Exhibit 99.1
NEWS RELEASE
Contact: | Suzy W. Taylor |
| 866-652-1810 |
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FirstCity Financial Corporation Reports First Quarter 2009 Results and Activities
Waco, Texas May 12, 2009
Highlights:
· FirstCity reported first quarter 2009 earnings of $0.6 million or $0.07 per diluted share.
· FirstCity invested $73.7 million in domestic portfolio acquisitions and other investments during the quarter.
· Continued available liquidity has enabled FirstCity to invest $31.0 million in domestic portfolio acquisitions and other investments subsequent to first quarter 2009.
First Quarter 2009 and Business Outlook
The first quarter of 2009 generated earnings of $0.6 million or $0.07 per diluted share compared to a loss of $3.6 million or ($0.34) per diluted share for the first quarter of 2008. The earnings improvement during the first quarter of 2009 was a result of increased revenues directly associated with higher domestic collections in the first quarter of 2009 compared to the same period last year. This additional revenue off-set the non-cash charges of $1.8 million in foreign currency exchange losses and $1.7 million of impairment during the first quarter of 2009. Additionally, FirstCity’s quarterly investments of $73.7 million included $64.9 million of domestic portfolio assets with a face value of $140.8 million acquired from the FDIC, $2.4 million of debt investments through our special situations platform, and $6.4 million of SBA loan originations.
Jim Sartain, Chief Executive Officer, said, “FirstCity continues to generate positive cash flows from its investments and loan servicing platform to cover operating expenses and bolster liquidity to fund future investment opportunities. With the availability under our credit lines and shared investment opportunities with other investors, we continue to take advantage of current market opportunities in both of our business segments. Our overall objective remains the same — leverage our expertise and market opportunities by strategically investing in distressed assets and special arrangements to achieve the best execution on our investments and maximize the ultimate cash recoveries.”
The Company continues to experience positive growth in the unrealized future gross profit associated with its core portfolio asset business. At the end of March 2009, the unrealized future gross profit on these assets increased to $136.0 million, which is up from $122.3 million at the end of December 2008 (refer to the schedule on page 10 of this release). This is another indicator of the Company’s ability to generate cash flows to support operations and sustain liquidity for future investment opportunities.
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The current market conditions have created increased opportunities for FirstCity to grow its distressed asset business through asset acquisitions at attractive margins, and the Company has been actively pursuing these prospects These opportunities exist in all of FirstCity’s markets, but management is primarily focused on the U.S. market as a result of the rising number of financial institution closures — which in turn increases the supply of distressed assets and the opportunities for legacy asset acquisitions through government programs. Distressed asset acquisitions are generally subject to competitive bidding and negotiations, and the distressed asset markets in which FirstCity operates are highly competitive. As such, there can be no assurance as to the ultimate execution of any on transaction.
FirstCity also continues to pursue investments in privately-held middle-market companies through its special situations platform. We believe investment opportunities at attractive risk-adjusted returns are on the rise since these companies are facing increasing difficulty in accessing the capital markets due to the dislocation in the credit markets, and capital constraints and underwriting limitations experienced by commercial financial institutions. FirstCity continues to seek opportunities to provide investment capital to middle-market companies through flexible capital structuring arrangements.
FirstCity has $350.0 million of credit facility commitments available to finance its portfolio and asset purchases, capital investments in new ventures, and to provide for working capital to support our growth. At March 31, 2009, FirstCity’s maximum borrowing capacity under these credit commitments approximated $83.2 million (subject to borrowing base requirements of the respective credit facilities). These credit facilities are available to FirstCity through their maturity in November 2010, at which time management expects to negotiate for a maturity date extension. FirstCity is in compliance with all covenants and requirements set forth in the underlying credit agreements for these credit facilities.
Items effecting comparability of results for the first quarter of 2009 are as follows:
The Company recorded net provisions for loss of $1.7 million during the first quarter of 2009 compared to $4.1 million in the first quarter of 2008. The provisions were recorded to reflect declines in expected realization and delayed timing of asset collections. In the first quarter of 2009, $1.4 million of the net provisions were attributable to domestic assets and $0.2 million related to European assets. The provisions were split between consolidated portfolios ($1.1 million) and non-consolidated subsidiaries ($0.6 million) in the first quarter 2009.
