UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
þ | ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] |
For the fiscal year ended December 31, 2004
OR
o | TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED] |
For the transition period from to
Commission file number 033-19694
A. Full title of the plan and the address of the plan, if different from that of the issue named below:
FIRSTCITY FINANCIAL CORPORATION
B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office:
FIRSTCITY FINANCIAL CORPORATION
6400 IMPERIAL DRIVE
WACO, TX 76712
FIRSTCITY FINANCIAL CORPORATION EMPLOYEES’ PROFIT SHARING AND RETIREMENT PLAN
Table of Contents
FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES:
December 31, 2004 and 2003 |
Financial Statements: |
Supplemental Schedule: |
December 31, 2003 and 2002 |
Financial Statements: |
Supplemental Schedule: |
December 31, 2002 and 2001 |
Financial Statements: |
Supplemental Schedule: |
SIGNATURE: |
EXHIBITS: |
FIRSTCITY FINANCIAL CORPORATION
Employees’ Profit Sharing and Retirement Plan
FINANCIAL STATEMENTS
AND SUPPLEMENTAL INFORMATION
DECEMBER 31, 2004 AND 2003
(With Report of Independent Registered Public Accounting Firm Thereon)
1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Plan Administrator
FirstCity Financial Corporation Employees’
Profit Sharing and Retirement Plan
We have audited the accompanying statements of net assets available for benefits of FirstCity Financial Corporation Employees’ Profit Sharing and Retirement Plan as of December 31, 2004 and 2003, and the related statements of changes in net assets available for benefits for the years then ended. These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of FirstCity Financial Corporation Employees’ Profit Sharing and Retirement Plan as of December 31, 2004 and 2003, and the changes in its net assets available for benefits for the years then ended in conformity with accounting principles generally accepted in the United States of America.
July 14, 2005
2
FIRSTCITY FINANCIAL CORPORATION
Employees’ Profit Sharing and Retirement Plan
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2004 AND 2003
2004 | 2003 | |||||||
ASSETS | ||||||||
Investments, at fair value | $ | 7,161,761 | $ | 6,104,258 | ||||
Participants’ loans | 315,126 | 343,004 | ||||||
7,476,887 | 6,447,262 | |||||||
Receivables: | ||||||||
Employer’s contribution | 7,040 | 7,402 | ||||||
Participants’ contributions | 19,845 | 19,490 | ||||||
Accrued income | — | 5,292 | ||||||
26,885 | 32,184 | |||||||
Net assets available for benefits | $ | 7,503,772 | $ | 6,479,446 | ||||
See accompanying notes to financial statements.
3
FIRSTCITY FINANCIAL CORPORATION
Employees’ Profit Sharing and Retirement Plan
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEARS ENDED DECEMBER 31, 2004 AND 2003
2004 | 2003 | |||||||
ADDITIONS TO NET ASSETS ATTRIBUTED TO: | ||||||||
Investment income: | ||||||||
Interest and dividends | $ | 106,473 | $ | 128,704 | ||||
Net appreciation in fair value of investments | 756,071 | 1,152,294 | ||||||
862,544 | 1,280,998 | |||||||
Contributions: | ||||||||
Employer | 147,713 | 149,646 | ||||||
Participants | 475,862 | 443,510 | ||||||
623,575 | 593,156 | |||||||
Total additions | 1,486,119 | 1,874,154 | ||||||
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO: | ||||||||
Benefits paid to participants | 459,413 | 328,404 | ||||||
Fiduciary fees | 2,380 | 3,381 | ||||||
Total deductions | 461,793 | 331,785 | ||||||
NET INCREASE | 1,024,326 | 1,542,369 | ||||||
NET ASSETS AVAILABLE FOR BENEFITS, BEGINNING OF YEAR | 6,479,446 | 4,937,077 | ||||||
NET ASSETS AVAILABLE FOR BENEFITS, END OF YEAR | $ | 7,503,772 | $ | 6,479,446 | ||||
See accompanying notes to financial statements.
