WACO, Texas, March 31, 2009 (GLOBE NEWSWIRE) -- FirstCity Financial Corporation (Nasdaq:FCFC)
Highlights:
* FirstCity Financial Corporation reported a fourth quarter 2008 loss of $34.8 million or $3.53 loss per diluted share - net loss for the fiscal year 2008 was $46.7 million or $4.55 loss per diluted share. Impacting the fourth quarter results were the following non-cash charges: * $20.1 million to write-down the deferred tax asset; * $11.3 million of net provisions; and * $2.6 million of foreign currency losses. * FirstCity invested $40.4 million in portfolio acquisitions and other investments during the quarter bringing total acquisitions for the year to $125.2 million. * Liquidity remains adequate and has provided for investments of $73.3 million in portfolio acquisitions and other investments through the 1st quarter of 2009.
Fourth Quarter 2008 and Business Outlook
The fourth quarter of 2008 produced a loss of $34.8 million or $3.53 per diluted share compared to a loss of $1.4 million or $0.12 per diluted share for the fourth quarter of 2007.
Jim Sartain, Chief Executive Officer, said, "While GAAP earnings have been hit hard in 2008 due to the large provisions, tax adjustments and foreign exchange losses, the Company continues to generate positive cash flow from its investments to cover its operating expenses and contribute to current investments. Recent investments are reflecting promising returns, and with the continued availability under our lines-of-credit, the Company expects to be able to take advantage of the current opportunities available in the market. We continue to strive to get the best execution on our acquisitions and monitor our operational costs to be as efficient as possible."
The Company has also experienced continued growth in the unrealized future gross profit associated with its core portfolio business showing positive growth to $122.3 million at the end of December 2008, which is up from $117 million at the end of September 2008. This is another indicator of the ability of the Company's business to generate cash flows to support operations.
The current market conditions have created increased opportunities for FirstCity to grow its business through asset acquisition opportunities at attractive margins. These opportunities exist in all of FirstCity's markets, but management is primarily focused on the numerous opportunities in the U.S. which result from continuing bank failures and the opportunities for acquisition of legacy assets through government programs.
FirstCity is encouraged with the acquisition prospects and the Company has been actively purchasing these assets. However, most of these transactions are subject to competitive bidding and negotiations, and there can be no assurance as to the ultimate execution of any one transaction.
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 December 31, 2008, FirstCity's maximum borrowing capacity under these credit commitments was approximately $120.0 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. As a result of amendments to certain of our debt agreements as described below, FirstCity is in compliance with all material covenants and requirements set forth in the underlying credit agreements for these credit facilities.
Items effecting comparability of results for the fourth quarter of 2008 are as follows:
As announced on December 15, 2008, the Company recognized a non-cash charge of $20.1 million during the fourth quarter of 2008, as a result of increasing the valuation allowance against the deferred tax asset. We established a full valuation allowance for the deferred tax asset due to the lack of sufficient objective evidence regarding the realization of these assets in the foreseeable future, caused primarily by the negative impact on our results of operations from the continued decline in general global economic conditions, which dramatically weakened in the fourth quarter of 2008. These conditions resulted in significantly higher impairments recorded by the Company in the fourth quarter of 2008.
Provisions for loss of $11.3 million were recorded during the fourth quarter of 2008 compared to $3.2 million in the fourth quarter of 2007. The provisions were recorded to reflect declines in expected realization and delayed timing of asset collections. Of those provisions, $8.2 million were on U.S. assets and $2.9 million relate to assets in Europe. The provisions were split between consolidated portfolios ($6.5 million) and equity investments ($4.8 million) in the fourth quarter 2008.
Foreign exchange losses of $2.6 million were recorded during the fourth quarter of 2008 compared to $0.2 million of foreign exchange gains in the fourth quarter 2007. $2.3 million of the fourth quarter 2008 foreign exchange losses were a result of the devaluation of the Mexican peso.
Selected financial data for the fourth quarter of 2008:
Total assets at the end of the fourth quarter of 2008 contracted to $329 million compared to $347 million at the end of the third quarter of 2008 as a result of the one-time charge and provisions mentioned above. Earning assets at the end of December 2008 stood at $296 million. Common equity at year-end was $50.3 million, resulting in a book value per diluted share of $4.90.
