FirstCity Financial Corp. (FCFC, Financial) filed Quarterly Report for the period ended 2009-09-30.
FIRSTCITY FINANCIAL CORP. is a specialized financial services company which evaluates, acquires, manages, services and disposes of portfolios of performing loans, non-performing loans, other real estate and other financial asets. Firstcity Financial Corp. has a market cap of $77.3 million; its shares were traded at around $7.85 with and P/S ratio of 1.7.
In the third quarter of 2009, the Company was involved in acquiring $48.7 million of domestic Portfolio Asset investments with a face value of approximately $115.1 million of which FirstCitys investment share was $21.0 million. In addition to its Portfolio Asset acquisitions in the third quarter of 2009, FirstCity invested $2.4 million in the form of SBA loan originations and advances; and $3.5 million in the form of debt investments under its Special Situations Platform (FirstCity Denver). At September 30, 2009, the carrying value of FirstCitys earning assets (Portfolio Assets, equity investments, loans receivable and entity-level earning assets) totaled $393.0 million. The global distribution of FirstCitys earning assets (at carrying value) at September 30, 2009 included $290.6 million in the United States; $60.9 million in Europe; and $41.5 million in Latin America.
The operating contribution from the Portfolio Asset Acquisition and Resolution segment resulted in a $2.0 million operating gain in the third quarter of 2009 compared to a $1.7 million operating loss for the same period in 2008. FirstCity was involved in acquiring $48.7 million of Portfolio Assets in the third quarter of 2009 with an approximate face value of $115.1 million, compared to its involvement in acquiring $4.5 million of Portfolio Assets in the third quarter of 2008 with an approximate face value of $78.1 million. In the third quarter of 2009, FirstCitys investment share in the Portfolio Asset acquisitions was $21.0 million with $18.6 million acquired through consolidated Portfolios and $2.4 million through Acquisition Partnerships. In the third quarter of 2008, the Companys investment share in the Portfolio Asset acquisitions was $3.2 million comprised of $2.9 million acquired through consolidated Portfolios and $0.3 million through Acquisition Partnerships.
· Domestic Total revenues reported by domestic Acquisition Partnerships decreased to $1.1 million in the third quarter of 2009 from $2.6 million for the same period in 2008. However, the total net loss reported by domestic partnerships decreased to $0.3 million in the third quarter of 2009 compared to a $0.5 million net loss in the third quarter of 2008. The decrease in total partnership revenues was attributed primarily to a significant decrease in portfolio collections to $4.7 million in the third quarter of 2009 from $13.2 million in the third quarter of 2008. The negative impact to net earnings as a result of the total partnership revenues decline was off-set partially by a $1.2 million decline in property protection expenses in the third quarter of 2009 compared to the same period in 2008. Portfolio assets (i.e. earning assets) held by the domestic partnerships decreased to $58.3 million in the third quarter of 2009 from $63.1 million for the same period in 2008. The collective activity described above translated to a decrease in FirstCitys share of net loss in domestic Acquisition Partnerships to $0.3 million for the third quarter of 2009 from $0.4 million for the same period in 2008.
· Latin America Total revenues reported by Latin American Acquisition Partnerships decreased to $3.8 million in the third quarter of 2009 from $8.8 million in the third quarter of 2008. Latin American partnerships reported a total net loss of $2.0 million in the third quarter of 2009 compared to $2.5 million of net earnings for the same period in 2008. The decrease in net earnings was attributed primarily to a significant decrease in collections to $8.7 million in the third quarter of 2009 from $16.4 million in the third quarter of 2008 (which negatively impacted revenues), and foreign currency transaction losses of $0.7 million recorded in the third quarter of 2009 compared to $3.1 million of foreign currency transaction gains in the third quarter of 2008 a $3.8 million negative impact. Latin American partnership portfolio asset holdings (i.e. earning assets) decreased to $135.7 million at September 30, 2009 from $184.2 million at September 30, 2008. The collective activity described above translated to a decrease in FirstCitys share of net earnings in Latin American Acquisition Partnerships to $0.2 million in net losses for the third quarter of 2009 from $0.4 million in net earnings for the same period in 2008.
· Europe Total revenues reported by European Acquisition Partnerships sharply decreased to $2.3 million in the third quarter of 2009 from $12.2 million in the third quarter of 2008. In addition, total net earnings reported by European partnerships decreased to $1.0 million of net losses in the third quarter of 2009 compared to $6.4 million of net earnings in the same period of 2008. The decrease in total partnership net earnings was attributed primarily to a significant decrease in collections to $7.2 million in the third quarter of 2009 from $17.0 million for the same period in 2008 (which negatively impacted revenues), and an increase in total provisions reported by the European partnerships to $2.1 million in the third quarter of 2009 from $1.0 million in the third quarter of 2008. European partnership portfolio asset holdings (i.e. earning assets) decreased to $77.2 million at September 30, 2009 from $109.2 million at September 30, 2008. The collective activity described above translated to a decrease in FirstCitys share of European partnership earnings to $0.3 million in losses for the third quarter of 2009 from $1.6 million in earnings for the third quarter of 2008.
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FIRSTCITY FINANCIAL CORP. is a specialized financial services company which evaluates, acquires, manages, services and disposes of portfolios of performing loans, non-performing loans, other real estate and other financial asets. Firstcity Financial Corp. has a market cap of $77.3 million; its shares were traded at around $7.85 with and P/S ratio of 1.7.
