FirstCity Financial Corp. (FCFC, Financial) filed Quarterly Report for the period ended 2012-03-31.
Firstcity Finl has a market cap of $95.2 million; its shares were traded at around $9.21 with a P/E ratio of 3.3 and P/S ratio of 1.3.
Servicing fee revenues. Servicing fee revenues increased to $5.7 million in Q1 2012 from $2.4 million in Q1 2011. Servicing fees from U.S. Acquisition Partnerships totaled $4.1 million in Q1 2012 compared to $0.9 million in Q1 2011, while servicing fees from Latin American Acquisition Partnerships totaled $1.5 million in Q1 2012 and $1.4 million in Q1 2011. Servicing fees from U.S. Acquisition Partnerships are generally based on a percentage of the collections received from Portfolio Assets held by these unconsolidated partnerships; whereas servicing fees from Latin American Acquisition Partnerships are generally based on the cost of servicing plus a profit margin. The increase in servicing fees from U.S. Acquisition Partnerships in Q1 2012 compared to Q1 2011 was attributable to an increase in collections from unconsolidated U.S. partnerships to $72.0 million in Q1 2012 from $27.9 million in Q1 2011, which resulted in a $1.3 million increase in service fee income. In addition, FirstCity recognized $1.9 million of additional compensation in the form of incentive fee income in Q1 2012 (compared to $-0- in Q1 2011) resulting from the achievement of an investor return threshold from a U.S. Acquisition Partnership.
Collections from our consolidated Portfolio Assets decreased to $25.9 million in Q1 2012 from $40.0 million in Q1 2011, which contributed to a $3.0 million decrease in liquidation income and gains in these comparative periods. Liquidation income and gains from our consolidated European Portfolio Assets decreased by $5.6 million in Q1 2012 compared to Q1 2011, due primarily to a significant decline in our consolidated European Portfolio Asset holdings since Q1 2011 (see discussion below) that resulted in corresponding decrease in collections from these Portfolio Assets to $0.5 million in Q1 2012 from $22.0 million. Liquidation income and gains from our consolidated U.S. Portfolio Assets improved by $3.0 million in Q1 2012 compared to Q1 2011, due primarily to an increase in collections from our consolidated U.S. Portfolio Assets to $25.2 million in Q1 2012 from $17.4 million in Q1 2011. Q1 2012 included $12.8 million of collection proceeds from sales of consolidated U.S. Portfolio Asset loans (compared to $4.4 million in Q1
· United States Total combined revenues reported by our U.S. Acquisition Partnerships (FirstCity share 10%-50%) increased to $22.6 million in Q1 2012 compared to $8.3 million in Q1 2011. In addition, total combined net earnings reported by our U.S. partnerships improved to $12.8 million in Q1 2012 from $5.8 million in Q1 2011. The increase in total revenues and net earnings in Q1 2012 compared to Q1 2011 was attributable primarily to an increase in collections to $72.0 million in Q1 2012 from $27.9 million in Q1 2011, partially off-set by increases of $3.3 million in service fee expense, $1.7 million in impairment provisions, and $1.9 million in asset-level expenses reported by these U.S. partnerships in Q1 2012 compared to Q1 2011. The collective activity described above translated to an increase in FirstCitys share of U.S. partnership net earnings to $2.1 million for Q1 2012 compared to $0.9 million for Q1 2011.