4
FIRSTCITY FINANCIAL CORPORATION
1. | DESCRIPTION OF THE PLAN | |||
The following description of the FirstCity Financial Corporation (the Company) Employees’ Profit Sharing Plan (the Plan) provides only general information. Participants should refer to the Plan agreement for a more complete description of the Plan’s provisions. | ||||
General |
The Plan is a defined contribution plan covering all employees of FirstCity Financial Corporation and its related entities, FirstCity Servicing Corporation, FirstCity Servicing Corporation of California, FirstCity Capital Corporation, and FirstCity Consumer Lending Corporation. An eligible employee must have at least six months of service and have attained the age of 21, excluding union employees. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). |
Contributions |
Participants may elect to have the employer make salary reductions to contribute to the Plan. The Company may make a discretionary matching contribution equal to a percentage of the participant’s deferred contribution. Contributions are subject to certain limitations. Participants can direct contributions into 14 different investment funds. Effective March 1, 2004, participants may not make contributions to the Wells Fargo Collective FirstCity Financial Corporation Company Stock Fund. |
Participant Accounts |
Each participant’s account is credited with the participant’s contribution and allocations of (a) the Company’s contribution and (b) Plan earnings and charged with an allocation of administrative expenses. Effective January 1, 2003, forfeited balances of terminated participants’ nonvested accounts are used to reduce employer contributions and administrative expense. Any remaining forfeitures are applied to participant accounts. Prior to January 1, 2003, forfeited balances of terminated participants’ nonvested accounts were distributed to the remaining eligible employees. Allocations are based on participant earnings or account balances, as defined. The benefit to which a participant is entitled is the benefit that can be provided from the participant’s vested account. |
Vesting |
Participants are immediately vested in their salary reduction contributions plus actual earnings thereon. Employer contributions are 20% vested to the participant after two full years of service, 20% for each additional year of service and fully vested after six years. Full vesting in employer contributions also occurs upon death, total disability, or retirement at or after age 65. |
Participant Loans |
Participants may borrow from their fund accounts a minimum of $1,000 up to a maximum equal to the lesser of $50,000 or 50% of their account balance. The loans are secured by the balance in the participant’s account and bear interest at rates that range from 4% to 9.5%, which are commensurate with local prevailing rates as determined quarterly by the Plan Administrator. Principal and interest are paid ratably through monthly payroll deductions. |
5
FIRSTCITY FINANCIAL CORPORATION
Employees’ Profit Sharing and Retirement Plan
NOTES TO FINANCIAL STATEMENTS – continued
Payment of Benefits |
On termination of service, a participant may elect to receive either a lump sum amount equal to the value of his or her account or various installment options over extended periods of time. |
Expenses |
The expenses of maintaining the Plan are satisfied directly out of the Plan’s assets or by the Company, except for certain transaction charges which are paid by the participants involved. |
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Basis of Accounting |
The financial statements of the Plan are prepared under the accrual method of accounting. |
Investment Valuation and Income Recognition |
The Plan’s investments are stated at fair value as determined by quoted market prices. Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date. |
Payment of Benefits |
Benefits are recorded when paid. |
Estimates |
The preparation of financial statements in conformity with generally accepted accounting principles requires the Plan Administrator to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results may differ from those estimates. |
3. | INVESTMENTS | |||
The following table presents the fair values of investments, all of which are participant directed, at December 31, 2004 and 2003. Investments that represent five percent or more of the Plan’s net assets are separately identified. |
6
FIRSTCITY FINANCIAL CORPORATION
Employees’ Profit Sharing and Retirement Plan
NOTES TO FINANCIAL STATEMENTS – continued
2004 | 2003 | |||||||
Investments at fair value as determined by quoted market price: | ||||||||
Mutual funds: | ||||||||
MFS Massachusetts Invs Tr Sh Ben Int Fund | $ | 712,961 | $ | — | ||||
T. Rowe Price Growth Stock Fund | 721,256 | — | ||||||
Baron Small Cap Fund | 721,458 | — | ||||||
Fidelity Adv Divers International Fund | 439,367 | — | ||||||
Alliance Berstein Premier Growth Fund | — | 790,170 | ||||||
Massachusetts Investors Trust | — | 769,117 | ||||||
Alliance Berstein Small Capital Growth Fund | — | 482,630 | ||||||
Others | 1,493,500 | 1,860,336 | ||||||
4,088,542 | 3,902,253 | |||||||
Collective funds: | ||||||||
Wells Fargo Collective Stable Return Fund | 1,906,662 | — | ||||||
Wells Fargo Collective S&P500 Index | 425,348 | — | ||||||
Merrill Lynch Retirement Preservation Trust | — | 1,727,821 | ||||||
Wells Fargo Collective FirstCity Financial Corporation Common Stock Fund | 741,209 | 474,184 | ||||||
3,073,219 | 2,202,005 | |||||||
$ | 7,161,761 | $ | 6,104,258 | |||||
During 2004 and 2003, the Plan’s investments (including investments bought, sold and held during the year) appreciated in value $756,071, and $1,152,294, respectively. | ||||
4. | TAX STATUS | |||
