updated 3/24/2011 8:15:32 AM ET 2011-03-24T12:15:32

WACO, Texas, March 24, 2011 (GLOBE NEWSWIRE) --

Highlights:

  • FirstCity reported fourth quarter 2010 earnings of $1.8 million or $0.17 per diluted share, and fiscal year 2010 earnings of $12.5 million or $1.23 per diluted share.
  • FirstCity invested $29.0 million during the quarter, consisting of $14.5 million of portfolio assets and $14.5 million in non-portfolio debt and equity investments. FirstCity invested $123.7 million during 2010, consisting of $67.7 million of portfolio assets and $56.0 million in non-portfolio debt and equity investments.

Overview of Fourth Quarter 2010

FirstCity reported net earnings of $1.8 million for the fourth quarter of 2010 ("Q4 2010"), compared to $8.4 million reported for the fourth quarter of 2009 ("Q4 2009"). The Company recorded diluted net earnings per common share of $0.17 in Q4 2010, compared to $0.80 of diluted net earnings per common share for the same period last year.

During Q4 2010, FirstCity and its investment partners jointly acquired $51.1 million of domestic portfolio assets with a face value of $107.8 million – of which FirstCity's investment acquisition share was $14.5 million. FirstCity's non-portfolio investments in Q4 2010 included $7.3 million of SBA loan advances and originations; $0.2 million of equity investments in privately-held middle-market companies; $6.5 million of equity investments in foreign partnerships; and $0.5 million of other investments.

In addition, during Q4 2010, the Company's consolidated coal mine operation (special situations platform investment) completed performance on its coal supply and purchase agreements (which expired in December 2010). As a result, the coal mine subsidiary was dissolved, and its results of operations for Q4 2010 and fiscal year 2010 were reclassified from the Company's special situations business segment and presented as discontinued operations.

The Company's unrealized future gross profit associated with its core portfolio business assets totaled $149.0 million at December 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 12 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 from continuing operations for Q4 2010 are as follows:

Total assets of FirstCity increased to $460.4 million at the end of December 2010 from $445.2 million at the end of September 2010. The Company's earning assets also experienced an increase to $400.5 million at the end of December 2010 from $386.2 million at the end of September 2010.

Revenues in Q4 2010 decreased to $19.1 million compared to $24.7 million in Q4 2009. The Company's revenues in Q4 2010 included $11.7 million of income and gains from portfolio assets, $2.7 million of fee income attributable to our loan servicing platform; $1.5 million of interest income and gains from loans receivable; and $1.3 million of revenues from our consolidated railroad subsidiary.

Revenues in Q4 2010 decreased as a result of a $6.9 million decrease in income and gains from portfolio assets in Q4 2010 compared to Q4 2009. A decline in collections from consolidated portfolio assets was the primary factor for the portfolio assets revenue decline in Q4 2010 compared to Q4 2009. In addition, this revenue decrease corresponds to a shift in the income-recognition methods used by the Company for certain of its existing and newly-acquired loan portfolio assets to non-accrual income methods (cost-recovery or cash basis) from the interest-accrual income method over the past 12-18 months. We apply non-accrual income-recognition methods to portfolio assets, as applicable, due to uncertainties related to estimating the timing and/or amount of collections as a result of the current economic environment.

The Company incurred $5.0 million of combined net impairment provisions in Q4 2010 from its consolidated and unconsolidated portfolio assets and loans compared to $5.5 million of combined net impairment provisions in Q4 2009. The provisions in Q4 2010 were recorded primarily 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 our Q4 2010 net impairment provisions included $1.7 million related to U.S. assets, $2.9 million related to European assets (primarily as a result of fair value measurements related to the German partnership step-acquisition transaction described below), and $0.4 related to Latin American assets. Net provisions in Q4 2010 were allocated between consolidated assets ($0.9 million) and FirstCity's share of net provisions from unconsolidated subsidiaries ($4.1 million).

The Company's share of foreign currency transaction losses from its consolidated and unconsolidated foreign operations was $0.5 million for both Q4 2010 and Q4 2009. Our combined foreign currency exchange loss in Q4 2010 related primarily to our consolidated Mexico operations.

