FirstCity Financial Corporation Reports Fourth Quarter And Full Year 2010 Results
Items impacting comparability of results from continuing operations for the year are as follows:
Total assets at the end of 2010 remained relatively steady at $460.4 million compared to $465.1 million a year ago (a 1% decrease). However, the Company's earning assets increased to $400.5 million at the end of 2010 from $366.2 million a year ago – due primarily to a $26.2 million increase in the Company's equity-method investments in domestic unconsolidated acquisition partnerships (increased investment activity under the Company's investment agreement with Varde Investment Partners, L.P.) and a $13.8 million increase in the Company's equity-method investments in its special situations platform (discussed below).
Revenues in 2010 increased to $85.6 million compared to $79.8 million last year. The Company's revenues in 2010 included $46.0 million of income and gains from portfolio assets, $6.0 million of interest income and gains from loans receivable, $8.7 million of fee income attributable to our loan servicing platform, and $15.2 million of revenues from our consolidated manufacturing and railroad subsidiaries.
Increased revenues in 2010 are primarily a result of $10.5 million of revenue from our consolidated wireless communications equipment manufacturing subsidiary in 2010 (acquired in December 2009). Our manufacturing subsidiary's operating agreement was amended in June 2010, with the consent of its owners, and the change resulted in FirstCity ceasing to have a controlling interest, but retaining a noncontrolling interest, in the manufacturing entity. As such, since July 1, 2010, the Company recorded its share of the manufacturing subsidiary's net earnings as "equity in earnings of unconsolidated subsidiaries" instead of reporting the subsidiary's consolidated results of operations. Revenues also increased as a result of a $3.3 million gain from an investment security sale.The revenue increases described above were off-set partially by a $7.9 million decrease in income and gains from portfolio assets in 2010 compared to 2009. This decrease corresponds to a shift in the income-recognition methods used by the Company for its loan portfolio assets (as described above). A decline in consolidated collections also contributed to the portfolio assets revenue decline in 2010 compared to 2009.
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