Revenues were up slightly in the fourth quarter of 2008 to $11.5 million compared to $11.0 million in the fourth quarter of 2007. Increased revenue from the special situations (private equity) segment off-set decreases in other components of revenue impacted by lower consolidated collections of $16 million in 2008 compared to $25 million in 2007.
Equity earnings declined to a loss of $7.8 million in the fourth quarter of 2008 from $2.6 million of income in the fourth quarter 2007. The decline is a result of provisions of $4.8 million and foreign currency losses of $3.7 million noted above, as well as lower partnership collections of $23.0 million compared to $44.8 million in the fourth quarter of 2008 and 2007, respectively.
Total operating expenses (excluding provision, interest and income tax expenses) for the quarter were down slightly to $8.3 million from $8.8 million in the fourth quarter 2007.
Total interest expense was down slightly to $4.2 million in the fourth quarter of 2008 from $4.4 million in the fourth quarter of 2007 primarily due to the lower average cost of funds of 7.1% compared to 9.3% a year ago while the average outstanding borrowings was higher during the fourth quarter 2008.
Fiscal year ending December 31, 2008
The full fiscal year of 2008 produced a net loss of $46.7 million or $4.55 per diluted share compared to net income of $2.2 million or $0.19 per diluted share for the full fiscal year of 2007.
Items effecting comparability of results for the year are as follows:
As discussed above, the Company recorded a $20.1 million non-cash charge during the fourth quarter of 2008 as a result of increasing the valuation allowance against the deferred tax asset.
Provisions for loss of $25.9 million were recorded in 2008 compared to $6.3 million for 2007. The provisions were recorded to reflect declines in expected realization and delayed timing of asset collections. Of those provisions, $20.8 million were on U.S. assets, and $1.9 million relate to assets in Latin America and $3.2 million relate to assets owned in Europe. The provisions were split between consolidated portfolios ($17.8 million) and equity investments ($8.1 million) for 2008.
Foreign exchange losses of $2.2 million were recorded during 2008. $1.3 million of these losses were a result of the devaluation of the Mexican peso, while $0.3 million was due to a decline in the Chilean Peso and $0.5 million from volatility of the Euro. This in contrast to foreign exchange gains of $1.1 million for the full fiscal year of 2007.
Selected financial data for the year:
Revenues for 2008 were up to $45.2 million compared to $43.7 million for 2007. While certain components of revenue such as portfolio income were down primarily due to lower consolidated collections of $62.9 million in 2008 compared to $85.9 million in 2007, increased revenue from the special situations (private equity) segment off-set the declines.
Equity earnings declined to $0.2 million for 2008 from $10.9 million for 2007. The decline is a result of provisions of $8.1 million and foreign currency losses of $2.2 million noted above. The decline was also driven by lower partnership collections of $160.8 million compared to $213.6 million for 2008 and 2007, respectively.
Total operating expenses (excluding provision, interest and income tax expenses) for 2008 increased to $38.1 million for 2008 from $31.7 million in 2007. The increases were primarily related to an increase in salaries and benefits of $4.0 million attributable to the first full year of operations for certain operating entities from our special situations segment and additional hiring in anticipation of expected growth during 2008 and beyond; an increase of $2.1 million in asset-level expenses associated with the increase in foreclosed assets over the past 12-18 months; and increased occupancy and other operating expenses of $1.6 million attributable to first full year of operations for certain operating entity investments. These operating expense increases were partially off-set by a $2.2 million decline in accounting and legal costs in 2008 compared to 2007 as a result of additional expenses incurred in 2007 in connection with an independent investigation authorized by the audit committee that was performed and completed in 2007.
Total interest expense for 2008 was down to $16.2 million from $18.1 million in 2007 primarily due to the lower average cost of funds of 7.8% compared to 8.8% a year ago, and slightly lower average outstanding borrowings during the year.
Investment in portfolio acquisitions and other investments approximated $125.2 million for 2008, increasing earning assets to $296.3 million at December 31, 2008, which is up from $243.6 million at December 31, 2007.
Other Corporate Matters
Bank of Scotland Credit Agreements
On March 30, 2009, FirstCity and Bank of Scotland Plc and BoS(USA) Inc. entered into amendments to FirstCity's loan facilities which amended the definitions of Indebtedness and Tangible Net Worth such that in the determination of tangible net worth and the computation of the ratio of indebtedness to tangible net worth for the fiscal quarters ending December 31, 2008 and thereafter, tangible net worth and indebtedness would be adjusted by deducting non-controlling interests in Subsidiaries from liabilities and adding non-controlling interests in Subsidiaries to equity as will be provided under GAAP for fiscal quarters ending after December 31, 2008. As a result of these amendments, FirstCity will be in compliance with the financial covenants related to tangible net worth and the ratio of indebtedness to tangible net worth with respect to FirstCity's financial statements to be delivered for the period ending December 31, 2008.
