SWS Group Inc. (SWS, Financial) filed Quarterly Report for the period ended 2012-09-28.
Sws Group, Inc. has a market cap of $185.1 million; its shares were traded at around $5.4 with and P/S ratio of 0.5.
Operating expenses increased $10.1 million for the three-months ended September 28, 2012 as compared to the same period of the prior fiscal year. This increase was primarily made up of an $8.0 million increase in the unrealized loss on the warrant valuation for the warrants held by Hilltop and Oak Hill and a $1.1 million increase in commissions and other employee compensation. The increase in commissions and other employee compensation was due to a $2.0 million increase in our liability to participants in the deferred compensation plan and a $0.5 million increase in salary and incentive compensation at the Bank due to increased headcount. These increases were partially offset by a $1.0 million decrease in retail commission expense due to lower production and a $0.6 million decrease in the institutional segment commission expense resulting from decreased segment revenue.
Net revenues in the retail segment decreased 4% for the three-months ended September 28, 2012 as compared to the same period last fiscal year. This decrease was primarily due to a $1.7 million decrease in commission revenue from September 30, 2011 to September 28, 2012. The decrease in commission revenue was due to the following: (i) a $0.8 million decrease from the loss of two top SWS Financial producers; (ii) a $0.4 million decrease due to PCG representative attrition; (iii) a $0.4 million decrease due to adverse market conditions and (iv) a $0.1 million decrease due to the decrease in the number of trading days from 68 in the first quarter of fiscal 2012 to 63 in the first quarter of fiscal 2013. Total customer assets were $13.8 billion at September 28, 2012 as compared to $12.6 billon at September 30, 2011. Assets under management were $818.0 million at September 28, 2012 as compared to $648.0 million at September 30, 2011.
Net revenues from the institutional segment decreased 1% for the three-months ended September 28, 2012 as compared to the three-months ended September 30, 2011, and pre-tax income decreased 2%. This decrease was in part due to the fact there were 63 trading days in the first quarter of fiscal 2013 as compared to 68 trading days in the first quarter of fiscal 2012. Commissions decreased $1.6 million primarily driven by a $1.8 million decrease in taxable fixed income and a $0.9 million decrease in municipal finance, partially offset by a $1.1 million increase in portfolio trading. The decrease in taxable fixed income was primarily due to the current political environment and economic uncertainty which we believe has reduced client activity, as well as lower interest rates and volatility in the market. The decrease in municipal finance was primarily due to a 41% decrease in the aggregate amount of senior managed municipal offerings and a 17% reduction in the aggregate amount of co-managed municipal offerings. The increase in portfolio trading was due to an increase in shares executed for the three-months ended September 28, 2012 when compared to the same period in the prior fiscal year.
Pre-tax loss from the other segment was $20.8 million for the three-months ended September 28, 2012, as compared to a pre-tax loss of $10.4 million in the same period last fiscal year. Net revenues increased 8% in the three-months ended September 28, 2012 as compared to the same period last fiscal year. Net revenues increased due to a $2.0 million increase in value from our deferred compensation plans investments. This increase was partially offset by a $1.1 million increase in interest expense related to the $100 million loan from Hilltop and Oak Hill in the three-months ended September 28, 2012 as compared to the same period last fiscal year because the $100 million loan was effective July 29, 2011 resulting in one less month of interest expense for the three-months ended September 30, 2011. In addition, net gains on principal transactions decreased due to the $0.7 million write down in fair value of an auction rate municipal bond. Operating expenses increased $11.0 million in the three-months ended September 28, 2012 as compared to the same period last fiscal year primarily due to the $8.0 million increase in the unrealized loss on the warrant valuation for the warrants held by Hilltop and Oak Hill. Additionally, commission and other employee compensation increased as a result of a $2.0 million increase in the liability to participants in the deferred compensation plan.
Read the The complete Report
Sws Group, Inc. has a market cap of $185.1 million; its shares were traded at around $5.4 with and P/S ratio of 0.5.