Subsequent to year-end, the Internal Revenue Service has determined and informed the Plan by a letter dated April 12, 2004, that the Plan and related trust are designed in accordance with applicable sections of the Internal Revenue Code. Therefore, no provision for income taxes has been included in the Plan’s financial statements. | ||||
5. | PLAN TERMINATION | |||
Although it has not expressed any intention to do so, the Company has a right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of Plan termination, participants will become 100% vested in their accounts. |
7
SUPPLEMENTAL INFORMATION
FIRSTCITY FINANCIAL CORPORATION
Employees’ Profit Sharing and Retirement Plan
AS OF DECEMBER 31, 2004
Employer Identification Number: 76-0243729
Plan Number: 001
(a) | (b) | (c) | (d) | (e) | ||||||
Identity of issue, borrower, lessor | Description of investment including maturity date | Cost | Current Value | |||||||
or similar party | rate of interest, collateral, par or maturity value | |||||||||
Mutual Funds: | ||||||||||
* | Wells Fargo | Wells Fargo Montgomery Total Return Bond 19,201.7057 shares | $ | 237,525 | ||||||
Calvert | Calvert Income Fund 15,129.3432 shares | 257,199 | ||||||||
* | Wells Fargo | Wells Fargo Growth Balanced Fund 2,339.4845 shares | 69,997 | |||||||
Lord Abbett | Lord Abbett Affiliated Fund 7,881.9023 shares | 116,495 | ||||||||
MFS Investments | MFS Massachusetts Invs Tr Sh Ben Int Fund 41,307.1033 shares | 712,961 | ||||||||
Davis Funds | Davis New York Venture Fund 8,154.2459 shares | 250,254 | ||||||||
American Funds | American Funds Growth Fund of America Fund 10,635.2171 shares | 289,597 | ||||||||
T. Rowe Price | T. Rowe Price Growth Stock Fund 27,196.6704 shares | 721,256 | ||||||||
ABN Amro | ABN Amro Mid Cap Fund 2,198.5915 shares | 53,756 |
(continued)
8
FIRSTCITY FINANCIAL CORPORATION
Employees’ Profit Sharing and Retirement Plan
SCHEDULE H - ITEM 4i - SCHEDULE OF ASSETS (HELD AT END OF YEAR)
AS OF DECEMBER 31, 2004
(Continued)
Employer Identification Number: 76-0243729
Plan Number: 001
(a) | (b) | (c) | (d) | (e) | ||||||
Identity of issue, borrower, lessor | Description of investment including maturity date | Cost | Current Value | |||||||
or similar party | rate of interest, collateral, par or maturity value | |||||||||
Mutual Funds: (Continued) | ||||||||||
RS Investments | RS Investments Partners Fund 6,289.2628 shares | $ | 218,678 | |||||||
Baron Funds | Baron Small Cap Fund 32,674.7381 shares | 721,458 | ||||||||
Fidelity Investments | Fidelity Advisors Divers International Fund 23,672.8109 shares | 439,366 | ||||||||
4,088,542 | ||||||||||
Collective funds: | ||||||||||
* | Wells Fargo | Wells Fargo Collective FirstCity Financial Corporation - Company Common Stock Fund 54,597.0076 units | 741,209 | |||||||
* | Wells Fargo | Wells Fargo Collective Stable Return Fund 51,111.4609 shares | 1,906,662 | |||||||
* | Wells Fargo | Wells Fargo Collective S&P500 Index Fund 8,501.8574 shares | 425,348 | |||||||
3,073,219 | ||||||||||
Participants’ Loans | ||||||||||
Participants’ loans; interest rates ranging from 4% to 9.5% | 315,126 | |||||||||
$ | 7,476,887 | |||||||||
* | Represents a party-in-interest to the Plan |
9
FIRSTCITY FINANCIAL CORPORATION
Employees’ Profit Sharing and Retirement Plan
FINANCIAL STATEMENTS
AND SUPPLEMENTAL INFORMATION
DECEMBER 31, 2003 AND 2002
(With Report of Independent Registered Public Accounting Firm Thereon)
10
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Plan Administrator
FirstCity Financial Corporation Employees’
Profit Sharing and Retirement Plan
We have audited the accompanying statements of net assets available for benefits of FirstCity Financial Corporation Employees’ Profit Sharing and Retirement Plan as of December 31, 2003 and 2002, and the related statements of changes in net assets available for benefits for the years then ended. These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of FirstCity Financial Corporation Employees’ Profit Sharing and Retirement Plan as of December 31, 2003 and 2002, and the changes in its net assets available for benefits for the years then ended in conformity with accounting principles generally accepted in the United States of America.
July 14, 2005
11
FIRSTCITY FINANCIAL CORPORATION
Employees’ Profit Sharing and Retirement Plan
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2003 AND 2002
2003 | 2002 | |||||||
ASSETS | ||||||||
Investments, at fair value | $ | 6,104,258 | $ | 4,726,989 | ||||
Participants’ loans | 343,004 | 179,668 | ||||||
6,447,262 | 4,906,657 | |||||||
Receivables: | ||||||||
Employer’s contribution | 7,402 | 7,755 | ||||||
Participants’ contributions | 19,490 | 17,443 | ||||||
Accrued income | 5,292 | 5,222 | ||||||
32,184 | 30,420 | |||||||
Net assets available for benefits | $ | 6,479,446 | $ | 4,937,077 | ||||
See accompanying notes to financial statements.
12
FIRSTCITY FINANCIAL CORPORATION
Employees’ Profit Sharing and Retirement Plan
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEARS ENDED DECEMBER 31, 2003 AND 2002
2003 | 2002 | |||||||
ADDITIONS TO NET ASSETS ATTRIBUTED TO: | ||||||||
Investment income: | ||||||||
Interest and dividends | $ | 128,704 | $ | 125,357 | ||||
Net appreciation (depreciation) in fair value of investments | 1,152,294 | ( 902,106 | ) | |||||
1,280,998 | ( 776,749 | ) | ||||||
Contributions: | ||||||||
Employer | 149,646 | 149,240 | ||||||
Participants | 443,510 | 397,065 | ||||||
593,156 | 546,305 | |||||||
Total additions | 1,874,154 | ( 230,444 | ) | |||||
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO: | ||||||||
Benefits paid to participants | 328,404 | 287,033 | ||||||
Fiduciary fees | 3,381 | 1,040 | ||||||
Total deductions | 331,785 | 288,073 | ||||||
NET INCREASE (DECREASE) | 1,542,369 | ( 518,517 | ) | |||||
NET ASSETS AVAILABLE FOR BENEFITS, BEGINNING OF YEAR | 4,937,077 | 5,455,594 | ||||||
NET ASSETS AVAILABLE FOR BENEFITS, END OF YEAR | $ | 6,479,446 | $ | 4,937,077 | ||||
See accompanying notes to financial statements.