Foreign currency exchange losses of $1.8 million were recorded during the first quarter of 2009 compared to $0.6 million of foreign currency exchange gains in the first quarter 2008. In the first quarter of 2009, $1.5 million of the foreign currency exchange losses were attributable to a 13% devaluation of the Mexican peso during the Company’s reporting period for its Mexican operations. However, since the end of March 2009, we have seen improvement in the value of the Mexican peso as it has since appreciated about 8%.
Total assets at the end of first quarter 2009 expanded to $378.2 million compared to $328.9 million at the end of fourth quarter 2008 as a result of FirstCity’s loan portfolio acquisitions and other investments during the quarter. The Company’s earning assets experienced a corresponding increase to $346.2 million at the end of March 2009 compared to $296.3 million at the end of December 2008.
2
Selected financial data for the first quarter of 2009:
Revenues in the first quarter of 2009 increased to $15.7 million compared to $9.5 million in the first quarter of 2008. The Company’s earnings in first quarter 2009 include $9.0 million of income and gains from Portfolio Assets; $1.7 million of interest income from loans receivable; $2.4 million of fee income attributable to our loan servicing platform, and $1.7 million of revenue and gains attributable to our majority-owned railroad operations. Increased revenue in the first quarter of 2009 is attributable primarily to increased collections on consolidated portfolios to $30.5 million in first quarter 2009 compared to $19.5 million in the first quarter of 2008, and FirstCity’s increased holdings in earning assets ($346.2 million at the end of March 2009 compared to $236.2 million at the end of March 2008).
Equity in earnings of unconsolidated subsidiaries was $0.1 million loss in the first quarter of 2009 compared to $2.8 million of net earnings in the first quarter of 2008. The decline is a result of FirstCity’s share of foreign currency exchange losses of $1.5 million in the first quarter of 2009 compared to $0.4 million of foreign currency exchange gains in the first quarter of 2008, and a decrease in total partnership collections to $19.6 million in first quarter of 2009 from $35.7 million in the first quarter of 2008.
Total operating expenses (excluding provision, interest and income tax expenses) for the first quarter of 2009 increased to $9.7 million from $9.0 million in the first quarter 2008 — attributed primarily to $0.6 million of consolidated foreign currency exchange losses recorded in the first quarter of 2009 compared to $0.2 million of consolidated gains in the first quarter of 2008.
Total interest expense dropped to $3.5 million in the first quarter of 2009 from $3.7 million in the first quarter of 2008 (even though FirstCity’s average debt holdings increased to $270.1 million at the end of March 2009 from $170.0 million at the end of March 2008). The interest expense decrease is attributable to the Company’s lower average cost of funds of 5.2% during the first quarter of 2009 compared to 8.7% from the same period a year ago.
Other Matters
Accounting Change
On January 1, 2009, the Company adopted SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements — an amendment of ARB No. 51 (“SFAS 160”). SFAS 160 changed, among other things, the presentation requirements for noncontrolling (minority) interests. SFAS 160 requires the ownership interests in consolidated subsidiaries held by other parties (previously referred to as minority interests) to be presented in the balance sheet as a component of equity. As a result, the Company’s equity at March 31, 2009 includes $20.9 million of noncontrolling interests. In addition, pursuant to SFAS 160, we reclassified noncontrolling interests in the amount of $15.6 million from total liabilities to equity in our December 31, 2008 balance sheet.
3
Conference Call
A conference call will be held on Tuesday, May 12, 2009 at 9:00 a.m. Central Time to discuss first 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 Fourth Quarter 2008 Conference Call |
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Date: | Tuesday, May 12, 2009 |
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Time: | 9:00 a.m. Central Time |
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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, | ||
| CCBN’s Investor websites - | www.streetevents.com and, | ||
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| www.earnings.com | ||
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Dial In Access: | Domestic | 800-706-7741 | ||
| International | 617-614-3471 | ||
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| Pass code | 39250920 | ||
Replay Available on FirstCity’s web page (www.fcfc.com/invest.htm)
FirstCity Financial Corporation is a diversified financial services company with operations dedicated primarily to distressed asset acquisitions and special situations investments. FirstCity has offices in the U.S. and affiliate organizations in Europe and Latin America. FirstCity common stock is listed on the NASDAQ Global Select Market (NASDAQ: FCFC).
