Good morning ladies and gentlemen and welcome to Cohen & Company, Inc.’s third quarter earnings conference call. My name is Wes and I will be your operator for today. At this time all participants have been placed in a listen only mode. Following formal remarks, the call will be opened to a question-and-answer session and instructions will be provided at that time. As a reminder, this conference call is being recorded. Before we begin, Cohen & Company would like to remind everyone that some of the statements the company makes during the call may contain forward-looking statements under applicable securities laws. These statements may involve risks and uncertainties that could cause the company’s actual results to differ materially from the results discussed in such forward-looking statements. The forward-looking statements made during this call are made only as of the date of this call and the company undertakes no obligation to update such statements to reflect subsequent events or circumstances. Cohen & Company advises you to read the cautionary note regarding forward-looking statements in its earnings release and in its most recent annual report on Form 10-K filed with the SEC. In addition, this morning’s discussion also includes non-GAAP financial measures that Cohen & Company believes may be helpful to investors. In the company’s earnings release, non-GAAP measures have been reconciled to GAAP where required in accordance with SEC regulations. I would now like to turn the call over to Mr. Daniel Cohen, Chairman and CEO of Cohen & Company.

Thank you for joining us for our third quarter earnings conference call. With me on the call are Chris Ricciardi, President of the company and the head of our Capital Markets business and Joe Pooler, our CFO. During today’s call we will discuss our third quarter results, the ongoing development of our Capital Markets business and the impact of our acquisition of JVB on our businesses. Overall, we are happy with our third quarter results and with the development of our businesses. We remain focused on pursuing growth in the capital markets, principal investment and new growth asset managed businesses. But we did experience a goodwill impairment charge associated with the successful wind down of our first distress mortgage fund. Our results remain positive. We experienced growth in our trading revenues, close to 30% year on year and generated $6.6 million of adjusted operating income. Also in the quarter, we announced our second quarterly dividend, which reflects our confidence in the continued cash generation of our business. Our year to date adjusted operating income per fully diluted share of $1.32 is a testament to the strength of the ongoing business. Chris will now discuss our capital markets business and some of our growth opportunities.

Thank you Daniel. I’ll briefly discuss developments in our Capital Markets business. First of all, I think the message contained in our trading results is fairly clear. While we face many of the same challenges that our competitors have broadly reported, where we are in our development cycle and our product mix means that we’re still experiencing growth since last year. We saw nearly 30% increase in net trading revenue relative to our 2009 Q3 results, where many of our competitors seem to have had an approximately 40% decline over the same period. We attribute these results in part to where we are in our maturity cycle. From last year, we’ve added many additional resources and capabilities. Sales personnel have increased. We increased the use of capital in our trading operations and we added additional product capabilities. We also believe that our product mix tends to be less impacted by the trading volume decreases seen broadly in flow credit and equities products. We have a broader mix of product revenue, including a proportion of our business in mortgage asset backed and structured products. One can also see the effects of the general market slowdown in our second to third quarter trading revenues, which are down about 30%. Going forward, we plan to continue to build out our sales and trading capabilities in ways we believe will be successful. Despite the momentum in market share gains from last year, we feel as though there are greater gains to be had. For example, until recently, we’ve not had the benefit of a properly suited prime brokered clearing relationship. In October, we changed our clearing firm to Pershing in an effort to enhance those services. Compared to what we had before, this provides us with several advantages. We’ll be able to open with…

Thank you Chris. In our statement of operations for the third quarter we continued to generate strong adjusted operating income. Our adjusted operating income increased $4.5 million from the prior year period to $6.6 million or $0.42 per fully diluted share. We are also happy to continue the quarterly dividend of $0.05 per share. Our net trading revenue increased close to 30% from the prior year period as we continue to invest in our capital markets platform. As of September 30, we had capital market head count of 97 compared to 61 as of the same period last year. We also continue to benefit from the use of some risk capital in our capital markets business. We had $56 million of net equity capital invested in our net trading portfolio at the end of the quarter. Our principal transactions and other revenue was $3 million for the quarter, which included gains on our investments in the first deep value fund and Euro Decennia. We continue to experience declining revenue in our asset management segment versus the prior year period, driven primarily by shrinking revenue from the management of collateralized debt obligations. The decrease of $1.2 million in CDO asset management revenue was partially offset by a $300,000 increase in investment fund and other asset management revenue. It is noteworthy that the first of our deep value mortgage funds is in the final phase of a profitable wind down with a life to date return of over 80% for its investors including Cohen. We invested $15 million in the fund. We also realized a $6 million incentive fee upon the wind down of the fund. This $6 million incentive fee was included as a component of income from equity method affiliates in our statement of operations. Our operating expenses for the…

