-
Operating net income was
$3.3 million , or$0.15 per diluted share, compared to$3.0 million , or$0.13 per share, for the second quarter of 2012. For the six months endedJune 30, 2013 , operating net income was$6.9 million , or$0.31 per share, compared to$7.5 million , or$0.33 per share, for the six months endedJune 30, 2012 . For more information on operating net income, including a reconciliation to net loss attributable toJMP Group , please see the section below titled "Non-GAAP Financial Measures." -
Excluding a one-time, after-tax expense of
$0.03 per share related to the initial public offering ofHarvest Capital Credit Corporation (NASDAQ: HCAP) in May, operating net income would have been$0.18 per share and$0.34 per share for the quarter and six months endedJune 30, 2013 , respectively. -
The net loss attributable to
JMP Group under generally accepted accounting principles, or GAAP, was$1.4 million , or$0.06 per share, compared to a net loss of$1.6 million , or$0.07 per share, for the second quarter of 2012. For the six months endedJune 30, 2013 , the net loss was$3.2 million , or$0.14 per share, compared to a net loss of$1.3 million , or$0.06 per share, for the six months endedJune 30, 2012 . -
Adjusted net revenues, which exclude certain non-cash items and
non-controlling interests, were
$38.1 million , compared to$27.7 million for the second quarter of 2012. For the six months endedJune 30, 2013 , adjusted net revenues were$70.1 million , compared to$62.9 million for the six months endedJune 30, 2012 . For more information on adjusted net revenues, including a reconciliation to net revenues, please see the section below titled "Non-GAAP Financial Measures." -
Total net revenues on a GAAP basis were
$30.9 million and$54.2 million for the quarter and six months endedJune 30, 2013 , respectively, compared to$26.9 million and$58.5 million for the quarter and six months endedJune 30, 2012 , respectively.
"JMP Group had a great second quarter," said Chairman and Chief
Executive Officer
Segment Results of Operations
At
At Harvest Capital Strategies, adjusted net revenues of
At
A summary of JMP Group's operating net income by segment for the quarter and six months ended June 30, 2013 and for comparable prior periods is set forth below.
Quarter Ended | Six Months Ended | |||||||||||||||
($ as shown) |
|
|
|
|
|
|||||||||||
|
|
|
|
|
|
|||||||||||
Harvest |
(0.01 | ) | 0.04 | 0.05 | 0.02 | 0.08 | ||||||||||
|
0.13 | 0.15 | 0.14 | 0.29 | 0.29 | |||||||||||
Corporate | (0.10 | ) | (0.08 | ) | (0.07 | ) | (0.18 | ) | (0.14 | ) | ||||||
Operating EPS |
|
|
|
|
|
For more information on segment reporting; adjusted net revenues, including a reconciliation to net revenues; and operating net income, including a reconciliation to net income, please see the section below titled "Non-GAAP Financial Measures."
Composition of Revenues
Investment Banking
Investment banking revenues were a record
A summary of the company's investment banking revenues and transaction counts for the quarter and six months ended June, 2013 and for comparable prior periods is set forth below.
Quarter Ended | Six Months Ended | |||||||||||||||||||
|
|
|
|
|
||||||||||||||||
($ in thousands) | Count | Revenues | Count | Revenues | Count | Revenues | Count | Revenues | Count | Revenues | ||||||||||
Public equity | 37 |
|
33 |
|
16 |
|
70 |
|
39 |
|
||||||||||
Debt and convertible securities |
8 | 4,890 | 10 | 1,648 | 5 | 642 | 18 | 6,538 | 10 | 2,101 | ||||||||||
Private capital markets and other |
2 | 2,830 | - | 145 | 3 | 1,047 | 2 | 2,975 | 5 | 3,247 | ||||||||||
Strategic advisory | 4 | 3,820 | 1 | 1,400 | 1 | 716 | 5 | 5,220 | 6 | 4,692 | ||||||||||
Total | 51 |
|
44 |
|
25 |
|
95 |
|
60 |
|
Brokerage
Net brokerage revenues were
Asset Management
Asset management fees and other related revenues were
Client assets under management at
At
Principal Transactions
Principal transactions generated net realized and unrealized gains of
A summary of the company's principal transaction revenues for the quarter and six months ended June 30, 2013 and for comparable prior periods is set forth below.