Equity in earnings of unconsolidated subsidiaries was $0.6 million in Q4 2010 compared to losses of $1.7 million for Q4 2009. This increase was due to additional equity earnings of $2.0 million from our foreign servicing entities in Q4 2010 compared to Q4 2009, and $2.8 million of additional equity earnings from our special situations platform in Q4 2010 compared to Q4 2009 (we recorded $1.9 million in equity earnings in Q4 2010 from our special situations equity-method investment in a prefabricated building manufacturer – see below for additional discussion). This increase was off-set partially by $2.4 million of lower equity earnings from our domestic and foreign acquisition partnerships recorded in Q4 2010 compared to Q4 2009.

In Q4 2010, the Company also recognized a $3.7 million gain attributable to a step-acquisition transaction in which the Company gained a controlling interest in eight German acquisition partnerships. FirstCity owned noncontrolling equity interests in these entities prior to the transaction. Under business combination accounting guidance, FirstCity's previously-held noncontrolling equity interests in these entities were re-measured to fair value — which resulted in the Company's recognition of the gain. In February 2011, FirstCity sold a substantial majority of its interests in the portfolio assets held by these entities (and its equity interest in another German acquisition partnership) to a European acquisition partnership entity for approximately $22.5 million. FirstCity has a noncontrolling 13% beneficial interest in this European acquisition partnership that purchased the portfolio assets and German entity (the remaining 87% beneficial interest is owned by a subsidiary of Värde Investment Partners, L.P.). FirstCity's net investment in Germany approximated $12.3 million at December 31, 2010, which was subsequently reduced to approximately $6.6 million in February 2011 upon FirstCity's sale transaction described above.

Q4 2009 included $6.1 million of other income in connection with FirstCity's settlement of a lawsuit.

Selected other financial data from continuing operations for Q4 2010:

The Company's total operating costs and expenses (excluding provision, interest and income tax expenses) decreased to $11.7 million for Q4 2010 from $12.2 million in Q4 2009, due primarily to $0.5 million of costs and expenses recorded by the Company's consolidated wireless communications equipment manufacturing subsidiary (special situations platform investment) in Q4 2009 compared to $-0- in Q4 2010 (the Company deconsolidated this subsidiary in June 2010 – see discussion below).

Total interest expense increased to $4.4 million in Q4 2010 from $3.7 million in Q4 2009. FirstCity's average debt holdings were $294.6 million at a 6.0% average cost of funds for Q4 2010, compared to its average debt holdings of $310.1 million at a 4.8% average cost of funds for Q4 2009. Our increased cost of funds primarily relates to the higher interest and fees charged on our Reducing Note Facility with Bank of Scotland (closed in June 2010) compared to the loan facilities we had in place with Bank of Scotland in 2009.

The Company recorded $1.1 million of income tax expense in Q4 2010 compared to $0.2 million of income tax expense in Q4 2009. Income tax expense in Q4 2010 was composed primarily of foreign and state income taxes, and fluctuates regularly depending on the timing and amount of taxable revenues generated from our domestic and foreign acquisition partnerships, and our operating and servicing entities.

Noncontrolling interest expense increased to $3.2 million in Q4 2010 from $2.4 million in Q4 2009. Noncontrolling interest expense represents the portions of net earnings that are attributed to our co-investors in our consolidated subsidiaries. This increase was a result of an increase in net earnings from certain of our consolidated subsidiaries in Q4 2010 compared to Q4 2009 – primarily our consolidated European acquisition partnerships and special situations platform.

Results of discontinued operations for Q4 2010:

The Company's discontinued operations, consisting of its consolidated coal mine subsidiary, reported a $0.3 million net loss in Q4 2010 (comprised of $13.9 million in operating revenues and $14.2 million in operating costs and expenses). The Company did not recognize any consolidated revenues, costs or expenses from its coal mine operation in Q4 2009 (the Company consolidated its investment in the coal mine operation in April 2010).

