Good morning ladies and gentlemen, thank you for standing by. Welcome to the Second Quarter 2010 Cohen & Company Inc. Earnings Conference Call. My name is Wes and I will be your operator for today. During the presentation, all participants will be in a listen-only mode. After the speakers’ remarks, you will be invited to participate in a question-and-answer session. (Operator instructions). As a reminder, this conference is being recorded. Before we begin, the company has asked me to read the following statement: you are cautioned that many statements made during this call are forward-looking statements that are based on assumptions regarding the economy and financial markets that are subject to a number of risks and uncertainties as set forth in the company’s earnings release and at SEC filings. Please read the statement in today’s release regarding forward-looking information. I would now like to hand the call over to your host for today’s call, Mr. Daniel Cohen, Chairman and CEO; please proceed

Thank you Wes and thank you everyone for joining us for our second quarter results conference call. With me on the call are Chris Ricciardi, the President and head of our capital markets business, and Joe Pooler, our CFO. We will discuss the second quarter results, our ongoing capital markets business and its continued development and the impact of our recent strategic transactions and global developments on our business. I will give an overview and discuss briefly the recent strategic transaction where we monetized our bank’s CDO management fees. Chris will then talk about the capital markets business and the impact of financial reforms and Joe will give some detail on the financial results and some financial color on our recent transaction. We were happy with the quarter, we were happy with the development of the business and we were happy with freeing financial resources to pursue our growth in the capital markets principal investment and new growth asset management businesses. Our results continue positively. We earned $0.20 per share. We experienced growth in our trading revenues of over 100% year-on-year. We continued to develop new capital markets businesses and we completed our second new issue of the year in fixed income. We announced a new dividend which reflects our confidence in the continued cash resources of our business. Our adjusted net income of $0.40, which represents operating income computing in accordance with GAAP before depreciation and amortization, impairments of intangible assets and share-based compensation expense, all items that are non cash reflect the strength of our ongoing overall businesses. And these are businesses that we are committed to grow. Our asset management revenue from our CDO management business continued to shrink, but in a difficult environment to raise capital, we’ve had some success. Our Deep Value funds in our…

Okay, thank you Daniel and good morning everyone. Those of you who listened to what I said during last quarter’s call will find this quarter’s message to be substantially similar. Second quarter was very much like the first quarter for our core capital markets business, and our core capital markets business is generally developing according to our plan. Before we go into specific issues, I may restate some of our basic philosophy and strategy. There are several core beliefs, one is that the credit market generally defined is the area of greatest opportunity for us, the credit market is large and diverse, generally very profitable and more importantly, we’re quite experienced and well known among our clients in the area. In other words, we’re very competitive in this space. Across the market, the second quarter was difficult for trading of the more commoditized credit products, principally investment-grade corporate bonds, and our experience was no different from our competitors. However, our business mix and strategy is substantially different such that we do not see a significant drop in our overall trading revenue relative to prior quarters. In fact, we’re up reasonably from most prior quarters. Only our investment-grade corporate bond business experienced reduced revenues this quarter. All other areas reported better results than prior quarters. This shows one view into the benefits of our strategy. For example, we’re not over-reliant on any one product area like corporate bond trading but also trade all types of structured products such as mortgage-backed securities. We have capabilities in agency and non agency mortgage-backed securities, residential and commercial, CLOs, CBOs, SBAs and brokered deposits. We also maintained our core belief in client coverage diversity. By this, we mean we prefer to cover many different types of clients. We find that this enhances our own business…

Thank you, Chris. We’ll start with some brief remarks on the P&L and then we’ll talk a little bit about the quarter ending balance sheet and then follow up with some color on the strategic transactions we announced last week. In our statement of operations for the quarter, we experienced significant improvement in all profitability measures compared to the prior year period. Our stronger capital position continues to allow us to capitalize on opportunities and trading and principal investing. Our net revenue increased over 15 million from the prior year period to 35.8 million and our operating income increased 6.5 million to a positive 4.7 million. We reported fully diluted earnings per share of $0.20 and we’re pleased to initiate a quarterly dividend of $0.5 per share. Our net trading revenue increased 103% from the prior year period, primarily as a result of our increase in overall capital markets headcount to 101 employees as of June 30, 2010 compared to 47 at the prior year period, and improved results as we continue to transition to a strategy of using some risk capital. We continued expanding our capital markets segment including additions in our European operation in the hiring of a team of 10 professionals to build out our agency brokerage business offering execution and brokerage services for cash equity and derivatives products. In the new issue and advisory revenue category, we earned 1.4 million in the second quarter, including engagements as the placement agent for a €68 million new issue for a European bank and as an advisor to an alternative asset manager in an asset sale transaction. Our principal transactions and other revenue was 8.5 million, which included gains on our investments and storage of finance, our Deep Value fund and another Strategos principal position. The revenue gains in…

Okay, thanks Joe. Just to recap the highlights, we had $0.20 in earnings this quarter or $0.47 for the first half, we declared a $0.5 dividend as we monetized 40% of our asset management revenue and raised cash to really deploy into our new businesses. We are happy with what we sold and we are happy with what we retained. We feel the company continues to be positioned well as we grow new businesses in the capital markets and we believe that there may be opportunities that are open for us as a focus fixed income dealer in the financial reform bills. So on that note I’ll open it up to questions Wes. Thank you.