Quarter Ended |
Six Months Ended |
|||||||||||||
(in thousands) |
|
|
|
|
|
|||||||||
Hedge fund investments |
|
|
( |
) |
|
|
||||||||
Principal investments: | ||||||||||||||
Investment in |
(136 | ) | - | - | (136 | ) | - | |||||||
Other principal investments | 55 | 85 | 901 | 140 | 582 | |||||||||
Total principal investments | (81 | ) | 85 | 901 | 4 | 582 | ||||||||
Venture investments: | ||||||||||||||
Investment in |
86 | (19 | ) | 328 | 67 | 525 | ||||||||
Other venture investments and warrants | 485 | 553 | 279 | 1,038 | 781 | |||||||||
Total venture investments | 571 | 534 | 607 | 1,105 | 1,306 | |||||||||
Principal transaction revenues net of non-controlling interests in
|
1,398 | 2,517 | 1,260 | 3,915 | 4,384 | |||||||||
Non-controlling interests in |
895 | (599 | ) | 6,520 | 296 | 9,880 | ||||||||
Total principal transaction revenues |
|
|
|
|
|
Included in the net gain of
Gain on Sale, Payoff and Mark-to-Market of Loans and Loan Loss Provision
Together,
For the quarter ended
At
A net loan loss provision of
Other Income
Other income was
Net Interest Income
Interest income was
Expenses
Compensation and Benefits
Compensation and benefits expense was
For the six months ended
Excluding the cost of stock-based awards but accelerating and
recognizing the cost of net deferred compensation for the period,
compensation and benefits expense was 65.6% of adjusted net revenues for
the quarter, compared to 59.5% for the second quarter of 2012, and was
64.1% for the six months ended
Non-Compensation Expense
Non-compensation expense was
As a percentage of adjusted net revenues, non-compensation expense was
23.6% for the quarter, compared to 21.6% for the second quarter of 2012,
and was 21.6% for the six months ended
Personnel
At
Non-GAAP Financial Measures
In addition to the GAAP financial results presented in this press
release,
Adjusted Net Revenue
Adjusted net revenue is a non-GAAP financial measure that (i) includes
asset management fees, net interest income or expense, and other
revenues eliminated upon the consolidation of
-
base management and incentive fees earned by
Harvest Capital Strategies as manager ofHarvest Growth Capital and Harvest Growth Capital II, both venture capital funds, andHarvest Capital Credit , a small business lending strategy; Harvest Capital Strategies is managing member ofHarvest Growth Capital andHarvest Growth Capital II and is the external manager ofHarvest Capital Credit , and, as a result of its ownership of each (until the IPO ofHarvest Capital Credit onMay 2, 2013 ),JMP Group has consolidated the three entities (for the appropriate periods) in accordance with GAAP accounting standards and has eliminated the fees in consolidation; presenting these fees as thoughHarvest Growth Capital , Harvest Growth Capital II andHarvest Capital Credit were deconsolidated presents the entities' results in a manner similar to those of the other investment funds managed by Harvest Capital Strategies; -
the non-cash net amortization of liquidity discounts associated with
JMP Credit Advisors CLO I, due to scheduled contractual principal
repayments, of
$6.2 million and$15.0 million for the quarter and six months ended June 30, 2013, respectively; - the non-specific, non-cash loan loss provision recorded with regard to the loan portfolio underlying JMP Credit Advisors CLO II, which is required by GAAP;
-
unrealized mark-to-market gains or losses on the investment portfolio
at
Harvest Capital Credit by reversing them; then, reflecting the company's IPO, recognizing those previously reversed gains or losses as ofMay 2, 2013 ; - unrealized mark-to-market gains or losses on the company's strategic equity investments as well as certain warrant positions; and
-
non-controlling interests in net unrealized gains and losses generated
by
Harvest Growth Capital and Harvest Growth Capital II, of which Harvest Capital Strategies is manager and managing member; under GAAP,JMP Group consolidates the two funds; however, as presented, unrealized gains and losses that do not accrue to the company are reversed.
