Exhibit 99.1
N E W S R E L E A S E
Contact: | Suzy W. Taylor |
| 866-652-1810 |
FirstCity Financial Reports Second Quarter 2008 Results and Activities
Waco, Texas August 11, 2008……….
Highlights:
· FirstCity reported 2nd quarter 2008 loss of $6.5 million or $0.63 per diluted share — which includes $8.5 million of net provisions.
· FirstCity invested $65.6 million in portfolio acquisitions and other investments during the quarter.
· FirstCity purchased 215,800 shares of its common stock during the quarter under its stock repurchase plan.
Components of the quarterly results are detailed below (dollars in thousands except per share data):
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| Three Months Ended |
| Six Months Ended |
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| June 30, |
| June 30, |
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| 2008 |
| 2007 |
| 2008 |
| 2007 |
| ||||
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| (unaudited) |
| (unaudited) |
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Portfolio Asset Acquisition and Resolution |
| $ | (4,821 | ) | $ | 4,313 |
| $ | (6,621 | ) | $ | 6,183 |
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Corporate overhead* |
| (1,658 | ) | (2,507 | ) | (3,351 | ) | (5,292 | ) | ||||
Earnings (loss) from continuing operations |
| (6,479 | ) | 1,806 |
| (9,972 | ) | 891 |
| ||||
Loss from discontinued operations, net of taxes |
| (50 | ) | — |
| (141 | ) | — |
| ||||
Net earnings (loss) to common stockholders |
| $ | (6,529 | ) | $ | 1,806 |
| $ | (10,113 | ) | $ | 891 |
|
Diluted earnings (loss) per common share |
| $ | (0.63 | ) | $ | 0.16 |
| $ | (0.97 | ) | $ | 0.08 |
|
* Corporate overhead includes $0.8 million and $2.0 million of expenses related to an independent audit committee investigation for the three-month and six-month periods ended June 30, 2007, respectively.
Portfolio Asset Acquisition and Resolution
For the second quarter 2008, the operating contribution from the Portfolio Asset Acquisition business resulted in a $4.8 million loss. The loss was comprised primarily of $11.5 million in revenues, $3.0 million in equity in earnings of investments, and $19.3 million of expenses. The business generated 50% of the revenues (including equity in earnings of investments) from domestic investments, 27% from investments in Latin America, and 23% from investments in Europe.
Earnings for the second quarter were positively impacted by continued income streams from Portfolio Assets of $5.6 million, equity in earnings of investments of $3.0 million, servicing fees of $2.7 million, and interest income of $1.2 million from loans receivable.
Second quarter earnings were negatively impacted by $8.5 million of net provisions — comprised of $7.1 million of net provisions recorded to our consolidated domestic and Latin American portfolios, and $1.4 million as our share of net provisions recorded to portfolio assets held in our partnership interests ($1.1 million of net provisions in domestic partnerships, $0.2 million of net recoveries in European partnerships, and $0.5 million of net provisions in Latin American partnerships).
Portfolio Asset Acquisition and Resolution (Continued)
The provisions in second quarter 2008 were attributed primarily to declines in values of loan collateral and real estate assets in our domestic portfolios, and additional delays in the timing of collections of expected cash flows on domestic loan portfolios. Management believes that declines in real estate values and delayed collections are the resulting adverse effects from the subprime mortgage crisis that began in the United States in 2007. Economic uncertainties and substantial losses incurred by lending institutions over the past year have resulted in “tightened credit standards” and “restrained lending”; and excess supplies of building inventories have caused significant declines in real estate values. These events, in turn, triggered the following obstacles that hinder economic growth and stability: (1) increased defaults and foreclosures on loan collateral because borrowers cannot refinance their loans and/or continue to make payments; (2) adverse effects on businesses due to a decline in consumer spending; and (3) decreased investment by businesses due to their inability to obtain low-cost loans to finance their operations and/or growth. The provisions were identified in connection with management’s regular evaluation of the collectibility of the Company’s Portfolio Assets. Management’s evaluation is inherently subjective as it requires estimates that are susceptible to revision in future periods as more information becomes available.
