-
Operating net income was
$2.7 million , or$0.12 per diluted share, for the quarter, compared to$3 .7 million, or$0.17 per diluted share, for the third quarter of 2010. For the nine months ended September 30, 2011, operating net income was a record$13.9 million , or$0.61 per diluted share, an increase of 20.1% from$11.6 million , or$0.52 per diluted share, for the nine months ended September 30, 2010. -
Excluding the financial impact of gains recognized by
JMP Credit Corporation on the sale or payoff of loans initially acquired inApril 2009 , adjusted operating net income was$0.10 per share and$0.41 per share for the quarter and nine months endedSeptember 30, 2011 , respectively, compared to$0.06 per share and$0.20 per share for the quarter and nine months ended September 30, 2010, respectively. For more information on operating net income and adjusted operating net income, on a consolidated and a segment basis, including a reconciliation to net income, please see the section below titled "Non-GAAP Financial Measures." -
The net loss attributable to
JMP Group under generally accepted accounting principles, or GAAP, was$1.6 million , or$0.07 per diluted share, for the quarter, compared to net income of$1 .8 million, or$0.08 per diluted share, for the third quarter of 2010. For the nine months endedSeptember 30, 2011 , net income was$3 .4 million, or$0.15 per diluted share, a decrease of 40.3% from$5 .7 million, or$0.26 per diluted share, for the nine months ended September 30, 2010. -
Adjusted net revenues, which exclude certain non-cash items and
noncontrolling interests, were
$28.1 million for the quarter, compared to$34.1 million for the third quarter of 2010. For the nine months ended September 30, 2011, adjusted net revenues were a record$109 .6 million, an increase of 3.5% from$105 .9 million for the nine months ended September 30, 2010. 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
$17.4 million for the quarter, compared to$32.7 million for the third quarter of 2010. For the nine months endedSeptember 30, 2011 , total net revenues were$91 .7 million, a decrease of 8.9% from$100 .7 million for the nine months ended September 30, 2010.
"While not immune from the difficult operating environment that
characterized most of the third quarter, JMP still managed to generate
operating EPS of
"Despite a virtual shutdown of the equity capital markets in August and
September, our investment banking group produced flat sequential
quarterly revenues, which suggests continued market share gains in the
period. Net commission revenues increased sequentially and posted the
first year-over-year increase since the second quarter of 2009. While
one quarter does not make a trend, we may be seeing the first positive
signs that our market share growth strategy is working in that business.
Harvest Capital Strategies had mixed results for the quarter. Asset
management fee revenues were strong, thanks to a great quarter at
Revenues
Investment Banking
Investment banking revenues were
The company executed 17 investment banking transactions during the
quarter, compared to 16 during the third quarter of 2010. Public equity
underwriting revenues amounted to
Brokerage
Net brokerage revenues were
Asset Management
Asset management fees and other related revenues totaled
Client assets under management at
Principal Transactions
Principal transactions generated a net loss of
A statement of the company's principal transaction revenues for the
quarter and nine months ended
Quarter Ended | Nine Months Ended | |||||||||||||
(in thousands) |
|
|
|
|
|
|||||||||
Hedge fund investments |
( |
) |
|
|
|
|
||||||||
Principal investments: |
||||||||||||||
Investment in New York Mortgage Trust | (689 | ) | 545 | (218 | ) | 14 | (554 | ) | ||||||
Other principal investments | (68 | ) | - | (26 | ) | (349 | ) | (8 | ) | |||||
Total principal investments | (757 | ) | 545 | (244 | ) | (335 | ) | (562 | ) | |||||
|
||||||||||||||
Venture investments: |
||||||||||||||
Investment in |
(149 | ) | 8 | 161 | (49 | ) | 160 | |||||||