A reconciliation of JMP Group's net revenues to its adjusted net
revenues for the quarter and six months ended
Quarter Ended | Six Months Ended | ||||||||||||||
(in thousands) |
|
|
|
|
|
||||||||||
Revenues: | |||||||||||||||
Non-interest revenues |
|
|
|
|
|
||||||||||
Net interest expense | (2,394 | ) | (3,141 | ) | (1,618 | ) | (5,535 | ) | (3,768 | ) | |||||
Loan loss provision | (975 | ) | (949 | ) | (1,107 | ) | (1,924 | ) | (1,200 | ) | |||||
Total net revenues | 30,904 | 23,248 | 26,895 | 54,152 | 58,529 | ||||||||||
Asset management fees earned on |
522 | 858 | 353 | 1,379 | 685 | ||||||||||
Dividend distribution from |
421 | 257 | - | 678 | 77 | ||||||||||
Less: Net interest income and other revenues from |
(789 | ) | (1,327 | ) | (476 | ) | (2,116 | ) | (815 | ) | |||||
Total net revenues including fee revenues from consolidated entities |
31,058 | 23,036 | 26,772 | 54,093 | 58,476 | ||||||||||
Add back/(subtract): | |||||||||||||||
Net amortization of liquidity discounts on loans and asset-backed securities issued |
6,239 | 8,740 | 7,000 | 14,979 | 14,175 | ||||||||||
Loan loss provision — JMP Credit Advisors CLO II |
1,128 | - | - | 1,128 | - | ||||||||||
Unrealized mark-to-market (gain)/loss — |
- | (516 | ) | 44 | 257 |
(13 |
) |
||||||||
Realization of mark-to-market gain — |
772 | - | - | - | - | ||||||||||
Net unrealized (gain)/loss on strategic equity investments and warrants |
(243 | ) | 157 | 447 | (86 | ) | 126 | ||||||||
Non-controlling interests in net unrealized (gains)/losses on
|
(895 | ) | 599 | (6,520 | ) | (296 | ) | (9,880 | ) | ||||||
Adjusted net revenues |
|
|
|
|
|
||||||||||
|
(1) |
Adjustments to reflect economic contributions from two |
Company management has utilized adjusted net revenue, adjusted in the manner described above, as an additional device to aid in understanding and analyzing JMP Group's financial results for the periods presented. Management believes that adjusting net revenue in these ways is useful in that it allows for a better evaluation of the performance of JMP Group's ongoing business and facilitates a meaningful comparison of the company's results in a given period to those in prior and future periods.
Asset Management-Related Fee Revenues
Asset management-related fee revenue is a non-GAAP financial measure
that sums asset management fees with certain fee revenues (in
particular, asset management fundraising fees generated by
A statement of JMP Group's asset management-related fee revenues for the
quarter and six months ended
Quarter Ended | Six Months Ended | |||||||||
(in thousands) |
|
|
|
|
|
|||||
Base management fees: | ||||||||||
Fees reported as asset management fees |
|
|
|
|
|
|||||
Fees reported as other income | - | 262 | 606 | 262 | 1,315 | |||||
Fees earned at |
595 | 508 | 241 | 1,103 | 442 | |||||
Total base management fees | 3,147 | 3,135 | 3,309 | 6,282 | 6,657 | |||||
Incentive fees: | ||||||||||
Fees reported as asset management fees | 836 | 4,387 | 1,030 | 5,223 | 2,066 | |||||
Fees reported as other income | - | - | - | - | - | |||||
Fees earned at |
66 | 350 | 112 |
416 |
243 | |||||
Total incentive fees | 902 | 4,737 | 1,142 | 5,639 | 2,309 | |||||
Other fee income: | ||||||||||
Fundraising fees | 26 | 26 | 26 | 52 | 53 | |||||
New York Mortgage Trust termination fee | - | - | 1,735 | - | 1,735 | |||||
Total other fee income | 26 | 26 | 1,761 | 52 | 1,788 | |||||
Asset management-related fee revenues: | ||||||||||
All fees reported as asset management fees | 3,388 | 6,752 | 3,492 | 10,140 | 6,966 | |||||
All fees reported as other income | 26 | 288 | 2,367 | 314 | 3,103 | |||||
All fees earned at |
661 | 858 | 353 | 1,519 | 685 | |||||
Total asset management-related fee revenues |
|
|
|
|
|
Company management has utilized asset management-related fee revenue as a means of assessing the performance of JMP Group's combined asset management activities, including its fundraising and other services for third parties. Management believes that asset management-related fee revenues, as presented above, provide useful information by indicating the relative contributions of base management fees and performance-related incentive fees, thus facilitating a comparison of those fees in a given period to those in prior and future periods. Management also believes that asset management-related fee revenue is a more meaningful measure than standalone asset management fees as reported, because asset management-related fee revenues represent the combined impact of JMP Group's various asset management activities on the company's total net revenues.