Prudential Lawsuit
As announced on December 15, 2008, FirstCity disclosed that it had reached an agreement to settle the lawsuit involving the disputed ownership of approximately $18.6 million of proceeds from the demutualization of Prudential Insurance Company. The mediator's proposal, which was accepted by the claimants on November 25, 2008, would provide FirstCity with 50% of the demutualization proceeds (approximately $9.3 million) if the Court of Appeals affirms the summary judgment in favor of FirstCity; otherwise, the total recovery to FirstCity would be 33.3% of the proceeds (approximately $6.2 million).
Pursuant to the mediator's proposal, on December 31, 2008, the parties to the suit filed a motion with the Court of Appeals requesting it to abate the appeal, and remand the action to the trial court for approval or disapproval of the settlement on behalf of the class of former employees. The Court of Appeals has jurisdiction of the suit and the trial court's approval of the settlement is necessary. If the trial court does not approve the settlement the parties will be restored to their positions in the suit prior to the acceptance of the mediator's proposal.
The mediator's proposal provides that the parties will enter into a more detailed settlement agreement including mutual releases of all parties. The settlement is subject to approval of the procedure for the settlement by the Court of Appeals and the preliminary approval of the terms of the settlement by the trial court, notice to the class of the action, and final approval by the trial court after hearings on the fairness of the settlement with respect to the class of former employees. The Court of Appeals has not taken any action on the motion filed by the parties to the suit. FirstCity cannot give any assurances as to whether the settlement will be approved by the Court of Appeals or trial court, the time period for the appeal of the final judgment in the event that the settlement is not approved or the timing of receipt or ultimate amount of proceeds to be received, if any.
The current financial statements of FirstCity do not reflect any impact regarding this settlement.
Conference Call
A conference call will be held on Tuesday, March 31, 2009 at 9:00 a.m. Central Time to discuss fourth 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
Date: Tuesday, March 31, 2009
Time: 9:00 a.m. Central Time
Host: James T. Sartain, FirstCity's President and
Chief Executive Officer
Web
Access: FirstCity's web page - www.fcfc.com/invest.htm or,
CCBN's Investor websites - www.streetevents.com and,
www.earnings.com
Dial In
Access: Domestic 866-543-6407
International 617-213-8898
Pass code 29467572
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 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).
The FirstCity Financial Corporation logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=4413
Forward-Looking Statements
FirstCity may from time to time make written or oral forward-looking statements, including statements contained in this press release, in FirstCity's filings with the SEC, in its reports to stockholders and in other FirstCity communications. These statements relate to the Company's strategic objectives and future performance, which are not historical facts, 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, as amended ("Exchange Act"). Forward-looking statements include, without limitation, statements regarding our future financial position, business strategy, and plans and objectives of management for future operations, as well as any statement that may project, indicate or imply future results, performance or achievements, and may contain the "anticipates," "believes," "feels," "expects," "estimates," "seeks," "strives," "plans," "intends," "outlook," "forecast," "position," "target," "mission," "assume," "achievable," "potential," "strategy," "goal," "aspiration," "outcome," "continue," "remain," "maintain," "trend," "objective" and variations of such words and similar expressions, or future or conditional verbs such as "will," "would," "should," "could," "might," "can," "may" and similar expressions. Forward-looking statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict. Actual results and outcomes may differ materially from those expressed in, or implied by, our forward-looking statements.