Other venture investments and warrants | (642 | ) | 268 | 68 | (24 | ) | 563 | |||||||
Total venture investments | (791 | ) | 276 | 229 | (73 | ) | 723 | |||||||
Principal transaction revenues net of noncontrolling interest in
|
(3,306 | ) | 2,433 | 23 | 113 | 1,789 | ||||||||
Noncontrolling interest in |
(2,984 | ) | 121 | 1,032 | (219 | ) | 1,098 | |||||||
Total principal transaction revenues |
( |
) |
|
|
( |
) |
|
|||||||
Of the
Gain on Sales and Payoffs of Loans and Loan Loss Provision
A loan loss provision of
At
Net Interest and Net Dividend Income
Interest income was
Expenses
Compensation and Benefits
Compensation and benefits expense was
As a percentage of adjusted net revenues, compensation and benefits
expense was 56.9% for the quarter, compared to 56.8% for the third
quarter of 2010, and was 60.4% for the nine months ended September 30,
2011, compared to 61.8% for the nine months ended
Non-Compensation Expense
Non-compensation expense was
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
management fees eliminated upon the consolidation of
-
management fees earned by Harvest Capital Strategies as manager of
Harvest Growth Capital , a venture capital fund;Harvest Capital Strategies is managing member ofHarvest Growth Capital ; and, despite its minority ownership,JMP Group consolidates the fund in accordance with GAAP accounting standards and eliminates the management fees in consolidation; presenting these management fees as thoughHarvest Growth Capital were deconsolidated presents the fund's results in a manner similar to those of the other funds managed byHarvest Capital Strategies; -
the non-cash net amortization of liquidity discounts at
JMP Credit , due to scheduled contractual principal repayments, of$6.4 million and$16.9 million for the quarter and nine months ended September 30, 2011, respectively; -
non-cash amortization, in connection with an intangible asset, of
$0.1 million per quarter in certain periods prior to the quarter endedSeptember 30, 2011 ; - unrealized mark-to-market gains or losses on the company's strategic equity investments in publicly traded New York Mortgage Trust, Inc. as well as certain warrant positions; and
-
noncontrolling interests in net unrealized gains and losses generated
by
Harvest Growth Capital , of which Harvest Capital Strategies is manager and managing member; under GAAP,JMP Group consolidates the fund; 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 the company's adjusted
net revenues for the quarter and nine months ended
Quarter Ended | Nine Months Ended | ||||||||||||||
(in thousands) |
|
|
|
|
|
||||||||||
Revenues: | |||||||||||||||
Non-interest revenues |
|
|
|
|
|
||||||||||
Net interest income | (1,573 | ) | (1,068 | ) | 2,963 | (661 | ) | 10,994 | |||||||
Total net revenues | 17,375 | 31,461 | 32,658 | 91,738 | 100,722 | ||||||||||
Management fees earned on | |||||||||||||||
|
203 | 203 | 78 | 609 | 156 | ||||||||||
Total net revenues including fees on |
17,578 | 31,664 | 32,736 | 92,347 | 100,878 | ||||||||||
Add back/(subtract): | |||||||||||||||
Net amortization of liquidity discounts on loans and asset-backed securities issued |
6,363 | 5,746 | 2,139 | 16,903 | 5,331 | ||||||||||
Amortization of intangible asset | - | 100 | - | 200 | - | ||||||||||
Net unrealized loss/(gain) on strategic equity investments and warrants |
1,141 | (824 | ) | 218 | (80 | ) | 787 | ||||||||
Noncontrolling interest in net unrealized loss/(gain) on |
2,984 | (121 | ) | (1,032 | ) | 219 | (1,098 | ) | |||||||
Adjusted net revenues |
|
|
|
|
|
||||||||||
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 adjusted net revenues provide useful information by excluding non-cash additions to and deductions from total net revenues as well as noncontrolling interests that may otherwise obscure the company's operating revenues and complicate an assessment of the company's core business activities. Management also believes that adjusted net revenue 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.
