-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, J5FSKpQ0mylbqb6DrEBYi3BWrCT8s20m/gkd6jaRl8NsRruL4F3aq0d41UbfrSZW HJOzulYuMJJZL0Acp3qHkQ== 0000909518-98-000285.txt : 19980430 0000909518-98-000285.hdr.sgml : 19980430 ACCESSION NUMBER: 0000909518-98-000285 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980429 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19980429 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIRSTCITY FINANCIAL CORP CENTRAL INDEX KEY: 0000828678 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 760243729 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-26500 FILM NUMBER: 98604468 BUSINESS ADDRESS: STREET 1: P O BOX 8216 CITY: WACO STATE: TX ZIP: 767148216 BUSINESS PHONE: 8177511750 MAIL ADDRESS: STREET 1: P O BOX 8216 CITY: WACO STATE: TX ZIP: 767148216 FORMER COMPANY: FORMER CONFORMED NAME: FIRST CITY BANCORPORATION OF TEXAS INC/ DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: FIRST CITY ACQUISITION CORP DATE OF NAME CHANGE: 19880523 8-K 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of report (Date of earliest event reported) April 29, 1998 ---------------------- FIRSTCITY FINANCIAL CORPORATION ------------------------------- (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) Delaware 1-7614 76-0243729 -------- ------ ---------- (STATE OR OTHER JURISDICTION (COMMISSION FILE NUMBER) (IRS EMPLOYER OF INCORPORATION) IDENTIFICATION NO.) 6400 Imperial Drive, Waco, TX 76712 - ------------------------------------------------------------------------------ (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE) Registrant's telephone number, including area code (254) 751-1750 ------------------------ HOFS02...:\92\54892\0010\1612\FRM4298L.080 INFORMATION TO BE INCLUDED IN THE REPORT ITEM 5. OTHER EVENTS Press Release of April 29, 1998. ITEM 7. EXHIBITS Exhibit number Description 99.1 Press Release of April 29, 1998 2 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. FIRSTCITY FINANCIAL CORPORATION By: /s/ Gary H. Miller --------------------------------- Name: Gary H. Miller Title: Senior Vice President and Chief Financial Officer Date: April 29, 1998 3 EXHIBIT INDEX Exhibit number Description -------------- ----------- 99.1 Press Release of April 29, 1998 4 EX-99 2 EXHIBIT 99.1 NEWS RELEASE First City Financial Corporation Contact: Suzy W. Taylor (713) 652-1810 FIRSTCITY FINANCIAL ANNOUNCES FIRST QUARTER 1998 RESULTS HOUSTON, TEXAS APRIL 29, 1998... FirstCity Financial Corporation today announced earnings of $5.6 million for the quarter ended March 31, 1998. After dividends on the company's preferred stock and minority interests in subsidiaries, earnings were $4.3 million or $.64 per share on a fully diluted basis, compared to $7.6 million or $1.14 per share in the first quarter of 1997. The first quarter 1997 results reflect the positive effect of the $6.8 million, or $1.03 per share, payment from First City Liquidating Trust in settlement of its servicing contract with the company. Commenting on the first quarter results, James T. Sartain, President of FirstCity noted, "Results for the quarter reflect strong progress in each of our businesses and we believe we are well positioned for a strong 1998." In Mortgage Banking, total originations for the quarter ended March 31, 1998 of $1.9 billion grew 43% compared to the prior quarter, and more than tripled originations from 1997's comparable quarter. The favorable interest rate environment coupled with the continued expansion of the company's origination channels were major contributors to the strong growth experienced. The servicing portfolio increased by $508 million to end the quarter at $7.2 billion, as mortgage originations outpaced the impact of refinance activity in the quarter. Capital Corp., FirstCity's recently established mortgage conduit, held loans in inventory totaling $92 million by quarter's end. The company anticipates its first securitization of these loans in the second quarter of 1998. The portfolio asset acquisition and resolution business had a strong first quarter as portfolio acquisitions totaled approximately $52 million. Asset purchases were varied in nature, the largest purchase being a portfolio of real estate assets located in Texas. Collections for the quarter of $69.7 million compared favorably to $40.5 million in the prior year's comparable quarter. The consumer lending unit, which primarily originates auto finance receivables, completed a restructuring at year-end 1997. FirstCity Funding, the revamped origination unit, originated loans of $18.5 million during the quarter, and has originated an aggregate of approximately 2000 loans to date. These loans, which are individually underwritten and bought at discounts anticipated to cover any potential losses, have been acquired from dealers at an average 13% discount to face value and carry an average coupon of over 19%. Funding's aggregate