Thank you Joe. As you can see with the acquisition of JVB financial, the continued development of our trading businesses is the build of our capital markets platform. The continued development of our asset management business is, we are happy with our quarter with the exception of some of our expenses which are one time, and a charge against the non-tangible goodwill of the company. With those remarks, I’ll open it up for questions.

(Operator Instructions) Your first question comes from Dan Orlow of Orlow & Orlow. Dan Orlow – Orlow & Orlow: Hi. Good morning. Congratulations on the quarter. A couple of different questions. One is, can you talk a little bit about the competitive position of the company in terms of some of the investments you’ve made and some of these business lines open up, meaning be it SBA or new issue or how you’re positioned for if the CLO and CDO market continues to sort of expand again. And then I have some follow on questions, so I’ll just start there, and if you want me to back in queue I will.

Oh no, please we’ll take the other questions and I appreciate you asking them one at a time. So all the things mentioned, the CLO business, the CDO business, structured finance new issues, these are what we really consider the core of the company. So in terms of our operating earnings that we’re delivering today, we think they’re very much a baseline of what we can do if new issues in structured finances in some way do come back. That having been said, we are going to have silos that aren’t performing on a regular basis. That’s just the nature of having a diversified trading platform. We haven’t chosen to diversify further afield yet because we certainly haven’t found the right match. But I think that in terms of client development, this has been a period when we’ve really been able to do so and simply earn money by trading for clients. The asset management business for managers our size has not been an easy environment to raise money in, but we’ve had as we can see from our incentive performance and our performance on our deep value funds, good performance. Elsewhere we have buds that are growing into flowers and we look forward to develop that side of the business and it does contribute revenue, but we think that we’ve actually hit a point in that business development where we can see an upward path. Chris or Joe, do you want to elaborate?

I guess the only thing I would add is that we have started some securitizations that are potentially successful and specifically there have been some new CLO’s that have been done. There’s one for LCM. There’s one for Apollo. The newswires in the last weeks, so they’re starting to happen for frequency and regularity and that’s a very encouraging sign. And the other area that is starting to build is the CMDS new issue. I think both of these areas, CMDS, I mean we’ve tracked this cycle before. When you see the secondary trading spreads get to certain levels, you have the new issue securitizations again and now you’re starting to see those bubbles at attractive rates such that you can actually do new issues. So that’s extremely encouraging. It’s still small in the scheme of things and a fraction of what it was with the height before it tipped over the edge, and so I think that you can see the upside from here and it has been very encouraging, but there’s still a long way to go. Dan Orlow – Orlow & Orlow: In terms of thinking about how – are some of those, transaction on the market with Sandler and Neill, how should we think about your franchise. I mean, what are the comparable vehicles in the market and as people continue to rethink their strategies in capital markets. I mean obviously you’ve made a decision in term of JVB, is there that kind of large scale risk appetite for these types of specialty operations.

Well I think that the key element is that they tend to attract the greatest interest when the vertical that they’re really in, their core vertical is doing particularly well, so with Sandler & Neill, they’re a great financial institution M&A shop that’s looking like it will gear up. There’s a lot of visibility on that. Today there’s less visibility in what we do, so I think that we have a lot of upside in our value and we wouldn’t necessarily pay outrageous rates for capital to expand it. Dan Orlow – Orlow & Orlow: If I hear correctly from the call, it sounds like there’s $21 million in cash that’s available to be recycled. Am I hearing that correctly because there’s the $15 million investment plus the $6 million incentive fee assuming it was paid on an earn out basis, not on an earn out final basis. Is that accurate? Is that $21 million in cash generally available now for you to – for another use?

Well some of it is part of our existing cash capital base, and some of it will come in, in terms of it being available for being recycled as the wind down of the funds in the cash sense gets done in the fourth quarter.

That’s correct. The incentive fee was not in our cash balance at the end of the quarter and the funds started returning principal really about a year ago, so there was a significant amount of the principal and return on the principal in the cash at the end of the quarter. Dan Orlow – Orlow & Orlow: Is there more principle expected?

