Exhibit 99.1
N E W S R E L E A S E
Contact: | Suzy W. Taylor |
| 866-652-1810 |
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FirstCity Financial Corporation Reports First Quarter 2010 Results
Waco, Texas May 17, 2010……….
Highlights:
· FirstCity reported first quarter 2010 earnings of $0.1 million or $0.01 per diluted share.
· FirstCity invested $28.4 million in portfolio acquisitions and other investments during the quarter.
· FirstCity has invested $6.2 million in domestic portfolio acquisitions and other investments subsequent to first quarter 2010.
· FirstCity has obtained preliminary approval from Bank of Scotland for a $270.0 million 3-year term loan subject to final documentation and closing.
First Quarter 2010 and Business Outlook
FirstCity reported net earnings of $0.1 million for the first quarter of 2010 (“Q1 2010”), compared to $0.6 million reported for the first quarter of 2009 (“Q1 2009”). The Company recorded diluted net earnings per common share of $0.01 in Q1 2010, compared to $0.07 of diluted net earnings per common share for the same period last year.
FirstCity’s investments of $28.4 million during Q1 2010 included $14.6 million of domestic portfolio assets with a face value of $34.5 million acquired primarily from financial institutions; $4.5 million of SBA loan advances and originations; $4.8 million of debt investments to privately-held middle-market companies; $4.4 million of equity investments in domestic portfolio companies; and $0.1 million of other equity investments. In addition, subsequent to Q1 2010, FirstCity has invested $5.3 million in domestic portfolio asset acquisitions and another $0.9 million in the form of debt and equity investments.
The Company’s unrealized future gross profit associated with its core portfolio asset business assets totaled $143.2 million at March 31, 2010. Unrealized future gross profit is a non-GAAP measure. Refer to the Schedule of Estimated Unrealized Gross Profit from Portfolio Assets on page 10 of this release for a reconciliation of this measure with the most directly comparable financial measure calculated and presented in accordance with U.S. generally accepted accounting principles.
Items impacting comparability of results for Q1 2010 are as follows:
Total assets of FirstCity at the end of Q1 2010 totaled $453.5 million compared to $465.1 million at the end of the fourth quarter of 2009. However, the Company’s earning assets increased to $374.3 million at the end of March 2010 compared to $366.2 million at the end of December 2009 as a result of its Q1 2010 investment activity.
(more)
Revenues in Q1 2010 increased to $21.6 million compared to $15.7 million in Q1 2009. The Company’s revenues in Q1 2010 included $11.5 million of income and gains from Portfolio Assets, $1.4 million of interest income and gains from loans receivable, $2.0 million of fee income attributable to our loan servicing platform; and $5.6 million of revenues from our consolidated railroad and manufacturing subsidiaries. Revenues in Q1 2010 increased as a result of the increase in collections from consolidated portfolios to $37.0 million in Q1 2010 compared to $30.5 million in Q1 2009; and $4.4 million of revenues from our consolidated manufacturing subsidiary in Q1 2010 (acquired in December 2009). FirstCity’s holdings in earning assets increased to $374.3 million at the end of Q1 2010 from $346.2 million at the end of Q1 2009.
The Company recorded net impairment provisions of $2.9 million during Q1 2010 compared to $1.7 million in Q1 2009. The provisions in Q1 2010 were recorded to reflect changes in management’s estimates as to the timing and amount of projected future collections and declines in domestic real estate values. The global distribution of Q1 2010 net impairment provisions included $1.7 million for domestic assets, $0.7 million related to Latin American assets, and $0.5 million related to European assets. Net provisions in Q1 2010 were split between consolidated assets ($1.7 million) and FirstCity’s share of net provisions from unconsolidated subsidiaries ($1.2 million).
Foreign currency transaction losses of $0.5 million were recorded during Q1 2010 compared to $1.8 million of foreign currency transactions losses for the same period in 2009.
