,974 Junior subordinated notes: Alesco Capital Trust I 28,125 (3) 12,904 12,577 Variable 5.31 % July 2037 Sunset Financial Statutory Trust I 20,000 (3) 9,205 8,972 Variable 5.49 % March 2035 48,125 22,109 21,549 Total $ 71,373 $ 43,917 $ 29,523 (1) The holder of the 2017 Convertible Note may convert all or any part of the outstanding principal amount of the 2017 Convertible Note at any time prior to maturity into units of the Operating LLC at a conversion price of $1.45 per unit, subject to customary anti-dilution adjustments. Units of the Operating LLC not held by Cohen & Company Inc. may, with certain restrictions, be redeemed and exchanged into shares of the Company o n a ten-for-one basis. Therefore, the 2017 Convertible Note can be converted into Operating LLC units and then redeemed and exchanged into Common Stock at an effective conversion price of $14.50 . See discussion below and note 18 to our Annual Report on Form 10-K for the year ended December 31, 2016. (2) The holders of the 2013 Convertible Notes may convert all or any part of the outstanding principal amount of the 2013 Convertible Notes at any time prior to maturity into shares of the Company’s common stock, par value $0.01 per share (“Common Stock”) at a conversion price of $30.00 per share, subject to customary anti-dilution adjustments. (3) The junior subordinated notes listed represent debt the Company owes to the two trusts noted above. The total par amount owed by the Company to the trusts is $49,614 . However, the Company owns the common stock of the trusts in a total par amount of $1,489 . The Company pays interest (and at maturity, principal) to the trusts on the entire $49,614 junior notes outstanding. The Company receives back from the trusts the pro rata share of interest and principal on the common stock the Company holds of $1,489. Accordingly, the Company shows the net par value not held by it as $48,125 in the table above. These trusts are VIEs and the Company does not consolidate them even though the Company holds common stock. The Company carries the common stock on its balance sheet at a value of $0. (4) Represents the interest rate in effect as of the last day of the reporting period. |
Equity (Tables)
Equity (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
Schedule Of Unrestricted Common Stock Activity | Common Stock Shares December 31, 2016 1,134,957 Vesting of shares 61,616 Shares withheld for employee taxes (7,699) Retirement of Common Stock (8,878) September 30, 2017 1,179,996 |
Operating LLC Membership Units | Operating LLC Membership Units Units related to UIS Agreement 398,741 Units surrendered from retirement of Common Stock (88,829) Total 309,912 |
Schedule Of Effects Of Changes In Ownership Interest Subsidiary | September 30, 2017 September 30, 2016 Net income / (loss) attributable to Cohen & Company Inc. $ 551 $ 2,070 Transfers (to) from the non-controlling interest: Increase / (decrease) in Cohen & Company Inc. paid in capital for the acquisition / (surrender) of additional units in consolidated subsidiary, net 153 (552) Changes from net income / (loss) attributable to Cohen & Company Inc. and transfers (to) from the non-controlling interest $ 704 $ 1,518 |
Earnings _ (Loss) Per Common 38
Earnings / (Loss) Per Common Share (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Earnings / (Loss) Per Common Share [Abstract] | |
Schedule of Earnings / (Loss) Per Common Share | EARNINGS / (LOSS) PER COMMON SHARE (Dollars in Thousands, except share or per share information) Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Net income / (loss) attributable to Cohen & Company $ (547) $ 1,041 $ 551 $ 2,070 Income / (loss) attributable to non-controlling interest attributable to Operating LLC membership units exchangeable into Cohen & Company shares (1) (211) 489 274 925 Add / (deduct): Adjustment (2) (30) (23) (29) (33) Net income / (loss) on a fully converted basis $ (788) $ 1,507 $ 796 $ 2,962 Weighted average common shares outstanding - Basic 1,212,826 1,180,742 1,209,585 1,232,824 Unrestricted Operating LLC membership units exchangeable into Cohen & Company shares (1) 532,409 532,409 532,409 532,409 Restricted units or shares - 13,049 13,938 9,124 Weighted average common shares outstanding - Diluted (3) 1,745,235 1,726,200 1,755,932 1,774,357 Net income / (loss) per common share - Basic $ (0.45) $ 0.88 $ 0.46 $ 1.68 Net income / (loss) per common share - Diluted $ (0.45) $ 0.87 $ 0.45 $ 1.67 (1) The Operating LLC membership units not held by Cohen & Company Inc. (that is, those held by the non-controlling interest for the nine months ended September 30, 2017 and 2016) may be redeemed and exchanged int o shares of the Company on a ten -for-one basis . The Operating LLC membership units not held by Cohen & Company Inc. are redeemable, at any time, for (i) cash in an amount equal to one tenth of the average of the per share closing prices of Common Stock for the ten consecutive trading days immediately preceding the date the Company receives the member’s redemption notice, or (ii) at the Company’s option, one tenth of a share of Common Stock, subject, in each case, to appropriate adjustment upon the occurrence of an issuance of additional shares of Common Stock as a dividend or other distribution on the outstanding Common Stock, or a further subdivision or combination of the outstanding shares of Common Stock. These membership units enter into the computation of diluted net income / (loss) per common share when the effect is not anti-dilutive using the if-converted method. (2 ) An adjustment is included for income tax expense. If the Operating LLC membership units had been converted at the beginning of the period, the Company would have incurred a higher income tax expense or realized a higher income tax benefit, as applicable. (3) For the three months ended September 30, 2017, weighted average common shares outstanding exclude s (i) 14,059 shares representing restricted Operating LLC membership units, restricted Common Stock, and restricted units of Common Stock that would be anti-dilutive because of the Company’s net loss, (ii) 274,917 shares from the assumed conversion of the 2013 Notes, and (iii) 1,034,483 shares from the assumed conversion of the 2017 Note because of the Company’s net loss and the inclusion of the converted shares would be anti-dilutive. For the nine months ended September 30, 2017, weighted average common shares outstanding excludes (i) 274,917 from the assumed conversion of the 2013 Notes and (ii) 773,947 shares from the assumed conversion of the 2017 Note because the inclusion of the converted shares would be anti-dilutive. For the three and nine months ended September 30, 2016, the weighted average common shares outstanding excluded 274,917 shares from the assumed conversion of the 2013 Notes because the inclusion of these shares would be antidilutive. |
Segment and Geographic Inform39
Segment and Geographic Information (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Segment and Geographic Information [Abstract] | |
Schedule Of Segment Reporting Information | SEGMENT INFORMATION Statement of Operations Information Nine Months Ended September 30, 2017 Capital Asset Principal Segment Unallocated Markets Management Investing Total (1) Total Net trading $ 20,158 $ - $ - $ 20,158 $ - $ 20,158 Asset management - 6,202 - 6,202 - 6,202 New issue and advisory 3,992 - - 3,992 - 3,992 Principal transactions and other income 4 4,995 516 5,515 - 5,515 Total revenues 24,154 11,197 516 35,867 - 35,867 Total operating expenses 20,576 3,521 286 24,383 6,181 30,564 Operating income (loss) 3,578 7,676 230 11,484 (6,181) 5,303 Interest expense - - - - (4,330) (4,330) Income (loss) before income taxes 3,578 7,676 230 11,484 (10,511) 973 Income tax expense (benefit) - - - - 148 148 Net income (loss) 3,578 7,676 230 11,484 (10,659) 825 Less: Net income (loss) attributable to the non-controlling interest - - - - 274 274 Net income (loss) attributable to Cohen & Company Inc. $ 3,578 $ 7,676 $ 230 $ 11,484 $ (10,933) $ 551 Other statement of operations data Depreciation and amortization (included in total operating expense) $ 51 $ 3 $ - $ 54 $ 133 $ 187 SEGMENT INFORMATION Statement of Operations Information Nine Months Ended September 30, 2016 Capital Asset Principal Segment Unallocated Markets Management Investing Total (1) Total Net trading $ 31,973 $ - $ - $ 31,973 $ - $ 31,973 Asset management - 5,662 - 5,662 - 5,662 New issue and advisory 2,176 - - 2,176 - 2,176 Principal transactions and other income 140 1,541 698 2,379 - 2,379 Total revenues 34,289 7,203 698 42,190 - 42,190 Total operating expenses 26,662 2,394 369 29,425 6,640 36,065 Operating income (loss) 7,627 4,809 329 12,765 (6,640) 6,125 Interest expense - - - - (2,973) (2,973) Income (loss) before income taxes 7,627 4,809 329 12,765 (9,613) 3,152 Income tax expense (benefit) - - - - 157 157 Net income (loss) 7,627 4,809 329 12,765 (9,770) 2,995 Less: Net income (loss) attributable to the non-controlling interest - - - - 925 925 Net income (loss) attributable to Cohen & Company Inc. $ 7,627 $ 4,809 $ 329 $ 12,765 $ (10,695) $ 2,070 Other statement of operations data Depreciation and amortization (included in total operating expense) $ 90 $ 2 $ - $ 92 $ 128 $ 220 SEGMENT INFORMATION Statement of Operations Information Three Months Ended September 30, 2017 Capital Asset Principal Segment Unallocated Markets Management Investing Total (1) Total Net trading $ 5,988 $ - $ - $ 5,988 $ - $ 5,988 Asset management - 1,779 - 1,779 - 1,779 New issue and advisory 2,012 - - 2,012 - 2,012 Principal transactions and other income (2) 230 (6) 222 - 222 Total revenues 