Fiscal year ending December 31, 2010

The Company's fiscal year ended December 31, 2010 produced net earnings of $12.5 million or $1.23 per diluted share compared to net earnings of $18.7 million or $1.83 per diluted share for the fiscal year ended December 31, 2009. The decrease in earnings for 2010 compared to 2009 was driven primarily by the following: (1) a $7.9 million decline in income accretion from consolidated loan portfolio assets in 2010; (2) $6.2 million of additional net impairment provisions recorded by the Company in 2010 compared to 2009; (3) a $7.9 million increase in noncontrolling interest expense in 2010; and (4) $6.1 million of lawsuit settlement income recognized in 2009 (compared to $-0- in 2010). These factors that decreased earnings in 2010 compared to 2009 were off-set partially by the following: (1) a $14.9 million increase in equity earnings from unconsolidated subsidiaries in 2010; (2) $2.3 million of additional business combination gains recognized in 2010 compared to 2009; (3) a $3.3 million gain recognized in 2010 from the sale of an investment security; and (4) $4.0 million of net earnings from our consolidated coal mine operation (reported as discontinued operations). Additional information related to these factors is discussed below.

During 2010, FirstCity and its investment partners jointly acquired $225.8 million of domestic portfolio assets with a face value of $420.4 million - of which FirstCity's investment acquisition share was $67.7 million. FirstCity's non-portfolio investments in 2010 included $20.6 million of SBA loan advances and originations; $13.2 million of equity and debt investments in privately-held middle-market companies; $15.3 million of equity investments in foreign partnerships and other investments; and $6.9 million of equity investments in domestic partnerships and other investments.

Items impacting comparability of results from continuing operations for the year are as follows:

Total assets at the end of 2010 remained relatively steady at $460.4 million compared to $465.1 million a year ago (a 1% decrease). However, the Company's earning assets increased to $400.5 million at the end of 2010 from $366.2 million a year ago – due primarily to a $26.2 million increase in the Company's equity-method investments in domestic unconsolidated acquisition partnerships (increased investment activity under the Company's investment agreement with Varde Investment Partners, L.P.) and a $13.8 million increase in the Company's equity-method investments in its special situations platform (discussed below).

Revenues in 2010 increased to $85.6 million compared to $79.8 million last year. The Company's revenues in 2010 included $46.0 million of income and gains from portfolio assets, $6.0 million of interest income and gains from loans receivable, $8.7 million of fee income attributable to our loan servicing platform, and $15.2 million of revenues from our consolidated manufacturing and railroad subsidiaries.

Increased revenues in 2010 are primarily a result of $10.5 million of revenue from our consolidated wireless communications equipment manufacturing subsidiary in 2010 (acquired in December 2009). Our manufacturing subsidiary's operating agreement was amended in June 2010, with the consent of its owners, and the change resulted in FirstCity ceasing to have a controlling interest, but retaining a noncontrolling interest, in the manufacturing entity. As such, since July 1, 2010, the Company recorded its share of the manufacturing subsidiary's net earnings as "equity in earnings of unconsolidated subsidiaries" instead of reporting the subsidiary's consolidated results of operations. Revenues also increased as a result of a $3.3 million gain from an investment security sale.

The revenue increases described above were off-set partially by a $7.9 million decrease in income and gains from portfolio assets in 2010 compared to 2009. This decrease corresponds to a shift in the income-recognition methods used by the Company for its loan portfolio assets (as described above). A decline in consolidated collections also contributed to the portfolio assets revenue decline in 2010 compared to 2009.

The Company incurred $17.0 million of combined net impairment provisions in 2010 from its consolidated and unconsolidated portfolio assets and loans compared to $10.8 million in 2009. The provisions in 2010 were recorded primarily 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 the $17.0 million of net impairment provisions in 2010 includes $10.5 million for domestic assets, $1.3 million related to Latin American assets, and $5.2 million related to European assets. Net provisions in 2010 were allocated between consolidated assets ($9.3 million) and FirstCity's share of net provisions from unconsolidated subsidiaries ($7.7 million).

The Company's share of foreign currency transaction losses from its consolidated and unconsolidated foreign operations was $0.9 million in 2010, compared to $47,000 of foreign currency transactions gains in 2009.