13
FIRSTCITY FINANCIAL CORPORATION
Employees’ Profit Sharing and Retirement Plan
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2003 AND 2002
1. | DESCRIPTION OF THE PLAN | |||
The following description of the FirstCity Financial Corporation (the Company) Employees’ Profit Sharing Plan (the Plan) provides only general information. Participants should refer to the Plan agreement for a more complete description of the Plan’s provisions. | ||||
General |
The Plan is a defined contribution plan covering all employees of FirstCity Financial Corporation and its related entities, FirstCity Servicing Corporation, FirstCity Servicing Corporation of California, FirstCity Capital Corporation, and FirstCity Consumer Lending Corporation. Effective January 1, 2003, the Plan covers all employees of FirstCity Financial Corporation and its related entities, FirstCity Servicing Corporation, FirstCity Servicing Corporation of Minnesota, and FirstCity Consumer Lending Corporation. An eligible employee must have at least six months of service and have attained the age of 21, excluding union employees. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). |
Contributions |
Participants may elect to have the employer make salary reductions to contribute to the Plan. The Company may make a discretionary matching contribution equal to a percentage of the participant’s deferred contribution. Contributions are subject to certain limitations. Participants can direct contributions into 22 different investment funds in addition to the Company’s stock. |
Participant Accounts |
Each participant’s account is credited with the participant’s contribution and allocations of (a) the Company’s contribution and (b) Plan earnings and charged with an allocation of administrative expenses. Effective January 1, 2003, forfeited balances of terminated participants’ nonvested accounts are used to reduce employer contributions and administrative expense. Any remaining forfeitures are applied to participant accounts. Prior to January 1, 2003, forfeited balances of terminated participants’ nonvested accounts were distributed to the remaining eligible employees. Allocations are based on participant earnings or account balances, as defined. The benefit to which a participant is entitled is the benefit that can be provided from the participant’s vested account. |
Vesting |
Participants are immediately vested in their salary reduction contributions plus actual earnings thereon. Employer contributions are 20% vested to the participant after two full years of service, 20% for each additional year of service and fully vested after six years. Full vesting in employer contributions also occurs upon death, total disability, or retirement at or after age 65. |
Participant Loans |
Participants may borrow from their fund accounts a minimum of $1,000 up to a maximum equal to the lesser of $50,000 or 50% of their account balance. The loans are secured by the balance in the participant’s account and bear interest at rates that range from 4% to 9.5%, which are commensurate with local prevailing rates as determined quarterly by the Plan Administrator. Principal and interest are paid ratably through monthly payroll deductions. |
14
FIRSTCITY FINANCIAL CORPORATION
Employees’ Profit Sharing and Retirement Plan
NOTES TO FINANCIAL STATEMENTS – continued
Payment of Benefits |
On termination of service, a participant may elect to receive either a lump sum amount equal to the value of his or her account or various installment options over extended periods of time. |
Expenses |
The expenses of maintaining the Plan are satisfied directly out of the Plan’s assets or by the Company, except for certain transaction charges which are paid by the participants involved. |
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Basis of Accounting |
The financial statements of the Plan are prepared under the accrual method of accounting. |
Investment Valuation and Income Recognition |
The Plan’s investments are stated at fair value as determined by quoted market prices. Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date. |
Payment of Benefits |
Benefits are recorded when paid. |
Estimates |
The preparation of financial statements in conformity with generally accepted accounting principles requires the Plan Administrator to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results may differ from those estimates. |
3. | INVESTMENTS | |||
The following table presents the fair values of investments, all of which are participant directed, at December 31, 2003 and 2002. Investments that represent five percent or more of the Plan’s net assets are separately identified. |
15
FIRSTCITY FINANCIAL CORPORATION
Employees’ Profit Sharing and Retirement Plan
NOTES TO FINANCIAL STATEMENTS – continued
2003 | 2002 | |||||||
Investments at fair value as determined by quoted market price: | ||||||||
Mutual funds: | ||||||||
Alliance Berstein Premier Growth Fund | $ | 790,170 | $ | 617,858 | ||||
Massachusetts Investors Trust | 769,117 | 579,713 | ||||||
Alliance Berstein Small Capital Growth Fund | 482,630 | — | ||||||
Alliance Quasar Fund | — | 298,340 | ||||||
Merrill Lynch Aggregate Bond Index Fund | — | 262,738 | ||||||