There are many important factors that could cause the Company's actual results to differ materially from those indicated in the forward-looking statements. Such factors include, but are not limited to, changes in general economic conditions in the United States and local economic conditions in the geographic regions and industries in which the Company operates; availability of investments and investment opportunities; the Company's ability to project future cash receipts and develop critical assumptions and estimates underlying asset performance; level of non-performing assets, charge-offs and impairment provisions; risks associated with foreign operations; currency exchange rate fluctuations; changes in the interest rate environment and market liquidity; fluctuations in residential and commercial real estate values; adverse movements and volatility in equity capital markets; 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; risks of declining value of loans, collateral or assets; increased competition in the business in which we operate; credit risk associated with our borrowers' ability to repay their loans; changes in accounting standards, rules and interpretations; and 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, available through the Company's website, which contain a more detailed discussion on 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)
Three Months Ended Year Ended
December 31, December 31,
2008 2007 2008 2007
-------- -------- -------- --------
Revenues:
Servicing fees $ 2,065 $ 2,382 $ 10,813 $ 10,390
Income from Portfolio
Assets 4,993 6,291 20,779 22,754
Gain on sale of SBA
loans held for sale,
net -- 65 227 723
Interest income from SBA
loans 396 474 1,606 2,140
Interest income from
loans receivable -
affiliates 973 147 2,481 560
Interest income from
loans receivable -
other 595 306 1,766 3,822
Revenue from railroad
operations 68 681 2,542 982
Other income 2,424 686 4,982 2,285
-------- -------- -------- --------
Total revenues 11,514 11,032 45,196 43,656
-------- -------- -------- --------
Expenses:
Interest and fees on
notes payable to banks 3,742 4,394 15,432 18,060
Interest and fees on
notes payable to
affiliates 494 -- 816 --
Salaries and benefits 4,953 4,629 20,935 16,932
Provision for loan and
impairment losses 6,512 1,125 17,755 2,061
Asset-level expenses 971 1,557 5,632 3,507
Occupancy, data
processing and other 2,396 2,692 11,566 11,282
-------- -------- -------- --------
Total expenses 19,068 14,397 72,136 51,842
-------- -------- -------- --------
Equity in earnings of
investments (7,790) 2,629 228 10,944
Gain on sale of
subsidiaries and equity
investments -- -- -- 207
-------- -------- -------- --------
Earnings (loss) from
continuing operations
before income taxes and
minority interest (15,344) (736) (26,712) 2,965
Income taxes (19,959) (415) (20,204) (781)
Minority interest 496 (209) 241 1
-------- -------- -------- --------
Net earnings (loss) $(34,807) $ (1,360) $(46,675) $ 2,185
======== ======== ======== ========
Basic earnings (loss) per
common share are as
follows:
Net earnings (loss) per
common share $ (3.53) $ (0.14) $ (4.55) $ 0.20
Weighted average common
shares outstanding 9,865 10,778 10,258 10,786
Diluted earnings (loss)
per common share are as
follows:
Net earnings (loss) per
common share $ (3.53) $ (0.12) $ (4.55) $ 0.19
Wtd. avg. common shares
outstanding 9,865 11,362 10,258 11,392
Selected Unaudited Balance Sheet Data
Dec. 31, Dec. 31,
2008 2007
--------- ---------
Cash and cash equivalents $ 19,103 $ 23,037
Restricted cash 1,217 509
Earning assets:
Portfolio acquisition and resolution assets:
Domestic 167,211 149,717
Latin America 42,426 33,450
Europe 48,612 46,701
Other 228 371
Special situations platform assets 37,786 13,361
Deferred tax asset, net -- 20,101
Service fees receivable and other assets 12,354 10,872
--------- ---------
Total assets $ 328,937 $ 298,119
========= =========
Notes payable to banks $ 242,889 $ 177,329
Note payable to affiliate 8,658 --
Minority interest and other liabilities 27,124 13,967
--------- ---------
Total liabilities 278,671 191,296