Operating Net Income
Operating net income is a non-GAAP financial measure that (i) reverses
compensation expense related to stock-based awards and deferred
compensation, (ii) excludes the net amortization of liquidity discounts
on loans held and asset-backed securities issued by
-
the grant of RSUs and stock options subsequent to the company's IPO,
which together resulted in non-cash compensation expense of
$1.0 million and$1.7 million for the quarter and six months endedJune 30, 2013 , respectively; - net deferred compensation, which, in order to state non-GAAP earnings as conservatively as possible, consists of (a) deferred compensation awarded at year-end 2012 and reflected in operating net income for 2012 though recognized as a GAAP expense in 2013 and 2014 less (b) compensation assumed to be awarded at year-end 2013 and deferred into 2014 and 2015;
-
the non-cash net amortization of liquidity discounts associated with
JMP Credit Advisors CLO I, due to scheduled contractual principal
repayments, of
$6.2 million and$15.0 million for the quarter and six months ended June 30, 2013, respectively; - the non-specific, non-cash loan loss provision recorded with regard to the loan portfolio underlying JMP Credit Advisors CLO II, which is required by GAAP;
-
unrealized mark-to-market gains or losses on the investment portfolio
at
Harvest Capital Credit by reversing them; then, reflecting the company's IPO, recognizing those previously reversed gains or losses as ofMay 2, 2013 ; - unrealized mark-to-market gains or losses on the company's strategic equity investments as well as certain warrant positions; and
-
a combined federal, state and local income tax rate of 38% for the
quarter ended
March 31, 2013 and all future periods, although an assumed rate of 42% was applied for all prior periods; the company's effective tax rate has proved lower than anticipated as a result of geographic changes in the company's revenue mix, with revenues generated inCalifornia (at the highest marginal rate) comprising less of the total in recent years than in the past.
A reconciliation of JMP Group's net income to its operating net income
for the quarter and six months ended
Quarter Ended | Six Months Ended | ||||||||||||||
(in thousands, except per share amounts) |
|
|
|
|
|
||||||||||
Net loss attributable to |
( |
) |
( |
) |
( |
) |
( |
) |
( |
) | |||||
Subtract: | |||||||||||||||
Income tax benefit | 644 | 812 | 920 | 1,456 | 539 | ||||||||||
Loss before taxes | (2,079 | ) | (2,531 | ) | (2,558 | ) | (4,610 | ) | (1,803 | ) | |||||
Add back/(subtract): | |||||||||||||||
Compensation expense — stock options | 259 | 137 | - | 396 | - | ||||||||||
Compensation expense — post-IPO RSUs | 704 | 616 | 208 | 1,320 | 388 | ||||||||||
Compensation expense — deferred compensation |
(1,146 | ) | (1,124 | ) | - | (2,270 | ) | - | |||||||
Net amortization of liquidity discounts — JMP Credit Advisors CLO I |
6,239 | 8,740 | 7,000 | 14,979 | 14,175 | ||||||||||
Loan loss provision — JMP Credit Advisors CLO II |
821 | - | - | 821 | - | ||||||||||
Unrealized mark-to-market (gain)/loss — |
- | (162 | ) | 75 | (162 | ) | 87 | ||||||||
Realization of mark-to-market gain — |
772 | - | - | 772 | - | ||||||||||
Unrealized (gain)/loss on strategic equity investments and warrants |
(243 | ) | 157 | 447 | (86 | ) | 126 | ||||||||
Operating income before taxes | 5,327 | 5,833 | 5,172 | 11,160 | 12,973 | ||||||||||
Income tax expense assumed | 2,024 | 2,216 | 2,172 | 4,240 | 5,448 | ||||||||||
Operating net income |
|
|
|
|
|
||||||||||
Operating net income per share: | |||||||||||||||
Basic |
|
|
|
|
|
||||||||||
Diluted |
|
|
|
|
|
||||||||||
Weighted average shares outstanding: | |||||||||||||||
Basic | 22,199 | 22,607 | 22,772 | 22,402 | 22,476 | ||||||||||
Diluted | 22,707 | 22,905 | 22,859 | 22,744 | 23,057 |
Company management has utilized operating net income on a total and per share basis, adjusted in the manner described above, as an additional device to aid in understanding and analyzing JMP Group's financial results for the periods presented. Management believes that operating net income provides useful information by excluding certain items that may not be representative of the company's core operating results or core business activities. Management also believes that operating net income is a useful measure because it allows for a better evaluation of the performance of JMP Group's ongoing business and facilitates a meaningful comparison of the company's results in a given period to those in prior and future periods.
