Exhibit 99.1
FIRSTCITY FINANCIAL CORPORATION
PRO FORMA CONSOLIDATED BALANCE SHEET AT JUNE 30, 2004
(Dollars in thousands)
(Unaudited)
Pro Forma Adjustments | ||||||||||||||||||||
Historical | (A) | (B) | Other | Pro Forma | ||||||||||||||||
Assets | ||||||||||||||||||||
Assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | 3,823 | $ | 86,800 | $ | (85,148 | ) | $ | (315 | )(C) | $ | 5,160 | ||||||||
Portfolio Assets, net | 11,238 | — | — | — | 11,238 | |||||||||||||||
Loans receivable from Acquisition Partnerships held for investment | 20,333 | — | — | — | 20,333 | |||||||||||||||
Equity investments | 85,359 | (25,824 | ) | — | — | 59,535 | ||||||||||||||
Deferred tax asset, net | 20,101 | — | — | — | 20,101 | |||||||||||||||
Service fees receivable from affiliates | 1,033 | — | — | — | 1,033 | |||||||||||||||
Other assets, net | 13,528 | — | (800 | ) | (6,253 | )(D) | 6,475 | |||||||||||||
Net assets of discontinued operations | 5,527 | — | — | — | 5,527 | |||||||||||||||
Total Assets | $ | 160,942 | $ | 60,976 | $ | (85,948 | ) | $ | (6,568 | ) | $ | 129,402 | ||||||||
Liabilities and Stockholders’ Equity | ||||||||||||||||||||
Liabilities: | ||||||||||||||||||||
Notes payable to affiliates | $ | 97,856 | $ | — | $ | (79,854 | ) | $ | — | $ | 18,002 | |||||||||
Notes payable other | 4,664 | — | (3,944 | ) | — | 720 | ||||||||||||||
Preferred stock subject to mandatory redemption | 3,978 | — | — | — | 3,978 | |||||||||||||||
Minority interest | 6,516 | (5,160 | ) | — | — | 1,356 | ||||||||||||||
Other liabilities | 12,013 | — | (337 | ) | — | 11,676 | ||||||||||||||
Total Liabilities | 125,027 | (5,160 | ) | (84,135 | ) | — | 35,732 | |||||||||||||
Stockholders’ equity: | ||||||||||||||||||||
Common stock | 112 | — | — | — | 112 | |||||||||||||||
Paid in capital | 99,288 | — | — | — | 99,288 | |||||||||||||||
Accumulated deficit | (65,775 | ) | 66,136 | (1,813 | ) | (315 | )(C) | (8,020 | ) | |||||||||||
(6,253 | )(D) | |||||||||||||||||||
Accumulated other comprehensive income | 2,290 | — | — | — | 2,290 | |||||||||||||||
Total Stockholders’ Equity | 35,915 | 66,136 | (1,813 | ) | (6,568 | ) | 93,670 | |||||||||||||
Total Liabilities and Stockholders’ Equity | $ | 160,942 | $ | 60,976 | $ | (85,948 | ) | $ | (6,568 | ) | $ | 129,402 | ||||||||
(A) | Record proceeds of sale of FirstCity’s 31% interest in Drive. | |||
(B) | Record $83.8 million pay down of debt and interest, payment of $1.3 million of debt fees to Bank of Scotland and write-off $1.5 million of unamortized loan fees relating to the paid off debt (net of $.7 million on new loan fees capitalized). | |||
(C) | Record $315 thousand estimated closing costs. | |||
(D) | Record write-off remaining $6.3 million unamortized loan discount relating to the accrued participation liability owed to Bank of Scotland. |
FIRSTCITY FINANCIAL CORPORATION
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 2004
(Dollars in thousands)
(Unaudited)
Pro Forma | ||||||||||||
Adjustments | ||||||||||||
Historical | (A) | Pro Forma | ||||||||||
Revenues: | ||||||||||||
Servicing fees from affiliates | $ | 6,748 | $ | — | $ | 6,748 | ||||||
Gain on resolution of Portfolio Assets | 237 | — | 237 | |||||||||
Equity in earnings of investments | 16,969 | (10,155 | ) | 6,814 | ||||||||
Interest income from affiliates | 1,061 | — | 1,061 | |||||||||
Interest income — other | 136 | — | 136 | |||||||||
Other income | 1,782 | — | 1,782 | |||||||||
Total revenues | 26,933 | (10,155 | ) | 16,778 | ||||||||
Expenses: | ||||||||||||
Interest and fees on notes payable to affiliates | 4,797 | (3,131 | ) | 1,666 | ||||||||
Interest and fees on notes payable — other | 171 | — | 171 | |||||||||
Interest on shares subject to mandatory redemption | 133 | — | 133 | |||||||||
Salaries and benefits | 7,554 | — | 7,554 | |||||||||