The following tables detail the impact of net foreign currency gains (losses) on corporate earnings:
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| Three Months Ended |
| Six Months Ended |
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| June 30, |
| June 30, |
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Illustration of the Effects of Currency |
| 2008 |
| 2007 |
| 2008 |
| 2007 |
| ||||
Fluctuations (dollars in thousands) |
| (unaudited) |
| (unaudited) |
| ||||||||
Net earnings (loss) to Common Stockholders |
| $ | (6,529 | ) | $ | 1,806 |
| $ | (10,113 | ) | $ | 891 |
|
Foreign currency gains (losses): |
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Euro |
| (187 | ) | (204 | ) | 38 |
| (446 | ) | ||||
Mexican Peso |
| 448 |
| 182 |
| 694 |
| 159 |
| ||||
Argentine Peso |
| 25 |
| 9 |
| 22 |
| (2 | ) | ||||
Canadian Dollar |
| 3 |
| 199 |
| (12 | ) | 220 |
| ||||
Chilean Peso |
| (42 | ) | 21 |
| 62 |
| 23 |
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Exchange rate at valuation date: |
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Euro |
| 0.63 |
| 0.74 |
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Mexican Peso |
| 10.28 |
| 10.87 |
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Argentine Peso |
| 3.02 |
| 3.09 |
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Canadian Dollar |
| 1.01 |
| 1.06 |
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Chilean Peso |
| 513.20 |
| 527.80 |
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The Company was involved in acquiring $36.7 million of portfolio investments with a face value of approximately $92.1 million in the second quarter 2008 — of which FirstCity’s investment share was $33.4 million. FirstCity’s global distribution of its second quarter 2008 investments includes $28.4 million in the United States and $5.0 million in Latin America. In addition to its portfolio acquisitions in second quarter 2008, FirstCity invested $23.9 million in the form of senior debt financing arrangements with domestic entities; $5.0 million for SBA loan originations and advances; and $3.3 million on investment property. At June 30, 2008, FirstCity’s earning assets (Portfolio Assets, equity investments, loans receivable and entity-level earning assets) totaled $296.3 million, and the global distribution of such earning assets (at carrying value) included $204.5 million in the United States; $47.0 million in Europe; and $44.8 million in Latin America.
2
Portfolio Asset Acquisition and Resolution (Continued)
Portfolio purchases are detailed below (in millions):
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| Portfolio Purchases |
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| FirstCity |
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| Latin |
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| FirstCity |
| Investment |
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| Domestic |
| Europe |
| America |
| Total |
| Investment |
| in Other |
| Total |
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2008 |
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2nd Quarter |
| $ | 28.4 |
| $ | — |
| $ | 8.3 |
| $ | 36.7 |
| $ | 33.4 |
| $ | 32.2 |
| $ | 65.6 |
|
1st Quarter |
| 6.7 |
| — |
| 13.2 |
| 19.9 |
| 8.4 |
| 1.5 |
| 9.9 |
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YTD 2008 |
| $ | 35.1 |
| $ | — |
| $ | 21.5 |
| $ | 56.6 |
| $ | 41.8 |
| $ | 33.7 |
| $ | 75.5 |
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2007 |
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4th Quarter |
| $ | 5.3 |
| $ | 14.7 |
| $ | 4.4 |
| $ | 24.4 |
| $ | 15.7 |
| $ | 3.7 |
| $ | 19.4 |
|
3rd Quarter |
| 17.4 |
| 2.3 |
| — |
| 19.7 |
| 16.3 |
| 6.3 |
| 22.6 |
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2nd Quarter |
| 27.4 |
| 2.4 |
| 61.6 |
| 91.4 |
| 25.2 |
| 4.2 |
| 29.4 |
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1st Quarter |
| 71.6 |
| 3.8 |
| 3.4 |
| 78.8 |
| 69.5 |
| 7.8 |
| 77.3 |
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YTD 2007 |
| $ | 121.7 |
| $ | 23.2 |
| $ | 69.4 |
| $ | 214.3 |
| $ | 126.7 |
| $ | 22.0 |
| $ | 148.7 |
|
Total Year 2006 |
| $ | 136.6 |
| $ | 102.2 |
| $ | 58.2 |
| $ | 297.0 |
| $ | 144.0 |
| $ | 28.2 |
| $ | 172.2 |
|
Total Year 2005 |
| $ | 93.4 |
| $ | 37.2 |
| $ | 16.0 |
| $ | 146.6 |
| $ | 71.4 |
| $ | 3.2 |
| $ | 74.6 |
|
Considering the substantial losses reported in the financial services sector over the past year and downward pressure on economic growth due to the subprime mortgage crisis, management remains positive on the outlook of the Company. Management believes that current market conditions should not hinder FirstCity’s ability to expand its business, and that asset acquisition opportunities at attractive margins are available. As mentioned above, FirstCity was involved in acquiring $36.7 million of portfolio investments with a face value of approximately $92.1 million in the second quarter 2008 (of which FirstCity’s investment share was $33.4 million), and the Company invested an additional $32.2 million in the form of debt financing arrangements and real estate investments. In addition, the Company is currently evaluating 26 different transactions representing over $2.7 billion in face value of assets, although there can be no assurance that FirstCity will be able to consummate any of these transactions on acceptable terms.
