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

November 15, 2010 | About:
10qk

10qk

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Siebert Financial Corp. (SIEB) filed Quarterly Report for the period ended 2010-09-30.

Siebert Financial Corp. has a market cap of $53.01 million; its shares were traded at around $2.39 with and P/S ratio of 2.09. SIEB is in the portfolios of Jim Simons of Renaissance Technologies LLC.

Highlight of Business Operations:

Income from Sieberts equity investment in SBS for the three months ended September 30, 2010 was $633,000, an increase of $87,000 or 15.9% from the same period in 2009. This increase was due to SBS participating in more senior managed or co-managed transactions. Loss from our equity investment in SBSFPC for the three months ended September 30, 2010 was $4,000 as compared to income of $69,000 from the same period in 2009. This loss in 2010 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 September 30, 2010 was $1.8 million and a tax benefit for the three months ended September 30, 2009 was $840,000. The tax provision for the three months ended September 30, 2010 was incurred due to the recording of a full valuation allowance on deferred taxes based on recent losses and the likelihood of realization. The tax benefit for the three months ended September 30, 2009 was due to our loss before taxes of $1.3 million. Further, at September 30, 2009, the Company increased its income tax receivable balance based on the Companys 2008 consolidated income tax returns filed in the third quarter of 2009 and recorded a benefit of approximately $330,000 relating to prior years resulting in an effective tax rate in the third quarter of 2009 of 65%.

Commission and fee income for the nine months ended September 30, 2010 was $13.2 million, a decrease of $933,000 or 6.6% from the same period in 2009 primarily due to a decrease in retail customer trading volumes as well as a decrease in the retail customer average commission charged per trade offset by an increase in fees from margin debits due to increased customer margin debit balances and 12b-1 fees 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. Our institutional trading commissions and commission recapture decreased as well.

Income from Sieberts equity investment in SBS for the nine months ended September 30, 2010 was $2.5 million, a decrease of $552,000 or 18.3% from the same period in 2009. This decrease was due to SBS participating in fewer senior managed or co-managed transactions. Loss from our equity investment in SBSFPC for the nine months ended September 30, 2010 was $12,000 as compared to a loss of $113,000 from the same period in 2009. These losses were 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 provision for the nine months ended September 30, 2010 was $1.6 million and a tax benefit for the nine months ended September 30, 2009 was $618,000. The tax provision for the nine months ended September 30, 2010 was incurred due to the recording of a full valuation allowance on deferred taxes based on recent losses and the likelihood of realization. The tax benefit for the nine months ended September 30, 2009 was due to our loss before taxes of $837,000. Further, at September 30, 2009, the Company increased its income tax receivable balance based on the Companys 2008 consolidated income tax returns filed in the third quarter of 2009 and recorded a benefit of approximately $330,000 relating to prior years resulting in an effective tax rate in the third quarter of 2009 of 65%.

Siebert is subject to the net capital requirements of the SEC, FINRA and other regulatory authorities. At September 30, 2010, Sieberts regulatory net capital was $20.5 million, $20.2 million in excess of its minimum capital requirement of $250,000.

Read the The complete Report

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