Yeah, there’s still a – the fund itself was mostly cash at the end of the quarter, but had not distributed everything, so we’ll collect our incentive fee plus a little bit more return/principal in the fourth quarter. Dan Orlow – Orlow & Orlow: So then my final question. I really will get back in queue. As you think about the Pershing relationship, can you talk a little bit more granularly about what type of rates you’re seeing in terms of cash financing for inventory and how you’d expect that to move in terms of expected yield on the grossed up basis, because it just seems to me like a lot of your capacity is to offer that type of storage facility out there, and (inaudible) that type of relationship. So as you deploy more capital, your grosses will go higher and maybe you’ll even get better pricing on incremental yield basis. So your volume and margin will both expand. I’m just trying to understand how that dynamic will flow through from your perspective over the next couple quarters.

Chris, do you want to answer that?

Sure. A couple of points. There are all different types of bonds and all different types of financing rates so I can’t give you ... Dan Orlow – Orlow & Orlow: I know it’s ...

... but the terms of the impact, what we’re clearly expecting and hoping to do, is to deploy really sort of the same capital we’ve already been deploying but with the advantage of having now better financing rates, we can run. If before we had a bond at a 6% yield, and we weren’t financing it at all, we’re paying all capital for it and now if you can get Fed funds based financing on those same bonds, you can see that it has a net interest margin or carry potential which is quite attractive, and that is the norm. I think throughout the street among our competitors, we just didn’t have that in place before, so using roughly the same amount of capital that we’ve always had, with the better financing, it allows us to run larger inventory which has more touch points for trading, and of course has potential for the higher carry, especially in this environment where borrowing rates are extremely low as everyone knows. And then it does allow us to do underwritings. Let say for an example, in the agency debt deals which are larger because we have the ability to finance the underwritings and on a net capital basis that we really couldn’t do before without the financing. So I think in general terms, that’s what we’re expecting. My final point on that is that we really just put it in place in October, so it’s going to take a couple of quarters to realize the full benefits of that. Dan Orlow – Orlow & Orlow: Again, it’s more of a strategic question than looking or you’re just adding 150 basis points of yield on your current portfolio or something. All right, I’ll get back in queue. Thank you.

Let me just – one other point on Sandler, it’s interesting that you brought it up. I mean they are, as Dana mentioned, they’re not exactly the same as us of course. They have some businesses which are much more fully developed than ours for example. Dan Orlow – Orlow & Orlow: And of course, they’re a great firm too.

They are a great firm. They’re actually, for those who didn’t know, they were our partner in the first pooled bank trust preferred deals that we did, the first three deals, and so we have a good working relationship with them, and have worked on a lot of things in the past. There are some things that they have that are more developed than ours, like their bank M&A activities like their equity capital markets. But in some other ways they’re very similar. We have fixed income trading operations that I think are very similar, and we have some things that they don’t have that probably would like to grow bigger like bigger asset management business. So, but it is an interesting comparable in the market and we’re glad that they’re getting this transaction done. Dan Orlow – Orlow & Orlow: Thanks. Nice quarter guys. Congratulations.

Thank you.

Your next question comes from Rick Sherman of Oppenheimer. Rick Sherman – Oppenheimer: Hi. I’ve got a couple of questions just to clarify my understanding of your structure of these partnership units. Are they just convertible into common stock on a one for one basis?

Yes. They’re convertible into common stock on a one for one basis and they’re useful in that they both help the company preserve some of our tax benefits and help those partners in the old Cohen & Company not to trigger tax gains on phantom income. Rick Sherman – Oppenheimer: OK. So when the one’s that you’re issuing for JVB, are they of the same type as the ones that are currently outstanding and do these pay dividends or anything and are they convertible at will pretty much to the holder when they want or is there some other way this is done?

Joe, do you want to answer that?

Yeah, the JVB units will be convertible similar to the existing units on a one unit for one share basis, but there is a vesting provision, so they won’t be immediately convertible. They’re be convertible over a three year period basically. Rick Sherman – Oppenheimer: OK. And I was reading your 10-K that just came, for ‘09. Was there like a certain date where these units become equity automatically after three years or was there a certain time limit to them? I was a little confused because there was something about how they convert from an A to a B or a C.