Other Corporate Matters
Liquidity
FirstCity has $350.0 million of credit facility commitments available to finance its portfolio and asset purchases and equity investments in new ventures, and to provide for working capital loans. At June 30, 2008, FirstCity’s maximum borrowing capacity under these credit commitments was $128.0 million, subject to borrowing base requirements of the respective credit facilities.
Share Repurchase Program
FirstCity has a stock repurchase program providing for the repurchase of up to 1,500,000 shares of its common stock. To date, the Company has purchased 1,078,630 shares at an average cost of $8.62 per share (including 215,800 shares purchased in the second quarter of 2008 at an average cost of $5.13, and 480,330 shares purchased in the first six months of 2008 at an average cost of $6.76 per share). Share repurchases continue and signify management’s assessment that the shares are undervalued in the market and represent a good investment alternative to enhance long term shareholder value.
3
Conference Call
A conference call will be held on Monday, August 11, 2008 at 9:00 a.m. Central Time to discuss second quarter results. A question and answer session will follow the prepared remarks. Details to access the call and webcast are as follows:
| Event: | FirstCity Financial Corporation Second Quarter 2008 Conference Call | ||||
| Date: | Monday, August 11, 2008 | ||||
| Time: | 9:00 a.m. Central Time | ||||
| Host: | James T. Sartain, FirstCity’s President and Chief Executive Officer | ||||
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| Web Access: | FirstCity’s web page - |
| www.fcfc.com/invest.htm or, | ||
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| CCBN’s Investor websites - |
| www.streetevents.com and, | ||
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| www.fulldisclosure.com | ||
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| Dial In Access: | Domestic |
| 800-291-5365 | ||
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| International |
| 617-614-3922 | ||
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| Pass code |
| 11238703 | ||
Replay Available on FirstCity’s web page (www.fcfc.com/invest.htm)
FirstCity Financial Corporation is a diversified financial services company with operations dedicated to portfolio asset acquisition and resolution with offices in the U.S. and with affiliate organizations in Europe and Latin America. FirstCity common stock is listed on the NASDAQ Global Select Market (NASDAQ: FCFC).
Forward-Looking Statements
Certain statements in this press release, which are not historical in fact, including, but not limited to, statements relating to future performance, may be deemed to be forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act. Forward-looking statements include, without limitation, any statement that may project, indicate or imply future results, performance or achievements, and may contain the words “expect,” “intend,” “plan,” “estimate,” “believe,” “will be,” “will continue,” “will likely result,” “indication” and similar expressions. Such statements inherently are subject to a variety of risks and uncertainties that could cause actual results to differ materially from those projected. There are many important factors that could cause the Company’s actual results to differ materially.
These factors include, but are not limited to, the performance of the Company’s subsidiaries and affiliates; availability of portfolio assets and other investment opportunities; the Company’s ability to consummate portfolio acquisitions and other investment transactions on acceptable terms; assumptions underlying portfolio asset performance; risks associated with start up of new businesses and entry into new foreign markets, risks associated with foreign operations; currency exchange rate fluctuations; interest rate risk; credit risk; risks of declining value of loans, collateral or assets; the degree to which the Company is leveraged; the Company’s continued need for financing; availability of the Company’s credit facilities; ability to obtain additional financing from the Bank of Scotland or any other lender; the impact of certain covenants in loan agreements of the Company and its subsidiaries; the ability of the Company to utilize net operating loss carry forwards; general economic, business and market conditions; foreign social and economic conditions; changes (legislative and otherwise) in the asset securitization industry; regulatory and accounting changes; fluctuation in residential and commercial real estate values; capital markets conditions, including the markets for asset-backed securities; uncertainties of any litigation arising from discontinued operations; factors more fully discussed and identified under Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations;” and risk factors and other risks identified in the Company’s Annual Report on Form 10-K for the year ended December 31, 2007, filed with the SEC on March 17, 2008, as well as in the Company’s other filings with the SEC. Many of these factors are beyond the Company’s control. In addition, it should be noted that past financial and operational performance of the Company is not necessarily indicative of future financial and operational performance. Given these risks and uncertainties, investors should not place undue reliance on forward-looking statements.
