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TheStreet Open House

FirstCity Financial Corporation Reports Fourth Quarter And Full Year 2010 Results

Results of discontinued operations for Q4 2010:

The Company's discontinued operations, consisting of its consolidated coal mine subsidiary, reported a $0.3 million net loss in Q4 2010 (comprised of $13.9 million in operating revenues and $14.2 million in operating costs and expenses). The Company did not recognize any consolidated revenues, costs or expenses from its coal mine operation in Q4 2009 (the Company consolidated its investment in the coal mine operation in April 2010).

Fiscal year ending December 31, 2010

The Company's fiscal year ended December 31, 2010 produced net earnings of $12.5 million or $1.23 per diluted share compared to net earnings of $18.7 million or $1.83 per diluted share for the fiscal year ended December 31, 2009. The decrease in earnings for 2010 compared to 2009 was driven primarily by the following: (1) a $7.9 million decline in income accretion from consolidated loan portfolio assets in 2010; (2) $6.2 million of additional net impairment provisions recorded by the Company in 2010 compared to 2009; (3) a $7.9 million increase in noncontrolling interest expense in 2010; and (4) $6.1 million of lawsuit settlement income recognized in 2009 (compared to $-0- in 2010). These factors that decreased earnings in 2010 compared to 2009 were off-set partially by the following: (1) a $14.9 million increase in equity earnings from unconsolidated subsidiaries in 2010; (2) $2.3 million of additional business combination gains recognized in 2010 compared to 2009; (3) a $3.3 million gain recognized in 2010 from the sale of an investment security; and (4) $4.0 million of net earnings from our consolidated coal mine operation (reported as discontinued operations). Additional information related to these factors is discussed below.

During 2010, FirstCity and its investment partners jointly acquired $225.8 million of domestic portfolio assets with a face value of $420.4 million - of which FirstCity's investment acquisition share was $67.7 million. FirstCity's non-portfolio investments in 2010 included $20.6 million of SBA loan advances and originations; $13.2 million of equity and debt investments in privately-held middle-market companies; $15.3 million of equity investments in foreign partnerships and other investments; and $6.9 million of equity investments in domestic partnerships and other investments.

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