Well most of the units are owned by myself and they can’t convert for three years, so that there’s no liquidity for them. I believe they can convert after three years. I’m not sure whether or not there’s a forced conversion at some point. Joe, do you know?

No, there’s not a forced conversion Daniel. You have like four million of the 5.3 million units that are at the partnership and you can’t convert for three years. You had a preferred A that permitted you to appoint three Board members and then you had a conversion rate. The preferred A was able to be converted into preferred B that basically got you equal voting rights on a one for one basis for your units, so that may be the disclosure that you’re thinking of. Rick Sherman – Oppenheimer: That is what I’m thinking of. So when you are reporting, I notice you’re reporting on a fully diluted basis. That pretty much includes all these various types of units that are outstanding.

Yeah, that’s as if everything is converted. Rick Sherman – Oppenheimer: OK. Another question I had is on JVB. I noticed that in ‘09, they had a net profit substantially greater than the run rate of ‘10. Is their ‘09 earnings relative to what their revenue was a more normal run rate that you hope to accomplish after the acquisition?

This is Chris. That is our hope. Of course it’s obviously based on market conditions which are out of everyone’s control, but I think some things happened in 2010 which are contributing to some of the lower results. One of them is certainly the effect of this transaction itself. They have certain transaction expenses that they wouldn’t have had otherwise. They didn’t have in ‘09 and they won’t have going forward. The other is, they were starting their build out in some areas where we already occupy the space, and as you know, when you’re starting out certain build out projects, it’s costly and it hurts your bottom line. So at this point, the plan is to integrate what they call the institutional business, which is just really our business here in the sales and trading area into ours, and so that will remove those build out costs and expenses from their ongoing operations and then allow them to focus on their core business which the business that generated the $5 million in 2009. Rick Sherman – Oppenheimer: All right. So it sounds like, obviously there’s no guarantee, but it sounds like you’re hoping that it will be relatively accretive to earnings as you move through 2011.

That’s what we hope, yes. Rick Sherman – Oppenheimer: OK. I just have one other question as to the amount of compensation for the Board of Directors in this 10-K is approximately $100,000 per person. Is that, which I don’t know, seems a little high for a company of your size, but is that would be the normal rate of compensation expense that’s going to probably run through as you go forward or is that something that has been looked at also in terms of cost control.

Well, 2009 was a year when we merged together with Alesco Financial and there were a large number of extraordinary meetings, almost constant stream of them, which we haven’t had in this year, so that contributed to a higher Directors fee than we would expect to be the norm. Rick Sherman – Oppenheimer: To be the norm. OK. One last question is, is the fourth – are you running a way that basically after you see how the whole year – I assume you’re moving to a type of thing where you’re – a lot of the compensation is paid in the form of a bonus pool based on results at the end of each year, similar to most investment banking houses. Is that how you’re going to be doing it and if so, does that mean that for the fourth – every year in the fourth quarter, there’s more of a compensation expense depending, assuming it was a good year, or is it just I’m not thinking about it the right way.

We have a mixed platform where there’s both incentive compensation paid to producers on a quarterly basis or even a monthly basis and additionally, there is a bonus pool. We have substantial accruals. Joe, what is the exact number?

The total accrued comp at the end of the quarter is I think like $16 or $17 million. Probably $12 of that is sort of discretionary non direct, and the other piece relates to the September commissionable folks that was paid in early October. Rick Sherman – Oppenheimer: So you are accruing this throughout the year so basically it isn’t like a one quarter hit.

Yeah, you won’t see a one quarter earnings hit for a full year bonus in the fourth quarter. We accrue our discretionary compensation as the year moves forward. Rick Sherman – Oppenheimer: OK. Great. Thank you very much.

As well, I’d just like to point out that we also have substantial retention payments that we paid over 2010 given the transaction with Alesco Financial. That won’t necessarily be repeated in 2011. Rick Sherman – Oppenheimer: Yeah, I’m assuming there was quite a bit of upfront costs when you’re bringing in and growing the amount of people that you have over this last year.

Yes. Rick Sherman – Oppenheimer: OK. Thanks very much.

Thanks.

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

All right. Well thank you for our two questioners or their in depth questions and we’ll look forward to talking to you on the next conference call. Thanks.

Ladies and gentlemen, that concludes Cohen & Company, Inc. third quarter 2010 earnings conference call. We appreciate your time. You may now disconnect.