Equity in earnings of unconsolidated subsidiaries was $14.6 million in 2010 compared to losses of $0.3 million for 2009. This increase was due to additional equity earnings of $15.4 million and $5.1 million from our special situations platform subsidiaries and foreign servicing entities, respectively, recorded in 2010 compared to 2009. This increase was off-set partially by $5.5 million of lower equity earnings from our domestic and foreign acquisition partnerships recorded in 2010 compared to 2009. In 2010, we recorded $16.2 million in equity earnings from our equity-method investment related to a prefabricated building manufacturer (an unconsolidated subsidiary of our special situations platform). This entity reported significantly higher net earnings in 2010 related to building orders and a short-term lease agreement with a single customer. The entity's business dealings with this customer were completed in 2010.

The Company recognized $4.6 million of business combination gains in 2010 in connection with the following transactions: (1) $3.7 million related to its step-acquisition of eight German acquisition partnerships (discussed above), and (2) $0.9 million related to a step-acquisition transaction involving three domestic acquisition partnerships in March 2010.

2009 included $6.1 million of other income in connection with FirstCity's settlement of a lawsuit.

Selected other financial data from continuing operations for the year:

The Company's total operating expenses (excluding provision, interest and income tax expenses) increased to $54.9 million for 2010 from $41.9 million for 2009 - due primarily to $10.8 million of consolidated costs and expenses from our manufacturing subsidiary in 2010 (refer to discussion above), and a $1.4 million increase in asset-level expenses incurred in 2010 compared to 2009 (these expenses generally represent costs incurred by the Company to manage its portfolio assets, support foreclosed properties and protect its security interests in loan collateral).

Total interest expense increased to $16.3 million in 2010 from $14.3 million for 2009 (FirstCity's average debt holdings increased to $300.9 million in 2010 from $295.6 million in 2009). The interest expense increase is attributable to the Company's higher average cost of funds of 5.4% during 2010 compared to 4.8% for 2009. Our increased cost of funds primarily relates to the higher interest and fees charged on our Reducing Note Facility with Bank of Scotland (closed in June 2010) compared to the loan facilities we had in place with Bank of Scotland in 2009.

Noncontrolling interest expense increased to $13.4 million in 2010 from $5.6 million in 2009. Noncontrolling interest expense represents the portions of net earnings that are attributed to our co-investors in our consolidated subsidiaries. This increase was a result of a significant increase in net earnings from certain of our consolidated subsidiaries in 2010 compared to 2009 - primarily our consolidated European acquisition partnerships and special situations platform.

Results of discontinued operations for the year:

The Company's discontinued operations, consisting of its consolidated coal mine subsidiary, reported $4.0 million of net earnings in 2010 (comprised of $42.3 million in operating revenues, $43.2 million in operating costs and expenses, and a $4.8 million business combination gain). The Company recognized the business combination gain, in connection with a step-acquisition transaction, when it increased its stake in the coal mine subsidiary to a controlling interest from a noncontrolling interest in April 2010.

Conference Call

A conference call will be held on Thursday, March 24, 2011 at 9:00 a.m. Central Time to discuss Q4 2010 and full year 2010 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 2010 Conference Call
Date: Thursday, March 24, 2011  
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 866-713-8566  
  International 617-597-5325  
         
  Pass code 18616478    
         
Replay available on FirstCity's web page ( www.fcfc.com/invest.htm )

The FirstCity Financial Corporation logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=4413

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 and risks, including unfavorable conditions and negative trends in U.S. and global economies, financial markets and real estate markets; adverse fluctuations in the underlying values of real estate and other assets securing our loan portfolios; sufficiency of funds generated from our operations, existing cash and available liquidity sources, combined with our ability to access the credit and capital markets, to finance our operations and investment activities; our ability to project future cash collections and develop critical assumptions and estimates surrounding the liquidation of our portfolio assets; and other factors and 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)
         