Highlight of Business Operations:
The Company recorded net earnings of $2.0 million for the third quarter of 2009, an increase of $3.8 million from the $1.8 million net loss reported for the third quarter of 2008. Diluted net earnings to common stockholders were $0.19 per share in the third quarter of 2009, compared to diluted net losses of $0.17 per common share for the same period in 2008. Revenue streams generated by the Companys earnings assets and servicing platform positively impacted earnings in the third quarter of 2009 as revenues in the third quarter of 2009 increased to $18.7 million compared to $12.7 million in the third quarter of 2008. The Companys revenues in the third quarter of 2009 include $12.1 million of income and gains from Portfolio Assets; $1.5 million of interest income from loans receivable; $2.2 million of fee income attributable to our loan servicing platform, and $0.8 million of revenue attributable to our majority-owned railroad operations. The increase in earnings in the third quarter of 2009 from the comparable prior quarter in 2008 were also positively impacted by a $0.6 million decrease in net impairment provisions, and a $0.6 million increase in foreign currency transaction gains. The impact of net impairment provisions and foreign currency transaction gains to our earnings in the third quarter of 2009 are further explained below. In addition, see Results of Operations below for a detailed review of the Companys operations for the third quarter of 2009 compared to the third quarter of 2008.In the third quarter of 2009, the Company was involved in acquiring $48.7 million of domestic Portfolio Asset investments with a face value of approximately $115.1 million of which FirstCitys investment share was $21.0 million. In addition to its Portfolio Asset acquisitions in the third quarter of 2009, FirstCity invested $2.4 million in the form of SBA loan originations and advances; and $3.5 million in the form of debt investments under its Special Situations Platform (FirstCity Denver). At September 30, 2009, the carrying value of FirstCitys earning assets (Portfolio Assets, equity investments, loans receivable and entity-level earning assets) totaled $393.0 million. The global distribution of FirstCitys earning assets (at carrying value) at September 30, 2009 included $290.6 million in the United States; $60.9 million in Europe; and $41.5 million in Latin America.
The operating contribution from the Portfolio Asset Acquisition and Resolution segment resulted in a $2.0 million operating gain in the third quarter of 2009 compared to a $1.7 million operating loss for the same period in 2008. FirstCity was involved in acquiring $48.7 million of Portfolio Assets in the third quarter of 2009 with an approximate face value of $115.1 million, compared to its involvement in acquiring $4.5 million of Portfolio Assets in the third quarter of 2008 with an approximate face value of $78.1 million. In the third quarter of 2009, FirstCitys investment share in the Portfolio Asset acquisitions was $21.0 million with $18.6 million acquired through consolidated Portfolios and $2.4 million through Acquisition Partnerships. In the third quarter of 2008, the Companys investment share in the Portfolio Asset acquisitions was $3.2 million comprised of $2.9 million acquired through consolidated Portfolios and $0.3 million through Acquisition Partnerships.
· Domestic Total revenues reported by domestic Acquisition Partnerships decreased to $1.1 million in the third quarter of 2009 from $2.6 million for the same period in 2008. However, the total net loss reported by domestic partnerships decreased to $0.3 million in the third quarter of 2009 compared to a $0.5 million net loss in the third quarter of 2008. The decrease in total partnership revenues was attributed primarily to a significant decrease in portfolio collections to $4.7 million in the third quarter of 2009 from $13.2 million in the third quarter of 2008. The negative impact to net earnings as a result of the total partnership revenues decline was off-set partially by a $1.2 million decline in property protection expenses in the third quarter of 2009 compared to the same period in 2008. Portfolio assets (i.e. earning assets) held by the domestic partnerships decreased to $58.3 million in the third quarter of 2009 from $63.1 million for the same period in 2008. The collective activity described above translated to a decrease in FirstCitys share of net loss in domestic Acquisition Partnerships to $0.3 million for the third quarter of 2009 from $0.4 million for the same period in 2008.
· Latin America Total revenues reported by Latin American Acquisition Partnerships decreased to $3.8 million in the third quarter of 2009 from $8.8 million in the third quarter of 2008. Latin American partnerships reported a total net loss of $2.0 million in the third quarter of 2009 compared to $2.5 million of net earnings for the same period in 2008. The decrease in net earnings was attributed primarily to a significant decrease in collections to $8.7 million in the third quarter of 2009 from $16.4 million in the third quarter of 2008 (which negatively impacted revenues), and foreign currency transaction losses of $0.7 million recorded in the third quarter of 2009 compared to $3.1 million of foreign currency transaction gains in the third quarter of 2008 a $3.8 million negative impact. Latin American partnership portfolio asset holdings (i.e. earning assets) decreased to $135.7 million at September 30, 2009 from $184.2 million at September 30, 2008. The collective activity described above translated to a decrease in FirstCitys share of net earnings in Latin American Acquisition Partnerships to $0.2 million in net losses for the third quarter of 2009 from $0.4 million in net earnings for the same period in 2008.
· Europe Total revenues reported by European Acquisition Partnerships sharply decreased to $2.3 million in the third quarter of 2009 from $12.2 million in the third quarter of 2008. In addition, total net earnings reported by European partnerships decreased to $1.0 million of net losses in the third quarter of 2009 compared to $6.4 million of net earnings in the same period of 2008. The decrease in total partnership net earnings was attributed primarily to a significant decrease in collections to $7.2 million in the third quarter of 2009 from $17.0 million for the same period in 2008 (which negatively impacted revenues), and an increase in total provisions reported by the European partnerships to $2.1 million in the third quarter of 2009 from $1.0 million in the third quarter of 2008. European partnership portfolio asset holdings (i.e. earning assets) decreased to $77.2 million at September 30, 2009 from $109.2 million at September 30, 2008. The collective activity described above translated to a decrease in FirstCitys share of European partnership earnings to $0.3 million in losses for the third quarter of 2009 from $1.6 million in earnings for the third quarter of 2008.
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