Asset Management-Related Fee Revenues
Asset management-related 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 the company's asset management-related revenues for the
quarter and nine months ended
Quarter Ended | Nine Months Ended | |||||||||
(in thousands) |
|
|
|
|
|
|||||
Base management fees: | ||||||||||
Fees reported as asset management fees |
|
|
|
|
|
|||||
Fees reported as other income | 937 | 569 | 223 | 1,923 | 453 | |||||
Fees earned at |
203 | 203 | 78 | 609 | 156 | |||||
Total base management fees | 3,659 | 3,088 | 2,846 | 9,640 | 7,716 | |||||
Incentive fees: | ||||||||||
Fees reported as asset management fees | 3,175 | 3,730 | 737 | 7,785 | 2,209 | |||||
Fees reported as other income | 29 | 2 | - | 381 | 263 | |||||
Total incentive fees | 3,204 | 3,732 | 737 | 8,166 | 2,472 | |||||
Fundraising fees reported as other income | 60 | 111 | 69 | 232 | 378 | |||||
Asset management-related fee revenues: | ||||||||||
All fees reported as asset management fees | 5,694 | 6,046 | 3,282 | 14,892 | 9,316 | |||||
All fees reported as other income | 1,026 | 682 | 292 | 2,536 | 1,094 | |||||
All fees earned at |
203 | 203 | 78 | 609 | 156 | |||||
Total asset management-related fee revenues |
|
|
|
|
|
|||||
Company management has utilized asset management-related 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 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 revenue is a more meaningful measure than standalone asset management fees as reported, because asset management-related 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
stock-based compensation expense related to equity awards granted both
at the time of JMP Group's
-
the grant of 1,931,060 restricted stock units, or RSUs, at the time of
the company's IPO, which resulted in no non-cash compensation expense
for the quarter ended
September 30, 2011 and$0 .8 million of non-cash compensation expense for the nine months ended September 30, 2011; -
the grant of RSUs subsequent to the company's IPO, which resulted in
non-cash compensation expense of
$0.1 million and$0.4 million for the quarter and nine months ended September 30, 2011, respectively; -
the non-cash net amortization of liquidity discounts at
JMP Credit , due to scheduled contractual principal repayments, of$6.4 million and$16.9 million for the quarter and nine months ended September 30, 2011, respectively; -
non-cash amortization, in connection with an intangible asset, of
$0.1 million per quarter in certain periods prior to the quarter endedSeptember 30, 2011 ; - unrealized mark-to-market gains or losses on the company's strategic equity investments in publicly traded New York Mortgage Trust, Inc. as well as certain warrant positions; and
- a combined federal, state and local income tax rate of 42%.
Reconciliations of JMP Group's net income to the company's operating net
income for the quarter and nine months ended
Quarter Ended | ||||||||
(in thousands, except per share amounts) |
|
|
|
|||||
Net (loss)/income attributable to |
( |
) |
|
|
||||
Add back: | ||||||||
Income tax (benefit)/expense | (1,410 | ) | 1,281 | 1,536 | ||||
Income before taxes | (3,033 | ) | 2,799 | 3,351 | ||||
Add back/(subtract): | ||||||||
Compensation expense — IPO-related RSUs | - | 447 | 340 | |||||
Compensation expense — post-IPO RSUs | 112 | 122 | 392 | |||||
Net amortization of liquidity discounts on loans and asset-backed securities issued |
6,363 | 5,746 | 2,139 | |||||
Amortization of intangible asset | - | 100 | - | |||||
Unrealized loss/(gain) on strategic equity investments and warrants |
1,141 | (824 | ) | 218 | ||||
Operating income before taxes | 4,583 | 8,390 | 6,440 | |||||
Income tax expense (assumed rate of 42%) | 1,925 | 3,524 | 2,705 | |||||
Operating net income |
|
|
|
|||||
Operating net income per share: | ||||||||
Basic |
|
|
|
|||||
Diluted |
|
|
|
|||||
Weighted average shares outstanding: | ||||||||
Basic | 22,354 | 22,254 | 21,583 | |||||
Diluted | 22,493 | 22,613 | 22,114 | |||||
Nine Months Ended | |||||
(in thousands, except per share amounts) |
|
|
|||
Net income attributable to |
|
|
|||
Add back: | |||||
Income tax expense | 2,354 | 5,026 | |||
Income before taxes | 5,787 | 10,775 | |||
Add back/(subtract): | |||||
Compensation expense — IPO-related RSUs | 778 | 2,237 | |||
Compensation expense — post-IPO RSUs | 360 | 809 | |||
Net amortization of liquidity discounts on loans and asset-backed securities issued |
16,903 | 5,331 | |||
Amortization of intangible asset | 200 | - | |||
Unrealized (gain)/loss on strategic equity investments and warrants |
(80 | ) | 787 | ||
Operating income before taxes | 23,948 | 19,939 | |||
Income tax expense (assumed rate of 42%) | 10,058 | 8,375 | |||
Operating net income |
|
|
|||
Operating net income per share: | |||||
Basic |
|
|
|||
Diluted |
|
|
|||
Weighted average shares outstanding: | |||||
Basic | 22,152 | 21,616 | |||
Diluted | 22,634 | 22,243 | |||
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.