Segment Reporting
In order to demonstrate the contribution to the company's results of each of its primary businesses on a standalone basis, JMP Group presents the operating net income generated by each segment in the tables that follow. Management believes that this presentation enables investors to better understand the separate but interrelated financial operations of the company's various business lines and to more accurately assess the contribution of each to JMP Group's aggregate results.
Total net revenues have been adjusted, in part, as detailed above in the
section titled "Adjusted Net Revenue," and the resulting adjusted net
revenues (i) include asset management fees, net interest income or
expense, and other revenues eliminated upon the consolidation of
A statement of JMP Group's operating net income on a segment basis for
the quarter ended
Quarter Ended |
||||||||||||||||||||||||||||||
(in thousands, except per share amounts) |
JMP Securities |
Harvest (1) Capital Strategies |
JMP Credit Corp. |
Corporate |
Elimin- |
Operating JMP Group |
HGC Consoli- dation |
HCC (1) Consoli- dation |
Consoli- dated JMP Group |
|||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||
Investment banking |
|
- | - | - |
( |
) |
|
- | - |
|
||||||||||||||||||||
Brokerage | 6,980 | - | - | - | - | 6,980 | - | - | 6,980 | |||||||||||||||||||||
Asset management-related fees (2) | - | 4,073 | 86 | - | (84 | ) | 4,075 | (386 | ) | (137 | ) | 3,552 | ||||||||||||||||||
Principal transactions (3) | 114 | 38 | 9 | 1,427 | - | 1,588 | 864 | 369 | 2,821 | |||||||||||||||||||||
Gain on sale and payoff of loans | - | - | 336 | - | - | 336 | - | - | 336 | |||||||||||||||||||||
Net dividend (expense)/income | (8 | ) | 421 | - | 63 | - | 476 | - | (421 | ) | 55 | |||||||||||||||||||
Net interest (expense)/income (4) | (33 | ) | - | 4,206 | (779 | ) | - | 3,394 | 1 | 450 | 3,845 | |||||||||||||||||||
Provision for loan losses | - | - | 153 | - | - | 153 | - | - | 153 | |||||||||||||||||||||
Adjusted net revenues | 28,363 | 4,532 | 4,790 | 711 | (337 | ) | 38,059 | 479 | 261 | 38,799 | ||||||||||||||||||||
Expenses: | ||||||||||||||||||||||||||||||
Non-interest expense/(income) (5)(7) | 23,585 | 6,540 | (147 | ) | 4,248 | (388 | ) | 33,838 | 56 | 47 | 33,941 | |||||||||||||||||||
Less: Non-controlling interest (6)(7) | - | (1,351 | ) | 245 | - | - | (1,106 | ) | 423 | 214 | (469 | ) | ||||||||||||||||||
Operating income/(loss) before taxes |
4,778 | (657 | ) | 4,692 | (3,537 | ) | 51 | 5,327 | - | - | 5,327 | |||||||||||||||||||
Income tax expense/(benefit) (assumed rate of 38%) |
1,815 | (249 | ) | 1,783 | (1,345 | ) | 20 | 2,024 | - | - | 2,024 | |||||||||||||||||||
Operating net income/(loss) |
|
( |
) |
|
( |
) |
|
|
- | - |
|
|||||||||||||||||||
Operating net income/(loss) per share: |
||||||||||||||||||||||||||||||
Basic |
|
( |
) |
|
( |
) |
|
|
- | - |
|
|||||||||||||||||||
Diluted |
|
( |
) |
|
( |
) |
|
|
- | - |
|
(1) |
|
(2) |
Reflects revenues detailed in section above titled "Asset
Management-Related Fee Revenues;" management fees totaling |
(3) |
Reverses net unrealized gains and losses on strategic equity
investments and warrants and includes previously reversed net
unrealized gains at |
(4) |
Excludes expense related to the non-cash net amortization of liquidity discounts associated with JMP Credit Advisors CLO I. |
(5) |
Reverses stock-based compensation expense as well as accounting
adjustments related to deferred compensation expense and excludes