initial investment in its portfolio is at an overall loan-to-wholesale value ratio of 86%. The formation of FirstCity Funding coincided with the termination of the origination program pursuant to which auto finance contracts were purchased from participating financial institutions based on contractual, pre-set underwriting guidelines. Loans generated through this discontinued program were not acquired at sufficient discounts to cover losses associated with the loans, and resulted in a $2.4 million loss provision in the first quarter 1998. FirstCity was contractually obligated to fund contracts under this discontinued program through January 31, 1998 and therefore acquired approximately $13.4 million of these loans during the quarter. (more) (2) Separately, FirstCity intends to exercise its option to repurchase for $1.00 each and all Warrants to purchase shares of its common stock. Approximately 497,000 of these Warrants are outstanding and each Warrant allows the holder to purchase one share of common stock at a price of $25 per share. The company has the right to repurchase these Warrants, after completion of a mandatory 45 day notice period, for $1.00 if the common stock price at the close of market exceeds $31.25 for 10 of 15 consecutive trading days. April 28, 1998 marked the 10th consecutive trading day on which the common stock closing price exceeded $31.25. Therefore, 45 days after the repurchase notice has been given to holders, the company will repurchase Warrants that have not been exercised. If all Warrants are exercised, it will result in approximately $12.4 million of new common equity for FirstCity. This press release contains forward looking statements. These statements are generally identified by the use of words or phrases such as "expect", "anticipate", "should", etc. The forward looking statements are based on FirstCity's current expectations and are dependent upon a number of uncertainties that could cause the actual results to differ materially from those implied, projected or predicted in the forward looking statements. The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for such forward looking statements. Factors which may affect actual results include FirstCity's ability to continue to grow its earnings base, its access to public markets to sell assets as well as the overall interest rate environment and other factors. In addition to the factors listed in this press release, please refer to the Company's public documents filed with the SEC for a more in depth discussion of risks and risk factors. FirstCity is a diversified financial services company with operations dedicated to mortgage lending, portfolio asset acquisition and resolution and consumer lending through over 90 offices in the US and with affiliate organizations in Europe and Mexico. Its common (FCFC) and preferred (FCFCP and FCFCO) stocks are listed on the NASDAQ National Market System. FIRSTCITY FINANCIAL CORPORATION FINANCIAL SUMMARY
(Amounts in thousands, except per share data) QUARTER ENDED: Mar. 31, 1998 Mar. 31, 1997 ------------------ ------------------ Revenues: Gain on sale of mortgage loans $ 20,269 $ 5,321 Net mortgage warehouse income 1,722 766 Gain on sale of mortgage servicing rights - 2,266 Servicing fees: Mortgage 4,694 3,571 Other 1,113 7,862 (1) Gain on resolution of Portfolio Assets 3,097 5,301 Equity earnings of Acquisition Partnerships 3,214 1,541 Rental income on real estate Portfolios 81 70 Interest income 3,799 2,779 Other income 4,037 1,161 Interest income on Class "A" Certificate - 1,659 ------------------ ------------------ Total revenues 42,026 32,297 Expenses: Interest on notes payable 3,418 2,862 Salaries and benefits 16,017 8,991 Amortization Mortgage servicing rights 3,176 1,547 Other 432 953 Provision for loan losses 2,352 798 Harbor merger related expenses - - Occupancy, data processing and other 11,691 7,577 ------------------ ------------------ Total expenses 37,086 22,728 Net earnings before minority interest, ================== ================== preferred dividends and income taxes $ 4,940 $ 9,569 ================== ================== Benefit (provision) for income taxes 641 (352) ------------------ ------------------ Net earnings before minority interest 5,581 9,217 and preferred dividends Minority interest (215) - Preferred dividends 1,515 1,659 ================== ================== Net earnings to common shareholders $ 4,281 $ 7,558 ================== ================== Net earnings per common share - basic 0.66 1.16 Net earnings per common share - diluted 0.64 1.14 Wtd. avg. common shares outstanding - basic 6,531 6,514 Wtd. avg. common shares outstanding - diluted 6,678 6,613
(1) - Includes $6,800 received as a result of terminating the Investment Management Agreement with the FirstCity Liquidating Trust in the first quarter of 1997. FIRSTCITY FINANCIAL CORPORATION SELECTED BALANCE SHEET DATA (Amounts in thousands)
