updated 5/10/2011 8:16:03 AM ET 2011-05-10T12:16:03

WACO, Texas, May 10, 2011 (GLOBE NEWSWIRE) --

Highlights:

  • FirstCity reported first quarter 2011 earnings of $3.7 million or $0.36 per diluted share.
  • FirstCity invested $12.2 million in portfolio assets and other investments during the quarter.

Components of FirstCity's quarterly results are summarized below:

  Three Months Ended
  March 31,
  2011 2010
(Dollars in thousands, except per share data) (Unaudited)
Portfolio Asset Acquisition and Resolution  $ 4,985  $ 1,093
Special Situations Platform  473  715
Corporate and other  (1,733)  (1,707)
Net earnings attributable to FirstCity  $ 3,725  $ 101
Diluted earnings per common share  $ 0.36  $ 0.01

James T. Sartain, CEO of FirstCity, commented, "Increased collections drove our strong earnings this quarter. Although opportunities for investment remain fiercely competitive, our pipeline is very active and we believe that we will be able to continue to grow our earnings base while sticking to our investment discipline."

Portfolio Asset Acquisition and Resolution

For the first quarter of 2011 ("Q1 2011"), our Portfolio Asset Acquisition and Resolution business segment reported $5.0 million in earnings – comprised primarily of $18.6 million in revenues, $1.7 million in equity in earnings of unconsolidated subsidiaries, and $10.7 million of operating costs and expenses. Earnings for Q1 2011 were positively impacted by an increase in revenue streams from our core investment activities and servicing platform (due to increased collections) in Q1 2011 compared to the prior year's first quarter, combined with lower impairment provisions from our consolidated and unconsolidated Portfolio Assets and loan investments. Additional information related to our Portfolio Asset Acquisition and Resolution business segment is included in the supplemental schedules of this release.

The Company's unrealized gross profit associated with its core portfolio assets totaled $150.2 million at March 31, 2011. Unrealized future gross profit is a non-GAAP measure. Refer to the Schedule of Estimated Unrealized Gross Profit from Portfolio Assets on page 9 of this release for a reconciliation of this measure with the most directly comparable financial measures calculated and presented in accordance with U.S. GAAP.

Special Situations Platform

Our Special Situations Platform business segment provided $0.5 million in earnings for Q1 2011 – comprised primarily of $2.2 million in revenues, $0.2 million in equity in earnings of unconsolidated subsidiaries, and $1.8 million of operating costs and expenses. Earnings for Q1 2011 were positively impacted by continued revenue streams from our loan investments and consolidated railroad operations, combined with no impairment provisions recorded during the quarter. However, Q1 2011 earnings were negatively impacted by a decline in equity in earnings from unconsolidated subsidiaries due mainly to seasonal losses recognized by some of our retail and manufacturing investees. Additional information related to our Special Situations Platform business segment is included in the supplemental schedules of this release.

Conference Call

A conference call will be held on Tuesday, May 10, 2011 at 9:00 a.m. Central Time to discuss Q1 2011 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 2011 Conference Call
Date: Tuesday, May 10, 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 800-299-0148
  International 617-801-9711
     
  Pass code 30807965
 
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, as amended. 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 the precautionary statements included in this document and those contained 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 
  March 31,
  2011 2010
Revenues:    
Finance and Servicing:    
Servicing fees  $ 2,425  $ 2,003
Income from Portfolio Assets  12,840  11,463
Gain on sale of SBA loans held for sale, net  884  —
Interest income from SBA loans  349  268
Interest income from loans receivable  926  1,086
Other income  1,928  1,131
   19,352  15,951
Manufacturing and Railroad Operations:    
Operating revenues - manufacturing  —  4,359
Operating revenues - railroad  1,343  1,265
Other   87  —
   1,430  5,624
Total revenues  20,782  21,575
Costs and expenses:    
Finance and Servicing:    
Interest and fees on notes payable to banks and other  3,583  3,042
Interest and fees on note payable to affiliate  380  392
Salaries and benefits  5,149  5,071
Provision for loan and impairment losses  639  1,702
Asset-level expenses  1,414  1,621
Other  2,161  3,196
   13,326  15,024
Manufacturing and Railroad Operations:    
Cost of revenues and operating costs - manufacturing  —  4,836
Cost of revenues and operating costs - railroad  885  606
   885  5,442
Total costs and expenses  14,211  20,466
Earnings before other revenue and income taxes  6,571  1,109
Equity in earnings of unconsolidated subsidiaries  1,871  2,229
Gain on business combination  —  891
Earnings before income taxes  8,442  4,229
 Income tax expense (benefit)  602  (486)
Net earnings  7,840  4,715
Less: net income attributable to noncontrolling interests  4,115  4,614
Net earnings attributable to FirstCity  $ 3,725  $ 101
     