   Three Months Ended  Year Ended      
  December 31, December 31,
  2010 2009 2010 2009
Revenues:        
Finance and Servicing:        
Servicing fees  $ 2,660  $ 2,113  $ 8,658  $ 9,130
Income from Portfolio Assets  11,691  18,581  45,971  53,835
Gain on sale of SBA loans held for sale, net  294  416  654  1,327
Gain on sale of investment security  --  --  3,250  --
Interest income from SBA loans  317  311  1,212  1,251
Interest income from loans receivable  937  737  4,122  4,569
Other income  1,959  1,119  6,511  4,818
   17,858  23,277  70,378  74,930
Manufacturing and Railroad Operations:        
Operating revenues - manufacturing  --  540  10,466  540
Operating revenues - railroad  1,160  893  4,615  3,121
Other   101  4  105  1,196
   1,261  1,437  15,186  4,857
Total revenues  19,119  24,714  85,564  79,787
Costs and expenses:        
Finance and Servicing:        
Interest and fees on notes payable to banks and other  4,007  3,224  14,594  12,400
Interest and fees on note payable to affiliate  387  404  1,572  1,709
Salaries and benefits  5,217  5,441  21,284  21,096
Provision for loan and impairment losses  877  3,058  9,294  5,266
Asset-level expenses  1,871  1,853  7,852  6,499
Other  3,767  3,854  12,427  11,820
   16,126  17,834  67,023  58,790
Manufacturing and Railroad Operations:        
Cost of revenues and operating costs - manufacturing  --  469  10,788  469
Cost of revenues and operating costs - railroad  871  633  2,739  2,164
   871  1,102  13,527  2,633
Total costs and expenses  16,997  18,936  80,550  61,423
Earnings from continuing operations before other revenue and income taxes  2,122 5,778  5,014  18,364
Equity in earnings (losses) of unconsolidated subsidiaries  602  (1,737)  14,609  (264)
Gain on business combinations  3,704  811  4,595  2,266
Income from lawsuit settlement  --  6,119  --  6,119
Earnings from continuing operations before income taxes  6,428  10,971  24,218  26,485
Income tax expense  1,060  225  2,252  2,182
Earnings from continuing operations, net of tax  5,368  10,746  21,966  24,303
Income (loss) from discontinued operations  (348)    3,962  --
Net earnings  5,020  10,746  25,928  24,303
Less: net income attributable to noncontrolling interests  3,242  2,392  13,425  5,559
Net earnings attributable to FirstCity  $ 1,778  $ 8,354  $ 12,503  $ 18,744
         
Basic earnings (loss) per common share are as follows:        
Earnings from continuing operations  $ 0.20  $ 0.84  $ 0.85  $ 1.90
Discontinued operations  $ (0.03)  $--   $ 0.39  $ --
Net earnings per common share  $ 0.17  $ 0.84  $ 1.24  $ 1.90
Weighted average common shares outstanding  10,205  9,903  10,092  9,851
         
Diluted earnings (loss) per common share are as follows:        
Earnings from continuing operations  $ 0.20  $ 0.80  $ 0.84  $ 1.83
Discontinued operations  $ (0.03)  $ --  $ 0.39  $ --
Net earnings per common share  $ 0.17  $ 0.80  $ 1.23  $ 1.83
Weighted average common shares outstanding  10,312  10,385  10,197  10,239
         
Selected Balance Sheet Data
(Dollars in thousands)
  December 31, December 31,    
  2010 2009    
  (Unaudited)      
Cash and cash equivalents  $ 46,597  $ 80,368    
Restricted cash  1,207  1,364    
Earning assets:        
Portfolio Asset Acquisition and Resolution assets:        
Domestic   241,589  225,406    
Latin America   39,476  41,248    
Europe   68,642  57,888    
Special Situations Platform assets   50,765  41,688    
Service fees receivable and other assets  12,128  17,112    
Total assets  $ 460,404  $ 465,074    
         
Notes payable to banks and other  $ 293,034  $ 305,888    
Note payable to affiliate  11,805  7,838    
Other liabilities  30,825  26,077    
Total liabilities  335,664  339,803    
Total equity  124,740  125,271    
Total liabilities and equity  $ 460,404  $ 465,074    
 
 
FirstCity Financial Corporation
Supplemental Information
(Dollars in thousands)
(Unaudited)
 