7,998 2,009 (6) 10,001 - 10,001 Total operating expenses 6,053 1,042 95 7,190 1,822 9,012 Operating income (loss) 1,945 967 (101) 2,811 (1,822) 989 Interest expense - - - - (1,606) (1,606) Income (loss) before income taxes 1,945 967 (101) 2,811 (3,428) (617) Income tax expense (benefit) - - - - 141 141 Net income (loss) 1,945 967 (101) 2,811 (3,569) (758) Less: Net income (loss) attributable to the non-controlling interest - - - - (211) (211) Net income (loss) attributable to Cohen & Company Inc. $ 1,945 $ 967 $ (101) $ 2,811 $ (3,358) $ (547) Other statement of operations data Depreciation and amortization (included in total operating expense) $ 16 $ 1 $ - $ 17 $ 43 $ 60 SEGMENT INFORMATION Statement of Operations Information Three Months Ended September 30, 2016 Capital Asset Principal Segment Unallocated Markets Management Investing Total (1) Total Net trading $ 10,486 $ - $ - $ 10,486 $ - $ 10,486 Asset management - 1,781 - 1,781 - 1,781 New issue and advisory 811 - - 811 - 811 Principal transactions and other income 30 441 541 1,012 - 1,012 Total revenues 11,327 2,222 541 14,090 - 14,090 Total operating expenses 8,556 779 117 9,452 1,987 11,439 Operating income (loss) 2,771 1,443 424 4,638 (1,987) 2,651 Interest expense - - - - (991) (991) Income (loss) before income taxes 2,771 1,443 424 4,638 (2,978) 1,660 Income tax expense (benefit) - - - - 130 130 Net income (loss) 2,771 1,443 424 4,638 (3,108) 1,530 Less: Net income (loss) attributable to the non-controlling interest - - - - 489 489 Net income (loss) attributable to Cohen & Company, Inc. $ 2,771 $ 1,443 $ 424 $ 4,638 $ (3,597) $ 1,041 Other statement of operations data Depreciation and amortization (included in total operating expense) $ 20 $ 1 $ - $ 21 $ 45 $ 66 (1) Unallocated includes certain expenses incurred by indirect overhead and support departments (such as the executive, finance, legal, information technology, human resources, risk, compliance, and other similar overhead and support departments). Some of the items not allocated include: (1) operating expenses (such as cash compensation and benefits, equity-based compensation expense, professional fees, travel and entertainment, consulting fees, and rent) related to support departments excluding certain departments that directly support the Capital Markets business segment; (2) interest expense on debt; and (3) income taxes. Management does not consider these items necessary for an understanding of the operating results of these business segments and such amounts are excluded in business segment reporting to the chief operating decision maker. |
Reconciliation Of Assets From Segment To Consolidated | BALANCE SHEET DATA As of September 30, 2017 (Dollars in Thousands) Capital Asset Principal Segment Unallocated Markets Management Investing Total (1) Total Total Assets $ 665,216 $ 2,682 $ 5,814 $ 673,712 $ 16,543 $ 690,255 Included within total assets: Goodwill (2) $ 7,937 $ 55 $ - $ 7,992 $ - $ 7,992 Intangible assets (2) $ 166 $ - $ - $ 166 $ - $ 166 BALANCE SHEET DATA December 31, 2016 (Dollars in Thousands) Capital Asset Principal Segment Unallocated Markets Management Investing Total (1) Total Total Assets $ 542,364 $ 4,973 $ 8,441 $ 555,778 $ 5,493 $ 561,271 Included within total assets: Goodwill (2) $ 7,937 $ 55 $ - $ 7,992 $ - $ 7,992 Intangible assets (2) $ 166 $ - $ - $ 166 $ - $ 166 (1) Unallocated assets primarily include: (1) amounts due from related parties other than receivables from employees which are allocated ; (2) furniture and equipment, net; and (3) other assets that are not considered necessary for an understan ding of business segment assets. S uch amounts are excluded in business segment reporting to the chief operating decision maker. (2) Goodwill and intangible assets as of September 30, 2017 and December 2016 are allocated to the Capital Markets and Asset Management business segments as indicated in the table above. |
Revenue By Geographic Area | GEOGRAPHIC DATA (Dollars in Thousands) Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Total Revenues: United States $ 7,604 $ 12,758 $ 29,499 $ 38,309 United Kingdom & Other 2,397 1,332 6,368 3,881 Total $ 10,001 $ 14,090 $ 35,867 $ 42,190 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Related Party Transactions [Abstract] | |
Schedule Of Related Party Transactions | RELATED PARTY TRANSACTIONS Nine Months Ended September 30, 2017 (Dollars in Thousands) Management fee revenue Net trading Principal transactions Other revenue Professional fee and other operating Interest expense incurred Bancorp (TBBK) $ - $ 13 $ - $ - $ - $ - EBC - - - - - 176 Edward E. Cohen IRA - - - - - 322 JDK Capital Partners 1, Ltd - - - - - 465 DGC Fintech Family Trust - - - - - 794 Fintech Acquisition Corp II - - - 1 - - Mead Park Advisors, LLC - - - - 50 - $ - $ 13 $ - $ 1 $ 50 $ 1,757 RELATED PARTY TRANSACTIONS Nine Months Ended September 30, 2016 (Dollars in Thousands) Management fee revenue Net trading Principal transactions Other revenue Professional fee and other operating Interest expense incurred EBC $ - $ - $ - $ - $ - $ 173 Edward E. Cohen IRA - - - - - 317 Mead Park Advisors, LLC - - - - 150 - $ - $ - $ - $ - $ 150 $ 490 RELATED PARTY TRANSACTIONS Three Months Ended September 30, 2017 (Dollars in Thousands) Management fee revenue Net trading Principal transactions Other revenue Professional fee and other operating Interest expense(income) incurred TBBK $ - $ - $ - $ - $ - $ - EBC - - - - - 59 Edward E. Cohen IRA - - - - - 109 JDK Capital Partners 1, Ltd - - - - - 210 DGC Fintech Family Trust - - - - - 359 Fintech Acquisition Corp II - - - 1 - - $ - $ - $ - $ 1 $ - $ 737 RELATED PARTY TRANSACTIONS Three Months Ended September 30, 2016 (Dollars in Thousands) Management fee revenue Net trading Principal transactions Other revenue Professional fee and other operating Interest expense incurred EBC $ - $ - $ - $ - $ - $ 58 Edward E. Cohen IRA - - - - - 107 Mead Park Advisors, LLC - - - - 50 - $ - $ - $ - $ - $ 50 $ 165 |
Due from _ Due to Related Par41
Due from / Due to Related Parties (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Due From / Due To Related Parties [Abstract] | |
Schedule of Due From / Due To Related Parties | DUE FROM/DUE TO RELATED PARTIES (Dollars in Thousands) September 30, 2017 December 31, 2016 Employees & other $ 547 $ 57 Due from Related Parties $ 547 $ 57 Mead Park $ - $ 50 Due to Related Parties $ - $ 50 |
Organization and Nature of Op42
Organization and Nature of Operations (Narrative) (Details) $ / shares in Units, $ in Millions | Sep. 01, 2017$ / shares | Sep. 30, 2017USD ($)segment$ / shares | Dec. 31, 2016$ / shares |
Securities [Line Items] | |||
Reverse stock split | 10 | ||
Common Stock, par value | $ / shares | $ 0.01 | $ 0.01 | |
Common Stock, pre split par value | $ / shares | $ 0.001 | ||
Assets under management | $ | $ 3,550 | ||
Number of Operating Segments | segment | 3 | ||
CDOs [Member] | |||
Securities [Line Items] | |||
Assets under management | $ | $ 3,220 | ||
Assets under management which are collateralized debt obligations percentage | 90.50% |
Summary of Significant Accoun43
Summary of Significant Accounting Policies (Narrative) (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Summary Of Significant Accounting Policies [Line Items] | |||
Maximum normal term for resale agreements | 1 month | ||
Estimated debt in fair value | $ 55,396 | $ 37,121 | |
Other assets | (1,732) | (4,301) | |
Debt | $ (43,917) | $ (29,523) | |
Restatement Adjustment [Member] | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Other assets | $ 410 | ||
Debt | $ 410 |
Dispositions (Narrative) (Detai
Dispositions (Narrative) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2017 | Mar. 31, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Legal and financial advisory fees | $ 1,666,000 | $ 1,513,000 | $ 5,694,000 | $ 4,718,000 | |||
Debt issued | $ 71,373,000 | 71,373,000 | |||||
Proceeds from issuance of convertible debt | 15,000,000 | ||||||
European Operations [Member] | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Disposal Group, Including Discontinued Operation, Consideration | $ 8,700,000 | ||||||
Daniel G. Cohen [Member] | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Legal and financial advisory fees | $ 600,000 | ||||||
Daniel G. Cohen [Member] | Employment Agreement [Member] | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Severance Costs | $ 3,000,000 | ||||||
Daniel G. Cohen [Member] | Second Extension [Member] | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Severance Costs | $ 1,000,000 | ||||||
COHN, LLC [Member] | Convertible 8.00%, Related Party Notes [Member] | Daniel G. Cohen [Member] | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Debt issued | $ 15,000,000 | ||||||
Proceeds from issuance of convertible debt | $ 15,000,000 |
Receivables From And Payables45
Receivables From And Payables To Brokers, Dealers, And Clearing Agencies (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Receivables From And Payables To Brokers, Dealers, And Clearing Agencies [Abstract] | ||||
Interest On Margin Payable | $ 161 | $ 171 | $ 517 | $ 450 |
Receivables From And Payables46
Receivables From And Payables To Brokers, Dealers, And Clearing Agencies (Schedule Of Due To (From) Broker-Dealers And Clearing Organizations) (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Receivables from Brokers-Dealers and Clearing Agencies [Abstract] | ||
Deposits with clearing agencies | $ 750 | $ 750 |
Unsettled regular way trades, net | 14,520 | 3,337 |
Receivables from clearing agencies | 93,600 | 77,091 |
Receivables from brokers, dealers, and clearing agencies | 108,870 | 81,178 |