Forward-Looking Statements
FirstCity may from time to time make written or oral forward-looking statements, including statements contained in this press release, FirstCity’s filings with the Securities and Exchange Commission (“SEC”), in its reports to stockholders and in other FirstCity communications. These statements relate to FirstCity’s or management’s intentions, hopes, beliefs, expectations, representations, projections, plans or predictions of the future and may be deemed to be forward-looking statements under the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934. The forward-looking statements in this press release are based upon management’s beliefs, assumptions and expectations of the Company’s future operations and economic performance, taking into account currently available information. These statements are not statements of historical fact. Forward-looking statements involve risks and uncertainties, some of which are not currently known to us. Actual events or results may differ from those expressed or implied in any such forward-looking statements as a result of various factors, including the risk factors and other risks that are described from time to time in the Company’s filings with the SEC including but not limited to its annual reports on Form 10-K, its quarterly reports on Form 10-Q, and its current reports on Form 8-K, filed with the SEC and available through the Company’s website, which contain a more detailed discussion of the Company’s business, including risks and uncertainties that may affect future results. Due to such uncertainties and risks, readers are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date hereof. Information in this press release may be superseded by more recent information or statements, which may be disclosed in later press releases, subsequent filings with the SEC or otherwise. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company’s expectations with regard thereto or to reflect any change in events, conditions or circumstances on which any such forward-looking statements are based, in whole or in part.
4
FirstCity Financial Corporation
Summary of Operations
(In thousands, except per share data)
(Unaudited)
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| Three Months Ended |
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| March 31, |
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| 2009 |
| 2008 |
| ||
Revenues: |
|
|
|
|
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Servicing fees |
| $ | 2,392 |
| $ | 2,200 |
|
Income from Portfolio Assets |
| 9,043 |
| 4,935 |
| ||
Interest income from SBA loans |
| 346 |
| 476 |
| ||
Interest income from loans receivable - affiliates |
| 923 |
| 150 |
| ||
Interest income from loans receivable - other |
| 429 |
| 275 |
| ||
Revenue from railroad operations |
| 747 |
| 805 |
| ||
Other income |
| 1,801 |
| 663 |
| ||
Total revenues |
| 15,681 |
| 9,504 |
| ||
Expenses: |
|
|
|
|
| ||
Interest and fees on notes payable to banks |
| 3,044 |
| 3,683 |
| ||
Interest and fees on notes payable to affiliates |
| 433 |
| — |
| ||
Salaries and benefits |
| 5,054 |
| 5,030 |
| ||
Provision for loan and impairment losses |
| 1,106 |
| 3,030 |
| ||
Asset-level expenses |
| 1,237 |
| 1,561 |
| ||
Occupancy, data processing and other |
| 3,406 |
| 2,455 |
| ||
Total expenses |
| 14,280 |
| 15,759 |
| ||
Equity in net earnings (loss) of subsidiaries |
| (146 | ) | 2,840 |
| ||
Earnings (loss) before income taxes |
| 1,255 |
| (3,415 | ) | ||
Income taxes |
| (263 | ) | (191 | ) | ||
Net earnings (loss) |
| 992 |
| (3,606 | ) | ||
Less: net income attributable to the noncontrolling interests |
| 348 |
| (22 | ) | ||
Net earnings (loss) attributable to FirstCity |
| $ | 644 |
| $ | (3,584 | ) |
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Basic earnings (loss) per common share are as follows: |
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|
|
|
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Net earnings (loss) attributable to FirstCity stockholders |
| $ | 0.07 |
| $ | (0.34 | ) |
Weighted average common shares outstanding |
| 9,832 |
| 10,584 |
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Diluted earnings (loss) per common share are as follows: |
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Net earnings (loss) attributable to FirstCity stockholders |
| $ | 0.07 |
| $ | (0.34 | ) |
Weighted average common shares outstanding |
| 9,833 |
| 10,584 |
|
Selected Unaudited Balance Sheet Data
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| March 31, |
| December 31, |
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|
| 2009 |
| 2008 |
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Cash and cash equivalents |
| $ | 18,905 |
| $ | 19,103 |
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Restricted cash |
| 1,277 |
| 1,217 |
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Earning assets: |
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Portfolio acquisition and resolution assets: |