(Operator instructions).

Hello.

And your first question comes from Eric Foster of Helsey & Cabot

Hi Eric Eric Foster - Helsey & Cabot: Hey, good morning. Congratulations -- solid quarter; great dividend; everything looks fabulous. But I don't think enough people really know the Cohen story. And what do you intend to do in terms of getting the word out, getting better or more aggressive IR? Or are you just going to let your earnings continue to expand and have people pick up on how undervalued your security is? Thank you very much

Well, thanks for your comments. We certainly -- our basic intention is to try to get as many people interested in what we are doing. We’ve had now our second quarter of good results, we’ve had a strategic transaction that values 40% of our CDO asset management revenue at 44.5 million which implies a substantial greater value than in the 100% and even our market capitalization. We have a growing fixed income broker dealer business that continues to fill a niche in the marketplace and continues to find new niches to fill while being balanced out across the whole entire credit spectrum. We have been busy certainly doing that while trying to reduce our expenses. Our intention is to try to get out and to talk to more people. We always welcome the opportunity to do so. One of the top priorities of the company over the next 6 months is certainly to try to do that. Eric Foster - Helsey & Cabot: Great, thank you.

Your next question comes from Mark Davis of Davis-Ross Investments.

Good morning. Looks like you did an excellent job this quarter and certainly transitioning the company well. How does the sale of Alesco affect your future expenses and income? What do you think the real impact is here on headcount? And I noticed yesterday that there was a statement by Cascade Bank Corp. that they're going to be a nuisance here potentially going forward. What were your thoughts about the prospective legal action they talked about taking? Thank you

Well I’ll just -- first, let’s start with Cascade Bank. We don’t make any comments publicly on any pending legal matters arising out of contract disputes. Let me turn it over to Joe to answer the rest of the questions.

Yeah, in terms of the revenue, the P&Limpact to the Alesco transaction -- the accounting for the Alesco transaction is such that they will be very little difference from the current run rate for the next 3 years as the total aggregate proceeds of the services agreement and the sale agreement will be amortized straight line into revenue through 2013. Comparing that to our current monthly run rate, it’s maybe 50 to $75,000 more. The earn-out could provide incremental P&L and we announced our current projections are in the range of $12 million, obviously that depends on the level of default and prepayments in the securitization.

Thank you.

Thank you.

Your next question comes from Dan Orlow of Tensor

Good morning. Congratulations for the quarter

Hey Dan

Good morning. I just had three sort of questions. And I jumped on the call late, so my apologies if they've been covered. And we can pick it up offline. I certainly don't want to waste everyone's time. First is, could you talk a little bit about where you think the capital is best deployed? And in the context of that, did you -- is there a metric that we should be thinking about in terms of a metric of profitability going forward that you think is the right metric for investors to focus in on? And the second sort of prong is this question, as you think about redeploying some of the capital back into the businesses, how much of that do you think would be guided by the regulatory scheme as it's changed across the financial services landscape? And is this in the pattern of helping firms restructure for capital needs or is it as other firms just find it a more difficult environment to work in, is there more niche market opportunities for you guys to pursue and teams that are available in the market that have lively books of businesses that just are looking for a friendlier environment? Thanks.

Okay well, I guess if you don’t mind, I’ll just sort of regroup them into two sets of questions one of which is there a metric that we can look at in terms of looking at net income. In our business, frankly, revenue is the most important metric that translates directly into net income. The way we’d like to think of our business when this fixed income side or across the entire business as we’d like to -- and it won’t be constant over the period managed to our compensation as a percentage of revenue and then have it fixed; and it’s smaller fixed not as we can manage to overcome below that. Our focus is really having as many “troops on the frontline” as possible. We don’t have a -- what we done new issue business. We’ve done that without a large investment banking force that’s something we’ll never have so our goal is to keep our compensation marginal while our fixed not as small as possible and that’s really the same over the growing asset management businesses and the continuing asset management businesses as well as over our fixed income training platform and our principal investment businesses with probably less -- balancing out at some compensation metric number. But the biggest indicator will continue to be revenue. And then as to how we deploy the cash, Joe do you want to elaborate on that response in any way?

The other thing I’d say about -- I mean the performance metrics that we focus on are normal income -- operating income. The one thing that I’d say is that our net income before minority interest we focus on that more than the bottom line net income just because our minority interest is a little bit unconventional and that it’s convertible one for one so we are focused on operating income, adjusted operating income after backing out conventional noncash items such as dot com; and depreciation and amortization. And as the management of the business, we are focused on minimizing our fixed expenses and keeping all of our revenues marginal to our compensation and that’s the way that we are certainly running this face of the business. I would say for what is our historic compensation rates in over the first two quarters

65%.