Payables to Broker-Dealers and Clearing Agencies [Abstract] | ||
Margin payable | 32,602 | 85,761 |
Payables to brokers, dealers, and clearing agencies | $ 32,602 | $ 85,761 |
Financial Instruments (Narrativ
Financial Instruments (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Financial Instruments [Abstract] | ||||
Unrealized gain (losses) in net trading revenue | $ 181 | $ 1,319 | $ 1,562 | $ 1,262 |
Financial Instruments (Schedule
Financial Instruments (Schedule Of Trading Securities) (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Investments-trading | $ 104,262 | $ 157,178 |
U.S. government agency MBS and CMOs [Member] | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Investments-trading | 955 | 9,539 |
U.S. government agency debt securities [Member] | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Investments-trading | 19,311 | 30,681 |
RMBS [Member] | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Investments-trading | 21 | 70 |
U.S. Treasury securities [Member] | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Investments-trading | 4,971 | |
ABS [Member] | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Investments-trading | 1 | 1 |
SBA loans [Member] | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Investments-trading | 11,404 | 18,416 |
Corporate bonds and redeemable preferred stock [Member] | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Investments-trading | 30,924 | 45,271 |
Foreign government bonds [Member] | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Investments-trading | 1,112 | 339 |
Municipal bonds [Member] | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Investments-trading | 28,299 | 43,759 |
Certificates of deposit [Member] | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Investments-trading | 1,087 | 240 |
Derivatives [Member] | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Investments-trading | 2,713 | 8,763 |
Equity securities [Member] | ||
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Investments-trading | $ 3,464 | $ 99 |
Financial Instruments (Schedu49
Financial Instruments (Schedule Of Trading Securities Sold, Not Yet Purchased) (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Security Owned and Sold, Not yet Purchased, at Fair Value [Line Items] | ||
Trading securities sold, not yet purchased | $ 89,993 | $ 85,183 |
U.S. Treasury securities [Member] | ||
Security Owned and Sold, Not yet Purchased, at Fair Value [Line Items] | ||
Trading securities sold, not yet purchased | 56,166 | 56,329 |
Corporate bonds and redeemable preferred stock [Member] | ||
Security Owned and Sold, Not yet Purchased, at Fair Value [Line Items] | ||
Trading securities sold, not yet purchased | 32,410 | 18,552 |
Municipal bonds [Member] | ||
Security Owned and Sold, Not yet Purchased, at Fair Value [Line Items] | ||
Trading securities sold, not yet purchased | 21 | 20 |
Derivatives [Member] | ||
Security Owned and Sold, Not yet Purchased, at Fair Value [Line Items] | ||
Trading securities sold, not yet purchased | $ 1,396 | $ 10,282 |
Financial Instruments (Schedu50
Financial Instruments (Schedule Of Other Investments) (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Schedule of Investments [Line Items] | ||
Other investments, Amortized Cost | $ 9,703 | $ 12,560 |
Other investments, Carrying Value | 5,814 | 8,303 |
Other investments, Unrealized Gain / (Loss) | (3,889) | (4,257) |
EuroDekania [Member] | ||
Schedule of Investments [Line Items] | ||
Other investments, Amortized Cost | 4,797 | 4,969 |
Other investments, Carrying Value | 828 | 1,165 |
Other investments, Unrealized Gain / (Loss) | (3,969) | (3,804) |
CLOs [Member] | ||
Schedule of Investments [Line Items] | ||
Other investments, Amortized Cost | 4,636 | 7,312 |
Other investments, Carrying Value | 4,590 | 6,733 |
Other investments, Unrealized Gain / (Loss) | (46) | (579) |
CDOs [Member] | ||
Schedule of Investments [Line Items] | ||
Other investments, Amortized Cost | 188 | 191 |
Other investments, Carrying Value | 25 | 28 |
Other investments, Unrealized Gain / (Loss) | (163) | (163) |
Residential Loans [Member] | ||
Schedule of Investments [Line Items] | ||
Other investments, Amortized Cost | 82 | 88 |
Other investments, Carrying Value | 354 | 360 |
Other investments, Unrealized Gain / (Loss) | 272 | 272 |
Foreign currency forward contracts [Member] | ||
Schedule of Investments [Line Items] | ||
Other investments, Carrying Value | 17 | 17 |
Other investments, Unrealized Gain / (Loss) | $ 17 | $ 17 |
Fair Value Disclosures (Narrati
Fair Value Disclosures (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Fair Value, Assets, Level 1 to Level 2 Transfers, Amount | $ 0 | $ 0 | $ 0 | $ 0 |
Fair Value, Liabilities, Level 1 to Level 2 Transfers, Amount | 0 | 0 | 0 | 0 |
Fair value, option, changes in fair value, gains (losses) | (107) | 281 | (385) | (287) |
Alternative Investments [Member] | ||||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||||
Fair value of assets transfers into level 3 | 0 | |||
Fair value of assets transfers out of level 3 | $ 0 |
Fair Value Disclosures (Schedul
Fair Value Disclosures (Schedule Of Assets And Liabilities Measured At Fair Value On A Recurring Basis) (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total investments-trading | $ 104,262 | $ 157,178 | |
Other investments, measured using hierarchy | 4,986 | 7,138 | |
Other investments, Carrying Value | 5,814 | 8,303 | |
Trading securities sold, not yet purchased | 89,993 | 85,183 | |
Quoted Prices In Active Markets (Level 1) [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total investments-trading | 5,007 | 99 | |
Other investments, measured using hierarchy | 17 | 17 | |
Trading securities sold, not yet purchased | 56,170 | 56,329 | |
Significant Other Observable Inputs (Level 2) [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total investments-trading | 99,255 | 157,079 | |
Other investments, measured using hierarchy | 354 | 360 | |
Trading securities sold, not yet purchased | 33,823 | 28,854 | |
Significant Unobservable Inputs (Level 3) [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Other investments, measured using hierarchy | 4,615 | 6,761 | |
U.S. government agency MBS and CMOs [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total investments-trading | 955 | 9,539 | |
U.S. government agency MBS and CMOs [Member] | Significant Other Observable Inputs (Level 2) [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total investments-trading | 955 | 9,539 | |
U.S. government agency debt securities [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total investments-trading | 19,311 | 30,681 | |
U.S. government agency debt securities [Member] | Significant Other Observable Inputs (Level 2) [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total investments-trading | 19,311 | 30,681 | |
RMBS [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total investments-trading | 21 | 70 | |
RMBS [Member] | Significant Other Observable Inputs (Level 2) [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total investments-trading | 21 | 70 | |
U.S. Treasury securities [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total investments-trading | 4,971 | ||
Trading securities sold, not yet purchased | 56,166 | 56,329 | |
U.S. Treasury securities [Member] | Quoted Prices In Active Markets (Level 1) [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total investments-trading | 4,971 | ||
Trading securities sold, not yet purchased | 56,166 | 56,329 | |
ABS [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total investments-trading | 1 | 1 | |
ABS [Member] | Significant Other Observable Inputs (Level 2) [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total investments-trading | 1 | 1 | |
SBA loans [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total investments-trading | 11,404 | 18,416 | |
SBA loans [Member] | Significant Other Observable Inputs (Level 2) [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total investments-trading | 11,404 | 18,416 | |
Corporate bonds and redeemable preferred stock [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total investments-trading | 30,924 | 45,271 | |
Trading securities sold, not yet purchased | 32,410 | 18,552 | |
Corporate bonds and redeemable preferred stock [Member] | Significant Other Observable Inputs (Level 2) [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total investments-trading | 30,924 | 45,271 | |
Trading securities sold, not yet purchased | 32,410 | 18,552 | |
Foreign government bonds [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total investments-trading | 1,112 | 339 | |
Foreign government bonds [Member] | Significant Other Observable Inputs (Level 2) [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total investments-trading | 1,112 | 339 | |
Municipal bonds [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total investments-trading | 28,299 | 43,759 | |
Trading securities sold, not yet purchased | 21 | 20 | |
Municipal bonds [Member] | Significant Other Observable Inputs (Level 2) [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total investments-trading | 28,299 | 43,759 | |
Trading securities sold, not yet purchased | 21 | 20 | |
Certificates of deposit [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total investments-trading | 1,087 | 240 | |
Certificates of deposit [Member] | Significant Other Observable Inputs (Level 2) [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total investments-trading | 1,087 | 240 | |
Derivatives [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total investments-trading | 2,713 | 8,763 | |