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|
|
|
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Domestic |
| 220,292 |
| 167,211 |
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Latin America |
| 39,685 |
| 42,426 |
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Europe |
| 45,910 |
| 48,612 |
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Other |
| 224 |
| 228 |
| ||
Special situations platform assets |
| 40,052 |
| 37,786 |
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Service fees receivable and other assets |
| 11,902 |
| 12,354 |
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Total assets |
| $ | 378,247 |
| $ | 328,937 |
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Notes payable to banks |
| $ | 284,852 |
| $ | 242,889 |
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Note payable to affiliate |
| 8,658 |
| 8,658 |
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Other liabilities |
| 11,731 |
| 11,515 |
| ||
Total liabilities |
| 305,241 |
| 263,062 |
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Total equity |
| 73,006 |
| 65,875 |
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Total liabilities and equity |
| $ | 378,247 |
| $ | 328,937 |
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5
FirstCity Financial Corporation
Supplemental Information
(Dollars in thousands)
(Unaudited)
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| Three Months Ended |
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|
| March 31, |
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| 2009 |
| 2008 |
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Summary Operating Statement Data for Each Segment |
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Portfolio Asset Acquisition and Resolution segment: |
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|
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Revenues |
| $ | 13,297 |
| $ | 8,233 |
|
Equity in net earnings (loss) of subsidiaries |
| (985 | ) | 2,840 |
| ||
Expenses |
| (10,373 | ) | (10,137 | ) | ||
Operating contribution before provision for loan and impairment losses |
| 1,939 |
| 936 |
| ||
Provision for loan and impairment losses |
| 1,106 |
| 3,030 |
| ||
Operating contribution, net of taxes |
| $ | 833 |
| $ | (2,094 | ) |
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|
|
|
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Special Situations Platform segment: |
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|
|
|
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Revenues |
| $ | 2,338 |
| $ | 1,089 |
|
Equity in net earnings of subsidiaries |
| 839 |
| — |
| ||
Expenses |
| (1,356 | ) | (817 | ) | ||
Operating contribution before provision for loan and impairment losses |
| 1,821 |
| 272 |
| ||
Provision for loan and impairment losses |
| — |
| — |
| ||
Operating contribution, net of taxes |
| $ | 1,821 |
| $ | 272 |
|
|
| Three Months Ended |
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|
| March 31, |
| ||||
|
| 2009 |
| 2008 |
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Portfolio Asset Acquisition and Resolution segment: |
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|
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|
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Revenues and equity in earnings of investments by region: |
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|
|
|
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Domestic |
| $ | 9,733 |
| $ | 5,630 |
|
Latin America |
| 919 |
| 3,035 |
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Europe |
| 1,652 |
| 2,395 |
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Canada |
| 8 |
| 13 |
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Total |
| $ | 12,312 |
| $ | 11,073 |
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|
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Revenues and equity in earnings of investments by source: |
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|
|
|
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Equity earnings (loss) |
| $ | (985 | ) | $ | 2,840 |
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Income from Portfolio Assets |
| 9,043 |
| 4,935 |
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Servicing fees |
| 2,392 |
| 2,200 |
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Interest income from SBA loans |
| 346 |
| 476 |
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Interest income from affiliates |
| 536 |
| 150 |
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Interest income from loans receivable - other |
| 207 |
| 13 |
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Other |
| 773 |
| 459 |
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Total |
| $ | 12,312 |
| $ | 11,073 |
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Special Situations Platform segment: |