Provision for loan and impairment losses | 22 | — | 22 | |||||||||
Occupancy, data processing, communication and other | 3,237 | (4 | ) | 3,233 | ||||||||
Total expenses | 15,914 | (3,135 | ) | 12,779 | ||||||||
Earnings from continuing operations before income taxes and minority interest | 11,019 | (7,020 | ) | 3,999 | ||||||||
Provision for income taxes | (583 | ) | 427 | (156 | ) | |||||||
Earnings from continuing operations before minority interest | 10,436 | (6,593 | ) | 3,843 | ||||||||
Minority interest | (2,038 | ) | 2,029 | (9 | ) | |||||||
Earnings from continuing operations | $ | 8,398 | $ | (4,564 | ) | $ | 3,834 | |||||
Earnings from continuing operations per common share are as follows: | ||||||||||||
Basic | $ | 0.75 | $ | 0.34 | ||||||||
Diluted | $ | 0.71 | $ | 0.32 | ||||||||
Weighted average common shares outstanding | ||||||||||||
Basic | 11,216 | 11,216 | ||||||||||
Diluted | 11,806 | 11,806 |
(A) | To eliminate equity in earnings of Drive, interest expense, minority interest, taxes and other expenses from the Consumer business segment that would not have been incurred if the transaction had been completed at the beginning of the period. The elimination of $3.1 million of additional interest and fees on notes payable includes interest savings from paydown of $83.8 million x average rate of 6.52% ÷ 2 = $2,732 and amortization of loan fees of $399. |
FIRSTCITY FINANCIAL CORPORATION
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
For the Year Ended December 31, 2003
(Dollars in thousands)
(Unaudited)
Pro Forma | ||||||||||||
Adjustments | ||||||||||||
Historical | (A) | Pro Forma | ||||||||||
Revenues: | ||||||||||||
Servicing fees from affiliates | $ | 15,051 | $ | — | $ | 15,051 | ||||||
Gain on resolution of Portfolio Assets | 1,380 | — | 1,380 | |||||||||
Equity in earnings of investments | 21,411 | (7,237 | ) | 14,174 | ||||||||
Interest income from affiliates | 2,794 | — | 2,794 | |||||||||
Interest income — other | 533 | — | 533 | |||||||||
Other income | 1,560 | — | 1,560 | |||||||||
Total revenues | 42,729 | (7,237 | ) | 35,492 | ||||||||
Expenses: | ||||||||||||
Interest and fees on notes payable to affiliates | 7,567 | (6,353 | ) | 1,214 | ||||||||
Interest and fees on notes payable — other | 155 | — | 155 | |||||||||
Interest on shares subject to mandatory redemption | 133 | — | 133 | |||||||||
Salaries and benefits | 15,875 | — | 15,875 | |||||||||
Provision for loan and impairment losses | 98 | — | 98 | |||||||||
Occupancy, data processing, communication and other | 7,518 | (27 | ) | 7,491 | ||||||||
Total expenses | 31,346 | (6,380 | ) | 24,966 | ||||||||
Earnings from continuing operations before income taxes and minority interest | 11,383 | (857 | ) | 10,526 | ||||||||
Provision for income taxes | (240 | ) | 55 | (185 | ) | |||||||
Earnings from continuing operations before minority interest | 11,143 | (802 | ) | 10,341 | ||||||||
Minority interest | (1,436 | ) | 1,446 | 10 | ||||||||
Earnings from continuing operations | $ | 9,707 | $ | 644 | $ | 10,351 | ||||||
Earnings from continuing operations per common share are as follows: | ||||||||||||
Basic | $ | 0.86 | $ | 0.92 | ||||||||
Diluted | $ | 0.85 | $ | 0.91 | ||||||||
Weighted average common shares outstanding | ||||||||||||
Basic | 11,200 | 11,200 | ||||||||||
Diluted | 11,349 | 11,349 |
(A) | To eliminate equity in earnings of Drive, interest expense, minority interest, taxes and other expenses from the Consumer business segment that would not have been incurred if the transaction had been completed at the beginning of the period. The elimination of $6.4 million of additional interest and fees on notes payable includes interest savings from paydown of $83.8 million x average rate of 6.66% = $5,582 and amortization of loan fees of $771. |