   Three Months Ended   Year Ended 
  December 31, December 31,
  2010 2009 2010 2009
Summary Operating Statement Data for Business Segments      
 Portfolio Asset Acquistion and Resolution segment:        
Revenues  $ 17,029  $ 22,677  $ 66,387  $ 71,760
Equity in losses of unconsolidated subsidiaries  (1,440)  (1,016)  (1,693)  (1,204)
Gain on business combinations  3,704  --  4,595  1,455
Costs and expenses  (13,463)  (12,173)  (47,980)  (44,346)
Operating contribution before provision for loan and impairment losses and noncontrolling interest expense  5,830  9,488  21,309  27,665
Provision for loan and impairment losses, net  877  2,991  6,271  4,232
Net income attributable to noncontrolling interests  (2,992)  (2,319)  (10,282)  (5,173)
Operating contribution, net of direct taxes   $ 1,961  $ 4,178  $ 4,756  $ 18,260
         
Special Situations Platform segment:        
Revenues  $ 2,050  $ 1,950  $ 19,043  $ 7,683
Equity in earnings (loss) of unconsolidated subsidiaries  2,042  (721)  16,302  940
Gain on business combinations  --  810 --  810
Costs and expenses  (1,813)  (1,963)  (17,469)  (6,257)
Operating contribution before provision for loan and impairment losses and noncontrolling interest expense  2,279  76  17,876  3,176
Provision for loan and impairment losses --  67  3,023  1,034
Net income attributable to noncontrolling interests  (250)  (73)  (3,143)  (386)
Operating contribution (loss), net of direct taxes   $ 2,029  $ (64)  $ 11,710  $ 1,756
     
   Three Months Ended   Year Ended 
  December 31, December 31,
Portfolio Asset Acquisition and Resolution segment: 2010 2009 2010 2009
Revenues and equity in losses of investments by region:      
Domestic  $ 10,680  $ 19,518  $ 42,432  $ 57,542
Latin America  2,417  2,360  9,576  10,445
Europe  2,492  (217)  12,686  2,553
Canada  --  --  --  16
Total  $ 15,589  $ 21,661  $ 64,694  $ 70,556
       
Revenues and equity in losses of investments by source:      
Equity in losses of unconsolidated subsidiaries  $ (1,440)  $ (1,016)  $ (1,693)  $ (1,204)
Income from Portfolio Assets  11,691  18,581  45,971  53,835
Servicing fees  2,660  2,113  8,658  9,130
Gain on sale of investment securities  --  --  3,250 --
Gain on sale of SBA loans held for sale, net  294  416  654  1,327
Interest income from SBA loans  317  311  1,212  1,251
Interest income from loans receivable  397  493  1,768  2,467
Other  1,670  763  4,874  3,750
Total  $ 15,589  $ 21,661  $ 64,694  $ 70,556
         
Special Situations Platform segment:      
Revenues and equity in earnings (loss) of investments by source:      
Equity in earnings (loss) of unconsolidated subsidiaries  $ 2,042  $ (721)  $ 16,302  $ 940
Interest income from loans receivable  540  244  2,354  2,102
Operating revenue - railroad  1,160  893  4,615  3,121
Operating revenue - manufacturing  --  540  10,466  540
Other  350  273  1,608  1,920
Total  $ 4,092  $ 1,229  $ 35,345  $ 8,623
       
Number of personnel at period end:      
Domestic, Portfolio Asset Acquisition and Resolution segment  88  87    
Domestic, Special Situations Platform segment  29  124    
Latin America  117  123    
Corporate  30  31    
Total personnel   264  365    
 
 
FirstCity Financial Corporation
Supplemental Information
(Dollars in thousands)
(Unaudited)
         
   Three Months Ended   Year Ended 
  December 31, December 31,
  2010 2009 2010 2009
Analysis of Equity Investments        
FirstCity's average investment:        
Domestic, Portfolio Asset Acquisition and Resolution segment  $ 33,299  $ 13,768  $ 24,141  $ 13,806
Domestic, Special Situations Platform segment  15,763  2,304  7,556  1,609
Latin America  15,934  17,564  16,782  17,764
Europe  3,193  11,355  5,686  12,331
Europe-Servicing subsidiaries  33,064  25,806  28,499  23,688
Latin America-Servicing subsidiaries  2,095  2,783  2,081  2,905
Total  $ 103,348  $ 73,580  $ 84,745  $ 72,103
         