Trading securities sold, not yet purchased | 1,396 | 10,282 | |
Derivatives [Member] | Quoted Prices In Active Markets (Level 1) [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Trading securities sold, not yet purchased | 4 | ||
Derivatives [Member] | Significant Other Observable Inputs (Level 2) [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total investments-trading | 2,713 | 8,763 | |
Trading securities sold, not yet purchased | 1,392 | 10,282 | |
Equity securities [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total investments-trading | 3,464 | 99 | |
Equity securities [Member] | Quoted Prices In Active Markets (Level 1) [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total investments-trading | 36 | 99 | |
Equity securities [Member] | Significant Other Observable Inputs (Level 2) [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Total investments-trading | 3,428 | ||
CLOs [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Other investments, measured using hierarchy | 4,590 | 6,733 | |
CLOs [Member] | Significant Unobservable Inputs (Level 3) [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Other investments, measured using hierarchy | 4,590 | 6,733 | |
CDOs [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Other investments, measured using hierarchy | 25 | 28 | |
CDOs [Member] | Significant Unobservable Inputs (Level 3) [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Other investments, measured using hierarchy | 25 | 28 | |
Residential Loans [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Other investments, measured using hierarchy | 354 | 360 | |
Residential Loans [Member] | Significant Other Observable Inputs (Level 2) [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Other investments, measured using hierarchy | 354 | 360 | |
Foreign currency forward contracts [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Other investments, measured using hierarchy | 17 | 17 | |
Foreign currency forward contracts [Member] | Quoted Prices In Active Markets (Level 1) [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Other investments, measured using hierarchy | 17 | 17 | |
EuroDekania [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Other investments, at fair value | [1] | 828 | 1,165 |
Other investments, Carrying Value | $ 828 | $ 1,165 | |
[1] | Hybrid Securities Fund-European. |
Fair Value Disclosures (Sched53
Fair Value Disclosures (Schedule Of Assets And Liabilities Measured With Level 3 Inputs) (Details) - Alternative Investments [Member] - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | ||
Schedule of additional information about assets and liabilities measured at fair value on a recurring basis level 3 inputs | |||||
Level 3 inputs, Beginning balance | $ 4,855 | $ 8,058 | $ 6,761 | $ 11,603 | |
Transfers into Level 3 | 0 | ||||
Transfers out of Level 3 | 0 | ||||
Accretion of income | [1] | 169 | 250 | 938 | 1,005 |
Purchases | |||||
Sales and returns of capital | (306) | (2,443) | (2,996) | (7,093) | |
Level 3 inputs, Ending balance | 4,615 | 6,257 | 4,615 | 6,257 | |
Change in unrealized gains /(losses) | [2] | 187 | 580 | 608 | 868 |
Trading Revenue [Member] | |||||
Schedule of additional information about assets and liabilities measured at fair value on a recurring basis level 3 inputs | |||||
Transactions included in income | |||||
Principal Investing [Member] | |||||
Schedule of additional information about assets and liabilities measured at fair value on a recurring basis level 3 inputs | |||||
Transactions included in income | [1] | (103) | 392 | (88) | 742 |
CLOs [Member] | |||||
Schedule of additional information about assets and liabilities measured at fair value on a recurring basis level 3 inputs | |||||
Level 3 inputs, Beginning balance | 4,828 | 8,028 | 6,733 | 11,569 | |
Transfers into Level 3 | 0 | ||||
Transfers out of Level 3 | 0 | ||||
Accretion of income | [1] | 169 | 250 | 938 | 1,005 |
Purchases | |||||
Sales and returns of capital | (304) | (2,441) | (2,993) | (7,091) | |
Level 3 inputs, Ending balance | 4,590 | 6,229 | 4,590 | 6,229 | |
Change in unrealized gains /(losses) | [2] | 187 | 580 | 608 | 872 |
CLOs [Member] | Trading Revenue [Member] | |||||
Schedule of additional information about assets and liabilities measured at fair value on a recurring basis level 3 inputs | |||||
Transactions included in income | |||||
CLOs [Member] | Principal Investing [Member] | |||||
Schedule of additional information about assets and liabilities measured at fair value on a recurring basis level 3 inputs | |||||
Transactions included in income | [1] | (103) | 392 | (88) | 746 |
CDOs [Member] | |||||
Schedule of additional information about assets and liabilities measured at fair value on a recurring basis level 3 inputs | |||||
Level 3 inputs, Beginning balance | 27 | 30 | 28 | 34 | |
Transfers into Level 3 | 0 | ||||
Transfers out of Level 3 | 0 | ||||
Accretion of income | [1] | ||||
Purchases | |||||
Sales and returns of capital | (2) | (2) | (3) | (2) | |
Level 3 inputs, Ending balance | $ 25 | $ 28 | 25 | 28 | |
Change in unrealized gains /(losses) | [2] | (4) | |||
CDOs [Member] | Trading Revenue [Member] | |||||
Schedule of additional information about assets and liabilities measured at fair value on a recurring basis level 3 inputs | |||||
Transactions included in income | |||||
CDOs [Member] | Principal Investing [Member] | |||||
Schedule of additional information about assets and liabilities measured at fair value on a recurring basis level 3 inputs | |||||
Transactions included in income | [1] | $ (4) | |||
[1] | Recorded as a component of principal transactions and other income in the consolidated statement of operations. | ||||
[2] | Represents the change in unrealized gains and losses for the period included in principal transactions and other income for assets held at the end of the reporting period. |
Fair Value Disclosures (Quantit
Fair Value Disclosures (Quantitative Information About Level 3 Fair Value Measurements) (Details) - Significant Unobservable Inputs (Level 3) [Member] - CLOs [Member] - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2017 | Dec. 31, 2016 | |
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Fair Value | $ 4,590 | $ 6,733 |
Minimum [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Yield | 12.80% | 11.80% |
Duration | 4 years 9 months 18 days | 5 years 3 months 18 days |
Maximum [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Yield | 23.90% | 25.00% |
Duration | 6 years 9 months 18 days | 6 years 7 months 6 days |
Weighted Average [Member] | ||
Fair Value Inputs, Assets, Quantitative Information [Line Items] | ||
Yield | 15.60% | 16.10% |
Duration | 5 years 8 months 12 days | 5 years 9 months 18 days |
Default rate | 2.00% | 2.00% |
Fair Value Disclosures (Fair Va
Fair Value Disclosures (Fair Value, Investments, Entities That Calculate Net Asset Value Per Share) (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2017 | Dec. 31, 2016 | ||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |||
Redemption frequency | |||
Other Investment Vehicles [Member] | |||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |||
Other investments, at fair value | $ 828 | $ 1,165 | |
EuroDekania [Member] | |||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |||
Other investments, at fair value | [1] | $ 828 | 1,165 |
Redemption frequency | [2],[3] | N/A | |
EuroDekania [Member] | Other Investment Vehicles [Member] | |||
Fair Value, Investments, Entities that Calculate Net Asset Value Per Share [Line Items] | |||
Other investments, at fair value | [2] | $ 828 | $ 1,165 |
[1] | Hybrid Securities Fund-European. | ||
[2] | EuroDekania owns investments in hybrid capital securities that have attributes of debt and equity, primarily in the form of subordinated debt issued by insurance companies, banks, and bank holding companies based primarily in Western Europe; widely syndicated leveraged loans issued by European corporations; CMBS, including subordinated interests in first mortgage real estate loans; and RMBS and ABS backed by consumer and commercial receivables. The majority of the assets are denominated in Euros and U.K. Pounds Sterling. The fair value of the investment in this category has been estimated using the NAV per share of the investment in accordance with the "practical expedient" provisions of FASB ASC 820. | ||
[3] | Not applicable. |
Derivative Financial Instrume56
Derivative Financial Instruments (Narrative) (Details) € in Thousands | Sep. 30, 2017EUR (€) | Sep. 30, 2017USD ($) | Dec. 31, 2016EUR (€) | Dec. 31, 2016USD ($) |
TBA And Other Forward Agency MBS [Member] | Short [Member] | ||||
Derivative [Line Items] | ||||
Derivative, Notional Amount | $ 1,378,275,000 | $ 1,045,384,000 | ||
TBA And Other Forward Agency MBS [Member] | Long [Member] | ||||
Derivative [Line Items] | ||||
Derivative, Notional Amount | 1,378,275,000 | 1,045,384,000 | ||
Foreign currency forward contracts [Member] | ||||
Derivative [Line Items] | ||||
Derivative, Notional Amount | € | € 1,000 | € 1,625 | ||
EuroDollar futures contracts [Member] | ||||
Derivative [Line Items] | ||||
Derivative, Notional Amount | 0 | $ 0 | ||
Other Extended Settlement Trades [Member] | ||||
Derivative [Line Items] | ||||
Forward purchase commitment | 4,838,000 | |||
Forward sale commitment | $ 0 |
Derivative Financial Instrume57
Derivative Financial Instruments (Balance Sheet Information) (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Derivatives, Fair Value [Line Items] | ||
Derivative, Fair Value, Net | $ 1,334 | $ (1,502) |
Investments-trading [Member] | TBAs [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative, Fair Value, Net | 2,712 | 8,763 |