Equity in earnings of unconsolidated subsidiaries was $2.2 million in Q1 2010 compared to $0.1 million of losses for Q1 2009. This favorable increase in equity earnings from unconsolidated subsidiaries is primarily due to additional investment income and deferred tax benefits recognized on our foreign servicing entities and a significant drop in foreign currency transaction losses reported by our Latin American acquisition partnerships in Q1 2010 compared to Q1 2009.
Selected financial data for Q1 2010:
The Company’s total operating costs and expenses (excluding provision, interest and income tax expenses) increased to $15.3 million for Q1 2010 from $9.6 million in Q1 2009, primarily due to $4.8 million of costs and expenses from our consolidated manufacturing subsidiary in Q1 2010 (acquired in December 2009), and $0.4 million of additional asset-level expenses incurred in Q1 2010 compared to Q1 2009 as a result of our increased holdings in Portfolio Assets.
Total interest expense was $3.5 million in both Q1 2010 and Q1 2009. FirstCity’s average debt holdings increased to $302.2 million for Q1 2010 from $270.1 million for Q1 2009. However, interest expense remained constant due to the Company’s lower average cost of funds of 4.6% during Q1 2010 compared to 5.2% from the same period in 2009 due to a decline in market interest rates since Q1 2009.
The Company recorded an income tax benefit of $0.5 million in Q1 2010 compared to $0.4 million of income tax expense in Q1 2009. This $0.9 million favorable swing was due to the Company’s ability to recognize foreign deferred tax benefits associated with its foreign consolidated operations.
Other Corporate Matters
Credit Agreements with Bank of Scotland and BoS(USA) (collectively, “Bank of Scotland”)
As reported in our March 30, 2010 news release and in our 2009 Form 10-K filed with the SEC on the same date, Bank of Scotland extended the maturity dates of First City’s existing loan facilities to April 1, 2011, and the Company has been negotiating a term loan that allows for repayment to Bank of Scotland over time as cash flows from the underlying assets securing the loan facilities are realized. FirstCity has since obtained preliminary approval from Bank of Scotland on a $270.0 million term loan subject to final documentation and closing. The primary terms of this pending, preliminary cash flow note facility follows:
· Scheduled amortization of $270.0 million over 3 years ($45.0 million in the first year, $80.0 million in the second year, $80.0 million in the first nine months of the third year, and $65.0 million at maturity), with interest at LIBOR + 3.5% (LIBOR floor of 1.0%);
· Repayment will be supported by the Company’s future cash flows, assets and equity investments which are currently pledged to Bank of Scotland;
· FirstCity’s existing loan facilities with Bank of Scotland will be capped (i.e. Bank of Scotland will have no further obligation to fund the existing loan facilities);
· FirstCity will receive a monthly, unencumbered cash leak-through of 20% of the repayment cash flows, up to $25.0 million, after (a) payment to Bank of Scotland of interest and fees; and (b) payment of a scheduled overhead allowance to FirstCity ($1.5 million per month for the first year, $1.03 million per month for the second year, and $0.7 million per month for the third year);
· FirstCity will provide a limited guaranty in the amount of $75.0 million; and
· FirstCity will be required to maintain a minimum net worth (to be defined) of $60.0 million.
As part of the pending agreement, FirstCity expects to have in excess of $40.0 million in unencumbered cash at closing, which combined with the unencumbered cash leak-through of up to $25.0 million described above, will potentially provide the Company in excess of $65.0 million in unencumbered cash to fund future investments and operations.
FirstCity continues to negotiate with other parties to obtain additional financing and to make investments in acquisition partnerships. There can be no assurances that FirstCity will close on this pending cash flow note with Bank of Scotland for its loan facilities on terms that are acceptable to the Company, or that FirstCity will be able to obtain alternative sources of funding and investment capital on acceptable terms, if at all.