Total equity 50,266 106,823
--------- ---------
Total liabilities and equity $ 328,937 $ 298,119
========= =========
FirstCity Financial Corporation
Supplemental Information
(Dollars in thousands)
(Unaudited)
Three Months Ended Year Ended
December 31, December 31,
2008 2007 2008 2007
-------- -------- -------- --------
Summary Operating
Statement Data for Each
Segment
------------------------
Portfolio Asset
Acquisition and
Resolution segment:
Revenues $ 9,267 $ 10,041 $ 38,402 $ 41,887
Equity in earnings of
investments (8,166) 2,629 (724) 10,944
Gain on sale of
subsidiaries and equity
investments -- -- -- 207
Expenses (8,243) (11,037) (42,339) (39,443)
-------- -------- -------- --------
Operating contribution
before provision for
loan and impairment
losses (7,142) 1,633 (4,661) 13,595
Provision for loan and
impairment losses 5,930 1,125 17,173 2,061
-------- -------- -------- --------
Operating contribution,
net of direct taxes $(13,072) $ 508 $(21,834) $ 11,534
======== ======== ======== ========
Special Situations
Platform segment:
Revenues $ 2,175 $ 904 $ 6,408 $ 1,330
Equity in earnings of
investments 376 -- 952 --
Expenses (1,714) (843) (4,891) (1,432)
-------- -------- -------- --------
Operating contribution
before provision for
loan and impairment
losses 837 61 2,469 (102)
Provision for loan and
impairment losses 581 -- 581 --
-------- -------- -------- --------
Operating contribution,
net of direct taxes $ 256 $ 61 $ 1,888 $ (102)
======== ======== ======== ========
Portfolio Asset
Acquisition and
Resolution segment:
--------------------
Revenues and equity in
earnings of investments
by region:
Domestic $ 3,930 $ 6,728 $ 21,462 $ 32,520
Latin America (1,163) 3,540 10,158 12,068
Europe (1,675) 2,388 6,015 8,055
Canada 9 14 43 188
-------- -------- -------- --------
Total $ 1,101 $ 12,670 $ 37,678 $ 52,831
======== ======== ======== ========
Revenues and equity in
earnings of investments
by source:
Equity earnings $ (8,166) $ 2,629 $ (724) $ 10,944
Income from Portfolio
Assets 4,993 6,291 20,779 22,754
Servicing fees 2,065 2,382 10,813 10,390
Gain on sale of SBA
loans held for sale,
net -- 65 227 723
Interest income from SBA
loans 396 474 1,606 2,140
Interest income from
loans receivable -
affiliates 532 147 1,271 560
Interest income from
loans receivable -
other 263 98 696 3,492
Other 1,018 584 3,010 1,828
-------- -------- -------- --------
Total $ 1,101 $ 12,670 $ 37,678 $ 52,831
======== ======== ======== ========
Special Situations
Platform segment:
------------------
Revenues and equity in
earnings of investments
by source:
Equity earnings $ 376 $ -- $ 952 $ --
Interest income from
loans receivable -
affiliates 441 -- 1,210 --
Interest income from
loans receivable -
other 333 208 1,070 330
Revenue from railroad
operations 68 681 2,542 982
Other 1,333 15 1,586 18
-------- -------- -------- --------
Total $ 2,551 $ 904 $ 7,360 $ 1,330
======== ======== ======== ========
FirstCity Financial Corporation
Supplemental Information
(Dollars in thousands)
(Unaudited)
Portfolio Purchases and Other Investments:
------------------------------------------
Portfolio Purchases
------------------------------------------
Latin
Domestic Europe America Total
--------- --------- --------- ---------
2009
1st Quarter $ 70,238 $ -- $ -- $ 70,238
========= ========= ========= =========
2008
4th Quarter $ 26,363 $ 1,823 $ -- $ 28,186
3rd Quarter 2,912 -- 1,576 4,488
2nd Quarter 28,427 -- 8,314 36,741
1st Quarter 6,692 -- 13,207 19,899
--------- --------- --------- ---------
Total Year 2008 $ 64,394 $ 1,823 $ 23,097 $ 89,314
========= ========= ========= =========
Total Year 2007 $ 121,679 $ 23,199 $ 69,455 $ 214,333
========= ========= ========= =========
Total Year 2006 $ 136,596 $ 102,158 $ 58,236 $ 296,990
========= ========= ========= =========
FirstCity
FirstCity Investment
FirstCity Investment in Special
Investment in Other Situations Total
---------- ---------- ---------- ----------
2009
1st Quarter $ 64,907 $ 6,182 $ 2,200 $ 73,289
========== ========== ========== ==========
2008
4th Quarter $ 27,183 $ 10,071 $ 3,150 $ 40,404
