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The First Marblehead Corp. (FMD) filed Quarterly Report for the period ended 2011-12-31.
First Marblehead Corp. has a market cap of $140 million; its shares were traded at around $1.45 with and P/S ratio of 0.3.
This is the annual revenues and earnings per share of FMD over the last 10 years. For detailed 10-year financial data and charts, go to 10-Year Financials of FMD.
Highlight of Business Operations:
The net loss for our Education Financing segment for the three months ended December 31, 2011 improved by $566 thousand to $3.5 million from $4.1 million for the three months ended December 31, 2010. The change was principally due to $7.2 million of revenue from tuition payment processing fees due to the inclusion of TMS after December 31, 2010 and a $13.2 million higher income tax benefit as a result of the ATB’s order, offset by $8.3 million in lower trust updates as a result of the deconsolidation of the NCSLT Trusts, a decrease of $7.8 million in cash distributions received under TERI’s confirmed plan of reorganization and $3.6 million in higher non-interest expenses as a result of our acquisition of TMS on December 31, 2010 and increased marketing costs incurred to originate education loans at Union Federal.The net loss for our Education Financing segment for the six months ended December 31, 2011 increased by $1.5 million to $21.7 million from $20.2 million for the six months ended December 31, 2010. The change was principally due to $14.5 million of revenue from tuition payment processing fees due to the inclusion of TMS after December 31, 2010 and a $13.4 million higher income tax benefit as a result of the ATB’s order, offset by $7.7 million in lower trust updates as a result of the deconsolidation of the NCSLT Trusts, a decrease of $6.7 million in cash distributions received under TERI’s confirmed plan of reorganization and $14.5 million in higher non-interest expenses as a result of our acquisition of TMS on December 31, 2010 and increased marketing costs incurred to originate education loans at Union Federal.
The decrease of $1.7 million for the three months ended December 31, 2011 was primarily the result of a loss of $3.2 million recorded during the quarter associated with the service revenue receivables that were sold on November 14, 2011, which partially offset revenues of $7.2 million generated by TMS, compared to revenues of $5.1 million associated with the service revenue receivables recorded in the three months ended December 31, 2010. We did not acquire TMS until December 31, 2010, and, accordingly, the results of TMS were not included in our results for the three and six months ended December 31, 2010.
Other administrative fees. Other administrative fees for the three and six months ended December 31, 2011 were $3.5 million and $7.3 million, respectively, a decrease of $602 thousand and $1.5 million, compared to the three and six months ended December 31, 2010, respectively. These decreases were due to lower allowable revenues under special servicing agreements for default prevention as well as lower education loan balances within the securitization trusts upon which the administrative fees are based. Revenues under special servicing agreements are based, in part, on the actual expenses incurred by our subsidiary FMER in its capacity as special servicer, and, in part, on the dollar volume of education loans outstanding in various consolidated and unconsolidated securitization trusts. FMER’s reimbursement for expenses as special servicer is capped at monthly and aggregate amounts.
The allowance for loan losses included a specific allowance for education loans greater than 180 days past due, but not yet charged-off, of $1.1 million at December 31, 2011 and $54.1 million at June 30, 2011. We also established a general allowance of $1.9 million at December 31, 2011 and $396.1 million at June 30, 2011 for estimated projected defaults, net of recoveries and third party guarantees, over the confirmation period. We may also apply qualitative adjustments in determining the allowance for loan losses. To estimate defaults for the first six months of the confirmation period, we applied delinquency “roll rates” to education loans currently past due. We based the applied roll rates on roll rates that we observed over the preceding 24 months. For the second six months of the confirmation period, we based net default projections on default and recovery rates determined using the same models used in our estimates of the fair value of service revenue receivables. We based our default and recovery curves, and additional qualitative adjustments, on macroeconomic indicators and our historical observations.
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