Investments-trading [Member] | Other Extended Settlement Trades [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative, Fair Value, Net | 1 | |
Other Investment At Fair Value [Member] | Foreign currency forward contracts [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative, Fair Value, Net | 17 | 17 |
Trading securities sold, not yet purchased [Member] | TBAs [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative, Fair Value, Net | (1,376) | $ (10,282) |
Trading securities sold, not yet purchased [Member] | Other Extended Settlement Trades [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative, Fair Value, Net | $ (20) |
Derivative Financial Instrume58
Derivative Financial Instruments (Statement Of Operations Information) (Details) - Not Designated as Hedging Instruments [Member] - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Derivative [Line Items] | ||||
Derivative financial instruments, net gain (loss) recognized | $ 1,554 | $ 2,042 | $ 5,369 | $ 6,200 |
Revenues - principal transactions and other income [Member] | Foreign currency forward contracts [Member] | ||||
Derivative [Line Items] | ||||
Derivative financial instruments, net gain (loss) recognized | (34) | (30) | (132) | (83) |
Revenues - net trading [Member] | Other Extended Settlement Trades [Member] | ||||
Derivative [Line Items] | ||||
Derivative financial instruments, net gain (loss) recognized | 4 | (3) | (15) | (3) |
Revenues - net trading [Member] | TBAs [Member] | ||||
Derivative [Line Items] | ||||
Derivative financial instruments, net gain (loss) recognized | $ 1,584 | $ 2,075 | $ 5,516 | $ 6,286 |
Collateralized Securities Tra59
Collateralized Securities Transactions (Narrative) (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)entitysecurity | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($)entitysecurity | |
Concentration Risk [Line Items] | |||||
Securities reverse repurchase agreements | $ 436,541 | $ 436,541 | $ 281,821 | ||
Fair value of securities received as collateral under reverse repurchase agreements | 454,635 | $ 454,635 | $ 294,516 | ||
Number of securities related to reverse purchase agreements | security | 13 | 8 | |||
Number of counterparties related to reverse repurchase agreements | entity | 4 | 3 | |||
Securities sold under agreement to repurchase | 448,133 | $ 448,133 | $ 295,445 | ||
Fair value of securities pledged as collateral under repurchase agreements | 466,958 | 466,958 | $ 309,256 | ||
Revenues | 10,001 | $ 14,090 | 35,867 | $ 42,190 | |
Product Concentration Risk [Member] | |||||
Concentration Risk [Line Items] | |||||
Revenues | $ 1,091 | $ 962 | $ 2,633 | $ 2,213 |
Collateralized Securities Tra60
Collateralized Securities Transactions (Schedule Of Repurchase Agreements Accounted For As Secured Borrowings) (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Assets Sold under Agreements to Repurchase [Line Items] | ||
Gross amount of recognized liabilities for repurchase agreements | $ 448,133 | $ 295,445 |
Overnight and Continuous [Member] | ||
Assets Sold under Agreements to Repurchase [Line Items] | ||
Gross amount of recognized liabilities for repurchase agreements | 11,517 | 13,775 |
Up to 30 Days [Member] | ||
Assets Sold under Agreements to Repurchase [Line Items] | ||
Gross amount of recognized liabilities for repurchase agreements | 436,616 | 281,670 |
U.S. government agency MBS [Member] | ||
Assets Sold under Agreements to Repurchase [Line Items] | ||
Gross amount of recognized liabilities for repurchase agreements | 436,616 | 281,670 |
U.S. government agency MBS [Member] | Up to 30 Days [Member] | ||
Assets Sold under Agreements to Repurchase [Line Items] | ||
Gross amount of recognized liabilities for repurchase agreements | 436,616 | 281,670 |
SBA loans [Member] | ||
Assets Sold under Agreements to Repurchase [Line Items] | ||
Gross amount of recognized liabilities for repurchase agreements | 11,517 | 13,775 |
SBA loans [Member] | Overnight and Continuous [Member] | ||
Assets Sold under Agreements to Repurchase [Line Items] | ||
Gross amount of recognized liabilities for repurchase agreements | $ 11,517 | $ 13,775 |
Other Assets and Accounts Pay61
Other Assets and Accounts Payable and Other Liabilities (Narrative) (Details) | Sep. 29, 2017USD ($)contract | Sep. 30, 2017USD ($) | Sep. 30, 2017USD ($) | Dec. 31, 2016USD ($) |
Related Party Transaction [Line Items] | ||||
Proceeds from investment | $ 11,000,000 | |||
Investment agreement, due to investors | $ 50,000 | |||
JKD Capital Partners I, LTD [Member] | ||||
Related Party Transaction [Line Items] | ||||
Proceeds from investment | 1,000,000 | $ 6,000,000 | ||
Net interest expense | $ 210,000 | $ 465,000 | ||
DGC Family Fintech Trust/CBF [Member] | ||||
Related Party Transaction [Line Items] | ||||
Number of investment agreements entered | contract | 2 | |||
Investment amount | $ 10,000,000 | |||
Due to investors, annual return on investment | 3.20% | |||
Investment agreement, written notice period for termination | 90 days | |||
Investment agreement, after termination deadline, notice period for additional payment equal to Investment Balance plus an amount equal to any accrued by unpaid investment return | 60 days | |||
Investment agreement, upon termination, period in which payment to investors must occur | 30 days | |||
Due to investors, upon termination of investment agreement, return on investment amount | 15.00% | |||
DGC Family Fintech Trust/CBF [Member] | Investment Agreement, Before Third Anniversary, Greater Than Zero But Less Than Or Equal To $5,333,333 [Member] | ||||
Related Party Transaction [Line Items] | ||||
Due to investors, additional return on investment | 15.00% | |||
DGC Family Fintech Trust/CBF [Member] | Investment Agreement, Before Third Anniversary, Greater Than $5,333,333 But Less Than Or Equal To $8,000,000 [Member] | ||||
Related Party Transaction [Line Items] | ||||
Investment agreement, due to investors | $ 800,000 | |||
DGC Family Fintech Trust/CBF [Member] | Investment Agreement, Before Third Anniversary, Greater Than $8,000,000 [Member] | ||||
Related Party Transaction [Line Items] | ||||
Due to investors, annual return on investment | 10.00% | |||
DGC Family Fintech Trust/CBF [Member] | Investment Agreement, Following Third Anniversary, Revenue Of Business Greater Than Zero, The Greater Of 20% Investment Amount, Or 20% Of Revenue Of Business Or Any Annual Period Which Revenue Of Business Is Zero Or Less Than Zero [Member] | ||||
Related Party Transaction [Line Items] | ||||
Due to investors, annual return on investment | 3.20% | |||
Investment terms, annual period revenue range for additional return on investment | $ 0 | |||
Investment terms, range on investment amount for annual return on investment | 20.00% | |||
Investment terms, range on revenue of business for annual return on investment | 20.00% | |||
Maximum [Member] | DGC Family Fintech Trust/CBF [Member] | Investment Agreement, Before Third Anniversary, Greater Than Zero But Less Than Or Equal To $5,333,333 [Member] | ||||
Related Party Transaction [Line Items] | ||||
Investment terms, annual period revenue range for additional return on investment | $ 5,333,000 | |||
Maximum [Member] | DGC Family Fintech Trust/CBF [Member] | Investment Agreement, Before Third Anniversary, Greater Than $5,333,333 But Less Than Or Equal To $8,000,000 [Member] | ||||
Related Party Transaction [Line Items] | ||||
Investment terms, annual period revenue range for additional return on investment | 8,000,000 | |||
Maximum [Member] | DGC Family Fintech Trust/CBF [Member] | Investment Agreement, Following Third Anniversary, Revenue Of Business Greater Than Zero, The Greater Of 20% Investment Amount, Or 20% Of Revenue Of Business Or Any Annual Period Which Revenue Of Business Is Zero Or Less Than Zero [Member] | ||||
Related Party Transaction [Line Items] | ||||
Investment terms, annual period revenue range for additional return on investment | 0 | |||
Minimum [Member] | DGC Family Fintech Trust/CBF [Member] | Investment Agreement, Before Third Anniversary, Greater Than Zero But Less Than Or Equal To $5,333,333 [Member] | ||||
Related Party Transaction [Line Items] | ||||
Investment terms, annual period revenue range for additional return on investment | 0 | |||
Minimum [Member] | DGC Family Fintech Trust/CBF [Member] | Investment Agreement, Before Third Anniversary, Greater Than $5,333,333 But Less Than Or Equal To $8,000,000 [Member] | ||||
Related Party Transaction [Line Items] | ||||
Investment terms, annual period revenue range for additional return on investment | 5,333,000 | |||
Minimum [Member] | DGC Family Fintech Trust/CBF [Member] | Investment Agreement, Before Third Anniversary, Greater Than $8,000,000 [Member] | ||||
Related Party Transaction [Line Items] | ||||
Investment terms, annual period revenue range for additional return on investment | 8,000,000 | |||
Minimum [Member] | DGC Family Fintech Trust/CBF [Member] | Investment Agreement, Following Third Anniversary, Revenue Of Business Greater Than Zero, The Greater Of 20% Investment Amount, Or 20% Of Revenue Of Business Or Any Annual Period Which Revenue Of Business Is Zero Or Less Than Zero [Member] | ||||
Related Party Transaction [Line Items] | ||||
Investment terms, annual period revenue range for additional return on investment | $ 0 |
Other Assets And Accounts Pay62
Other Assets And Accounts Payable And Other Liabilities (Schedule Of Other Assets) (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Schedule of other assets | ||
Deferred costs | $ 600 | |
Prepaid expenses | $ 852 | 976 |
Prepaid income taxes | 99 | |