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Revenues and equity in earnings of investments by source: |
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|
|
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Equity earnings |
| $ | 839 |
| $ | — |
|
Interest income from loans receivable - affiliates |
| 387 |
| — |
| ||
Interest income from loans receivable - other |
| 221 |
| 262 |
| ||
Revenue from railroad operations |
| 747 |
| 805 |
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Other |
| 983 |
| 22 |
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Total |
| $ | 3,177 |
| $ | 1,089 |
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Number of personnel at period end: |
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Domestic, Portfolio Asset Acquisition and Resolution segment |
| 84 |
| 75 |
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Domestic, Special Situations Platform segment |
| 22 |
| 19 |
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Latin America |
| 126 |
| 122 |
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Corporate |
| 31 |
| 34 |
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Total personnel |
| 263 |
| 250 |
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6
FirstCity Financial Corporation
Supplemental Information
(Dollars in thousands)
(Unaudited)
Portfolio Purchases and Other Investments:
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|
| FirstCity |
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| Portfolio Purchases |
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| FirstCity |
| Investment |
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| Latin |
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| FirstCity |
| Investment |
| in Special |
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| Domestic |
| Europe |
| America |
| Total |
| Investment |
| in Other |
| Situations |
| Total |
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2009 |
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1st Quarter |
| $ | 70,238 |
| $ | — |
| $ | — |
| $ | 70,238 |
| $ | 64,907 |
| $ | 6,418 |
| $ | 2,400 |
| $ | 73,725 |
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2008 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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4th Quarter |
| $ | 26,363 |
| $ | 1,823 |
| $ | — |
| $ | 28,186 |
| $ | 27,183 |
| $ | 10,071 |
| $ | 3,150 |
| $ | 40,404 |
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3rd Quarter |
| 2,912 |
| — |
| 1,576 |
| 4,488 |
| 3,241 |
| 6,040 |
| — |
| 9,281 |
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2nd Quarter |
| 28,427 |
| — |
| 8,314 |
| 36,741 |
| 33,448 |
| 15,443 |
| 16,756 |
| 65,647 |
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1st Quarter |
| 6,692 |
| — |
| 13,207 |
| 19,899 |
| 8,435 |
| 1,453 |
| — |
| 9,888 |
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Total Year 2008 |
| $ | 64,394 |
| $ | 1,823 |
| $ | 23,097 |
| $ | 89,314 |
| $ | 72,307 |
| $ | 33,007 |
| $ | 19,906 |
| $ | 125,220 |
|
Total Year 2007 |
| $ | 121,679 |
| $ | 23,199 |
| $ | 69,455 |
| $ | 214,333 |
| $ | 126,714 |
| $ | 10,476 |
| $ | 11,530 |
| $ | 148,720 |
|
Total Year 2006 |
| $ | 136,596 |
| $ | 102,158 |
| $ | 58,236 |
| $ | 296,990 |
| $ | 144,048 |
| $ | 28,181 |
| $ | — |
| $ | 172,229 |
|
Portfolio Asset Acquisition and Resolution segment:
|
| Three Months Ended |
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|
| March 31, |
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|
| 2009 |
| 2008 |
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Aggregate purchase price of portfolios acquired: |
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Acquisition partnerships |
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Domestic |
| $ | 70,238 |
| $ | 6,693 |
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Latin America |
| — |
| 13,207 |
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Europe |
| — |
| — |
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Total |
| $ | 70,238 |
| $ | 19,900 |
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| Purchase |
| FirstCity’s |
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| Price |
| Investment |
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Historical Acquisitions of Portfolios - Annual: |
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|
|
|
|
|
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Three months ended March 31, 2009 |
| $ | 70,238 |
| $ | 64,907 |
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2008 |
| 89,314 |
| 72,307 |
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2007 |
| 214,333 |
| 126,714 |
| ||
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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|
| March 31, |
| December 31, |
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|
| 2009 |
| 2008 |
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Portfolio acquisition and resolution assets by region: |