Basic earnings per common share are as follows:    
Net earnings per common share  $ 0.36  $ 0.01
Weighted average common shares outstanding  10,267  9,992
     
Diluted earnings per common share are as follows:  
Net earnings per common share  $ 0.36  $ 0.01
Weighted average common shares outstanding  10,298  10,093
 
Selected Balance Sheet Data
(Dollars in thousands)
  March 31, December 31,
  2011 2010
  (Unaudited)  
Cash and cash equivalents  $ 52,939  $ 46,597
Restricted cash  1,228  1,207
Earning assets:    
Portfolio Asset Acquisition and Resolution assets:  
Domestic   226,135  241,589
Latin America   39,468  39,476
Europe   47,373  68,642
Special Situations Platform assets   48,611  50,765
Service fees receivable and other assets  11,566  12,128
Total assets  $ 427,320  $ 460,404
     
Notes payable to banks and other  $ 266,524  $ 293,034
Notes payable to affiliates  7,565  11,805
Other liabilities  24,565  30,825
Total liabilities  298,654  335,664
Total equity  128,666  124,740
Total liabilities and equity  $ 427,320  $ 460,404
 
 
FirstCity Financial Corporation
Supplemental Information
(Dollars in thousands)
(Unaudited)
     
   Three Months Ended 
  March 31,
  2011 2010
Summary Operating Statement Data for Business Segments  
Portfolio Asset Acquisition and Resolution segment:  
Revenues  $ 18,554  $ 14,722
Equity in earnings of unconsolidated subsidiaries  1,719  1,183
Gain on business combination  —  891
Costs and expenses  (10,616)  (10,126)
Operating contribution before provision for loan and impairment losses and noncontrolling interest expense  9,657  6,670
Provision for loan and impairment losses, net  (639)  (1,101)
Net income attributable to noncontrolling interests  (4,033)  (4,476)
Operating contribution, net of direct taxes   $ 4,985  $ 1,093
     
Special Situations Platform segment:    
Revenues  $ 2,196  $ 6,810
Equity in earnings of unconsolidated subsidiaries  152  1,046
Costs and expenses  (1,793)  (6,402)
Operating contribution before provision for loan and impairment losses and noncontrolling interest expense  555  1,454
Provision for loan and impairment losses  —  (601)
Net income attributable to noncontrolling interests  (82)  (138)
Operating contribution (loss), net of direct taxes   $ 473  $ 715
     
   Three Months Ended 
  March 31,
Portfolio Asset Acquisition and Resolution segment: 2011 2010
Revenues and equity in earnings of investments by region:  
Domestic  $ 10,452  $ 8,381
Latin America  2,351  1,785
Europe  7,470  5,739
Total  $ 20,273  $ 15,905
     
Revenues and equity in earnings of investments by source:  
Equity in earnings of unconsolidated subsidiaries  $ 1,719  $ 1,183
Income from Portfolio Assets  12,840  11,463
Servicing fees  2,425  2,003
Gain on sale of SBA loans held for sale, net  884  —
Interest income from SBA loans  349  268
Interest income from loans receivable  395  477
Other  1,661  511
Total  $ 20,273  $ 15,905
     
Special Situations Platform segment:  
Revenues and equity in earnings of investments by source:  
Equity in earnings of unconsolidated subsidiaries  $ 152  $ 1,046
Interest income from loans receivable  531  609
Operating revenue - railroad  1,343  1,265
Operating revenue - manufacturing  —  4,359
Other  322  577
Total  $ 2,348  $ 7,856
     
Number of personnel at period end:  
Domestic, Portfolio Asset Acquisition and Resolution segment  88  89
Domestic, Special Situations Platform segment  28  124
Latin America  119  122
Corporate  30  30
Total personnel   265  365
 
 
FirstCity Financial Corporation
Supplemental Information
(Dollars in thousands)
(Unaudited)
     
   Three Months Ended 
  March 31,
  2011 2010
Analysis of Equity Investments  
FirstCity's average investment:    
Domestic, Portfolio Asset Acquisition and Resolution segment  $ 38,110  $ 12,234
Domestic, Special Situations Platform segment  14,143  2,224
Latin America  14,786  17,416
Europe  (103)  8,088
Europe-Servicing subsidiaries  35,298  25,144
Latin America-Servicing subsidiaries  2,945  2,433
Total  $ 105,179  $ 67,539
     
FirstCity's share of equity earnings (losses):  
Domestic, Portfolio Asset Acquisition and Resolution segment  $ 932  $ 132
Domestic, Special Situations Platform segment  152  1,046
Latin America  (356)  (120)
Europe  8  (620)
Europe-Servicing subsidiaries  975  2,423
Latin America-Servicing subsidiaries  160  (632)
Total  $ 1,871  $ 2,229
     
