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Siebert Financial Corp. Reports Operating Results (10-Q)

August 16, 2010 | About:
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10qk

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Siebert Financial Corp. (SIEB) filed Quarterly Report for the period ended 2010-06-30.

Siebert Financial Corp. has a market cap of $44.36 million; its shares were traded at around $2 with and P/S ratio of 1.75. SIEB is in the portfolios of Jim Simons of Renaissance Technologies LLC.

Highlight of Business Operations:

Income from Sieberts equity investment in Siebert, Brandford, Shank & Co., L.L.C., an entity in which Siebert holds a 49% equity interest (SBS), for the three months ended June 30, 2010, was $516,000, a decrease of $1.0 million or 66.9% from the same period in 2009. SBS serves as an underwriter for municipal bond offerings. This decrease was due to SBS participating in fewer senior managed or co-managed transactions. Loss from our equity investment in SBS Financial Products Company, LLC, an entity in which we hold a 33.33% equity interest (SBSFPC) for the three months ended June 30, 2010, was $16,000 as compared to a loss of $115,000 from the same period in 2009. This loss in 2009 was due to the mark to market loss in positions. Income and loss from equity investees is considered to be integral to our operations and material to the results of operations.

The tax provision for the three months ended June 30, 2010 and 2009 was $563,000 and $422,000, respectively, due to our income before income tax of $1.4 million and $986,000, respectively.

Commission and fee income for the six months ended June 30, 2010 was $10.3 million, an increase of $581,000 or 6.0% from the same period in 2009 primarily due to recording $3 million as commission and fee income as part of our negotiations with our primary clearing firm for a three year Fully Disclosed Clearing Agreement in the second quarter of 2010 as well as increases in margin debits due to higher margin debit balances and an increase in institutional trading offset by a decrease in commissions generated by retail customers due to a decrease in trading volumes.

Income from Sieberts equity investment in Siebert, Brandford, Shank & Co., L.L.C., an entity in which Siebert holds a 49% equity interest (SBS) for the six months ended June 30, 2010, was $1.9 million, a decrease of $639,000 or 25.9% from the same period in 2009. This decrease was due to SBS participating in fewer senior managed or co-managed transactions. SBS serves as an underwriter for municipal bond offerings. Loss from our equity investment in SBS Financial Products Company, LLC, an entity in which we hold a 33.33% equity interest (SBSFPC), for the six months ended June 30, 2010, was $7,000 as compared to a loss of $182,000 from the same period in 2009 due to the mark to market loss in positions. We consider income and loss from equity investees to be integral to our operations and material to the results of operations.

The tax benefit for the six months ended June 30, 2010 was $232,000 based on our loss before income taxes of $644,000 and tax provisions for the six months ended June 30, 2009 was $222,000 based on our income before income tax of $454,000.

Siebert is subject to the net capital requirements of the SEC, the NYSE and other regulatory authorities. At June 30, 2010, Sieberts regulatory net capital was $22.4 million, $22.2 million in excess of its minimum capital requirement of $250,000.

Read the The complete Report

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