Conference Call
A conference call will be held on Monday, May 17, 2010 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 First Quarter 2010 Conference Call | ||
Date: | Monday, May 17, 2010 | ||
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, | |
| CCBN’s Investor websites - | www.streetevents.com and, | |
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| www.earnings.com | |
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Dial In Access: | Domestic | 800-510-9836 | |
| International | 617-614-3670 | |
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| Pass code | 36753093 | |
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).
Cautionary Statement Regarding 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 FirstCity’s continued need for financing; availability of FirstCity’s credit facilities; FirstCity’s ability to obtain additional financing from Bank of Scotland or any other lender; and other 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.
FirstCity Financial Corporation
Summary of Operations
(Dollars in thousands, except per share data)
(Unaudited)
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| Three Months Ended |
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| 2010 |
| 2009 |
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Revenues: |
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Finance and Servicing: |
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Servicing fees |
| $ | 2,003 |
| $ | 2,392 |
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Income from Portfolio Assets |
| 11,463 |
| 9,043 |
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Interest income from SBA loans |
| 268 |
| 346 |
| ||
Interest income from loans receivable - affiliates |
| 954 |
| 923 |
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Interest income from loans receivable - other |
| 132 |
| 429 |
| ||
Other income |
| 1,131 |
| 880 |
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| 15,951 |
| 14,013 |
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Manufacturing: |
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Sales revenues |
| 4,359 |
| — |
| ||
Railroad: |
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Operating revenues |
| 1,265 |
| 747 |
| ||
Other income |
| — |
| 921 |
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| 1,265 |
| 1,668 |
| ||
Total revenues |
| 21,575 |
| 15,681 |
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Costs and expenses: |
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Finance and Servicing: |
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Interest and fees on notes payable to banks |
| 3,042 |
| 3,009 |
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Interest and fees on notes payable to affiliates |
| 392 |
| 433 |
| ||
Salaries and benefits |
| 5,071 |
| 4,810 |
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Provision for loan and impairment losses |
| 1,702 |
| 1,106 |
| ||
Asset-level expenses |
| 1,621 |
| 1,237 |
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Other |
| 3,196 |
| 3,047 |
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| 15,024 |
| 13,642 |
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Manufacturing: |
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Cost of sales and operating expenses |
| 4,836 |
| — |
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Railroad: |
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Cost of revenues and operating expenses |
| 568 |
| 456 |
| ||
Interest and fees on notes payable to bank |
| 38 |
| 35 |
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| 606 |
| 491 |
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Total costs and expenses |
| 20,466 |
| 14,133 |
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Earnings before other revenue and income taxes |
| 1,109 |
| 1,548 |
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Equity in earnings (loss) of unconsolidated subsidiaries |
| 2,229 |
| (146 | ) | ||
Gain on business combinations |
| 891 |
| — |
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Earnings before income taxes |
| 4,229 |
| 1,402 |
| ||