FirstCity's share of equity earnings (losses):        
Domestic, Portfolio Asset Acquisition and Resolution segment  $ (134)  $ 1,017  $ (195)  $ 1,233
Domestic, Special Situations Platform segment  2,042  (721)  16,302  940
Latin America  (157)  (368)  (662)  (828)
Europe  (2,761)  (1,287)  (4,884)  (598)
Europe-Servicing subsidiaries  1,509  (24)  4,783  30
Latin America-Servicing subsidiaries  103  (354)  (735)  (1,041)
Total  $ 602  $ (1,737)  $ 14,609  $ (264)
         
Selected Other Data:        
Average investment in consolidated portfolio assets and loans receivable:        
Domestic, Portfolio Asset Acquisition and Resolution segment  $ 208,229  $ 221,475  $ 213,334  $ 205,245
Domestic, Special Situations Platform segment  23,624  29,636  27,170  29,657
Latin America  17,625  18,612  18,089  19,144
Europe  17,217  23,169  16,583  18,594
Canada  --  --  --  105
Total  $ 266,695  $ 292,892  $ 275,176  $ 272,745
         
Income from consolidated portfolio assets and loans receivable:      
Domestic, Portfolio Asset Acquisition and Resolution segment  $ 8,471  $ 17,836  $ 33,971  $ 52,576
Domestic, Special Situations Platform segment  540  244  2,354  2,102
Latin America  662  1,112  3,747  3,888
Europe  3,566  853  11,887  2,400
Canada  --  --  --  16
Total  $ 13,239  $ 20,045  $ 51,959  $ 60,982
         
Servicing fee revenues:        
Domestic partnerships:        
Servicing fee revenue  $ 1,021  $ 299  $ 2,007  $ 1,695
Average servicing fee  3.2% 2.7% 3.3% 5.6%
Latin American partnerships:        
Servicing fee revenue  $ 1,499  $ 1,674  $ 6,183  $ 6,876
Average servicing fee %  31.9% 42.8% 27.6% 36.2%
Total Service Fees-Portfolio Assets:        
Servicing fee revenue  $ 2,520  $ 1,973  $ 8,190  $ 8,571
Average servicing fee %  6.8% 13.2% 9.8% 17.5%
Service Fees-SBA loans:  $ 140  $ 140  $ 468  $ 559
Total Service Fees  $ 2,660  $ 2,113  $ 8,658  $ 9,130
         
Coll ections:        
Domestic unconsolidated partnerships  $ 32,135  $ 11,054  $ 61,356  $ 30,096
Latin American unconsolidated partnerships   6,484  5,748  28,666  26,283
European unconsolidated partnerships  6,525  8,161  18,634  30,739
Total unconsolidated partnership collections  45,144  24,963  108,656  87,118
Domestic consolidated partnerships  25,718  48,286  103,744  164,371
Latin American consolidated partnerships  312  908  2,920  2,838
European consolidated partnerships  5,590  3,803  19,002  10,409
Total consolidated partnership collections  31,620  52,997  125,666  177,618
Total collections  $ 76,764  $ 77,960  $ 234,322  $ 264,736
         
Servicing portfolio (face value) at period end:        
Domestic   $ 1,164,642  $ 899,199    
Latin America  1,559,372  1,464,129    
Europe  1,200,508  1,695,806    
Total  $ 3,924,522  $ 4,059,134    
 
 
FirstCity Financial Corporation
Supplemental Information
(Dollars in thousands)
(Unaudited)
                 
Portfolio Purchases and Other Investments:          
               FirstCity   
  Portfolio Purchases    FirstCity   Investment   
       Latin     FirstCity   Investment   in Special   
  Domestic  Europe   America   Total   Investment   in Other   Situations   Total 
2010                
4th Quarter  $ 51,059  $ --  $ --  $ 51,059  $ 14,473  $ 14,314  $ 175  $ 28,962
3rd Quarter  15,025  --  --  15,025  10,513  4,956  148  15,617
2nd Quarter  141,566  --  --  141,566  28,122  14,482  8,107  50,711
1st Quarter  18,114  --  --  18,114  14,605  9,005  4,790  28,400
Total Year 2010  $ 225,764  $ --  $ --  $ 225,764  $ 67,713  $ 42,757  $ 13,220  $ 123,690
2009                
4th Quarter  $ 14,608  $ --  $ --  $ 14,608  $ 13,188  $ 5,903  $ 3,370  $ 22,461
3rd Quarter  48,659  --  --  48,659  21,000  2,403  3,481  26,884
2nd Quarter  67,085  --  --  67,085  48,559  19,149  3,164  70,872
1st Quarter  70,238  --  --  70,238  64,907  6,418  2,400  73,725
Total Year 2009  $ 200,590  $ --  $ --  $ 200,590  $ 147,654  $ 33,873  $ 12,415  $ 193,942
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
                 