· Latin America Total combined revenues reported by our Latin American Acquisition Partnerships (FirstCitys share 8%-50%) decreased to $4.3 million in Q1 2012 from $4.8 million in Q1 2011. However, total combined net earnings reported by our Latin American partnerships increased to $8.4 million for Q1 2012 compared to $1.7 million in earnings for Q1 2011. The decrease in revenues reported by these partnerships in Q1 2012 compared to Q1 2011 was attributable primarily to a decrease in collections to $6.4 million in Q1 2012 compared to $7.4 million in Q1 2011. The increase in net earnings reported by these partnerships in Q1 2012 compared to Q1 2011 was attributable primarily to $4.8 million of additional foreign currency exchange gains recorded by these partnerships in Q1 2012 compared to Q1 2011. The increase in foreign currency exchange gains recorded in Q1 2012 stemmed from the translation impact to the U.S. dollar-denominated debt held by certain Latin American partnerships (due to the higher appreciation in value of the Mexican peso relative to the U.S. dollar in Q1 2012 compared to Q1 2011). Further contributing to the increase in combined net earnings reported by these partnerships was a $2.0 million decline in impairment provisions recorded by these partnerships in Q1 2012 compared to Q1 2011. The collective activity described above translated to an improvement in FirstCitys share of Latin American partnership net earnings to $0.2 million of income for Q1 2012 compared to $0.4 million in losses for Q1 2011. FirstCitys average investment in Latin American Acquisition Partnerships was $4.4 million for Q1 2012 compared to $14.8 million for Q1 2011. The decline in our average investment in these partnerships since Q1 2011 was due primarily to the Companys recognition of a $7.4 million impairment charge on certain Latin American (Mexico) Acquisition Partnerships in the fourth quarter of 2011.
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Firstcity Finl has a market cap of $95.2 million; its shares were traded at around $9.21 with a P/E ratio of 3.3 and P/S ratio of 1.3.
Highlight of Business Operations:
Through our Portfolio Asset Acquisition and Resolution (PAA&R) business segment, FirstCity and its investment partners acquired $91.2 million of Portfolio Assets in Q1 2012 with an approximate face value of $210.1 million, compared to the Companys involvement in acquiring $11.1 million of Portfolio Assets in Q1 2011 with an approximate face value of $17.2 million. In Q1 2012, FirstCitys investment acquisition share in the Portfolio Asset acquisitions was $9.5 million consisting of $0.4 million acquired through consolidated portfolio entities and $9.1 million acquired through unconsolidated Acquisition Partnerships. In Q1 2011, FirstCitys investment acquisition share in the Portfolio Asset acquisitions was $4.8 million consisting of $2.8 million acquired through consolidated portfolio entities and $2.0 million acquired through unconsolidated Acquisition Partnerships. Generally speaking, income recognized from our investments in consolidated Portfolio Assets is reported as Income from Portfolio Assets on our consolidated statements of earnings, whereas income from our investments in unconsolidated subsidiaries that acquire Portfolio Assets is reported as Equity income from unconsolidated subsidiaries. Furthermore, since we perform as the servicer for the vast majority of our U.S. and Latin American unconsolidated Portfolio Assets, we also recognize fee income related to the performance of our servicing responsibilities. This fee income is reported as Servicing fees on our consolidated statements of earnings. We also generate service fee income from our U.S. and Latin American consolidated Portfolio Assets that we service; however, this income is eliminated in consolidation and, as such, is not included on our consolidated statements of earnings.Servicing fee revenues. Servicing fee revenues increased to $5.7 million in Q1 2012 from $2.4 million in Q1 2011. Servicing fees from U.S. Acquisition Partnerships totaled $4.1 million in Q1 2012 compared to $0.9 million in Q1 2011, while servicing fees from Latin American Acquisition Partnerships totaled $1.5 million in Q1 2012 and $1.4 million in Q1 2011. Servicing fees from U.S. Acquisition Partnerships are generally based on a percentage of the collections received from Portfolio Assets held by these unconsolidated partnerships; whereas servicing fees from Latin American Acquisition Partnerships are generally based on the cost of servicing plus a profit margin. The increase in servicing fees from U.S. Acquisition Partnerships in Q1 2012 compared to Q1 2011 was attributable to an increase in collections from unconsolidated U.S. partnerships to $72.0 million in Q1 2012 from $27.9 million in Q1 2011, which resulted in a $1.3 million increase in service fee income. In addition, FirstCity recognized $1.9 million of additional compensation in the form of incentive fee income in Q1 2012 (compared to $-0- in Q1 2011) resulting from the achievement of an investor return threshold from a U.S. Acquisition Partnership.