Highlight of Business Operations:
Net revenues decreased $2.6 million for the three-months ended September 28, 2012 as compared to the same period of the prior fiscal year. The largest components of the decrease were in net interest and commissions. The $3.5 million decrease in net interest revenue was due primarily to a 16% decrease in the average loan balance and a 20 basis point decrease in the net yield at the Bank as compared to the same period of the prior fiscal year. Also, interest expense on the loan from Hilltop and Oak Hill reduced net interest revenue by $3.1 million in the three-months ended September 28, 2012 as compared to $2.0 million in the three-months ended September 30, 2011. Additionally, interest revenue in our institutional business decreased $1.2 million due to a 20% decrease in the average stock loan portfolio balances as well as the decreased volume of trades in our taxable fixed income business. The $3.3 million decrease in commission revenue was due primarily to a $1.5 million decrease in our independent registered representatives commission revenue related to the loss of two top producers, a decrease in the number of trading days from 68 days in the first quarterOperating expenses increased $10.1 million for the three-months ended September 28, 2012 as compared to the same period of the prior fiscal year. This increase was primarily made up of an $8.0 million increase in the unrealized loss on the warrant valuation for the warrants held by Hilltop and Oak Hill and a $1.1 million increase in commissions and other employee compensation. The increase in commissions and other employee compensation was due to a $2.0 million increase in our liability to participants in the deferred compensation plan and a $0.5 million increase in salary and incentive compensation at the Bank due to increased headcount. These increases were partially offset by a $1.0 million decrease in retail commission expense due to lower production and a $0.6 million decrease in the institutional segment commission expense resulting from decreased segment revenue.
Net revenues in the retail segment decreased 4% for the three-months ended September 28, 2012 as compared to the same period last fiscal year. This decrease was primarily due to a $1.7 million decrease in commission revenue from September 30, 2011 to September 28, 2012. The decrease in commission revenue was due to the following: (i) a $0.8 million decrease from the loss of two top SWS Financial producers; (ii) a $0.4 million decrease due to PCG representative attrition; (iii) a $0.4 million decrease due to adverse market conditions and (iv) a $0.1 million decrease due to the decrease in the number of trading days from 68 in the first quarter of fiscal 2012 to 63 in the first quarter of fiscal 2013. Total customer assets were $13.8 billion at September 28, 2012 as compared to $12.6 billon at September 30, 2011. Assets under management were $818.0 million at September 28, 2012 as compared to $648.0 million at September 30, 2011.
Net revenues from the institutional segment decreased 1% for the three-months ended September 28, 2012 as compared to the three-months ended September 30, 2011, and pre-tax income decreased 2%. This decrease was in part due to the fact there were 63 trading days in the first quarter of fiscal 2013 as compared to 68 trading days in the first quarter of fiscal 2012. Commissions decreased $1.6 million primarily driven by a $1.8 million decrease in taxable fixed income and a $0.9 million decrease in municipal finance, partially offset by a $1.1 million increase in portfolio trading. The decrease in taxable fixed income was primarily due to the current political environment and economic uncertainty which we believe has reduced client activity, as well as lower interest rates and volatility in the market. The decrease in municipal finance was primarily due to a 41% decrease in the aggregate amount of senior managed municipal offerings and a 17% reduction in the aggregate amount of co-managed municipal offerings. The increase in portfolio trading was due to an increase in shares executed for the three-months ended September 28, 2012 when compared to the same period in the prior fiscal year.
Pre-tax loss from the other segment was $20.8 million for the three-months ended September 28, 2012, as compared to a pre-tax loss of $10.4 million in the same period last fiscal year. Net revenues increased 8% in the three-months ended September 28, 2012 as compared to the same period last fiscal year. Net revenues increased due to a $2.0 million increase in value from our deferred compensation plans investments. This increase was partially offset by a $1.1 million increase in interest expense related to the $100 million loan from Hilltop and Oak Hill in the three-months ended September 28, 2012 as compared to the same period last fiscal year because the $100 million loan was effective July 29, 2011 resulting in one less month of interest expense for the three-months ended September 30, 2011. In addition, net gains on principal transactions decreased due to the $0.7 million write down in fair value of an auction rate municipal bond. Operating expenses increased $11.0 million in the three-months ended September 28, 2012 as compared to the same period last fiscal year primarily due to the $8.0 million increase in the unrealized loss on the warrant valuation for the warrants held by Hilltop and Oak Hill. Additionally, commission and other employee compensation increased as a result of a $2.0 million increase in the liability to participants in the deferred compensation plan.
Read the The complete Report