Income tax expense (benefit) |
| (486 | ) | 410 |
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Net earnings |
| 4,715 |
| 992 |
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Less: net income attributable to noncontrolling interests |
| 4,614 |
| 348 |
| ||
Net earnings attributable to FirstCity |
| $ | 101 |
| $ | 644 |
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Basic earnings per common share are as follows: |
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Net earnings attributable to FirstCity stockholders |
| $ | 0.01 |
| $ | 0.07 |
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Weighted average common shares outstanding |
| 9,992 |
| 9,832 |
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Diluted earnings per common share are as follows: |
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Net earnings attributable to FirstCity stockholders |
| $ | 0.01 |
| $ | 0.07 |
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Weighted average common shares outstanding |
| 10,093 |
| 9,833 |
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Selected Balance Sheet Data
(Dollars in thousands)
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| March 31, |
| December 31, |
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| (Unaudited) |
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Cash and cash equivalents |
| $ | 58,469 |
| $ | 80,368 |
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Restricted cash |
| 1,742 |
| 1,364 |
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Earning assets: |
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Portfolio Asset Acquisition and Resolution assets: |
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Domestic |
| 238,693 |
| 225,406 |
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Latin America |
| 40,433 |
| 41,248 |
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Europe |
| 49,826 |
| 57,888 |
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Special Situations Platform assets |
| 45,389 |
| 41,688 |
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Service fees receivable and other assets |
| 18,920 |
| 17,112 |
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Total assets |
| $ | 453,472 |
| $ | 465,074 |
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Notes payable to banks |
| $ | 302,402 |
| $ | 305,888 |
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Note payable to affiliate |
| 7,838 |
| 7,838 |
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Other liabilities |
| 26,474 |
| 26,077 |
| ||
Total liabilities |
| 336,714 |
| 339,803 |
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Total equity |
| 116,758 |
| 125,271 |
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Total liabilities and equity |
| $ | 453,472 |
| $ | 465,074 |
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FirstCity Financial Corporation
Supplemental Information
(Dollars in thousands)
(Unaudited)
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| Three Months Ended |
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| 2010 |
| 2009 |
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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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Revenues |
| $ | 14,722 |
| $ | 13,297 |
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Equity in net earnings (loss) of unconsolidated subsidiaries |
| 1,183 |
| (985 | ) | ||
Gain on business combinations |
| 891 |
| — |
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Expenses |
| (10,126 | ) | (10,373 | ) | ||
Operating contribution before provision for loan and impairment losses |
| 6,670 |
| 1,939 |
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Provision for loan and impairment losses |
| 1,101 |
| 1,106 |
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Net loss (income) attributable to noncontrolling interests |
| (4,476 | ) | 83 |
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Operating contribution, net of direct taxes |
| $ | 1,093 |
| $ | 916 |
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Special Situations Platform segment: |