The forward-looking statements in this release speak only as of the date of this release. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement to reflect any change in the Company’s expectations with regard thereto or any change in events, conditions or circumstances on which any forward-looking statement is based.
4
FirstCity Financial Corporation |
Summary of Operations |
(In thousands, except per share data) |
(Unaudited) |
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|
| Three Months Ended |
| Six Months Ended |
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|
| June 30, |
| June 30, |
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| 2008 |
| 2007 |
| 2008 |
| 2007 |
| ||||
Revenues: |
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Servicing fees |
| $ | 2,706 |
| $ | 2,977 |
| $ | 4,906 |
| $ | 5,582 |
|
Income from Portfolio Assets |
| 5,622 |
| 5,685 |
| 10,557 |
| 10,720 |
| ||||
Gain on sale of SBA loans held for sale, net |
| 133 |
| 343 |
| 142 |
| 624 |
| ||||
Interest income from SBA loans |
| 366 |
| 606 |
| 842 |
| 914 |
| ||||
Interest income from affiliates |
| 483 |
| 140 |
| 633 |
| 266 |
| ||||
Interest income from loans receivable - other |
| 355 |
| 982 |
| 630 |
| 1,889 |
| ||||
Revenue from controlled affiliate |
| 859 |
| — |
| 1,664 |
| — |
| ||||
Other income |
| 965 |
| 538 |
| 1,619 |
| 997 |
| ||||
Total revenues |
| 11,489 |
| 11,271 |
| 20,993 |
| 20,992 |
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Expenses: |
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Interest and fees on notes payable |
| 3,758 |
| 4,668 |
| 7,441 |
| 8,919 |
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Salaries and benefits |
| 5,297 |
| 3,864 |
| 10,327 |
| 7,857 |
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Provision for loan and impairment losses |
| 7,090 |
| 746 |
| 10,120 |
| 1,072 |
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Occupancy, data processing, property protection and other |
| 4,680 |
| 4,388 |
| 8,605 |
| 8,321 |
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Total expenses |
| 20,825 |
| 13,666 |
| 36,493 |
| 26,169 |
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Equity in earnings of investments |
| 3,008 |
| 4,332 |
| 5,848 |
| 6,158 |
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Earnings (loss) from continuing operations before income taxes and minority interest |
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| (6,328 | ) | 1,937 |
| (9,652 | ) | 981 |
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Income taxes |
| (98 | ) | (146 | ) | (289 | ) | (213 | ) | ||||
Minority interest |
| (53 | ) | 15 |
| (31 | ) | 123 |
| ||||
Earnings (loss) from continuing operations |
| (6,479 | ) | 1,806 |
| (9,972 | ) | 891 |
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Discontinued operations |
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Loss from discontinued operations |
| (50 | ) | — |
| (141 | ) | — |
| ||||
Net earnings (loss) |
| $ | (6,529 | ) | $ | 1,806 |
| $ | (10,113 | ) | $ | 891 |
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Basic earnings (loss) per common share are as follows: |
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Earnings (loss) from continuing operations |
| $ | (0.63 | ) | $ | 0.17 |
| $ | (0.96 | ) | $ | 0.08 |
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Discontinued operations |
| $ | — |
| $ | — |
| $ | (0.01 | ) | $ | — |
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Net earnings (loss) per common share |
| $ | (0.63 | ) | $ | 0.17 |
| $ | (0.97 | ) | $ | 0.08 |
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Weighted average common shares outstanding |
| 10,357 |
| 10,789 |