3rd Quarter 3,241 6,040 -- 9,281
2nd Quarter 33,448 15,443 16,756 65,647
1st Quarter 8,435 1,453 -- 9,888
---------- ---------- ---------- ----------
Total Year 2008 $ 72,307 $ 33,007 $ 19,906 $ 125,220
========== ========== ========== ==========
Total Year 2007 $ 126,714 $ 10,476 $ 11,530 $ 148,720
========== ========== ========== ==========
Total Year 2006 $ 144,048 $ 28,181 $ -- $ 172,229
========== ========== ========== ==========
Portfolio Asset
Acquisition and Three Months Ended Year Ended
Resolution segment: December 31, December 31,
-------------------- 2008 2007 2008 2007
---------- ---------- ---------- ----------
Aggregate purchase
price of portfolios
acquired:
Acquisition
partnerships
Domestic $ 26,363 $ 5,309 $ 64,394 $ 121,679
Latin America -- 4,496 23,097 69,455
Europe 1,823 14,661 1,823 23,199
---------- ---------- ---------- ----------
Total $ 28,186 $ 24,466 $ 89,314 $ 214,333
========== ========== ========== ==========
Historical Acquisitions Purchase FirstCity's
of Portfolios - Annual: Price Investment
---------- ----------
2008 $ 89,314 $ 72,307
2007 214,333 126,714
2006 296,990 144,048
2005 146,581 71,405
2004 174,139 59,762
Dec. 31, Dec. 31,
2008 2007
---------- ----------
Portfolio acquisition
and resolution assets
by region:
Domestic $ 167,211 $ 149,717
Latin America 42,426 33,450
Europe 48,612 46,701
Canada 228 371
---------- ----------
Total $ 258,477 $ 230,239
========== ==========
FirstCity Financial Corporation
Supplemental Information
(Dollars in thousands)
(Unaudited)
Three Months Ended Year Ended
December 31, December 31,
2008 2007 2008 2007
---------- ---------- ---------- ----------
Analysis of Equity
Investments
FirstCity's average
investment:
Domestic, Portfolio
Asset Acquisition
and Resolution
segment $ 16,827 $ 29,693 $ 20,694 $ 33,573
Domestic, Special
Situations Platform
segment 918 -- 242 --
Latin America 21,255 21,827 22,836 20,960
Europe 16,216 29,025 26,338 40,405
Europe-Servicing
subsidiaries 23,908 6,465 12,223 6,018
Latin America-
Servicing
subsidiaries 3,696 4,453 4,615 3,588
---------- ---------- ---------- ----------
Total $ 82,820 $ 91,463 $ 86,948 $ 104,544
========== ========== ========== ==========
FirstCity's share of
equity earnings
(losses):
Domestic, Portfolio
Asset Acquisition
and Resolution
segment $ (1,622) $ (144) $ (1,916) $ 2,284
Domestic, Special
Situations Platform
segment 376 -- 952 --
Latin America (3,724) 495 (2,215) 1,310
Europe (612) 1,653 5,093 5,948
Europe-Servicing
subsidiaries (1,779) 421 (1,130) 1,152
Latin America-
Servicing
subsidiaries (429) 204 (556) 250
---------- ---------- ---------- ----------
Total $ (7,790) $ 2,629 $ 228 $ 10,944
========== ========== ========== ==========
Selected Other Data:
Average investment in
consolidated
portfolio assets
and loans receivable:
Domestic, Portfolio
Asset Acquisition
and Resolution
segment $ 144,457 $ 135,256 $ 133,564 $ 145,555
Domestic, Special
Situations Platform
segment 28,733 4,213 20,301 1,990
Latin America 21,721 6,714 14,117 7,952
Europe 10,812 5,628 9,648 4,431
Canada 238 369 288 1,255
---------- ---------- ---------- ----------
Total $ 205,961 $ 152,180 $ 177,918 $ 161,183
========== ========== ========== ==========
Income from
consolidated
portfolio assets and
loans receivable:
Domestic, Portfolio
Asset Acquisition
and Resolution
segment $ 4,882 $ 6,479 $ 20,378 $ 27,122
Domestic, Special
Situations Platform
segment 774 208 2,280 330
Latin America 745 478 2,571 1,990
Europe 548 104 1,587 369
Canada 9 14 43 188
---------- ---------- ---------- ----------
Total $ 6,958 $ 7,283 $ 26,859 $ 29,999
========== ========== ========== ==========
Servicing fee
revenues:
Domestic
partnerships:
Servicing fee
revenue $ 329 $ 316 $ 2,194 $ 2,429
Average servicing
fee % 11.5% 3.4% 6.5% 3.7%
Latin American
partnerships:
Servicing fee
revenue $ 1,659 $ 2,041 $ 8,403 $ 7,782
Average servicing
fee % 30.2% 30.4% 23.3% 26.1%
Incentive service
fees $ -- $ -- $ -- $ --
Total Service Fees-
Portfolio Assets:
Servicing fee
revenue $ 1,988 $ 2,357 $ 10,597 $ 10,211
Average servicing
fee % 23.8% 14.6% 15.2% 10.7%