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Revenues |
| $ | 6,810 |
| $ | 2,338 |
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Equity in earnings of unconsolidated subsidiaries |
| 1,046 |
| 839 |
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Expenses |
| (6,402 | ) | (1,409 | ) | ||
Operating contribution before provision for loan and impairment losses |
| 1,454 |
| 1,768 |
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Provision for loan and impairment losses |
| 601 |
| — |
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Net income attributable to noncontrolling interests |
| (138 | ) | (431 | ) | ||
Operating contribution (loss), net of direct taxes |
| $ | 715 |
| $ | 1,337 |
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| Three Months Ended |
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| 2010 |
| 2009 |
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Portfolio Asset Acquisition and Resolution segment: |
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Revenues and equity in earnings of investments by region: |
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Domestic |
| $ | 8,381 |
| $ | 9,733 |
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Latin America |
| 1,785 |
| 919 |
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Europe |
| 5,739 |
| 1,652 |
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Canada |
| — |
| 8 |
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Total |
| $ | 15,905 |
| $ | 12,312 |
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Revenues and equity in earnings of investments by source: |
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Equity in earnings (loss) of unconsolidated subsidiaries |
| $ | 1,183 |
| $ | (985 | ) |
Income from Portfolio Assets |
| 11,463 |
| 9,043 |
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Servicing fees |
| 2,003 |
| 2,392 |
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Interest income from SBA loans |
| 268 |
| 346 |
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Interest income from loans receivable - affiliates |
| 477 |
| 536 |
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Interest income from loans receivable - other |
| — |
| 207 |
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Other |
| 511 |
| 773 |
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Total |
| $ | 15,905 |
| $ | 12,312 |
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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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Equity in earnings (loss) of unconsolidated subsidiaries |
| $ | 1,046 |
| $ | 839 |
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Interest income from loans receivable |
| 609 |
| 608 |
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Revenue from railroad operations |
| 1,265 |
| 747 |
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Revenue from manufacturing operations, net |
| 4,359 |
| — |
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Other |
| 577 |
| 983 |
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Total |
| $ | 7,856 |
| $ | 3,177 |
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Number of personnel at period end: |
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Domestic, Portfolio Asset Acquisition and Resolution segment |
| 89 |
| 84 |
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Domestic, Special Situations Platform segment |
| 124 |
| 22 |
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Latin America |
| 122 |
| 126 |
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Corporate |
| 30 |
| 31 |
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Total personnel |
| 365 |
| 263 |
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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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2010 |
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1st Quarter |
| $ | 18,114 |
| $ | — |
| $ | — |
| $ | 18,114 |
| $ | 14,605 |
| $ | 9,005 |
| $ | 4,790 |
| $ | 28,400 |
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2009 |
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4th Quarter |