| 10,471 |
| 10,789 |
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Diluted earnings (loss) per common share are as follows: |
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Earnings (loss) from continuing operations |
| $ | (0.63 | ) | $ | 0.16 |
| $ | (0.96 | ) | $ | 0.08 |
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Discontinued operations |
| $ | — |
| $ | — |
| $ | (0.01 | ) | $ | — |
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Net earnings (loss) per common share |
| $ | (0.63 | ) | $ | 0.16 |
| $ | (0.97 | ) | $ | 0.08 |
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Wtd. avg. common shares outstanding |
| 10,357 |
| 11,397 |
| 10,471 |
| 11,414 |
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Selected Unaudited Balance Sheet Data |
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| June 30, |
| December 31, |
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| 2008 |
| 2007 |
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Cash and cash equivalents |
| $ | 12,316 |
| $ | 23,037 |
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Restricted cash |
| 1,190 |
| 509 |
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Earning Assets: |
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Portfolio Assets, net |
| 147,840 |
| 122,001 |
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Loans and interest receivable |
| 52,923 |
| 26,574 |
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Equity investments |
| 87,624 |
| 87,622 |
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Railroad assets |
| 7,879 |
| 7,403 |
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Deferred tax asset, net |
| 20,101 |
| 20,101 |
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Service fees receivable and other assets |
| 18,750 |
| 10,872 |
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Total assets |
| $ | 348,623 |
| $ | 298,119 |
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Notes payable to banks |
| $ | 230,585 |
| $ | 177,329 |
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Note payable to affiliate |
| 8,658 |
| — |
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Minority interest and other liabilities |
| 15,188 |
| 13,967 |
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Total liabilities |
| 254,431 |
| 191,296 |
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Total equity |
| 94,192 |
| 106,823 |
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Total liabilities and equity |
| $ | 348,623 |
| $ | 298,119 |
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5
FirstCity Financial Corporation |
Supplemental Information |
(Dollars in thousands) |
(Unaudited) |
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| Three Months Ended |
| Six Months Ended |
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| June 30, |
| June 30, |
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| 2008 |
| 2007 |
| 2008 |
| 2007 |
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Portfolio Asset Acquisition and Resolution: |
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Summary Operating Statement Data |
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Revenues |
| $ | 11,445 |
| $ | 11,188 |
| $ | 20,766 |
| $ | 20,780 |
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Equity in earnings of investments |
| 3,008 |
| 4,332 |
| 5,848 |
| 6,158 |
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Expenses |
| (12,184 | ) | (10,461 | ) | (23,115 | ) | (19,683 | ) | ||||
Operating contribution before provision for |
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loan and impairment losses |
| 2,269 |
| 5,059 |
| 3,499 |
| 7,255 |