Others | 1,860,336 | 1,008,706 | ||||||
3,902,253 | 2,767,355 | |||||||
Collective trust fund: | ||||||||
Merrill Lynch Retirement Preservation Trust | 1,727,821 | 1,805,394 | ||||||
Common Stock: | ||||||||
FirstCity Financial Corporation Common Stock | 474,184 | 154,240 | ||||||
$ | 6,104,258 | $ | 4,726,989 | |||||
During 2003 and 2002, the Plan’s investments (including investments bought, sold and held during the year) appreciated (depreciated) in value as follows: |
2003 | 2002 | |||||||
Mutual fund investments at fair value as determined by quoted market price | $ | 751,804 | $ | ( 914,259 | ) | |||
FirstCity Financial Corporation common stock at fair value as determined by quoted market price | 400,490 | 12,153 | ||||||
$ | 1,152,294 | $ | ( 902,106 | ) | ||||
4. | COMPONENTS OF NET ASSETS AVAILABLE FOR BENEFITS | |||
Net assets available for benefits at December 31, 2003, include certain forfeitures which occurred during 2003. During 2003, $38,978 of 2002 forfeitures was distributed to eligible employees. As of December 31, 2003, unapplied forfeitures amounted to $12,437. | ||||
5. | TAX STATUS | |||
Subsequent to year-end, the Internal Revenue Service has determined and informed the Plan by a letter dated April 12, 2004, that the Plan and related trust are designed in accordance with applicable sections of the Internal Revenue Code. Therefore, no provision for income taxes has been included in the Plan’s financial statements. | ||||
6. | PLAN TERMINATION | |||
Although it has not expressed any intention to do so, the Company has a right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of Plan termination, participants will become 100% vested in their accounts. |
16
SUPPLEMENTAL INFORMATION
FIRSTCITY FINANCIAL CORPORATION
Employees’ Profit Sharing and Retirement Plan
AS OF DECEMBER 31, 2003
Employer Identification Number: 76-0243729
Plan Number: 001
(a) | (b) | (c) | (d) | (e) | ||||||
Identity of issue, borrower, lessor | Description of investment including maturity date | Cost | Current Value | |||||||
or similar party | rate of interest, collateral, par or maturity value | |||||||||
Mutual Funds: | ||||||||||
* | Merrill Lynch | ML Fundamental Growth Fund - Large Company Stock 9,010.9330 shares | $ | 146,428 | ||||||
* | Merrill Lynch | ML Capital Fund - Balance Fund 1,368.8757 shares | 36,084 | |||||||
* | Merrill Lynch | ML Healthcare Fund - Special Fund 9,602.2540 shares | 58,574 | |||||||
* | Merrill Lynch | ML Pacific Fund - Specialty Fund 2,664.5497 shares | 49,960 | |||||||
* | Merrill Lynch | ML Global Value Fund - Global Stock 1,576.4553 shares | 17,656 | |||||||
* | Merrill Lynch | ML S&P 500 Index Fund - Large Company Stock 20,165.0008 shares | 275,051 | |||||||
* | Merrill Lynch | ML Aggregate Bond Index Fund - Conservative Bond 24,763.0648 shares | 270,165 | |||||||
* | Merrill Lynch | ML International Fund Global Stock 16,140.2476 shares | 142,034 | |||||||
Nations | Nations International Value Fund Global Stock 7,466.8348 shares | 143,438 | ||||||||
GAM International | GAM International Fund 57.49033 shares | 957 | ||||||||
John Hancock | John Hancock Financial Industries - Specialty Fund 920.2838 shares | 16,068 |
(continued)
17
FIRSTCITY FINANCIAL CORPORATION
Employees’ Profit Sharing and Retirement Plan
SCHEDULE H - ITEM 4i - SCHEDULE OF ASSETS (HELD AT END OF YEAR)
AS OF DECEMBER 31, 2003
(Continued)
Employer Identification Number: 76-0243729
Plan Number: 001
(a) | (b) | (c) | (d) | (e) | ||||||
Identity of issue, borrower, lessor | Description of investment including maturity date | Cost | Current Value | |||||||
or similar party | rate of interest, collateral, par or maturity value | |||||||||
Mutual Funds: (Continued) | ||||||||||
State Street Research | State Street Research Aurora Fund - Small Company Stock 1,903.1285 shares | $ | 73,480 | |||||||
State Street Research | State Street Research High Income - Aggressive Bond 933.0720 shares | 3,266 | ||||||||
MFS Investment Management | MFS New Discovery Fund - Small Company Stock 7,565.1512 shares | 116,125 | ||||||||
Lord Abbett Management | Lord Abbett Affiliated Fund - Large Company Stock 5,091.2835 shares | 68,885 | ||||||||
Alliance Berstein Capital | Alliance Berstein Premier Growth Fund - Large Company Stock 46,866.5742 shares | 790,170 | ||||||||
Alliance Berstein Capital | Alliance Berstein Small Capital Growth Fund 23,531.4345 shares | 482,630 | ||||||||
Seligman | Seligman Communications and Information - Specialty Funds 2,744.0655 shares | 63,086 | ||||||||
Calvert | Calvert Income Fund - Conservative Bond 11,511.2333 shares | 196,382 | ||||||||
MFS Investment Management | Massachusetts Investors Trust - Large Company Stock 49,239.2736 shares | 769,117 | ||||||||
Davis New York | Davis New York Venture Fund - Large Company Stock 6,638.7040 shares | 182,697 | ||||||||
3,902,253 | ||||||||||
(continued)
18
FIRSTCITY FINANCIAL CORPORATION
Employees’ Profit Sharing and Retirement Plan
SCHEDULE H - ITEM 4i - SCHEDULE OF ASSETS (HELD AT END OF YEAR)
AS OF DECEMBER 31, 2003
(Continued)
Employer Identification Number: 76-0243729
Plan Number: 001
(a) | (b) | (c) | (d) | (e) | ||||||