fund-related expenses totaling |
(6) |
Excludes non-controlling interests totaling |
(7) |
Includes non-interest expense of |
A statement of JMP Group's operating net income on a segment basis for
the six months ended
Six Months Ended |
||||||||||||||||||||||||||||||
(in thousands, except per share amounts) |
JMP Securities |
Harvest (1) Capital Strategies |
JMP Credit Corp. |
Corporate |
Elimin- ations |
Operating JMP Group |
HGC Consoli- dation |
HCC (1) Consoli- dation |
Consoli- dated JMP Group |
|||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||||
Investment banking |
|
- | - | - |
( |
) |
|
- | - |
|
||||||||||||||||||||
Brokerage | 12,174 | - | - | - | - | 12,174 | - | - | 12,174 | |||||||||||||||||||||
Asset management-related fees (2) | - | 12,105 |
|
- | (268 | ) | 11,973 | (797 | ) | (584 | ) | 10,592 | ||||||||||||||||||
Principal transactions (3) | 385 | 662 | 9 | 2,756 | 6 | 3,818 | 245 | 406 | 4,469 | |||||||||||||||||||||
Gain on sale and payoff of loans (4) | - | - | 1,335 | - | - | 1,335 | - | - | 1,335 | |||||||||||||||||||||
Net dividend (expense)/income | (16 | ) | 678 | - | 63 | - | 725 | - | (678 | ) | 47 | |||||||||||||||||||
Net interest (expense)/income (5) | (49 | ) | - | 8,839 | (1,108 | ) | - | 7,682 | 1 | 1,760 | 9,443 | |||||||||||||||||||
Provision for loan losses | - | - | (796 | ) | - | - | (796 | ) | - | - | (796 | ) | ||||||||||||||||||
Adjusted net revenues | 45,981 | 13,445 | 9,523 | 1,711 | (585 | ) | 70,075 | (551 | ) | 904 | 70,428 | |||||||||||||||||||
Expenses: | ||||||||||||||||||||||||||||||
Non-interest expense/(income) (6)(8) | 39,500 | 14,079 | (1,405 | ) | 8,237 | (566 | ) | 59,845 | 93 | 144 | 60,082 | |||||||||||||||||||
Less: Non-controlling interest (7)(8) | - | (1,351 | ) | 421 | - | - | (930 | ) | (644 | ) | 760 | (814 | ) | |||||||||||||||||
|
||||||||||||||||||||||||||||||
Operating income/(loss) before taxes |
6,481 | 717 | 10,507 | (6,526 | ) | (19 | ) | 11,160 | - | - | 11,160 | |||||||||||||||||||
Income tax expense/(benefit) (assumed rate of 38%) |
2,462 | 273 | 3,993 | (2,481 | ) | (7 | ) | 4,240 | - | - | 4,240 | |||||||||||||||||||
Operating net income/(loss) |
|
|
|
( |
) |
( |
) |
|
- | - |
|
|||||||||||||||||||
Operating net income/(loss) per share: |
||||||||||||||||||||||||||||||
Basic |
|
|
|
( |
) |
( |
) |
|
- | - |
|
|||||||||||||||||||
Diluted |
|
|
|
( |
) |
( |
) |
|
- | - |
|
(1) |
|
|
(2) |
Reflects revenues detailed in section above titled "Asset
Management-Related Fee Revenues;" management fees totaling |
|
(3) |
Reverses net unrealized gains and losses on strategic equity
investments and warrants and includes previously reversed net
unrealized gains at |
|
(4) |
Excludes net unrealized mark-to-market gain of |
|
(5) |
Excludes expense related to the non-cash net amortization of liquidity discounts associated with JMP Credit Advisors CLO I. |
|
(6) |
Reverses stock-based compensation expense as well as accounting
adjustments related to deferred compensation expense and excludes
fund-related expenses totaling |
|
(7) |
Excludes non-controlling interests totaling |
|
(8) |
Includes non-interest expense of |
Adjusted Tangible Book Value per Share
At
(in thousands, except per share amounts) |
|
|
|
||||||
Total |
|
|
|
||||||
Less: Goodwill and intangible assets | - | - | - | ||||||
Tangible stockholders' equity | 121,120 | 125,238 | 123,449 | ||||||
Liquidity discount on loans | - | 3,511 | 7,582 | ||||||
Liquidity discount on asset-backed securities issued | - | (6,304 | ) | (33,097 | ) | ||||