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|
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Domestic |
| $ | 220,292 |
| $ | 167,211 |
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Latin America |
| 39,685 |
| 42,426 |
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Europe |
| 45,910 |
| 48,612 |
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Canada |
| 224 |
| 228 |
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Total |
| $ | 306,111 |
| $ | 258,477 |
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7
FirstCity Financial Corporation
Supplemental Information
(Dollars in thousands)
(Unaudited)
|
| Three Months Ended |
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|
| March 31, |
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|
| 2009 |
| 2008 |
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Analysis of Equity Investments |
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FirstCity’s average investment: |
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Domestic, Portfolio Asset Acquisition and Resolution segment |
| $ | 14,824 |
| $ | 23,696 |
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Domestic, Special Situations Platform segment |
| 1,385 |
| — |
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Latin America |
| 17,653 |
| 22,890 |
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Europe |
| 13,004 |
| 30,526 |
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Europe-Servicing subsidiaries |
| 21,938 |
| 7,153 |
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Latin America-Servicing subsidiaries |
| 2,969 |
| 4,925 |
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Total |
| $ | 71,773 |
| $ | 89,190 |
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FirstCity’s share of equity earnings (losses): |
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|
|
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Domestic, Portfolio Asset Acquisition and Resolution segment |
| $ | 1 |
| $ | 266 |
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Domestic, Special Situations Platform segment |
| 839 |
| — |
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Latin America |
| (1,644 | ) | 369 |
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Europe |
| 752 |
| 1,686 |
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Europe-Servicing subsidiaries |
| 169 |
| 316 |
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Latin America-Servicing subsidiaries |
| (263 | ) | 203 |
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Total |
| $ | (146 | ) | $ | 2,840 |
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Selected Other Data: |
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Average investment in consolidated portfolio assets and loans receivable: |
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Domestic, Portfolio Asset Acquisition and Resolution segment |
| $ | 170,815 |
| $ | 120,750 |
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Domestic, Special Situations Platform segment |
| 28,215 |
| 5,627 |
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Latin America |
| 19,467 |
| 6,998 |
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Europe |
| 12,041 |
| 9,107 |
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Canada |
| 222 |
| 350 |
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Total |
| $ | 230,760 |
| $ | 142,832 |
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Income from consolidated portfolio assets and loans receivable: |
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|
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Domestic, Portfolio Asset Acquisition and Resolution segment |
| $ | 8,772 |
| $ | 4,973 |
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Domestic, Special Situations Platform segment |
| 608 |
| 262 |
| ||
Latin America |
| 776 |
| 321 |
| ||
Europe |
| 576 |
| 276 |
| ||
Canada |
| 8 |
| 13 |
| ||
Total |
| $ | 10,740 |
| $ | 5,845 |
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|
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Servicing fee revenues: |
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Domestic partnerships: |
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Servicing fee revenue |
| $ | 582 |
| $ | 362 |
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Average servicing fee % |
| 13.1 | % | 3.2 | % | ||
Latin American partnerships: |
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Servicing fee revenue |
| $ | 1,736 |
| $ | 1,848 |
|
Average servicing fee % |
| 40.3 | % | 16.3 | % | ||
Total Service Fees-Portfolio Assets: |
|
|
|
|
| ||
Servicing fee revenue |
| $ | 2,318 |
| $ | 2,210 |
|
Average servicing fee % |
| 26.5 | % | 9.8 | % | ||
Service Fees-SBA loans: |
| $ | 74 |
| $ | (10 | ) |
Total Service Fees |
| $ | 2,392 |
| $ | 2,200 |
|
|
|
|
|
|
| ||
Collections: |
|
|
|
|
| ||
Domestic partnerships |
| $ | 4,447 |