65%, although it’s subject to fluctuation. And as to how we are really going to deploy the cash that we generated, there are 3 basic or 4 basic components, I think certainly we are looking to grow our trading book of business in areas where we think there is high volume ticket -- low margin high volume -- maybe not low margin but small ticket size higher volume business where we think we can make money and really feel a need touching as many customers as possible. Secondly, our model is a capital light model so our goal is we don’t deploy capital in terms of facilitating large trades with customers. So the cash will be used in terms of increasing some of our ability to position bonds but that’s really secondary in other primary use. Thirdly, we continue look to grow the business in whatever way possible in the asset management. And fourthly, there may be uses for the capital on the principal investment side where we think that it adds to a growing business in the configuration of our business. I don’t see any regulatory derivative to deployment of capital. We may take advantage of opportunities to deploy capital in a new trading environment for derivatives.

This is Chris. I mean as I said, we are watching closely how things unfold with the derivatives. Legislation, it is potentially a whole new business line for us and one that’s been historically profitably for 10 to 12 banks in the country and the intent of the legislation it seems is to open that up to transparency and liquidity in a lot more competition and so if that becomes a reality, that could be an opportunity for us and we think that like the other fixed income businesses we have we, it will require some amount of facilitation capital. Again, not huge principal investments but rather clients have a certain execution standard in mind when they want to deal with brokers and you need some amount of facilitation capital and fixed income that’s the way that that business works and though some have tried do it without that, that only really works in certain points in time. So if you want to have high quality of trading revenue and hope that that is sustainable and be relevant to our clients we need to have some amount of facilitation capital in our capital light strategy.

It’s not a question about your discipline or prudence, I think that the numbers speak to that. It’s really trying to gauge the size and scale of the market opportunity given the fact that given your -- given your own interest in the company I can’t imagine you guys looking to shake it through without thinking of what’s going to fall out of it.

The potential area of opportunity is enormous. I mean the credit market which is stated a couple of times is one of the reasons we focus on it, are extremely large diverse and profitable markets both in the cash and the derivatives side. There is still a lot more we can do in the cash side obviously we’ve only scratched the surface for both new issue and trading but then opening it up to the derivatives market is enormous as well. I mean it’s literally a multi dollar billion a year business for 8 to 10 banks in the country.

I guess my point would be that this has not been a story for you about asset recovery values. This is actually, you're on the glide path of growth; both because of the change in the market architecture, as well as your own organic direction.

Yeah, we feel that the configuration of Wall Street has left us with a real opportunity in front of us that we can continue in terms of this markets for years and years and years in the verticals that we operate today, augmenting them in things that are tangential to them.

Anyway, thanks. I'll get back in queue. Thanks for your time. Congratulations.

Thanks.

(Operator instructions). Our next question comes from Herbert Lust of Greenwich Fine Arts

Hello. I'm a private investor. I own about 100,000 shares, which I've bought a little bit start since December through Alesco and invested in commercial REITs for 30 years. I want to say that your last conference call and this one are the best I ever heard. I mean, it's really thorough and very reassuring to investors. The only question I have is, I always wondered how you handle this Alesco thing; you’re billions of dollars. It wasn't reflected on your balance sheet. That's what interests me. If I'm understanding right, you're doing everything you can to get rid of Alesco and get it off -- it's off balance in some way or the other, but my question is very simple; how much of Alesco is left on your off balance sheet, and how are you going to handle it?

Well, in general, all of the -- when we talk about on balance sheet or off balance sheet, we are really looking at debt. The sale of the Alesco contract where this really the sale of the management of CDOs which are basically companies which have amalgamations of underlying fixed income instruments which are then financed. So in terms of looking at what affect that we have on balance sheet from the Alesco positions, we do have trading positions on Alesco from time to time where we are facilitating trades for fixed income investors in the structure bonds that were issued by Alesco and other fixed income vehicles. But besides that, I believe that it’s almost zero; Joe.

Yeah that’s right. The investments that the pre-merger Alesco had prompted the consolidation of all those securitizations. When we deconsolidated post-merger, we carry those on a single line at their fare value and they’re virtually zero at this point.

Just one other point of clarification; so you know the things that we sold in this recent transaction were management contracts. They were owned by Cohen prior to the merger, not by Alesco, the merger partner, just they relate to the management of a separate thing, Alesco CDOs, but they were management contracts that had been owned by Cohen for years.

Yeah, and as to what debt that we have off balance sheet relating to this, I don’t believe we have any debt off balance sheet relating to Alesco. Did that answer the question?

And that this time I’m showing no further questions. I’ll turn the conference back to Mr. Cohen for any closing remarks.

Well, thank you everybody for asking questions. We very much appreciate it, we like talking about our business, we like clarifying what we’ve been doing for investors and now hopefully we’ll go back to the large opportunity set that we have in front of us. Thank you. Bye bye.

And ladies and gentlemen that concludes the Cohen & Company second quarter 2010 earnings conference call. We appreciate your time. You may now disconnect.