Security deposits | 285 | 1,799 |
Miscellaneous other assets | 20 | 138 |
Cost method investment | 25 | 25 |
Furniture, equipment and leasehold improvements, net | 384 | 498 |
Intangible assets | 166 | 166 |
Other assets | $ 1,732 | $ 4,301 |
Other Assets and Accounts Pay63
Other Assets and Accounts Payable and Other Liabilities (Schedule Of Accounts Payable And Other Liabilities) (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Schedule of accounts payable and other liabilities | ||
Accounts payable | $ 314 | $ 326 |
Rent payable | 13 | 54 |
Accrued interest payable | 626 | 305 |
Accrued interest on securities sold, not yet purchased | 688 | 512 |
Payroll taxes payable | 584 | 576 |
Other general accrued expenses | 1,514 | 1,084 |
Accounts payable and other liabilities | 20,680 | 9,618 |
JKD Capital Partners I, LTD [Member] | ||
Schedule of accounts payable and other liabilities | ||
Redeemable financial instrument | 6,941 | $ 6,761 |
DGC Family Fintech Trust/CBF [Member] | ||
Schedule of accounts payable and other liabilities | ||
Redeemable financial instrument | $ 10,000 |
Variable Interest Entities (Nar
Variable Interest Entities (Narrative) (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Variable Interest Entities [Abstract] | ||
VIE liabilities, contingent liabilities, and guarantees | $ 0 | $ 0 |
Variable Interest Entities (Sch
Variable Interest Entities (Schedule Of Variable Interest Entities) (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Jun. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Dec. 31, 2015 |
Variable Interest Entity [Line Items] | ||||||
Maximum Exposure | $ 4,615 | $ 6,761 | ||||
Alternative Investments [Member] | ||||||
Variable Interest Entity [Line Items] | ||||||
Other investments, fair value | $ 4,615 | $ 4,855 | $ 6,761 | $ 6,257 | $ 8,058 | $ 11,603 |
Debt (Narrative) (Details)
Debt (Narrative) (Details) | 9 Months Ended | |
Sep. 30, 2017USD ($)$ / shares | Sep. 30, 2016 | |
Debt Instrument [Line Items] | ||
Debt Instrument, Face Amount | $ 71,373,000 | |
Redeemable noncontrolling interest, membership units not held, share ratio | 10 | 10 |
Contingent Convertible Senior Notes [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Face Amount | $ 23,248,000 | |
8.00% Contingent Convertible Senior Notes Due 2022 [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Face Amount | 15,000,000 | |
Proceeds from Issuance of Debt | 15,000,000 | |
Debt Issuance Costs, Gross | $ 600,000 | |
Debt extension term | 1 year | |
Stated interest rate | 8.00% | |
Debt instrument, dividend threshold for reduced payment | $ / shares | $ 0.20 | |
Contingent portion of interest payable | 50.00% | |
Portion of interest payable added to principal | 50.00% | |
Interest rate, in event of default | 9.00% | |
Conversion price per unit | $ / shares | $ 1.45 | |
8.00% Contingent Convertible Senior Notes Due 2022 [Member] | Contingent Convertible Senior Notes [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Face Amount | $ 15,000,000 | |
Conversion price per unit | $ / shares | $ 1.45 | |
Debt instrument, noncontrolling interests, convertible price | $ / shares | $ 14.50 |
Debt (Debt Outstanding) (Detail
Debt (Debt Outstanding) (Details) | 9 Months Ended | ||
Sep. 30, 2017USD ($)$ / shares | Sep. 30, 2016 | Dec. 31, 2016USD ($)$ / shares | |
Debt Instrument [Line Items] | |||
Current Outstanding Par | $ 71,373,000 | ||
Long term debt less debt discount | $ 43,917,000 | $ 29,523,000 | |
Redeemable noncontrolling interest, membership units not held, share ratio | 10 | 10 | |
Common Stock, Par or Stated Value Per Share | $ / shares | $ 0.01 | $ 0.01 | |
Contingent Convertible Senior Notes [Member] | |||
Debt Instrument [Line Items] | |||
Current Outstanding Par | $ 23,248,000 | ||
Less unamortized debt issuance costs | (1,440,000) | $ (274,000) | |
Long term debt less debt discount | 21,808,000 | 7,974,000 | |
Junior subordinated debt [Member] | |||
Debt Instrument [Line Items] | |||
Junior subordinated notes | 48,125,000 | ||
Long term debt less debt discount | 22,109,000 | 21,549,000 | |
Junior subordinated notes | 49,614,000 | ||
Ownership value of common stock of trusts | 1,489,000 | ||
8.00% Contingent Convertible Senior Notes Due 2022 [Member] | |||
Debt Instrument [Line Items] | |||
Current Outstanding Par | $ 15,000,000 | ||
Interest Rate Terms | 8.00% | ||
Debt Instrument, Convertible, Conversion Price | $ / shares | $ 1.45 | ||
8.00% Contingent Convertible Senior Notes Due 2022 [Member] | Contingent Convertible Senior Notes [Member] | |||
Debt Instrument [Line Items] | |||
Current Outstanding Par | $ 15,000,000 | ||
Long term debt less debt discount | $ 15,000,000 | ||
Debt Instrument, Interest Rate, Effective Percentage | 8.00% | ||
Maturity | Mar. 31, 2022 | ||
Debt Instrument, Convertible, Conversion Price | $ / shares | $ 1.45 | ||
Debt instrument, noncontrolling interests, convertible price | $ / shares | $ 14.50 | ||
Debt Instrument, Convertible, Conversion Ratio | 10 | ||
8.00% Contingent Convertible Senior Notes Due 2018 [Member] | Contingent Convertible Senior Notes [Member] | |||
Debt Instrument [Line Items] | |||
Current Outstanding Par | $ 8,248,000 | ||
Long-term Debt, Gross | $ 8,248,000 | 8,248,000 | |
Debt Instrument, Interest Rate, Effective Percentage | 8.00% | ||
Maturity | Sep. 25, 2018 | ||
Debt Instrument, Convertible, Conversion Price | $ / shares | $ 30 | ||
Alesco Capital Trust I [Member] | Junior subordinated debt [Member] | |||
Debt Instrument [Line Items] | |||
Junior subordinated notes | $ 28,125,000 | ||
Long term debt less debt discount | $ 12,904,000 | 12,577,000 | |
Debt Instrument, Interest Rate, Effective Percentage | 5.31% | ||
Maturity | Jul. 30, 2037 | ||
Sunset Financial Statutory Trust I [Member] | Junior subordinated debt [Member] | |||
Debt Instrument [Line Items] | |||
Junior subordinated notes | $ 20,000,000 | ||
Long term debt less debt discount | $ 9,205,000 | $ 8,972,000 | |
Debt Instrument, Interest Rate, Effective Percentage | 5.49% | ||
Maturity | Mar. 30, 2035 |
Equity (Narrative) (Details)
Equity (Narrative) (Details) $ / shares in Units, $ in Thousands | Sep. 01, 2017USD ($)$ / sharesshares | Sep. 30, 2017USD ($)$ / sharesshares | Sep. 30, 2016USD ($)shares | Sep. 30, 2017USD ($)$ / sharesshares | Sep. 30, 2016USD ($)shares | Dec. 31, 2016USD ($)$ / sharesshares |
Permanent Equity [Line Items] | ||||||
Reverse stock split | 10 | |||||
Common Stock, par value | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | |||
Common Stock, pre split par value | $ / shares | $ 0.001 | |||||
Fractional shares issued | shares | 0 | |||||
Cash payment in lieu of shares | $ 4 | |||||
Common Stock, shares outstanding | shares | 1,262,584 | 1,261,094 | 1,261,094 | 1,208,919 | ||
Unvested restricted stock issued | shares | 81,098 | |||||
Ratio of Common Stock to membership units | 0.1 | |||||
Purchase of common stock, shares | shares | 2,774 | 8,040 | 21,448 | |||
Shares repurchased, price per share | $ / shares | $ 12 | |||||
Treasury Stock, Value, Acquired, Par Value Method | $ 33 | $ 79 | $ 201 | |||
Series E Preferred Stock [Member] | ||||||
Permanent Equity [Line Items] | ||||||
Ratio of shares to vote for vice chairman | 10 | |||||
Preferred Stock, shares outstanding | shares | 4,983,557 | 4,983,557 | 4,983,557 | |||
Preferred Stock, par value | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | |||
10b5-1 Plan [Member] | ||||||
Permanent Equity [Line Items] | ||||||
Repurchase amount authorized | $ 2,000 | $ 2,000 | $ 1,000 | |||
Purchase of common stock, shares | shares | 5,440 | 5,720 | ||||
Treasury Stock, Value, Acquired, Par Value Method | $ 63 | $ 66 | ||||
Private Repurchase Transaction [Member] | ||||||
Permanent Equity [Line Items] | ||||||
Purchase of common stock, shares | shares | 65,000 | |||||
Shares repurchased, price per share | $ / shares | $ 12.50 | |||||
Treasury Stock, Value, Acquired, Par Value Method | $ 813 | |||||
Investment Manager Repurchase [Member] | ||||||
Permanent Equity [Line Items] | ||||||
Purchase of common stock, shares | shares | 104,400 | |||||
Shares repurchased, price per share | $ / shares | $ 12.50 | |||||
Treasury Stock, Value, Acquired, Par Value Method | $ 1,305 | |||||
Accumulated Other Comprehensive Income (Loss) [Member] | ||||||
Permanent Equity [Line Items] | ||||||
Redemption of non-controlling interest, net | (14) | 49 | ||||
Additional paid-in capital [Member] | ||||||
Permanent Equity [Line Items] | ||||||
Redemption of non-controlling interest, net | 153 | (552) | ||||
Non-controlling Interest [Member] | ||||||
Permanent Equity [Line Items] | ||||||
Redemption of non-controlling interest, net | $ (139) | $ 503 |
Equity (Schedule Of Unrestricte
Equity (Schedule Of Unrestricted Common Stock Activity) (Details) | 9 Months Ended |
Sep. 30, 2017shares | |
Equity [Abstract] | |
Shares, Beginning | 1,134,957 |
Vesting of shares | 61,616 |
Shares withheld for employee taxes | (7,699) |
Retirement of common stock | (8,878) |
Shares, Ending | 1,179,996 |
Equity (Operating LLC Membershi
Equity (Operating LLC Membership Units) (Details) | 9 Months Ended |
Sep. 30, 2017shares | |
Permanent Equity [Line Items] | |
Membership Units Received Net Of Surrenders | 309,912 |
Unit Issuance And Surrender Agreement [Member] | |
Permanent Equity [Line Items] | |
Membership Units Received Net Of Surrenders | 398,741 |
Retirement of Common Stock [Member] | |
Permanent Equity [Line Items] | |
Membership Units Received Net Of Surrenders | (88,829) |
Equity (Schedule Of Effects Of
Equity (Schedule Of Effects Of Changes In Ownership Interest Subsidiary) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Equity [Abstract] | ||||