| $ | 11,197 |
|
Latin American partnerships |
| 6,090 |
| 11,764 |
| ||
European partnerships |
| 9,064 |
| 12,768 |
| ||
Partnership collections |
| 19,601 |
| 35,729 |
| ||
Domestic consolidated |
| 28,865 |
| 18,542 |
| ||
Latin American consolidated |
| 437 |
| 486 |
| ||
European consolidated |
| 1,162 |
| 461 |
| ||
Consolidated collections |
| 30,464 |
| 19,489 |
| ||
Total Collections |
| $ | 50,065 |
| $ | 55,218 |
|
|
|
|
|
|
| ||
Servicing portfolio (face value) at period end: |
|
|
|
|
| ||
Domestic |
| $ | 564,401 |
| $ | 556,774 |
|
Latin America |
| 918,214 |
| 1,596,845 |
| ||
Europe |
| 1,267,660 |
| 1,174,578 |
| ||
Total |
| $ | 2,750,275 |
| $ | 3,328,197 |
|
8
FirstCity Financial Corporation
Supplemental Information
(Dollars in thousands)
(Unaudited)
|
| Three Months Ended |
| ||||
Illustration of the Effects of Foreign |
| March 31, |
| ||||
Currency Fluctuations |
| 2009 |
| 2008 |
| ||
Net earnings (loss) to common stockholders |
| $ | 644 |
| $ | (3,584 | ) |
Foreign currency gains (losses), net: |
|
|
|
|
| ||
Euro |
| (441 | ) | 225 |
| ||
Mexican Peso |
| (1,451 | ) | 246 |
| ||
Argentine Peso |
| (41 | ) | (3 | ) | ||
Canadian Dollar |
| (5 | ) | (15 | ) | ||
Chilean Peso |
| 124 |
| 104 |
| ||
|
|
|
|
|
| ||
Exchange rate at valuation date: |
|
|
|
|
| ||
Euro |
| 0.76 |
| 0.63 |
| ||
Mexican Peso |
| 14.33 |
| 10.70 |
| ||
Argentine Peso |
| 3.72 |
| 3.16 |
| ||
Canadian Dollar |
| 1.25 |
| 1.02 |
| ||
Chilean Peso |
| 586.36 |
| 440.00 |
| ||
9
FirstCity Financial Corporation
Schedule of Estimated Unrealized Gross Profit from Portfolio Assets
March 31, 2009
(Unaudited)
|
| Basis in Portfolio Assets (1), (4) |
| |||||
($ in 000’s) |
| 12/31/2007 |
| 12/31/2008 |
| 03/31/2009 |
| |
Domestic |
| $ | 151,802 |
| 153,148 |
| 194,676 |
|
Europe |
| 40,340 |
| 29,555 |
| 27,094 |
| |
Latin America |
| 26,844 |
| 29,867 |
| 27,213 |
| |
Total |
| $ | 218,987 |
| 212,570 |
| 248,984 |
|
|
| Estimated Remaining Collections (2) |
| |||||
|
| 12/31/2007 |
| 12/31/2008 |
| 03/31/2009 |
| |
Domestic |
| $ | 195,845 |
| 217,347 |
| 280,444 |
|
Europe |
| 52,617 |
| 39,341 |
| 37,237 |
| |
Latin America |
| 68,900 |
| 78,211 |
| 67,274 |
| |
Total |
| $ | 317,363 |
| 334,899 |
| 384,955 |
|
|
| Estimated Unrealized Gross Profit (3) |
| |||||
|
| 12/31/2007 |
| 12/31/2008 |
| 03/31/2009 |
| |
Domestic |
| $ | 44,043 |
| 64,199 |
| 85,768 |
|
Europe |
| 12,278 |
| 9,787 |
| 10,143 |
| |
Latin America |
| 42,056 |
| 48,344 |
| 40,060 |
| |
Total |
| $ | 98,376 |
| 122,329 |
| 135,971 |
|
|
| Estimated Unrealized Gross Profit % |
| ||||
|
| 12/31/2007 |
| 12/31/2008 |
| 03/31/2009 |
|
Domestic |
| 22.49 | % | 29.54 | % | 30.58 | % |
Europe |
| 23.33 | % | 24.88 | % | 27.24 | % |
Latin America |
| 61.04 | % | 61.81 | % | 59.55 | % |
Total |
| 31.00 | % | 36.53 | % | 35.32 | % |
This schedule provides selected information related to the Company’s ownership interests in consolidated and non-consolidated Portfolio Assets and is provided for informational purposes to provide an indication of the future potential unrealized gross profit attributable to those portfolios. In preparing this schedule, management was required to make certain estimates and assumptions surrounding the underlying assets in the Portfolios that impact the reported amounts. Such estimates and assumptions could change in the future, as more information becomes known, which could impact the reported amounts. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates.
(1) Basis in 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 unconsolidated partnerships.
(2) Estimated Remaining Collections represents FirstCity’s share of future projected net cash collections expected from the Portfolios Assets.
(3) Unrealized Gross Profit represents the excess difference between the Estimated Remaining Collections and the Basis in Portfolio Assets.
(4) FirstCity considers Basis in Portfolio Assets a useful measurement of the Company’s underlying holdings and interests in Portfolio Assets. As FirstCity’s share of Basis in Portfolio Assets is considered a non-GAAP measure, the following reconciliation is provided:
|
| 12/31/2007 |
| 12/31/2008 |
| 03/31/2009 |
| |
FirstCity’s consolidated Portfolio Assets (as reported in “Portfolio Assets” on the balance sheet of the respective Form 10-K or 10-Q) |
| $ | 122,001 |
| 148,213 |
| 194,407 |
|
Noncontrolling interests in FirstCity’s consolidated Portfolio Assets (component of “Non-controlling interests” on the balance sheet of the respective Form 10-K or 10-Q) |
| (4,474 | ) | (11,460 | ) | (16,079 | ) | |
FirstCity’s interest in Portfolio Assets held by Acquisition Partnerships (a component of “Assets” as reported in the “Condensed Combined Balance Sheets” tabular disclosure under the “Equity Investments” footnote of the respective Form 10-K or 10-Q) |
| 101,460 |
| 75,817 |
| 70,656 |
| |
FirstCity’s basis in consolidated and non-consolidated Portfolio Assets |
| $ | 218,987 |
| 212,570 |
| 248,984 |
|
10