Joe Pooler
Analyst · 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 its most recent annual report on Form 10-K filed with the SEC. I would now like to turn the call over to Mr. Lester Brafman, Chief Executive Officer of Cohen & Company
Thank you, Lester. We will start with our statement of operations. Our net income, attributable to Cohen and Company Inc. shareholders was $3.6 million for the quarter or $2.13 per fully diluted share compared to net loss of $3.4 million for the prior quarter or $3.46 per fully diluted share and net income of $14.8 million for the prior year quarter or $7.64 per fully diluted share. Our adjusted pretax income was $6.4 million for the quarter compared to adjusted pretax loss of $14.9 million for the prior quarter, and adjusted pretax income of $23.8 million for the prior year quarter. Note that adjusted pretax income and loss is not a measure recognized under U.S. GAAP. See our disclosures, calculations, and reconciliations surrounding adjusted pretax income and loss in our earnings release. Fourth quarter 2021 principal transactions and other revenue came in at a negative $10.5 million, which included negative revenue related to mark to market principal transaction losses of $2.4 million on Metromile stock, $6.3 million on Shift Technology stock, and $4.1 million on various pipe investments in spec business combinations. Note that the 10.5 million of negative principal transactions revenue in the current quarter is offset by a $2.8 million credit recorded in the net income loss attributable to the non-convertible, non-controlling interest line item. New issue and advisory revenue was $17.2 million in the fourth quarter, an increase of $8.4 million from the third quarter and $15.5 million from the year-ago quarter. During the fourth quarter, our investment banking group generated $15.1 million in advisory revenue from eight transactions. Our commercial real estate opportunities group generated $1.4 million of origination revenue and our European insurance team generated 700,000 of origination revenue. Net trading revenue came in at $15.2 million in the fourth quarter, down $1.4 million from the third quarter, and down $2.9 million from the fourth quarter of '20. Our asset management revenue totaled $5.1 million in the quarter, which was up $3.3 million from the prior quarter, and up $1.3 million from the year-ago quarter. The increase from both prior quarters was primarily related to an incentive allocation earned by the manager of our [Indiscernible] fund. Compensation and benefits expense for the fourth quarter of '21 was $23.6 million, which was up from both the prior quarters. The increases were primarily related to accrued compensation, related to the new issue and advisory revenue in the current quarter, as well as new hires in the investment banking and commercial real estate groups. The number of company employees was 118 as of year-end compared to 115 as of the end of September, and 87 as of the end of the prior year. Net interest expense for the fourth quarter of 2021 was $1.7 million, including $650,000 on our two trust preferred debt instruments, $526,000 on our senior notes, $292,000 on our redeemable financial instrument, and $238,000 on our credit line. Income from equity method affiliates during the quarter totaled $28.5 million, which was primarily driven by income from our equity method investments in the sponsors of two SPACs, which closed their business combinations during the fourth quarter of 2021. The increased value of the founder shares held by the sponsors of those two SPACs, of which we were entitled to an allocation of from those sponsors, generated $30.4 million of income from equity method investments in the fourth quarter of 2021 on our books, of which $18.6 million was related to non-convertible, non-controlling interests. During the fourth quarter, income tax benefit was $2.2 million compared to $248,000 in the prior quarter, and $8 million in the prior year quarter. We will continue to evaluate our operations on a quarterly basis and may make adjustments to our valuation allowances applied against our net operating loss and net capital loss tax assets going forward. In terms of our balance sheet, at the end of the year, total equity was $149.5 million compared to $101.4 million at the end of the prior year. The non-convertible, non-controlling interest component of total equity was $31.9 million at the end of the year, compared to $27.8 million at the end of the prior year. Thus, our total equity, excluding this non-convertible, non-controlling interest component, was $117.6 million at the the end of the year, a $44 million increase from the $73.6 million at the end of the prior year. Consolidated corporate indebtedness was carried at $43.4 million and our redeemable financial instruments were carried at $8 million. As Lester mentioned, we have declared a special dividend of $0.75 per share and a quarterly dividend of $0.25 per share, both of which are payable on April 5th of '22 to stockholders of record as of March 22nd of '22. The Board of Directors will continue to evaluate the dividend policy each quarter and future decisions regarding dividends may be impacted by quarterly operating results, and the company's ongoing capital needs. With that, I will turn it back over to Lester for closing remarks.