Net income (loss) attributable to Cohen & Company Inc. | $ (547) | $ 1,041 | $ 551 | $ 2,070 |
Increase / (decrease) in Cohen & Company Inc.'s paid in capital for the acquisition / (surrender) of additional units in consolidated subsidiary, net | 153 | (552) | ||
Changes from net income / (loss) attributable to Cohen & Company Inc. and transfers (to) from non-controlling interest | $ 704 | $ 1,518 |
Net Capital Requirements (Detai
Net Capital Requirements (Details) $ in Thousands | Sep. 30, 2017USD ($) |
JVB's [Member] | |
Net Capital Requirements [Line Items] | |
Actual Net Capital or Liquid Capital | $ 61,730 |
Excess | 61,480 |
Cohen And Company And PrinceRidge L.L.C. [Member] | |
Net Capital Requirements [Line Items] | |
Actual Net Capital or Liquid Capital | 1,991 |
Cohen and Company Financial Limited [Member] | |
Net Capital Requirements [Line Items] | |
Amount Required | 1,138 |
Excess | $ 853 |
Earnings _ (Loss) Per Common 73
Earnings / (Loss) Per Common Share (Schedule of Earnings / (Loss) Per Common Share) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | ||
Earnings Per Share [Line Items] | |||||
Net income / (loss) attributable to Cohen & Company | $ (547) | $ 1,041 | $ 551 | $ 2,070 | |
Income / (loss) attributable to non-controlling interest attributable to Operating LLC membership units exchangeable into Cohen & Company shares | [1] | (211) | 489 | 274 | 925 |
Add / (deduct): Adjustment | [2] | (30) | (23) | (29) | (33) |
Net income / (loss) on a fully converted basis | $ (788) | $ 1,507 | $ 796 | $ 2,962 | |
Weighted average common shares outstanding - Basic | 1,212,826 | 1,180,742 | 1,209,585 | 1,232,824 | |
Unrestricted Operating LLC membership units exchangeable into IFMI shares | 532,409 | 532,409 | 532,409 | 532,409 | |
Restricted units or shares | 13,049 | 13,938 | 9,124 | ||
Weighted average common shares outstanding - Diluted | [3] | 1,745,235 | 1,726,200 | 1,755,932 | 1,774,357 |
Net income / (loss) per common share - Basic | $ (0.45) | $ 0.88 | $ 0.46 | $ 1.68 | |
Net income / (loss) per common share - Diluted | $ (0.45) | $ 0.87 | $ 0.45 | $ 1.67 | |
Redeemable noncontrolling interest, membership units not held, share ratio | 10 | 10 | |||
Redeemable noncontrolling interest, membership units not held, percentage of cash to average per share closing prices of common stock | 0.10% | 0.10% | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 14,059 | ||||
Convertible Debt Securities [Member] | |||||
Earnings Per Share [Line Items] | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 1,034,483 | ||||
Convertible Debt Securities [Member] | 8.00% Contingent Convertible Senior Notes Due 2018 [Member] | |||||
Earnings Per Share [Line Items] | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 274,917 | 274,917 | 274,917 | 274,917 | |
Convertible Debt Securities [Member] | 8.00% Contingent Convertible Senior Notes Due 2022 [Member] | |||||
Earnings Per Share [Line Items] | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 773,947 | ||||
[1] | The Operating LLC membership units not held by Cohen & Company Inc. (that is, those held by the non-controlling interest for the nine months ended September 30, 2017 and 2016) may be redeemed and exchanged into shares of the Company on a ten-for-one basis. The Operating LLC membership units not held by Cohen & Company Inc. are redeemable, at any time, for (i) cash in an amount equal to one tenth of the average of the per share closing prices of Common Stock for the ten consecutive trading days immediately preceding the date the Company receives the member’s redemption notice, or (ii) at the Company’s option, one tenth of a share of Common Stock, subject, in each case, to appropriate adjustment upon the occurrence of an issuance of additional shares of Common Stock as a dividend or other distribution on the outstanding Common Stock, or a further subdivision or combination of the outstanding shares of Common Stock. These membership units enter into the computation of diluted net income / (loss) per common share when the effect is not anti-dilutive using the if-converted method. | ||||
[2] | An adjustment is included for income tax expense. If the Operating LLC membership units had been converted at the beginning of the period, the Company would have incurred a higher income tax expense or realized a higher income tax benefit, as applicable. | ||||
[3] | For the three months ended September 30, 2017, weighted average common shares outstanding excludes (i) 14,059 shares representing restricted Operating LLC membership units, restricted Common Stock, and restricted units of Common Stock that would be anti-dilutive because of the Company's net loss, (ii) 274,917 shares from the assumed conversion of the 2013 Notes, and (iii) 1,034,483 shares from the assumed conversion of the 2017 Note because of the Company's net loss and the inclusion of the converted shares would be anti-dilutive. |
Commitments And Contingencies (
Commitments And Contingencies (Narrative) (Details) $ in Thousands | 1 Months Ended |
Oct. 31, 2013USD ($) | |
Commitments And Contingencies [Abstract] | |
Income Tax Examination, Estimate of Possible Loss | $ 4,683 |
Segment and Geographic Inform75
Segment and Geographic Information (Narrative) (Details) | 9 Months Ended |
Sep. 30, 2017segment | |
Segment and Geographic Information [Abstract] | |
Number of Operating Segments | 3 |
Segment and Geographic Inform76
Segment and Geographic Information (Schedule Of Segment Reporting Information) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | ||
Segment Reporting Information [Line Items] | |||||
Net trading | $ 5,988 | $ 10,486 | $ 20,158 | $ 31,973 | |
Asset management | 1,779 | 1,781 | 6,202 | 5,662 | |
New issue and advisory | 2,012 | 811 | 3,992 | 2,176 | |
Principal transactions and other income | 222 | 1,012 | 5,515 | 2,379 | |
Total revenues | 10,001 | 14,090 | 35,867 | 42,190 | |
Total operating expenses | 9,012 | 11,439 | 30,564 | 36,065 | |
Operating income | 989 | 2,651 | 5,303 | 6,125 | |
Interest expense, net | (1,606) | (991) | (4,330) | (2,973) | |
Income (loss) before income tax expense | (617) | 1,660 | 973 | 3,152 | |
Income tax expense (benefit) | 141 | 130 | 148 | 157 | |
Net income (loss) | (758) | 1,530 | 825 | 2,995 | |
Less: Net income (loss) attributable to the non-controlling interest | (211) | 489 | 274 | 925 | |
Net income (loss) attributable to Cohen & Company Inc. | (547) | 1,041 | 551 | 2,070 | |
Depreciation and amortization (included in total operating expense) | 60 | 66 | 187 | 220 | |
Operating Segments [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Net trading | 5,988 | 10,486 | 20,158 | 31,973 | |
Asset management | 1,779 | 1,781 | 6,202 | 5,662 | |
New issue and advisory | 2,012 | 811 | 3,992 | 2,176 | |
Principal transactions and other income | 222 | 1,012 | 5,515 | 2,379 | |
Total revenues | 10,001 | 14,090 | 35,867 | 42,190 | |
Total operating expenses | 7,190 | 9,452 | 24,383 | 29,425 | |
Operating income | 2,811 | 4,638 | 11,484 | 12,765 | |
Income (loss) before income tax expense | 2,811 | 4,638 | 11,484 | 12,765 | |
Net income (loss) | 2,811 | 4,638 | 11,484 | 12,765 | |
Net income (loss) attributable to Cohen & Company Inc. | 2,811 | 4,638 | 11,484 | 12,765 | |
Depreciation and amortization (included in total operating expense) | 17 | 21 | 54 | 92 | |
Unallocated [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total operating expenses | [1] | 1,822 | 1,987 | 6,181 | 6,640 |
Operating income | [1] | (1,822) | (1,987) | (6,181) | (6,640) |
Interest expense, net | [1] | (1,606) | (991) | (4,330) | (2,973) |
Income (loss) before income tax expense | [1] | (3,428) | (2,978) | (10,511) | (9,613) |
Income tax expense (benefit) | [1] | 141 | 130 | 148 | 157 |
Net income (loss) | [1] | (3,569) | (3,108) | (10,659) | (9,770) |
Less: Net income (loss) attributable to the non-controlling interest | [1] | (211) | 489 | 274 | 925 |
Net income (loss) attributable to Cohen & Company Inc. | [1] | (3,358) | (3,597) | (10,933) | (10,695) |
Depreciation and amortization (included in total operating expense) | [1] | 43 | 45 | 133 | 128 |
Capital Markets [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Net trading | 5,988 | 10,486 | 20,158 | 31,973 | |
New issue and advisory | 2,012 | 811 | 3,992 | 2,176 | |
Principal transactions and other income | (2) | 30 | 4 | 140 | |
Total revenues | 7,998 | 11,327 | 24,154 | 34,289 | |
Total operating expenses | 6,053 | 8,556 | 20,576 | 26,662 | |
Operating income | 1,945 | 2,771 | 3,578 | 7,627 | |
Income (loss) before income tax expense | 1,945 | 2,771 | 3,578 | 7,627 | |
Net income (loss) | 1,945 | 2,771 | 3,578 | 7,627 | |
Net income (loss) attributable to Cohen & Company Inc. | 1,945 | 2,771 | 3,578 | 7,627 | |
Depreciation and amortization (included in total operating expense) | 16 | 20 | 51 | 90 | |
Asset Management [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Asset management | 1,779 | 1,781 | 6,202 | 5,662 | |
Principal transactions and other income | 230 | 441 | 4,995 | 1,541 | |
Total revenues | 2,009 | 2,222 | 11,197 | 7,203 | |
Total operating expenses | 1,042 | 779 | 3,521 | 2,394 | |
Operating income | 967 | 1,443 | 7,676 | 4,809 | |
Income (loss) before income tax expense | 967 | 1,443 | 7,676 | 4,809 | |
Net income (loss) | 967 | 1,443 | 7,676 | 4,809 | |
Net income (loss) attributable to Cohen & Company Inc. | 967 | 1,443 | 7,676 | 4,809 | |
Depreciation and amortization (included in total operating expense) | 1 | 1 | 3 | 2 | |
Principal Investing [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Principal transactions and other income | (6) | 541 | 516 | 698 | |