Adjusted Operating Net Income
Adjusted operating net income excludes from operating net income the
financial contribution of gains recognized by
Reconciliations of the company's operating net income to its adjusted
operating net income for the quarter and nine months ended
Quarter Ended | ||||||
(in thousands, except per share amounts) |
|
|
|
|||
Operating net income |
|
|
|
|||
Add back: | ||||||
Income tax expense (assumed rate of 42%) | 1,925 | 3,524 | 2,705 | |||
Operating income before taxes | 4,583 | 8,390 | 6,440 | |||
Subtract: | ||||||
Earnings contribution from gains on loan portfolio acquired | 597 | 3,699 | 4,131 | |||
Adjusted operating income before taxes | 3,986 | 4,691 | 2,309 | |||
Income tax expense (assumed rate of 42%) | 1,674 | 1,970 | 970 | |||
Adjusted operating net income |
|
|
|
|||
Adjusted operating net income per share: | ||||||
Basic |
|
|
|
|||
Diluted |
|
|
|
|||
Weighted average shares outstanding: | ||||||
Basic | 22,354 | 22,254 | 21,583 | |||
Diluted | 22,493 | 22,613 | 22,114 | |||
Nine Months Ended | ||||
(in thousands, except per share amounts) |
|
|
||
Operating net income |
|
|
||
Add back: | ||||
Income tax expense (assumed rate of 42%) | 10,058 | 8,375 | ||
Operating income before taxes | 23,948 | 19,939 | ||
Subtract: | ||||
Earnings contribution from gains on loan portfolio acquired | 7,775 | 12,335 | ||
Adjusted operating income before taxes | 16,173 | 7,604 | ||
Income tax expense (assumed rate of 42%) | 6,793 | 3,194 | ||
Adjusted operating net income |
|
|
||
Adjusted operating net income per share: | ||||
Basic |
|
|
||
Diluted |
|
|
||
Weighted average shares outstanding: | ||||
Basic | 22,152 | 21,616 | ||
Diluted | 22,634 | 22,243 | ||
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 table that follows. 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 management fees eliminated upon consolidation of
Statements of JMP Group's operating net income on a segment basis for
the quarter and nine months ended
Quarter Ended |
|||||||||||||||||||||||||
(in thousands, except per share amounts) |
JMP Securities |
Harvest Capital Strategies |
JMP Credit Corp. |
Corporate |
Elimin- ations |
Operating JMP Group |
HGC Consolid- ation |
Consolid- ated JMP Group |
|||||||||||||||||
Revenues: | |||||||||||||||||||||||||
Investment banking |
|
- | - | - | - |
|
- |
|
|||||||||||||||||
Brokerage | 6,898 | - | - | - | - | 6,898 | - | 6,898 | |||||||||||||||||
Asset management-related fees (1) | 51 |
|
|
|
( |
) | 6,923 |
( |
) | 6,720 | |||||||||||||||
Principal transactions (2) | (789 | ) | (1,073 | ) | (11 | ) | (292 | ) | - | (2,165 | ) | (2,984 | ) | (5,149 | ) | ||||||||||
Gain on sale and payoff of loans | - | - | 1,373 | - | - | 1,373 | - | 1,373 | |||||||||||||||||
Net dividend income | 175 | - | - | 147 | - | 322 | - | 322 | |||||||||||||||||
Net interest income (3) | (8 | ) | 170 | 4,752 | (124 | ) | - | 4,790 | - | 4,790 | |||||||||||||||
Provision for loan losses | - | - | (123 | ) | - | - | (123 | ) | - | (123 | ) | ||||||||||||||
Adjusted net revenues | 16,375 | 5,586 | 6,296 | (139 | ) | (52 | ) | 28,066 | (3,187 | ) | 24,879 | ||||||||||||||