| $ | 14,608 |
| $ | — |
| $ | — |
| $ | 14,608 |
| $ | 13,188 |
| $ | 5,903 |
| $ | 3,370 |
| $ | 22,461 |
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3rd Quarter |
| 48,659 |
| — |
| — |
| 48,659 |
| 21,000 |
| 2,403 |
| 3,481 |
| 26,884 |
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2nd Quarter |
| 67,085 |
| — |
| — |
| 67,085 |
| 48,559 |
| 19,149 |
| 3,164 |
| 70,872 |
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1st Quarter |
| 70,238 |
| — |
| — |
| 70,238 |
| 64,907 |
| 6,418 |
| 2,400 |
| 73,725 |
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Total Year 2009 |
| $ | 200,590 |
| $ | — |
| $ | — |
| $ | 200,590 |
| $ | 147,654 |
| $ | 33,873 |
| $ | 12,415 |
| $ | 193,942 |
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Total Year 2008 |
| $ | 64,394 |
| $ | 1,823 |
| $ | 23,097 |
| $ | 89,314 |
| $ | 72,307 |
| $ | 33,007 |
| $ | 19,906 |
| $ | 125,220 |
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Total Year 2007 |
| $ | 121,679 |
| $ | 23,199 |
| $ | 69,455 |
| $ | 214,333 |
| $ | 126,714 |
| $ | 10,476 |
| $ | 11,530 |
| $ | 148,720 |
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Portfolio Asset Acquisition and Resolution segment:
|
| Three Months Ended |
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|
| 2010 |
| 2009 |
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Aggregate purchase price of portfolios acquired: |
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Acquisition partnerships |
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Domestic |
| $ | 18,114 |
| $ | 70,238 |
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Latin America |
| — |
| — |
| ||
Europe |
| — |
| — |
| ||
Total |
| $ | 18,114 |
| $ | 70,238 |
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| Purchase |
| FirstCity’s |
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Historical acquisitions of Portfolios - annual: |
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First three months of 2010 |
| $ | 18,114 |
| $ | 14,605 |
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2009 |
| 200,590 |
| 147,654 |
| ||
2008 |
| 89,314 |
| 72,307 |
| ||
2007 |
| 214,333 |
| 126,714 |
| ||
2006 |
| 296,990 |
| 144,048 |
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2005 |
| 146,581 |
| 71,405 |
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| March 31, |
| December 31, |
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Portfolio acquisition and resolution assets by region: |
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Domestic |
| $ | 238,693 |
| $ | 225,406 |
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Latin America |
| 40,433 |
| 41,248 |
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Europe |
| 49,826 |
| 57,888 |
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Total |
| $ | 328,952 |
| $ | 324,542 |
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Special Situations Platform segment:
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| Total |
| FirstCity Denver’s Investment |
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| Investment |
| Debt |
| Equity |
| Total |
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Historical investments - annual: |
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First three months of 2010 |
| $ | 4,790 |
| $ | 4,750 |
| $ | 40 |
| $ | 4,790 |
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2009 |
| 20,058 |
| 12,023 |
| 392 |
| 12,415 |
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2008 |
| 28,750 |
| 16,650 |
| 3,256 |
| 19,906 |
| ||||
2007 |
| 22,314 |
| 5,630 |
| 5,900 |
| 11,530 |
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FirstCity Financial Corporation
Supplemental Information
(Dollars in thousands)
(Unaudited)
|
| Three Months Ended |
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|
| 2010 |
| 2009 |
| ||
Analysis of Equity Investments |
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FirstCity’s average investment: |
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Domestic, Portfolio Asset Acquisition and Resolution segment |
| $ | 12,234 |
| $ | 14,824 |
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Domestic, Special Situations Platform segment |
