FirstCity Financial Corporation Reports Fourth Quarter And Full Year 2010 Results
2009 included $6.1 million of other income in connection with FirstCity's settlement of a lawsuit.
Selected other financial data from continuing operations for the year:
The Company's total operating expenses (excluding provision, interest and income tax expenses) increased to $54.9 million for 2010 from $41.9 million for 2009 - due primarily to $10.8 million of consolidated costs and expenses from our manufacturing subsidiary in 2010 (refer to discussion above), and a $1.4 million increase in asset-level expenses incurred in 2010 compared to 2009 (these expenses generally represent costs incurred by the Company to manage its portfolio assets, support foreclosed properties and protect its security interests in loan collateral).
Total interest expense increased to $16.3 million in 2010 from $14.3 million for 2009 (FirstCity's average debt holdings increased to $300.9 million in 2010 from $295.6 million in 2009). The interest expense increase is attributable to the Company's higher average cost of funds of 5.4% during 2010 compared to 4.8% for 2009. Our increased cost of funds primarily relates to the higher interest and fees charged on our Reducing Note Facility with Bank of Scotland (closed in June 2010) compared to the loan facilities we had in place with Bank of Scotland in 2009.Noncontrolling interest expense increased to $13.4 million in 2010 from $5.6 million in 2009. Noncontrolling interest expense represents the portions of net earnings that are attributed to our co-investors in our consolidated subsidiaries. This increase was a result of a significant increase in net earnings from certain of our consolidated subsidiaries in 2010 compared to 2009 - primarily our consolidated European acquisition partnerships and special situations platform. Results of discontinued operations for the year: The Company's discontinued operations, consisting of its consolidated coal mine subsidiary, reported $4.0 million of net earnings in 2010 (comprised of $42.3 million in operating revenues, $43.2 million in operating costs and expenses, and a $4.8 million business combination gain). The Company recognized the business combination gain, in connection with a step-acquisition transaction, when it increased its stake in the coal mine subsidiary to a controlling interest from a noncontrolling interest in April 2010.
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