Net liquidity discount | - | (2,793 | ) | (25,515 | ) | ||||
Accounting adjustment — deferred compensation | (9,255 | ) | (8,109 | ) | - | ||||
Pre-tax adjustments to equity | (9,255 | ) | (10,902 | ) | (25,515 | ) | |||
Income tax benefit (assumed rate of 38% for 2013) | 3,517 | 4,143 | 10,716 | ||||||
After-tax adjustments to equity | (5,738 | ) | (6,759 | ) | (14,799 | ) | |||
Adjusted tangible stockholders' equity |
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Adjusted tangible book value per share |
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Basic shares outstanding | 22,138 | 22,609 | 22,742 | ||||||
Quarterly operating ROATE (1) | 11.3 | % | 12.3 | % | 11.0 | % | |||
LTM operating ROATE (1) | 14.0 | % | 13.8 | % | 12.5 | % |
(1) |
Return on adjusted tangible equity (ROATE) equals annualized operating net income divided by average adjusted tangible stockholders' equity. |
Share Repurchase Activity
During the quarter ended
Cautionary Note Regarding Quarterly Financial Results
Due to the nature of its business, JMP Group's quarterly revenues and net income may fluctuate materially depending on: the size and number of investment banking transactions on which it advises; the timing of the completion of those transactions; the size and number of securities trades which it executes for brokerage customers; the performance of its asset management funds and inflows and outflows of assets under management; gains or losses stemming from sales of or prepayments on, or losses stemming from defaults on, loans underlying the company's collateralized loan obligations; and the effect of the overall condition of the securities markets and economy as a whole. Accordingly, revenues and net income in any particular quarter may not be indicative of future results. Furthermore, JMP Group's compensation expense is generally based upon revenues and can fluctuate materially in any quarter, depending upon the amount and sorts of revenue recognized as well as other factors. The amount of compensation and benefits expense recognized in a particular quarter may not be indicative of such expense in any future period. As a result, the company suggests that its annual results may be the most meaningful gauge for investors in evaluating the performance of its business.
Cautionary Note Regarding Forward-Looking Statements
This press release may contain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended.
Forward-looking statements provide JMP Group's current expectations or
forecasts about future events, including beliefs, plans, objectives,
intentions, assumptions and other statements that are not historical
facts. Forward-looking statements are subject to known and unknown risks
and uncertainties that could cause actual results to differ materially
from those expected or implied by the forward-looking statements. The
company's actual results could differ materially from those anticipated
in forward-looking statements for many reasons, including the factors
described in the sections entitled "Risk Factors" and "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" in the company's Form 10-K for the year ended
Conference Call
The conference call will also be broadcast live over the Internet and will be accessible via a link in the investor relations section of the company's website, at investor.jmpg.com/events.cfm. The Internet broadcast will be archived and will remain available on the website for future replay.
