WACO, TX – FirstCity Financial Corporation (NasdaqNM: FCFC) today announced net earnings to common stockholders for the quarter ended March 31, 2005, of $2.5 million or $.21 per share on a diluted basis.
Highlights of the Quarter:
- FirstCity reports 1st quarter 2005 earnings of $2.5 million, or $.21 per diluted share
- FirstCity invested $2.2 million in portfolio assets for the quarter.
- FirstCity invested an additional $2.0 million in equity investments.
- Pipeline for portfolio assets remains strong.
James T. Sartain, President and CEO of FirstCity, said, “We remain very optimistic regarding the portfolio acquisition business. Our pipeline is as strong as it has ever been. We are currently evaluating eighteen different transactions representing over $5 Billion in face value of assets. These prospects, coupled with our strong liquidity, position the company to perform very well in 2005.”
Portfolio Asset Acquisition and Resolution
FirstCity purchased $14.9 million in portfolio assets through Acquisition Partnerships during the first quarter of 2005. Purchases consisted of four portfolios — three in the United States and one in Mexico. Equity invested during the quarter by the Company was $2.2 million, consisting of $1.5 million in the U.S. and $.7 million in Mexico.
During the quarter, FirstCity also invested $2.0 million to increase its ownership percentage in a French servicing company from 10% to 12% and in an Acquisition Partnership located in France from 33% to 43%.
Operating contribution from the Portfolio Asset Acquisition business for the first quarter was $4.2 million. The earnings are comprised of $9.6 million in revenues and $5.4 million of expenses. The business generated 62% of the revenues from domestic investments, 25% from investments in Latin America and 13% from investments in Europe. The major components of revenue for the quarter include equity earnings in Acquisition Partnerships and servicing entities of $3.4 million, servicing fees of $3.2 million, gain on resolution of Portfolio Assets of $1.9 and interest income and other of $1.1 million.
Operating contribution from the Portfolio Asset Acquisition business for the first quarter includes net foreign currency gains of $549,000, which is comprised of $319,000 in Mexican peso gains and $230,000 of Euro gains. Quarterly results were less impacted by foreign currency fluctuations, as the Company borrowed in Euros to hedge the risk associated with foreign currency exposure.