Collections from our consolidated Portfolio Assets decreased to $25.9 million in Q1 2012 from $40.0 million in Q1 2011, which contributed to a $3.0 million decrease in liquidation income and gains in these comparative periods. Liquidation income and gains from our consolidated European Portfolio Assets decreased by $5.6 million in Q1 2012 compared to Q1 2011, due primarily to a significant decline in our consolidated European Portfolio Asset holdings since Q1 2011 (see discussion below) that resulted in corresponding decrease in collections from these Portfolio Assets to $0.5 million in Q1 2012 from $22.0 million. Liquidation income and gains from our consolidated U.S. Portfolio Assets improved by $3.0 million in Q1 2012 compared to Q1 2011, due primarily to an increase in collections from our consolidated U.S. Portfolio Assets to $25.2 million in Q1 2012 from $17.4 million in Q1 2011. Q1 2012 included $12.8 million of collection proceeds from sales of consolidated U.S. Portfolio Asset loans (compared to $4.4 million in Q1
· United States Total combined revenues reported by our U.S. Acquisition Partnerships (FirstCity share 10%-50%) increased to $22.6 million in Q1 2012 compared to $8.3 million in Q1 2011. In addition, total combined net earnings reported by our U.S. partnerships improved to $12.8 million in Q1 2012 from $5.8 million in Q1 2011. The increase in total revenues and net earnings in Q1 2012 compared to Q1 2011 was attributable primarily to an increase in collections to $72.0 million in Q1 2012 from $27.9 million in Q1 2011, partially off-set by increases of $3.3 million in service fee expense, $1.7 million in impairment provisions, and $1.9 million in asset-level expenses reported by these U.S. partnerships in Q1 2012 compared to Q1 2011. The collective activity described above translated to an increase in FirstCitys share of U.S. partnership net earnings to $2.1 million for Q1 2012 compared to $0.9 million for Q1 2011.
· Latin America Total combined revenues reported by our Latin American Acquisition Partnerships (FirstCitys share 8%-50%) decreased to $4.3 million in Q1 2012 from $4.8 million in Q1 2011. However, total combined net earnings reported by our Latin American partnerships increased to $8.4 million for Q1 2012 compared to $1.7 million in earnings for Q1 2011. The decrease in revenues reported by these partnerships in Q1 2012 compared to Q1 2011 was attributable primarily to a decrease in collections to $6.4 million in Q1 2012 compared to $7.4 million in Q1 2011. The increase in net earnings reported by these partnerships in Q1 2012 compared to Q1 2011 was attributable primarily to $4.8 million of additional foreign currency exchange gains recorded by these partnerships in Q1 2012 compared to Q1 2011. The increase in foreign currency exchange gains recorded in Q1 2012 stemmed from the translation impact to the U.S. dollar-denominated debt held by certain Latin American partnerships (due to the higher appreciation in value of the Mexican peso relative to the U.S. dollar in Q1 2012 compared to Q1 2011). Further contributing to the increase in combined net earnings reported by these partnerships was a $2.0 million decline in impairment provisions recorded by these partnerships in Q1 2012 compared to Q1 2011. The collective activity described above translated to an improvement in FirstCitys share of Latin American partnership net earnings to $0.2 million of income for Q1 2012 compared to $0.4 million in losses for Q1 2011. FirstCitys average investment in Latin American Acquisition Partnerships was $4.4 million for Q1 2012 compared to $14.8 million for Q1 2011. The decline in our average investment in these partnerships since Q1 2011 was due primarily to the Companys recognition of a $7.4 million impairment charge on certain Latin American (Mexico) Acquisition Partnerships in the fourth quarter of 2011.
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