Identity of issue, borrower, lessor | Description of investment including maturity date | Cost | Current Value | |||||||
or similar party | rate of interest, collateral, par or maturity value | |||||||||
Collective Trust Fund: | ||||||||||
* | Merrill Lynch | ML Retirement Preservation Trust - Stable Value 1,727.821.3500 shares | $ | 1,727,821 | ||||||
Common Stock: | ||||||||||
* | Merrill Lynch | FirstCity Financial Corporation - Company Common Stock 77,735.1133 shares | 474,184 | |||||||
Participants’ Loans | ||||||||||
Participants’ loans; interest rates ranging from 4% to 9.5% | 343,004 | |||||||||
$ | 6,447,262 | |||||||||
* | Represents a party-in-interest to the Plan |
19
FIRSTCITY FINANCIAL CORPORATION
Employees’ Profit Sharing and Retirement Plan
FINANCIAL STATEMENTS
AND SUPPLEMENTAL INFORMATION
DECEMBER 31, 2002 AND 2001
(With Report of Independent Registered Public Accounting Firm Thereon)
20
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Plan Administrator
FirstCity Financial Corporation Employees’
Profit Sharing and Retirement Plan
We have audited the accompanying statements of net assets available for benefits of FirstCity Financial Corporation Employees’ Profit Sharing and Retirement Plan as of December 31, 2002 and 2001, and the related statements of changes in net assets available for benefits for the year ended December 31, 2002. These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of FirstCity Financial Corporation Employees’ Profit Sharing and Retirement Plan as of December 31, 2002 and 2001, and the changes in its net assets available for benefits for the year ended December 31, 2002 in conformity with accounting principles generally accepted in the United States of America.
July 14, 2005
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FIRSTCITY FINANCIAL CORPORATION
Employees’ Profit Sharing and Retirement Plan
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 2002 AND 2001
2002 | 2001 | |||||||
ASSETS | ||||||||
Investments, at fair value | $ | 4,726,989 | $ | 5,207,497 | ||||
Participants’ loans | 179,668 | 219,544 | ||||||
4,906,657 | 5,427,041 | |||||||
Receivables: | ||||||||
Employer’s contribution | 7,755 | 7,426 | ||||||
Participants’ contributions | 17,443 | 16,016 | ||||||
Accrued income | 5,222 | 5,111 | ||||||
30,420 | 28,553 | |||||||
Net assets available for benefits | $ | 4,937,077 | $ | 5,455,594 | ||||
See accompanying notes to financial statements.
22
FIRSTCITY FINANCIAL CORPORATION
Employees’ Profit Sharing and Retirement Plan
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED DECEMBER 31, 2002
2002 | ||||
ADDITIONS TO NET ASSETS ATTRIBUTED TO: | ||||
Investment income: | ||||
Interest and dividends | $ | 125,357 | ||
125,357 | ||||
Contributions: | ||||
Employer | 149,240 | |||
Participants | 397,065 | |||
546,305 | ||||
Total additions | 671,662 | |||
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO: | ||||
Net depreciation in fair value of investments | 902,106 | |||
Benefits paid to participants | 287,033 | |||
Fiduciary fees | 1,040 | |||
Total deductions | 1,190,179 | |||
NET DECREASE | ( 518,517 | ) | ||
NET ASSETS AVAILABLE FOR BENEFITS, BEGINNING OF YEAR | 5,455,594 | |||
NET ASSETS AVAILABLE FOR BENEFITS, END OF YEAR | $ | 4,937,077 | ||
See accompanying notes to financial statements.
23
FIRSTCITY FINANCIAL CORPORATION
Employees’ Profit Sharing and Retirement Plan
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2002 AND 2001
1. | DESCRIPTION OF THE PLAN | |||
The following description of the FirstCity Financial Corporation (the Company) Employees’ Profit Sharing Plan (the Plan) provides only general information. Participants should refer to the Plan agreement for a more complete description of the Plan’s provisions. | ||||
General |
The Plan is a defined contribution plan covering all employees of FirstCity Financial Corporation and its related entities, FirstCity Servicing Corporation, FirstCity Servicing Corporation of California, FirstCity Capital Corporation, and FirstCity Consumer Lending Corporation. An eligible employee must have at least six months of service and have attained the age of 21, excluding union employees. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). |
Contributions |
Participants may elect to have the employer make salary reductions to contribute to the Plan. The Company may make a discretionary matching contribution equal to a percentage of the participant’s deferred contribution. Contributions are subject to certain limitations. Participants can direct contributions into 21 different investment funds in addition to the Company’s stock. |
Participant Accounts |
Each participant’s account is credited with the participant’s contribution and allocations of (a) the Company’s contribution, (b) Plan earnings, (c) forfeitures of terminated participants’ nonvested accounts and (d) administrative expenses. Allocations are based on participant earnings or account balances, as defined. The benefit to which a participant is entitled is the benefit that can be provided from the participant’s vested account. |
Vesting |