Service Fees-SBA
loans: $ 77 $ 25 216 179
Total Service Fees $ 2,065 $ 2,382 $ 10,813 $ 10,390
Collections:
Domestic
partnerships $ 2,864 $ 9,389 $ 33,600 $ 66,063
Latin American
partnerships 8,153 14,059 65,053 56,127
European
partnerships 11,950 21,329 62,098 91,422
---------- ---------- ---------- ----------
Subtotal 22,967 44,777 160,751 213,612
Consolidated
portfolio assets 16,334 25,071 62,857 85,888
---------- ---------- ---------- ----------
Total $ 39,301 $ 69,848 $ 223,608 $ 299,500
========== ========== ========== ==========
Servicing portfolio
(face value) at
period end:
Domestic $ 648,035 $ 564,828
Latin America 918,065 1,053,299
Europe 1,330,509 1,125,168
---------- ----------
Total $2,896,609 $2,743,295
========== ==========
Number of personnel
at period end:
Domestic, Portfolio
Asset Acquisition
and Resolution
segment 84 68
Domestic, Special
Situations Platform
segment 21 20
Latin America 130 118
Corporate 30 35
---------- ----------
Total personnel 265 241
========== ==========
FirstCity Financial Corporation
Supplemental Information
(Dollars in thousands)
(Unaudited)
Illustration of the Three Months Ended Year Ended
Effects of Foreign December 31, December 31,
Currency Fluctuations ------------------- -------------------
2008 2007 2008 2007
---------------------------------------------------------------------
Net earnings (loss) to
common stockholders $(34,807) $ (1,360) $(46,675) 2,185
Foreign currency gains
(losses), net:
Euro 21 97 (491) 882
Mexican Peso (2,257) 127 (1,286) (63)
Argentine Peso (72) (14) (74) (38)
Canadian Dollar (41) 4 (61) 247
Chilean Peso (206) 32 (335) 60
------------------------------------------
Exchange rate at valuation
date:
Euro 0.71 0.68
Mexican Peso 13.54 10.87
Argentine Peso 3.46 3.15
Canadian Dollar 1.22 0.98
Chilean Peso 648.00 497.70
FirstCity Financial Corporation
Schedule of Estimated Unrealized Gross Profit from Portfolio Assets
December 31, 2008
(Unaudited)
Basis in Portfolio Assets (1), (4)
--------------------------------------
($ in 000's) 12/31/2006 12/31/2007 12/31/2008
-----------------------------------------------------------------
Domestic $ 153,118 151,802 153,148
Europe 46,204 40,340 29,555
Latin America 22,378 26,844 29,867
--------------------------------------
Total $ 221,700 218,987 212,570
======================================
Estimated Remaining Collections (2)
--------------------------------------
12/31/2006 12/31/2007 12/31/2008
--------------------------------------
Domestic $ 215,987 195,845 217,347
Europe 61,081 52,617 39,341
Latin America 50,866 68,900 78,211
--------------------------------------
Total $ 327,934 317,363 334,899
======================================
Estimated Unrealized Gross Profit (3)
--------------------------------------
12/31/2006 12/31/2007 12/31/2008
--------------------------------------
Domestic $ 62,869 44,043 64,199
Europe 14,877 12,278 9,787
Latin America 28,488 42,056 48,344
--------------------------------------
Total $ 106,234 98,376 122,329
======================================
Estimated Unrealized Gross Profit %
--------------------------------------
12/31/2006 12/31/2007 12/31/2008
--------------------------------------
Domestic 29.1% 22.5% 29.5%
Europe 24.4% 23.3% 24.9%
Latin America 56.0% 61.0% 61.8%
Total 32.4% 31.0% 36.5%
A graphic accompanying this release is available at
http://media.globenewswire.com/cache/9623/file/6727.pdf
12/31/2006 12/31/2007 12/31/2008
--------------------------------------
FirstCity's consolidated
Portfolio Assets (as
reported in "Portfolio
Assets" on the balance
sheet of the respective
Form 10-K) $ 108,696 122,001 148,213
Minority ownership
interests in FirstCity's
consolidated Portfolio
Assets (component of
"Minority interest"
liability on the balance
sheet of the respective
Form 10-K) (2,005) (4,474) (11,460)
FirstCity's interests 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) 115,009 101,460 75,817
--------------------------------------
FirstCity's basis in
consolidated and non-
consolidated Portfolio
Assets $ 221,700 218,987 212,570
======================================