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Provision for loan and impairment losses |
| 7,090 |
| 746 |
| 10,120 |
| 1,072 |
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Operating contribution, net of direct taxes |
| $ | (4,821 | ) | $ | 4,313 |
| $ | (6,621 | ) | $ | 6,183 |
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Aggregate purchase price of portfolios acquired: |
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Acquisition partnerships |
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Domestic |
| $ | 28,426 |
| $ | 27,464 |
| $ | 35,119 |
| $ | 99,032 |
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Latin America |
| 8,314 |
| 61,558 |
| 21,521 |
| 64,959 |
| ||||
Europe |
| — |
| 2,409 |
| — |
| 6,211 |
| ||||
Total |
| $ | 36,740 |
| $ | 91,431 |
| $ | 56,640 |
| $ | 170,202 |
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| Purchase |
| FirstCity’s |
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| Price |
| Investment |
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Historical Acquisitions - Annual: |
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Six months ended June 30, 2008 |
| $ | 56,640 |
| $ | 41,883 |
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2007 |
| 214,333 |
| 126,714 |
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2006 |
| 296,990 |
| 144,048 |
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2005 |
| 146,581 |
| 71,405 |
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2004 |
| 174,139 |
| 59,762 |
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| June 30, |
| December 31, |
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| 2008 |
| 2007 |
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Portfolio acquisition and resolution assets by region: |
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|
|
|
|
|
| ||||
Domestic |
| $ | 204,234 |
| $ | 163,078 |
|
|
|
|
| ||
Latin America |
| 44,809 |
| 33,450 |
|
|
|
|
| ||||
Europe |
| 46,941 |
| 46,701 |
|
|
|
|
| ||||
Canada |
| 282 |
| 371 |
|
|
|
|
| ||||
Total |
| $ | 296,266 |
| $ | 243,600 |
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
| Three Months Ended |
| Six Months Ended |
| ||||||||
|
| June 30, |
| June 30, |
| ||||||||
|
| 2008 |
| 2007 |
| 2008 |
| 2007 |
| ||||
Revenues and equity in earnings of investments by region: |
|
|
|
|
|
|
|
|
| ||||
Domestic |
| $ | 7,249 |
| $ | 9,382 |
| $ | 13,967 |
| $ | 16,349 |
|
Latin America |
| 3,853 |
| 3,693 |
| 6,888 |
| 6,225 |
| ||||
Europe |
| 3,340 |
| 2,375 |
| 5,735 |
| 4,205 |
| ||||
Canada |
| 11 |
| 70 |
| 24 |
| 159 |
| ||||
Total |
| $ | 14,453 |
| $ | 15,520 |
| $ | 26,614 |
| $ | 26,938 |
|
|
|
|
|
|
|
|
|
|
| ||||
Revenues and equity in earnings of investments by source: |
|
|
|
|
|
|
|
|
| ||||
Equity earnings |
| $ | 3,008 |
| $ | 4,332 |
| $ | 5,848 |
| $ | 6,158 |
|
Income from Portfolio Assets |
| 5,622 |
| 5,685 |
| 10,557 |
| 10,720 |
| ||||
Servicing fees |
| 2,706 |
| 2,977 |
| 4,906 |
| 5,582 |
| ||||
Gain on sale of SBA loans held for sale, net |
| 133 |
| 343 |
| 142 |
| 624 |
| ||||
Interest income from SBA loans |
| 366 |
| 606 |
| 842 |
| 914 |
| ||||
Interest income from affiliates |
| 483 |
| 140 |
| 633 |
| 266 |
| ||||
Interest income from loans receivable - other |
| 355 |
| 982 |
| 630 |
| 1,889 |
| ||||
Revenue from controlled affiliate |
| 859 |
| — |
| 1,664 |
| — |
| ||||
Other |
| 921 |
| 455 |
| 1,392 |
| 785 |
| ||||
Total |
| $ | 14,453 |
| $ | 15,520 |
| $ | 26,614 |
| $ | 26,938 |
|
6
FirstCity Financial Corporation |
Supplemental Information |
(Dollars in thousands) |
(Unaudited) |
|
| Three Months Ended |
| Six Months Ended |
| ||||||||
|
| June 30, |
| June 30, |
| ||||||||
|
| 2008 |
| 2007 |
| 2008 |
| 2007 |