Participants are immediately vested in their salary reduction contributions plus actual earnings thereon. Employer contributions are 20% vested to the participant after two full years of service, 20% for each additional year of service and fully vested after six years. Full vesting in employer contributions also occurs upon death, total disability, or retirement at or after age 65. |
Forfeitures |
When certain terminations of participation in the Plan occur, the nonvested portion of the participant’s account, as defined by the Plan, represents a forfeiture. Forfeitures are allocated to participants in the succeeding plan year, as defined by the Plan. |
24
FIRSTCITY FINANCIAL CORPORATION
Employees’ Profit Sharing and Retirement Plan
NOTES TO FINANCIAL STATEMENTS – continued
Participant Loans |
Participants may borrow from their fund accounts a minimum of $1,000 up to a maximum equal to the lesser of $50,000 or 50% of their account balance. The loans are secured by the balance in the participant’s account and bear interest at rates that range from 5% to 9.5%, which are commensurate with local prevailing rates as determined quarterly by the Plan Administrator. Principal and interest are paid ratably through monthly payroll deductions. |
Payment of Benefits |
On termination of service, a participant may elect to receive either a lump sum amount equal to the value of his or her account or various installment options over extended periods of time. |
Expenses |
The expenses of maintaining the Plan are satisfied directly out of the Plan’s assets or by the Company, except for certain transaction charges which are paid by the participants involved. |
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Basis of Accounting |
The financial statements of the Plan are prepared under the accrual method of accounting. |
Investment Valuation and Income Recognition |
The Plan’s investments are stated at fair value as determined by quoted market prices. Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date. |
Payment of Benefits |
Benefits are recorded when paid. |
Estimates |
The preparation of financial statements in conformity with generally accepted accounting principles requires the Plan Administrator to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results may differ from those estimates. |
3. | INVESTMENTS | |||
The following table presents the fair values of investments, all of which are participant directed, at December 31, 2002 and 2001. Investments that represent five percent or more of the Plan’s net assets are separately identified. |
25
FIRSTCITY FINANCIAL CORPORATION
Employees’ Profit Sharing and Retirement Plan
NOTES TO FINANCIAL STATEMENTS – continued
2002 | 2001 | |||||||
Investments at fair value as determined by quoted market price: | ||||||||
Mutual funds: | ||||||||
Merrill Lynch Aggregate Bond Index Fund | $ | 262,738 | $ | 169,737 | ||||
Alliance Premier Growth Fund | 617,858 | 1,276,487 | ||||||
Alliance Quasar Fund | 298,340 | 524,604 | ||||||
Massachusetts Investors Trust | 579,713 | 1,263,168 | ||||||
Others | 1,008,706 | 416,034 | ||||||
2,767,355 | 3,650,030 | |||||||
Collective trust fund: | ||||||||
Merrill Lynch Retirement Preservation Trust | 1,805,394 | 1,446,744 | ||||||
Common Stock: | ||||||||
FirstCity Financial Corporation Common Stock | 154,240 | 110,723 | ||||||
$ | 4,726,989 | $ | 5,207,497 | |||||
During 2002 and 2001, the Plan’s investments (including investments bought, sold and held during the year) appreciated (depreciated) in value as follows: |
2002 | 2001 | |||||||
Mutual fund investments at fair value as determined by quoted market price | $ | (914,259 | ) | $ | (808,264 | ) | ||
FirstCity Financial Corporation common stock at fair value as determined by quoted market price | 12,153 | ( 45,877 | ) | |||||
$ | (902,106 | ) | $ | (854,141 | ) | |||
4. | COMPONENTS OF NET ASSETS AVAILABLE FOR BENEFITS | |||
There were no accounts included in net assets available for benefits at December 31, 2002, for persons who had withdrawn from participation during 2002. Net assets available for benefits at December 31, 2001, include accounts of persons who have withdrawn from participation in 2001 in the Plan totaling $34,797. | ||||
Also included in net assets available for benefits are forfeited account balances. At December 31, 2002 and 2001, there were $38,978 and $34,923, respectively, in suspended forfeitures. | ||||
5. | TAX STATUS | |||
The Plan obtained its latest determination letter on August 1, 1996, in which the Internal Revenue Service stated that the Plan, as then designed, was in compliance with the applicable requirements of the Internal Revenue Code (IRC). The Plan has been amended since receiving the determination letter. However, the Plan administrator and the Plan’s tax counsel believe that the Plan is currently designed and being operated in compliance with the applicable requirements of the IRC. Therefore, no provision for income taxes has been included in the Plan’s financial statements. |
26
FIRSTCITY FINANCIAL CORPORATION
Employees’ Profit Sharing and Retirement Plan
NOTES TO FINANCIAL STATEMENTS – continued
6. | PLAN TERMINATION | |||
Although it has not expressed any intention to do so, the Company has a right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of Plan termination, participants will become 100% vested in their accounts. | ||||