Total revenues | (6) | 541 | 516 | 698 | |
Total operating expenses | 95 | 117 | 286 | 369 | |
Operating income | (101) | 424 | 230 | 329 | |
Income (loss) before income tax expense | (101) | 424 | 230 | 329 | |
Net income (loss) | (101) | 424 | 230 | 329 | |
Net income (loss) attributable to Cohen & Company Inc. | $ (101) | $ 424 | $ 230 | $ 329 | |
[1] | Unallocated includes certain expenses incurred by indirect overhead and support departments (such as the executive, finance, legal, information technology, human resources, risk, compliance, and other similar overhead and support departments). Some of the items not allocated include: (1) operating expenses (such as cash compensation and benefits, equity-based compensation expense, professional fees, travel and entertainment, consulting fees, and rent) related to support departments excluding certain departments that directly support the Capital Markets business segment; (2) interest expense on debt; and (3) income taxes. Management does not consider these items necessary for an understanding of the operating results of these business segments and such amounts are excluded in business segment reporting to the chief operating decision maker. |
Segment and Geographic Inform77
Segment and Geographic Information (Reconciliation Of Assets From Segment To Consolidated) (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 | |
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Total assets | $ 690,255 | $ 561,271 | |
Goodwill | [1] | 7,992 | 7,992 |
Intangible assets | [1] | 166 | 166 |
Operating Segments [Member] | |||
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Total assets | 673,712 | 555,778 | |
Goodwill | [1] | 7,992 | 7,992 |
Intangible assets | [1] | 166 | 166 |
Unallocated [Member] | |||
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Total assets | [2] | 16,543 | 5,493 |
Capital Markets [Member] | |||
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Total assets | 665,216 | 542,364 | |
Goodwill | [1] | 7,937 | 7,937 |
Intangible assets | [1] | 166 | 166 |
Asset Management [Member] | |||
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Total assets | 2,682 | 4,973 | |
Goodwill | [1] | 55 | 55 |
Principal Investing [Member] | |||
Segment Reporting, Asset Reconciling Item [Line Items] | |||
Total assets | $ 5,814 | $ 8,441 | |
[1] | Goodwill and intangible assets as of September 30, 2017 and December 2016 are allocated to the Capital Markets and Asset Management business segments as indicated in the table above. | ||
[2] | Unallocated assets primarily include: (1) amounts due from related parties other than receivables from employees which are allocated; (2) furniture and equipment, net; and (3) other assets that are not considered necessary for an understanding of business segment assets. Such amounts are excluded in business segment reporting to the chief operating decision maker. |
Segment and Geographic Inform78
Segment and Geographic Information (Revenue By Geographic Area) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total Revenues | $ 10,001 | $ 14,090 | $ 35,867 | $ 42,190 |
United States [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total Revenues | 7,604 | 12,758 | 29,499 | 38,309 |
United Kingdom & Other [Member] | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Total Revenues | $ 2,397 | $ 1,332 | $ 6,368 | $ 3,881 |
Supplemental Cash Flow Disclo79
Supplemental Cash Flow Disclosure (Narrative) (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Debt Conversion [Line Items] | ||||
Interest paid | $ 3,919,000 | $ 2,079,000 | ||
Income taxes paid | 47,000 | 276,000 | ||
Income tax refunds | 83,000 | 16,000 | ||
Legal and financial advisory fees | $ 1,666,000 | $ 1,513,000 | 5,694,000 | 4,718,000 |
Debt issued | 71,373,000 | 71,373,000 | ||
8.00% Contingent Convertible Senior Notes Due 2022 [Member] | ||||
Debt Conversion [Line Items] | ||||
Debt issued | 15,000,000 | 15,000,000 | ||
Debt fee | $ 600,000 | 600,000 | ||
Additional paid-in capital [Member] | ||||
Debt Conversion [Line Items] | ||||
Redemption of non-controlling interest, net | 153,000 | (552,000) | ||
Accumulated Other Comprehensive Income (Loss) [Member] | ||||
Debt Conversion [Line Items] | ||||
Redemption of non-controlling interest, net | (14,000) | 49,000 | ||
Non-controlling Interest [Member] | ||||
Debt Conversion [Line Items] | ||||
Redemption of non-controlling interest, net | (139,000) | $ 503,000 | ||
Daniel G. Cohen [Member] | ||||
Debt Conversion [Line Items] | ||||
Legal and financial advisory fees | $ 600,000 |
Related Party Transactions (Nar
Related Party Transactions (Narrative) (Details) - USD ($) $ in Thousands | Sep. 29, 2017 | Jul. 31, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2013 |
Related Party Transaction [Line Items] | |||||||||
Securities sold under agreement to repurchase | $ 448,133 | $ 448,133 | $ 295,445 | ||||||
Fair value of securities pledged as collateral under repurchase agreements | 466,958 | 466,958 | 309,256 | ||||||
Cash and cash equivalents | 22,133 | $ 10,085 | $ 22,133 | $ 10,085 | 15,216 | $ 14,115 | |||
Company matching percent | 50.00% | ||||||||
Percent of employees gross salary qualifying for matching contributions | 3.00% | ||||||||
Company plan contributions | 41 | 40 | $ 177 | 188 | |||||
Proceeds from investment | 11,000 | ||||||||
EBC Family Trust [Member] | |||||||||
Related Party Transaction [Line Items] | |||||||||
Notes payable, related parties | $ 2,400 | ||||||||
Value of shares issued | 1,600 | ||||||||
Related Party Transaction, Amounts of Transaction | $ 4,000 | ||||||||
TBBK [Member] | |||||||||
Related Party Transaction [Line Items] | |||||||||
Securities sold under agreement to repurchase | 65,131 | 65,131 | 39,221 | ||||||
Fair value of securities pledged as collateral under repurchase agreements | 67,888 | 67,888 | 41,177 | ||||||
Interest Expense, Related Party | 370 | 146 | 930 | 301 | |||||
Cash and cash equivalents | 115 | 115 | 43 | ||||||
Edward E. Cohen IRA [Member] | |||||||||
Related Party Transaction [Line Items] | |||||||||
Interest Expense, Related Party | 109 | 107 | 322 | 317 | |||||
JKD Capital Partners I, LTD [Member] | |||||||||
Related Party Transaction [Line Items] | |||||||||
Interest Expense, Related Party | 210 | 465 | |||||||
Maximum investment from related party | 12,000 | ||||||||
Proceeds from investment | 1,000 | $ 6,000 | |||||||
CBF Cohen Bros. Financial [Member] | |||||||||
Related Party Transaction [Line Items] | |||||||||
Related Party Transaction, Amounts of Transaction | $ 8,000 | ||||||||
DGC Family Fintech Trust/CBF [Member] | |||||||||
Related Party Transaction [Line Items] | |||||||||
Interest Expense, Related Party | 0 | 0 | |||||||
Related Party Transaction, Amounts of Transaction | 10,000 | ||||||||
DGC Family Fintech Trust [Member] | |||||||||
Related Party Transaction [Line Items] | |||||||||
Related Party Transaction, Amounts of Transaction | $ 2,000 | ||||||||
Fin Tech Acquisition Corp. [Member] | |||||||||
Related Party Transaction [Line Items] | |||||||||
Related parties, agreement period for accounting and support services | 24 months | ||||||||
Board of Directors Chairman [Member] | |||||||||
Related Party Transaction [Line Items] | |||||||||
Revenue from Related Parties | 0 | $ 6 | 11 | $ 16 | |||||
Board of Directors Chairman [Member] | Corporate High Yield Investment Group of Zucker Moore, LLC [Member] | |||||||||
Related Party Transaction [Line Items] | |||||||||
Related Party Transaction, Expenses from Transactions with Related Party | $ 31 | $ 41 | |||||||
Contingent Convertible Senior Notes [Member] | Edward E. Cohen IRA [Member] | |||||||||
Related Party Transaction [Line Items] | |||||||||
Convertible notes purchased | $ 4,386 |
Related Party Transactions (Sch
Related Party Transactions (Schedule Of Related Party Transactions) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Related Party Transaction [Line Items] | ||||
Net trading | $ 5,988 | $ 10,486 | $ 20,158 | $ 31,973 |
Professional fee and other operating | 1,666 | 1,513 | 5,694 | 4,718 |
TBBK [Member] | ||||
Related Party Transaction [Line Items] | ||||
Net trading | 13 | |||
Interest expense incurred | 370 | 146 | 930 | 301 |
E.B.C. [Member] | ||||
Related Party Transaction [Line Items] | ||||
Interest expense incurred | 59 | 58 | 176 | 173 |
Edward E. Cohen IRA [Member] | ||||
Related Party Transaction [Line Items] | ||||
Interest expense incurred | 109 | 107 | 322 | 317 |
JKD Capital Partners I, LTD [Member] | ||||
Related Party Transaction [Line Items] | ||||
Interest expense incurred | 210 | 465 | ||
DGC Family Trust [Member] | ||||
Related Party Transaction [Line Items] | ||||
Interest expense incurred | 359 | 794 | ||
Fin Tech Acquisition Corp. [Member] | ||||
Related Party Transaction [Line Items] | ||||
Other revenue | 1 | 1 | ||
Mead Park Advisors LLC [Member] | ||||
Related Party Transaction [Line Items] | ||||
Professional fee and other operating | 50 | 50 | 150 | |
Affiliated Entity [Member] | ||||
Related Party Transaction [Line Items] | ||||
Net trading | 13 | |||
Other revenue | 1 | 1 | ||
Professional fee and other operating | 50 | 50 | 150 | |
Interest expense incurred | $ 737 | $ 165 | $ 1,757 | $ 490 |
Due from _ Due to Related Par82
Due from / Due to Related Parties (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Related Party Transaction [Line Items] | ||
Due from Related Parties | $ 547 | $ 57 |
Due to Related Parties | 50 | |
Employees [Member] | ||
Related Party Transaction [Line Items] | ||
Due from Related Parties | $ 547 | 57 |
Mead Park Advisors LLC [Member] | ||
Related Party Transaction [Line Items] | ||
Due to Related Parties | $ 50 |