| 2,224 |
| 1,385 |
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Latin America |
| 17,416 |
| 17,653 |
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Europe |
| 8,088 |
| 13,004 |
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Europe-Servicing subsidiaries |
| 25,144 |
| 21,938 |
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Latin America-Servicing subsidiaries |
| 2,433 |
| 2,969 |
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Total |
| $ | 67,539 |
| $ | 71,773 |
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FirstCity’s share of equity earnings (losses): |
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Domestic, Portfolio Asset Acquisition and Resolution segment |
| $ | 132 |
| $ | 1 |
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Domestic, Special Situations Platform segment |
| 1,046 |
| 839 |
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Latin America |
| (120 | ) | (1,644 | ) | ||
Europe |
| (620 | ) | 752 |
| ||
Europe-Servicing subsidiaries |
| 2,423 |
| 169 |
| ||
Latin America-Servicing subsidiaries |
| (632 | ) | (263 | ) | ||
Total |
| $ | 2,229 |
| $ | (146 | ) |
|
|
|
|
|
| ||
Selected Other Data: |
|
|
|
|
| ||
Average investment in consolidated portfolio assets and loans receivable: |
|
|
|
|
| ||
Domestic, Portfolio Asset Acquisition and Resolution segment |
| $ | 209,780 |
| $ | 170,815 |
|
Domestic, Special Situations Platform segment |
| 27,981 |
| 28,215 |
| ||
Latin America |
| 18,483 |
| 19,467 |
| ||
Europe |
| 18,810 |
| 12,041 |
| ||
Canada |
| — |
| 222 |
| ||
Total |
| $ | 275,054 |
| $ | 230,760 |
|
|
|
|
|
|
| ||
Income from consolidated portfolio assets and loans receivable: |
|
|
|
|
| ||
Domestic, Portfolio Asset Acquisition and Resolution segment |
| $ | 7,906 |
| $ | 8,772 |
|
Domestic, Special Situations Platform segment |
| 609 |
| 608 |
| ||
Latin America |
| 578 |
| 776 |
| ||
Europe |
| 3,724 |
| 576 |
| ||
Canada |
| — |
| 8 |
| ||
Total |
| $ | 12,817 |
| $ | 10,740 |
|
|
|
|
|
|
| ||
Servicing fee revenues: |
|
|
|
|
| ||
Domestic partnerships: |
|
|
|
|
| ||
Servicing fee revenue |
| $ | 288 |
| $ | 582 |
|
Average servicing fee |
| 5.4 | % | 13.1 | % | ||
Latin American partnerships: |
|
|
|
|
| ||
Servicing fee revenue |
| $ | 1,722 |
| $ | 1,736 |
|
Average servicing fee % |
| 36.7 | % | 40.3 | % | ||
Total Service Fees-Portfolio Assets: |
|
|
|
|
| ||
Servicing fee revenue |
| $ | 2,010 |
| $ | 2,318 |
|
Average servicing fee % |
| 20.0 | % | 26.5 | % | ||
Service Fees-SBA loans: |
| $ | (7 | ) | $ | 74 |
|
Total Service Fees |
| $ | 2,003 |
| $ | 2,392 |
|
|
|
|
|
|
| ||
Collections: |
|
|
|
|
| ||
Domestic partnerships |
| $ | 5,344 |
| $ | 4,447 |
|
Latin American partnerships |
| 6,151 |
| 6,090 |
| ||
European partnerships |
| 7,884 |
| 9,064 |
| ||
Partnership collections |
| 19,379 |
| 19,601 |
| ||
Domestic consolidated |
| 31,513 |
| 28,865 |
| ||
Latin American consolidated |
| 275 |
| 437 |
| ||
European consolidated |
| 5,236 |
| 1,162 |
| ||
Consolidated collections |
| 37,024 |
| 30,464 |
| ||
Total collections |
| $ | 56,403 |
| $ | 50,065 |
|
|
|
|
|
|
| ||
Servicing portfolio (face value) at period end: |
|
|
|
|
| ||
Domestic |
| $ | 892,929 |
| $ | 564,401 |
|
Latin America |
| 1,459,869 |
| 918,214 |
| ||
Europe |
| 1,577,991 |
| 1,267,660 |
| ||
Total |
| $ | 3,930,789 |
| $ | 2,750,275 |
|
FirstCity Financial Corporation
Supplemental Information
(Dollars in thousands)
(Unaudited)
Summary of Consolidated Portfolio Assets (at Carrying Value) by Region and Type
|
| March 31, 2010 |
| ||||||||||||||||||||||
|
| Income-Accruing Loans |
| Non-Accrual Loans |
|
|
|
|
| ||||||||||||||||
|
| Purchased |
|
|
| Purchased Credit- |
| Other |
|
|
|
|
| ||||||||||||
|
| Impaired |
|
|
|
|
| Cost recovery |
|
|
| Cost recovery |
|
|
|
|
| ||||||||
|
| Loans |
| Other |
| Cash basis |
| basis |
| Cash basis |
| basis |
| Real Estate |
| Total |
| ||||||||
United States |
| $ | 23,199 |
| $ | 4,227 |
| $ | 76,965 |
| $ | 74,622 |
| $ | 1,744 |
| $ | — |
| $ | 31,348 |
| $ | 212,105 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
France |
| — |
| 1,115 |