7. | WITHDRAWAL OF FIRSTCITY FUNDING FROM THE PLAN | |||
In February 2001, in connection with the disposition of FirstCity Funding, employees of FirstCity Funding became employees of Drive Corporation with their account balances transferring to the Drive Corporation 401(k) Plan. Distributions for the year ended December 31, 2002 and 2001, include $77,613 and $977,913, respectively, related to the transfer of these account balances. |
27
SUPPLEMENTAL INFORMATION
FIRSTCITY FINANCIAL CORPORATION
Employees’ Profit Sharing and Retirement Plan
Employer Identification Number: 76-0243729
Plan Number: 001
( a ) | ( b ) | ( c ) | ( d ) | ( e ) | ||||||||
Identity of issue, borrower, lessor | Description of investment including maturity date | Cost | Current Value | |||||||||
or similar party | rate of interest, collateral, par or maturity value | |||||||||||
Mutual Funds: | ||||||||||||
* | Merrill Lynch | ML Fundamental Growth Fund - Large Company Stock 7,076.7041 shares | $ | 89,874 | ||||||||
* | Merrill Lynch | ML Capital Fund — Balance Fund 942.7577 shares | 20,939 | |||||||||
* | Merrill Lynch | ML Healthcare Fund — Special Fund 5,134.4856 shares | 25,672 | |||||||||
* | Merrill Lynch | ML Pacific Fund — Specialty Fund 2,401.9389 shares | 32,762 | |||||||||
* | Merrill Lynch | ML Global Value Fund — Global Stock 651.1039 shares | 5,209 | |||||||||
* | Merrill Lynch | ML S&P 500 Index Fund — Large Company Stock 16,350.1976 shares | 175,928 | |||||||||
* | Merrill Lynch | ML Aggregate Bond Index Fund - Conservative Bond 23,994.2887 shares | 262,738 | |||||||||
* | Merrill Lynch | ML International Fund Global Stock 15,133.8631 shares | 103,970 | |||||||||
Nations | Nations International Value Fund Global Stock 7,290.2835 shares | 93,899 | ||||||||||
John Hancock | John Hancock Financial Industries - Specialty Fund 1633.6754 shares | 22,561 |
(continued)
28
FIRSTCITY FINANCIAL CORPORATION
Employees’ Profit Sharing and Retirement Plan
SCHEDULE H — ITEM 4i — SCHEDULE OF ASSETS (HELD AT END OF YEAR)
AS OF DECEMBER 31, 2002
(Continued)
Employer Identification Number: 76-0243729
Plan Number: 001
( a ) | ( b ) | ( c ) | ( d ) | ( e ) | ||||||||
Identity of issue, borrower, lessor | Description of investment including maturity date | Cost | Current Value | |||||||||
or similar party | rate of interest, collateral, par or maturity value | |||||||||||
Mutual Funds: (Continued) | ||||||||||||
State Street Research | State Street Research Aurora Fund - Small Company Stock 549.2987 shares | $ | 14,172 | |||||||||
MFS Investment Management | MFS New Discovery Fund — Small Company Stock 6,909.5295 shares | 78,976 | ||||||||||
Lord Abbett Management | Lord Abbett Affiliated Fund - Large Company Stock 2,892.7115 shares | 30,431 | ||||||||||
State Street Research | State Street Research High Income- Aggressive Bond 587.4309 shares | 1,856 | ||||||||||
Alliance Capital | Alliance Premier Growth Fund - Large Company Stock 44,967.8556 shares | 617,858 | ||||||||||
Alliance Capital | Alliance Quasar Fund Small Company Stock 21,540.7695 shares | 298,340 | ||||||||||
Seligman | Seligman Communications and Information - Specialty Funds 1,724.2825 shares | 27,847 | ||||||||||
Calvert | Calvert Income Fund — Conservative Bond 10,718.1016 shares | 175,348 | ||||||||||
MFS Investment Management | Massachusetts Investors Trust - Large Company Stock 45,043.7108 shares | 579,713 | ||||||||||
Davis New York | Davis New York Venture Fund - Large Company Stock 5,217.8573 shares | 109,262 | ||||||||||
2,767,355 | ||||||||||||
(continued)
29
FIRSTCITY FINANCIAL CORPORATION
Employees’ Profit Sharing and Retirement Plan
SCHEDULE H — ITEM 4i — SCHEDULE OF ASSETS (HELD AT END OF YEAR)
AS OF DECEMBER 31, 2002
(Continued)
Employer Identification Number: 76-0243729
Plan Number: 001
( a ) | ( b ) | ( c ) | ( d ) | ( e ) | ||||||||
Identity of issue, borrower, lessor | Description of investment including maturity date | Cost | Current Value | |||||||||
or similar party | rate of interest, collateral, par or maturity value | |||||||||||
Collective Trust Fund: | ||||||||||||
* | Merrill Lynch | ML Retirement Preservation Trust - Stable Value 1,805.393.7076 shares | $ | 1,805,394 | ||||||||
Common Stock: | ||||||||||||
* | Merrill Lynch | FirstCity Financial Corporation - Company Common Stock 112,584.1832 shares | 154,240 | |||||||||
Participants’ Loans | ||||||||||||
Participants’ loans; interest rates ranging from 5% to 9.5% | 179,668 | |||||||||||
$ | 4,906,657 | |||||||||||
* | Represents a party-in-interest to the Plan |
30
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Plan Administrator has duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.
FirstCity Financial Corporation Employees’ Profit Sharing and Retirement Plan
By: | /s/ JOE S. GREAK | |||
Joe S. Greak | ||||
Plan Administrator | ||||
July 15, 2005
31
EXHIBIT INDEX
Exhibit Number | Description | |
23.1 | Consent of Independent Registered Public Accounting Firm | |
23.2 | Consent of Independent Registered Public Accounting Firm | |
23.3 | Consent of Independent Registered Public Accounting Firm |
32