About
Consolidated Statements of Financial Condition (Unaudited) |
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(in thousands) |
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Assets | ||||
Cash and cash equivalents |
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Restricted cash and deposits | 167,019 | 69,813 | ||
Marketable securities owned, at fair value | 17,715 | 14,347 | ||
Other investments | 156,557 | 81,161 | ||
Loans held for sale | 6,779 | 3,134 | ||
Loans collateralizing asset-backed securities issued, net of allowance for loan losses |
633,353 | 401,003 | ||
Small business loans | - | 38,934 | ||
Deferred tax assets | 9,472 | 13,087 | ||
Other assets | 37,004 | 21,308 | ||
Total assets |
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Liabilities and Stockholders' Equity | ||||
Liabilities: | ||||
Marketable securities sold, but not yet purchased, at fair value |
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Accrued compensation | 25,778 | 20,256 | ||
Asset-backed securities issued | 742,709 | 415,456 | ||
Line of credit | - | 28,227 | ||
Note payable | 19,368 | 10,486 | ||
Bond payable | 46,000 | - | ||
Deferred tax liability | 3,706 | 9,775 | ||
Other liabilities | 25,076 | 26,791 | ||
Total liabilities | 874,513 | 522,558 | ||
Redeemable non-controlling interest | - | 161 | ||
Stockholders' Equity: | ||||
Total |
121,120 | 126,871 | ||
Non-redeemable non-controlling interest | 85,596 | 60,272 | ||
Total equity | 206,716 | 187,143 | ||
Total liabilities and stockholders' equity |
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Consolidated Statements of Operations (Unaudited) |
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Quarter Ended | Six Months Ended | |||||||||||
(in thousands, except per share amounts) |
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Revenues: | ||||||||||||
Investment banking |
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Brokerage | 6,980 | 5,412 | 12,174 | 10,904 | ||||||||
Asset management fees | 3,527 | 3,492 | 10,278 | 6,966 | ||||||||
Principal transactions | 2,292 | 7,780 | 4,209 | 14,264 | ||||||||
Gain on sale, payoff and mark-to-market of loans | 336 | 1,405 | 1,425 | 2,452 | ||||||||
Net dividend (expense) | 55 | (9 | ) | 47 | (23 | ) | ||||||
Other income | 26 | 2,407 | 314 | 3,142 | ||||||||
Non-interest revenues | 34,273 | 29,620 | 61,611 | 63,497 | ||||||||
Interest income | 7,711 | 8,260 | 15,869 | 15,718 | ||||||||
Interest expense | (10,105 | ) | (9,878 | ) | (21,404 | ) | (19,486 | ) | ||||
Net interest (expense) | (2,394 | ) | (1,618 | ) | (5,535 | ) | (3,768 | ) | ||||
Provision for loan losses | (975 | ) | (1,107 | ) | (1,924 | ) | (1,200 | ) | ||||
Total net revenues | 30,904 | 26,895 | 54,152 | 58,529 | ||||||||
Non-interest expenses: | ||||||||||||
Compensation and benefits | 24,776 | 16,704 | 44,381 | 38,475 | ||||||||
Administration | 4,005 | 1,709 | 5,336 | 2,959 | ||||||||
Brokerage, clearing and exchange fees | 1,025 | 858 | 1,912 | 1,754 | ||||||||
Travel and business development | 1,039 | 987 | 1,997 | 1,689 | ||||||||
Communications and technology | 832 | 825 | 1,685 | 1,733 | ||||||||
Occupancy | 808 | 721 | 1,612 | 1,538 | ||||||||
Professional fees | 812 | 718 | 1,836 | 1,357 | ||||||||
Depreciation | 238 | 217 | 464 | 415 | ||||||||
Other | 224 | (51 | ) | 307 | 215 | |||||||
Total non-interest expense | 33,759 | 22,688 | 59,530 | 50,135 | ||||||||
(Loss)/income before income tax expense | (2,855 | ) | 4,207 | (5,378 | ) | 8,394 | ||||||
Income tax (benefit)/expense | (644 | ) | (920 | ) | (1,456 | ) | (539 | ) | ||||
Net (loss)/income | (2,211 | ) | 5,127 | (3,922 | ) | 8,933 | ||||||
Less: Net income attributable to noncontrolling interest | (776 | ) | 6,765 | (768 | ) | 10,197 | ||||||
Net (loss)/income attributable to |
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Net (loss)/income attributable to |
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Diluted |
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Weighted average common shares outstanding: | ||||||||||||
Basic | 22,199 | 22,772 | 22,402 | 22,476 | ||||||||
Diluted | 22,199 | 22,772 | 22,402 | 22,476 |
Investor Relations:
(415)
835-8978
apalmer@jmpg.com
or
Media
Relations:
Dukas Public Relations
(212)
704-7385
seth@dukaspr.com
(212) 704-7385
zach@dukaspr.com
Source:
News Provided by Acquire Media