| ||||
Analysis of Equity Investments |
|
|
|
|
|
|
|
|
| ||||
FirstCity’s average investment: |
|
|
|
|
|
|
|
|
| ||||
Domestic |
| $ | 21,812 |
| $ | 34,200 |
| $ | 22,903 |
| $ | 35,084 |
|
Latin America |
| 23,798 |
| 21,177 |
| 23,311 |
| 20,161 |
| ||||
Europe |
| 31,163 |
| 44,365 |
| 30,793 |
| 46,112 |
| ||||
Europe-Servicing subsidiaries |
| 7,189 |
| 5,630 |
| 7,084 |
| 5,827 |
| ||||
Latin America-Servicing subsidiaries |
| 5,271 |
| 4,500 |
| 5,059 |
| 2,785 |
| ||||
Domestic-Operating subsidiaries |
| (110 | ) | — |
| (63 | ) | — |
| ||||
Total |
| $ | 89,123 |
| $ | 109,872 |
| $ | 89,087 |
| $ | 109,969 |
|
|
|
|
|
|
|
|
|
|
| ||||
FirstCity’s share of equity earnings (losses): |
|
|
|
|
|
|
|
|
| ||||
Domestic |
| $ | (112 | ) | $ | 1,113 |
| $ | 154 |
| $ | 1,364 |
|
Latin America |
| 735 |
| 887 |
| 1,104 |
| 877 |
| ||||
Europe |
| 2,394 |
| 1,673 |
| 4,080 |
| 3,213 |
| ||||
Europe-Servicing subsidiaries |
| 494 |
| 487 |
| 810 |
| 563 |
| ||||
Latin America-Servicing subsidiaries |
| (147 | ) | 172 |
| 56 |
| 141 |
| ||||
Domestic-Operating subsidiaries |
| (356 | ) | — |
| (356 | ) | — |
| ||||
Total |
| $ | 3,008 |
| $ | 4,332 |
| $ | 5,848 |
| $ | 6,158 |
|
|
|
|
|
|
|
|
|
|
| ||||
Selected Other Data: |
|
|
|
|
|
|
|
|
| ||||
Average investment in consolidated portfolio assets |
|
|
|
|
|
|
|
|
| ||||
and loans receivable: |
|
|
|
|
|
|
|
|
| ||||
Domestic |
| $ | 147,704 |
| $ | 163,146 |
| $ | 139,248 |
| $ | 150,017 |
|
Latin America |
| 9,031 |
| 8,267 |
| 8,176 |
| 8,831 |
| ||||
Europe |
| 9,219 |
| 4,014 |
| 9,158 |
| 3,800 |
| ||||
Canada |
| 295 |
| 1,837 |
| 321 |
| 2,023 |
| ||||
Total |
| $ | 166,249 |
| $ | 177,264 |
| $ | 156,903 |
| $ | 164,671 |
|
|
|
|
|
|
|
|
|
|
| ||||
Income from consolidated portfolio assets and loans receivable: |
|
|
|
|
|
|
|
|
| ||||
Domestic |
| $ | 6,239 |
| $ | 7,076 |
| $ | 11,474 |
| $ | 13,043 |
|
Latin America |
| 382 |
| 519 |
| 703 |
| 1,046 |
| ||||
Europe |
| 327 |
| 91 |
| 603 |
| 165 |
| ||||
Canada |
| 11 |
| 70 |
| 24 |
| 159 |
| ||||
Total |
| $ | 6,959 |
| $ | 7,756 |
| $ | 12,804 |
| $ | 14,413 |
|
|
|
|
|
|
|
|
|
|
| ||||
Servicing fee revenues: |
|
|
|
|
|
|
|
|
| ||||
Domestic partnerships: |
|
|
|
|
|
|
|
|
| ||||
Servicing fee revenue |
| $ | 347 |
| $ | 1,050 |
| $ | 709 |
| $ | 1,679 |
|
Average servicing fee % |
| 5.4 | % | 4.2 | % | 4.0 | % | 4.0 | % | ||||
Latin American partnerships: |
|
|
|
|
|
|
|
|
| ||||
Servicing fee revenue |
| $ | 2,281 |
| $ | 1,909 |
| $ | 4,129 |
| $ | 3,867 |
|
Average servicing fee % |
| 25.2 | % | 22.2 | % | 20.3 | % | 25.9 | % | ||||
Total Service Fees-Portfolio Assets: |
|
|
|
|
|
|
|
|
| ||||
Servicing fee revenue |
| $ | 2,628 |
| $ | 2,959 |
| $ | 4,838 |
| $ | 5,546 |
|
Average servicing fee % |
| 17.0 | % | 8.7 | % | 12.8 | % | 9.7 | % | ||||
Service Fees-SBA loans: |
| $ | 78 |
| $ | 18 |
| $ | 68 |
| $ | 36 |
|
Total Service Fees |
| $ | 2,706 |
| $ | 2,977 |
| $ | 4,906 |
| $ | 5,582 |
|
|
|
|
|
|
|
|
|
|
| ||||
Collections: |
|
|
|
|
|
|
|
|
| ||||
Domestic partnerships |
| $ | 6,378 |
| $ | 25,259 |
| $ | 17,575 |
| $ | 42,484 |
|
Latin American partnerships |
| 28,752 |
| 14,899 |
| 40,516 |
| 27,241 |
| ||||
European partnerships |
| 20,353 |
| 14,328 |
| 33,121 |
| 47,839 |
| ||||
Subtotal |
| 55,483 |
| 54,486 |
| 91,212 |
| 117,564 |
| ||||
Consolidated portfolio assets |
| 11,426 |
| 21,393 |
| 30,915 |
| 41,084 |
| ||||
Total |
| $ | 66,909 |
| $ | 75,879 |
| $ | 122,127 |
| $ | 158,648 |
|
|
|
|
|
|
|
|
|
|
| ||||
Servicing portfolio (face value): |
|
|
|
|
|
|
|
|
| ||||
Domestic |
| $ | 601,576 |
| $ | 616,079 |
|
|
|
|
| ||
Latin America |
| 1,614,533 |
| 2,475,093 |
|
|
|
|
| ||||
Europe |
| 1,154,890 |
| 1,035,833 |
|
|
|
|