| 5,610 |
| 7 |
| — |
| 2,199 |
| — |
| 8,931 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Germany |
| 4,718 |
| — |
| — |
| — |
| — |
| — |
| — |
| 4,718 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Mexico |
| — |
| — |
| — |
| 10,370 |
| — |
| — |
| — |
| 10,370 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Total |
| $ | 27,917 |
| $ | 5,342 |
| $ | 82,575 |
| $ | 84,999 |
| $ | 1,744 |
| $ | 2,199 |
| $ | 31,348 |
| $ | 236,124 |
|
|
| December 31, 2009 |
| ||||||||||||||||||||||
|
| Income-Accruing Loans |
| Non-Accrual Loans |
|
|
|
|
| ||||||||||||||||
|
| Purchased |
|
|
| Purchased Credit- |
| Other |
|
|
|
|
| ||||||||||||
|
| Impaired |
|
|
|
|
| Cost recovery |
|
|
| Cost recovery |
|
|
|
|
| ||||||||
|
| Loans |
| Other |
| Cash basis |
| basis |
| Cash basis |
| basis |
| Real Estate |
| Total |
| ||||||||
United States |
| $ | 42,385 |
| $ | 5,323 |
| $ | 42,125 |
| $ | 78,165 |
| $ | 2,770 |
| $ | — |
| $ | 26,438 |
| $ | 197,206 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
France |
| — |
| 1,555 |
| — |
| 7,648 |
| — |
| 2,305 |
| — |
| 11,508 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Germany |
| 5,225 |
| — |
| — |
| — |
| — |
| — |
| — |
| 5,225 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Mexico |
| — |
| — |
| — |
| 10,445 |
| — |
| — |
| — |
| 10,445 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Total |
| $ | 47,610 |
| $ | 6,878 |
| $ | 42,125 |
| $ | 96,258 |
| $ | 2,770 |
| $ | 2,305 |
| $ | 26,438 |
| $ | 224,384 |
|
Illustration of the Effects of Foreign Currency Fluctuations on Net Earnings
|
| Three Months Ended |
| ||||
|
| 2010 |
| 2009 |
| ||
Net earnings to common stockholders |
| $ | 101 |
| $ | 644 |
|
Foreign currency gains (losses), net: |
|
|
|
|
| ||
Euro |
| (400 | ) | (441 | ) | ||
Mexican Peso |
| 6 |
| (1,451 | ) | ||
Argentine Peso |
| (5 | ) | (41 | ) | ||
Chilean Peso |
| (53 | ) | 124 |
| ||
|
|
|
|
|
| ||
Exchange rate at valuation date: |
|
|
|
|
| ||
Euro |
| 0.74 |
| 0.76 |
| ||
Mexican Peso |
| 12.46 |
| 14.33 |
| ||
Argentine Peso |
| 3.87 |
| 3.72 |
| ||
Chilean Peso |
| 542.54 |
| 586.36 |
| ||
FirstCity Financial Corporation
Schedule of Estimated Unrealized Gross Profit from Portfolio Assets
March 31, 2010
(Unaudited)
|
| Basis in Portfolio Assets (1), (4) |
| |||||
($ in 000’s) |
| 12/31/2008 |
| 12/31/2009 |
| 3/31/2010 |
| |
Domestic |
| $ | 153,148 |
| 190,541 |
| 196,249 |
|
Europe |
| 29,555 |
| 32,665 |
| 26,167 |
| |
Latin America |
| 29,867 |
| 27,473 |
| 25,828 |
| |
Total |
| $ | 212,570 |
| 250,679 |
| 248,244 |
|
|
| Estimated Remaining Collections (2) |
| |||||
|
| 12/31/2008 |
| 12/31/2009 |
| 3/31/2010 |
| |
Domestic |
| $ | 217,347 |
| 276,018 |
| 279,165 |
|
Europe |
| 39,341 |
| 50,328 |
| 43,029 |
| |
Latin America |
| 78,211 |
| 70,398 |
| 69,255 |
| |
Total |
| $ | 334,899 |
| 396,744 |
| 391,449 |
|
|
| Estimated Unrealized Gross Profit (3) |
| |||||
|
| 12/31/2008 |
| 12/31/2009 |
| 3/31/2010 |
| |
Domestic |
| $ | 64,199 |
| 85,476 |
| 82,915 |
|
Europe |
| 9,787 |
| 17,663 |
| 16,862 |
| |
Latin America |
| 48,344 |
| 42,925 |
| 43,428 |
| |
Total |
| $ | 122,329 |
| 146,064 |
| 143,205 |
|
|
| Estimated Unrealized Gross Profit % |
| ||||
|
| 12/31/2008 |
| 12/31/2009 |
| 3/31/2010 |
|
Domestic |
| 29.54 | % | 30.97 | % | 29.70 | % |
Europe |
| 24.88 | % | 35.10 | % | 39.19 | % |
Latin America |
| 61.81 | % | 60.97 | % | 62.71 | % |
Total |
| 36.53 | % | 36.82 | % | 36.58 | % |
This schedule provides selected information related to the Company’s ownership interests in consolidated and unconsolidated 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:
|
| 12/31/2008 |
| 12/31/2009 |
| 3/31/2010 |
| |
FirstCity’s consolidated Portfolio Assets (as reported in “Portfolio Assets” on the balance sheet of the respective Form 10-K or 10-Q) |
| $ | 148,213 |
| 224,384 |
| 236,124 |
|
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) |
| (11,460 | ) | (37,277 | ) | (33,853 | ) | |
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) |
| 75,817 |
| 63,572 |
| 45,973 |
| |
FirstCity’s basis in consolidated and non-consolidated Portfolio Assets |
| $ | 212,570 |
| 250,679 |
| 248,244 |
|