Selected Other Data:    
Average investment in consolidated portfolio assets and loans receivable:  
Domestic, Portfolio Asset Acquisition and Resolution segment  $ 196,801  $ 209,780
Domestic, Special Situations Platform segment  23,090  27,981
Latin America  17,724  18,483
Europe  18,687  18,810
Total  $ 256,302  $ 275,054
     
Income from consolidated portfolio assets and loans receivable:  
Domestic, Portfolio Asset Acquisition and Resolution segment  $ 7,625  $ 7,906
Domestic, Special Situations Platform segment  531  609
Latin America  913  578
Europe  5,930  3,724
Total  $ 14,999  $ 12,817
     
Servicing fee revenues:    
Domestic partnerships:    
Servicing fee revenue  $ 898  $ 221
Average servicing fee  3.2% 4.1%
Latin American partnerships:    
Servicing fee revenue  $ 1,384  $ 1,722
Average servicing fee %  22.3% 36.7%
Total Service Fees-Portfolio Assets:    
Servicing fee revenue  $ 2,282  $ 1,943
Average servicing fee %  6.7% 19.4%
Service Fees-SBA loans:  $ 143  $ 60
Total Service Fees  $ 2,425  $ 2,003
     
Collections:    
Domestic unconsolidated partnerships  $ 27,909  $ 5,344
Latin American unconsolidated partnerships   7,418  6,151
European unconsolidated partnerships  --  7,884
Total unconsolidated partnership collections  35,327  19,379
Domestic consolidated partnerships  17,372  31,513
Latin American consolidated partnerships  671  275
European consolidated partnerships  21,996  5,236
Total consolidated partnership collections  40,039  37,024
Total collections  $ 75,366  $ 56,403
     
Servicing portfolio (face value) at period end:  
Domestic   $ 1,141,696  $ 892,929
Latin America  1,564,942  1,459,869
Europe  1,264,528  1,577,991
Total  $ 3,971,166  $ 3,930,789
 
 
FirstCity Financial Corporation
Supplemental Information
(Dollars in thousands)
(Unaudited)
                 
Portfolio Purchases and Other Investments:              
               FirstCity   
  Portfolio Purchases  FirstCity   FirstCity   Investment   
       Latin     Investment   Investment   in Special   
  Domestic  Europe   America   Total   in Portfolios   in Other   Situations   Total 
2011                
1st Quarter  $ 11,091  $ —  $ —  $ 11,091  $ 4,810  $ 6,669  $ 700  $ 12,179
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
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
                 
Portfolio Asset Acquisition and Resolution segment:            
         Three Months Ended       
        March 31,      
        2011 2010      
Aggregate purchase price of portfolios acquired:            
Acquisition partnerships              
Domestic        $ 11,091  $ 18,114      
Latin America        —  —      
Europe        —  —      
Total        $ 11,091  $ 18,114      
                 
         Purchase   FirstCity's       
Historical acquisitions of Portfolios - annual:      Price   Investment       
2011        $ 11,091  $ 4,810      
2010        225,764  67,713      
2009        200,590  147,654      
2008        89,314  72,307      
2007        214,333  126,714      
                 
        March 31, December 31,      
        2011 2010      
Portfolio acquisition and resolution assets by region:            
Domestic        $ 226,135  $ 241,589      
Latin America        39,468  39,476      
Europe        47,373  68,642      
Total        $ 312,976  $ 349,707      
                 
                 
Special Situations Platform segment:              
         Total  FirstCity Denver's Investment  
Historical investments - annual:      Investment  Debt Equity Total  
2011        $ 700  $ 700  $ —  $ 700  
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    
   
  March 31, 2011
   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  $ 27,041  $ 4,829  $ 60,124  $ 39,849  $ 1,527  $ —  $ 34,628  $ 167,998
                 
France  —  1,188  1,139  —  —  1,935  —  4,262
                 
Germany  —  —  —  811  —  —  —  811
                 
Mexico  —  —  —  10,000  —  —  —  10,000
Total  $ 27,041  $ 6,017  $ 61,263  $ 50,660  $ 1,527  $ 1,935  $ 34,628  $ 183,071
                 
  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
       
Illustration of the Effects of Foreign Currency Fluctuations on Net Earnings      
               
   Three Months Ended             
  March 31,            
  2011 2010            
Net earnings to common stockholders  $ 3,725  $ 101            
Foreign currency gains                
(losses), net:                
Euro  781  (400)            
Mexican Peso  175  6            
Argentine Peso  (5)  (5)            
Chilean Peso  24  (53)            
                 
                 
Exchange rate at valuation date:              
Euro 0.71 0.74            
Mexican Peso 11.97 12.46            
Argentine Peso 4.05 3.87            
Chilean Peso  484.22 542.54            

A graphic accompanying this release is available at http://media.globenewswire.com/cache/9623/file/10486.pdf

CONTACT: Suzy W. Taylor
         866-652-1810

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