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Gleacher & Company Reports First Quarter 2012 Financial Results

Under the Citibank Guaranty, the Company guaranteed ClearPoint’s payment to Citibank for any required repurchase of loans to the extent conditions regarding documentation, underwriting and similar matters were not resolved favorably by March 30, 2012 (subsequently extended until April 30, 2012), with respect to a certain population of loans purchased by Citibank, of approximately $56.0 million. In connection with the extension granted on March 30, 2012, Citibank and ClearPoint agreed that ClearPoint would repurchase loans in the amount of approximately $2.1 million under a staggered repurchase schedule ending no later than May 3, 2012. ClearPoint has marked these loans at 88% of par and has arranged for the sale of a majority of these loans to a third party. As of April 30, 2012, there are an additional $2.1 million of these loans required to be repurchased by ClearPoint under a staggered repurchase process. ClearPoint expects its ultimate recovery for these loans will be at levels substantially similar to or possibly greater than those obtained on the initial $2.1 million repurchased. The repurchases are being made directly by ClearPoint without giving effect to the Company’s guarantee.

The Curtailment Guaranties relate to two pools of loans, those which were financed under the warehouse lines on or about February 29, 2012 (the “legacy loans”) of approximately $114 million, and new loans funded by the warehouse lines thereafter (the “new loans”). The Company guaranteed curtailment payments with respect to these loans, ranging from 5% to 100% of the lesser of, in general, the market value or the principal amount of loans financed under the warehouse lines, depending on the length of time such loans persist on the warehouse lines, and only in the event ClearPoint cannot satisfy those payments itself. As of April 30, 2012, $109.2 million of the legacy loans had been sold to third parties and are therefore no longer on the warehouse lines. The remaining curtailment exposure on $4.8 million of unsold legacy loans is $1.5 million.

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