| ||||
Total |
| $ | 3,370,999 |
| $ | 4,127,005 |
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
| ||||
Number of personnel at period end: |
|
|
|
|
|
|
|
|
| ||||
Domestic |
| 101 |
| 68 |
|
|
|
|
| ||||
Latin America |
| 127 |
| 117 |
|
|
|
|
| ||||
Corporate |
| 35 |
| 37 |
|
|
|
|
| ||||
Total personnel |
| 263 |
| 222 |
|
|
|
|
|
7
FirstCity Financial Corporation Schedule of Unrealized Gross Profit June 30, 2008 (Unaudited) |
|
| Basis in Portfolio Assets (1) |
| |||||
($ in 000’s) |
| 12/31/2006 |
| 12/31/2007 |
| 6/30/2008 |
| |
Domestic |
| $ | 153,118 |
| 151,802 |
| 152,785 |
|
Europe |
| 46,204 |
| 40,340 |
| 38,947 |
| |
Latin America |
| 22,378 |
| 26,844 |
| 38,576 |
| |
Total (4) |
| $ | 221,700 |
| 218,987 |
| 230,307 |
|
|
|
|
|
|
|
|
| |
|
| Estimated Remaining Collections (2) |
| |||||
|
| 12/31/2006 |
| 12/31/2007 |
| 6/30/2008 |
| |
Domestic |
| $ | 215,987 |
| 195,845 |
| 213,511 |
|
Europe |
| 61,081 |
| 52,617 |
| 50,483 |
| |
Latin America |
| 50,866 |
| 68,900 |
| 87,058 |
| |
Total |
| $ | 327,934 |
| 317,363 |
| 351,052 |
|
|
|
|
|
|
|
|
| |
|
| Unrealized Gross Profit (3) |
| |||||
|
| 12/31/2006 |
| 12/31/2007 |
| 6/30/2008 |
| |
Domestic |
| $ | 62,869 |
| 44,043 |
| 60,726 |
|
Europe |
| 14,877 |
| 12,278 |
| 11,537 |
| |
Latin America |
| 28,488 |
| 42,056 |
| 48,482 |
| |
Total |
| $ | 106,234 |
| 98,376 |
| 120,745 |
|
|
|
|
|
|
|
|
| |
|
| Unrealized Gross Profit% |
| |||||
|
| 12/31/2006 |
| 12/31/2007 |
| 6/30/2008 |
| |
Domestic |
| 29.1 | % | 22.5 | % | 28.4 | % | |
Europe |
| 24.4 | % | 23.3 | % | 22.9 | % | |
Latin America |
| 56.0 | % | 61.0 | % | 55.7 | % | |
Total |
| 32.4 | % | 31.0 | % | 34.4 | % |
This schedule represents statistical information related to the Company’s ownership in Portfolio Assets and is provided for informational purposes to give an indication of the future Unrealized Gross Profit attributable to those pools. These are estimates and will change each period based upon review and judgment of management and individual facts and circumstances surrounding each asset in the Portfolios. |
|
(1) Book Value of Portfolio Assets represents FirstCity’s share of the unamortized purchase price of the Portfolios held by the various acquisition entities, some of which are consolidated by FirstCity and others held through equity investments in partnership or similar arrangements.
(2) Estimated Remaining Collections represents FirstCity’s share of future projected cash collections expected from the Portfolios, net of expenses.
(3) Unrealized Gross Profit represents the excess difference between the Estimated Remaining Collections and the Book Value of Portfolio Assets.
(4) FirstCity considers Book Value of its interests in Portfolio Assets a useful measurement of the Company’s underlying holdings and interests in Portfolio Assets. As FirstCity’s share of Book Value of Portfolio Assets is considered a non-GAAP measure, the following reconciliation is provided:
|
| 12/31/2006 |
| 12/31/2007 |
| 6/30/2008 |
| |
FirstCity’s consolidated Portfolio Assets (as reported in “Portfolio Assets” on the financial statement of the respective Form 10-K or 10-Q) |
| $ | 108,696 |
| 122,001 |
| 147,840 |
|
Minority owners’ interests in FirstCity’s majority-owned Portfolio Assets (component of “Minority interest” on the financial statement of the respective Form 10-K or 10-Q) |
| (2,005 | ) | (4,474 | ) | (11,046 | ) | |
FirstCity’s interests in Portfolio Assets held by equity investment entities (included in the “Condensed Combined Balance Sheets - Assets” tabular disclosure under the “Equity Investments” footnote of the respective Form 10-K or 10-Q) |
| 115,009 |
| 101,460 |
| 93,513 |
| |
|
| $ | 221,700 |
| 218,987 |
| 230,307 |
|
8