Mar. 31, 1998 Dec. 31, 1997 ------------- ------------- Mortgage Assets $ 1,191,418 $ 650,775 Portfolio acquisition and resolution assets 114,045 125,480 Consumer assets 61,491 61,135 Deferred tax asset 31,384 30,614 Total assets 1,469,136 940,119 Notes payable 1,267,797 750,781 Preferred stock 41,908 41,908 Total shareholders' equity 119,539 112,758 SUMMARY INCOME STATEMENT DATA FOR EACH BUSINESS Revenues $ 28,689 $ 12,733 Expenses 24,716 11,687 ----------------- ----------------- Operating contribution before direct taxes $ 3,973 $ 1,046 ================= ================= ================= ================= Operating contribution, net of direct taxes $ 3,884 $ 658 ================= ================= Revenues 9,038 15,785 (1) Expenses 4,855 6,320 ----------------- ----------------- Operating contribution before direct taxes $ 4,183 $ 9,465 ================= ================= Operating contribution, net of direct taxes $ 4,169 $ 9,365 ================= ================= Revenues 2,956 2,057 Expenses 5,451 2,803 ----------------- ----------------- Operating contribution before direct taxes $ (2,495) $ (746) ================= ================= Operating contribution, net of direct taxes $ (2,495) $ (747) ================= =================
(1) - Includes $6,800 received as a result of terminating the Investment Management Agreement with the FirstCity Liquidating Trust in the first quarter of 1997. FIRSTCITY FINANCIAL CORPORATION SUPPLEMENTAL INFORMATION (Amounts in thousands)
QUARTER ENDED: Mar. 31, 1998 Mar. 31, 1997 ----------------- ----------------- Quarterly origination: Direct Retail Residential: Conventional $ 102,494 $ 30,357 FHA/VA/FHMA 117,470 48,132 Home Improvement - - Brokered 19,913 7,903 Broker Retail Residential: Conventional 1,258,371 379,739 FHA/VA/FHMA 213,758 35,099 Home Equity 58,261 11,045 Commercial: Correspondent 113,265 - Construction 15,596 10,757 Acquisition of Home Equity 36,416 - ----------------- ----------------- Total Mortgage Production 1,935,544 523,032 ================= ================= Servicing portfolio: Conventional 4,897,749 3,748,717 Agency 876,405 592,473 Other 22,109 72,562 Commercial 1,400,287 145,809 ----------------- ----------------- Total Mortgage Servicing portfolio 7,196,550 4,559,561 ================= ================= Selected other data: Net warehouse income 1,722 766 Net margin on warehouse balances 0.75% 1.20% Gain on loans sold ($): Residential 18,513 4,955 Home Equity 1,756 366 Gain on loans sold (%): Residential 1.46% 1.05% Home Equity 4.54% 3.65% OMSR income as a percent of loans sold 1.81% 1.77% Servicing revenues: Residential 4,284 3,332 Commercial 238 43 Sub-serviced 172 196 ----------------- ----------------- 4,694 3,571 ================= ================= Number of personnel at period end: Production 442 272 Servicing 119 111 Other 602 321 ----------------- ----------------- Total personnel 1,163 704 ================= =================
FIRSTCITY FINANCIAL CORPORATION SUPPLEMENTAL INFORMATION (Amounts in thousands)
QUARTER ENDED: Mar. 31, 1998 Mar. 31, 1997 ----------------- ----------------- Aggregate purchase price of portfolios acquired: Wholly owned $ 1,109 $ - Acquisition partnerships 50,862 47,237 ----------------- ----------------- 51,971 47,237 ================= ================= Collections: Wholly owned 16,976 14,842 Acquisition partnerships 52,692 25,631 ----------------- ----------------- 69,668 40,473 ================= ================= Average investment in Portfolio Assets: Nonperforming 49,619 45,431 Performing 14,212 8,100 Real estate 18,307 23,833 Servicing portfolio (face value) 865,622 864,632 Selected other data: Servicing fees: Acquisition partnerships 660 873 Other 69 6,989 Gain on resolution of Portfolio Assets: Nonperforming 2,263 3,971 Performing 299 - Real estate 535 1,330 ----------------- ----------------- 3,097 5,301 ================= ================= Gross profit margin on Portfolio Assets: Nonperforming 22.40% 37.36% Performing 7.99% - Real estate 17.08% 31.60% Interest yield on performing Portfolio Assets 24.47% 19.66% Number of personnel at period end: Production 10 11 Servicing 64 95 ----------------- ----------------- Total personnel 74 106 ================= ================= Automobile and other consumer loans acquired: FirstCity Funding 18,532 - National Auto Funding 13,407 29,775 Other 1,436 1,349 Origination characteristics (FirstCity Funding only): Face value to wholesale value 99.28% Weighted average coupon 19.44% Purchase discount (% of face value) 13.35% Servicing portfolio (face value) 121,272 59,977 Selected other data: Interest income 2,566 2,015 Average yield 13.49% 18.38% Servicing fees 384 34 Number of personnel at period end: Production 56 18 Servicing 79 38 ----------------- ----------------- Total personnel 135 56 ================= =================
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