Portfolio Asset Acquisition and Resolution segment:          
         Three Months Ended   Year Ended   
        December 31, December 31,  
        2010 2009 2010 2009  
Aggregate purchase price of portfolios acquired:          
Acquisition partnerships              
Domestic        $ 51,059  $ 14,608  $ 225,764  $ 200,590  
Latin America        --  --  --  --  
Europe        --  --  --  --  
Total        $ 51,059  $ 14,608  $ 225,764  $ 200,590  
                 
         Purchase   FirstCity's       
Historical acquisitions of Portfolios - annual:  Price   Investment       
2010        $ 225,764  $ 67,713      
2009        200,590  147,654      
2008        89,314  72,307      
2007        214,333  126,714      
2006        296,990  144,048      
                 
        December 31, December 31,      
        2010 2009      
Portfolio acquisition and resolution assets by region:          
Domestic        $ 241,589  $ 225,406      
Latin America        39,476  41,248      
Europe        68,642  57,888      
Canada        --  --      
Total        $ 349,707  $ 324,542      
                 
                 
Special Situations Platform segment:            
         Total  FirstCity Denver's Investment  
Historical investments - annual:    Investment  Debt Equity Total  
2010        $ 13,739  $ 8,825  $ 4,395  $ 13,220  
2009        20,058  12,023  392  12,415  
2008        28,750  16,650  3,256  19,906  
2007        22,314  5,630  5,900  11,530  
 
 
FirstCity Financial Corporation
Supplemental Information
(Dollars in thousands)
(Unaudited)
 
Summary of Consolidated Portfolio Assets (at Carrying Value) by Region and Type    
  December 31, 2010
   Income-Accruing Loans   Non-Accrual Loans     
   Purchased     Purchased Credit-       
   Credit-     Impaired Loans   Other     
   Impaired       Cost recovery     Cost recovery     
   Loans   Other   Cash basis   basis   Cash basis   basis   Real Estate   Total 
United States  $ 3,420  $ 1,640  $ 94,144  $ 41,959  $ 1,574  $ --  $ 33,709  $ 176,446
                 
France  --  1,125  2,499  --  --  2,037  --  5,661
                 
Germany  --  --  2,022  12,659  --  --  9,376  24,057
                 
Mexico  --  --  --  9,897  --  --  --  9,897
Total  $ 3,420  $ 2,765  $ 98,665  $ 64,515  $ 1,574  $ 2,037  $ 43,085  $ 216,061
   
  December 31, 2009
   Income-Accruing Loans   Non-Accrual Loans     
   Purchased     Purchased Credit-       
   Credit-     Impaired Loans   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   Year Ended         
  December 31, December 31,        
  2010 2009 2010 2009        
Net earnings to common stockholders  $ 1,778  $ 8,354  $ 12,503  $ 18,744        
Foreign currency gains (losses), net:                
Euro  (16)  (147)  (462)  (66)        
Mexican Peso  (547)  (405)  (447)  (175)        
Argentine Peso  --  2  (16)  (52)        
Chilean Peso  36  69  28  329        
                 
               
Exchange rate at valuation date:              
Euro 0.75 0.70            
Mexican Peso 12.36 13.06            
Argentine Peso 3.98 3.82            
Chilean Peso  473.20 519.30            

A graphic accompanying this release is available at http://media.globenewswire.com/cache/9623/file/9737.pdf
 

CONTACT: FirstCity Financial Corporation
         Suzy W. Taylor
         866-652-1810

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