Expenses: | |||||||||||||||||||||||||
Non-interest expenses (4) | 17,714 | 4,854 | 322 | 522 | (52 | ) | 23,360 | 16 | 23,376 | ||||||||||||||||
Less: Noncontrolling interest (5) | - | - | 123 | - | - | 123 | (3,203 | ) | (3,080 | ) | |||||||||||||||
Operating income before taxes | (1,339 | ) | 732 | 5,851 | (661 | ) | - | 4,583 | - | 4,583 | |||||||||||||||
Income tax expense (assumed rate of 42%) |
(562 | ) | 307 | 2,457 | (277 | ) | - | 1,925 | - | 1,925 | |||||||||||||||
Operating net income |
( |
) |
|
|
( |
) | - |
|
- |
|
|||||||||||||||
Operating net income per share: | |||||||||||||||||||||||||
Basic |
( |
) |
|
|
( |
) | - |
|
- |
|
|||||||||||||||
Diluted |
( |
) |
|
|
( |
) | - |
|
- |
|
|||||||||||||||
Reconciliation to Adjusted Operating Net Income | |||||||||||||||||||||||||
Operating income before taxes |
|
|
|
||||||||||||||||||||||
Less: Earnings contribution from gain on loan portfolio acquired |
596 | 596 | 596 | ||||||||||||||||||||||
Adjusted operating income before taxes |
5,255 | 3,987 | 3,987 | ||||||||||||||||||||||
Income tax expense (assumed rate of 42%) |
2,207 | 1,674 | 1,674 | ||||||||||||||||||||||
Adjusted operating net income |
|
|
|
||||||||||||||||||||||
Adjusted operating net income per share: |
|||||||||||||||||||||||||
Basic |
( |
) |
|
|
( |
) | - |
|
- |
|
|||||||||||||||
Diluted |
( |
) |
|
|
( |
) | - |
|
- |
|
|||||||||||||||
(1) |
Reflects revenues detailed in section above titled "Asset
Management-Related Fee Revenues;" management fees of |
(2) |
Reverses net unrealized gains and losses on strategic equity
investments and warrants and excludes noncontrolling interests in
net unrealized gains and losses related to |
(3) |
Excludes expense related to the non-cash net amortization of
liquidity discounts at |
(4) |
Reverses stock-based compensation expense and excludes fund-related
expenses of |
(5) |
Excludes noncontrolling interests of |
Nine Months Ended |
|||||||||||||||||||||||
(in thousands, except per share amounts) |
JMP Securities |
Harvest Capital Strategies |
JMP Credit Corp. |
Corporate |
Elimin- ations |
Operating JMP Group |
HGC Consolid- ation |
Consolid- ated JMP Group |
|||||||||||||||
Revenues: | |||||||||||||||||||||||
Investment banking |
|
- | - | - | - |
|
- |
|
|||||||||||||||
Brokerage | 19,370 | - | - | - | - | 19,370 | - | 19,370 | |||||||||||||||
Asset management-related fees (1) | 155 |
|
|
|
( |
) | 18,037 |
( |
) | 17,428 | |||||||||||||
Principal transactions (2) | 324 | 201 | (320 | ) | (171 | ) | - | 34 | (219 | ) | (185 | ) | |||||||||||
Gain on sale and payoff of loans | - | - | 14,981 | - | - | 14,981 | - | 14,981 | |||||||||||||||
Net dividend income | 487 | - | - | 383 | - | 870 | - | 870 | |||||||||||||||
Net interest income (3) | 130 | 189 | 16,524 | (401 | ) | - | 16,442 | - | 16,442 | ||||||||||||||
Provision for loan losses | - | - | (477 | ) | - | - | (477 | ) | - | (477 | ) | ||||||||||||
Adjusted net revenues | 60,798 | 17,782 | 31,471 | (59 | ) | (403 | ) | 109,589 | (828 | ) | 108,761 | ||||||||||||
Expenses: | |||||||||||||||||||||||
Non-interest expenses (4) | 55,680 | 14,806 | 7,755 | 7,400 | (403 | ) | 85,238 | 51 | 85,289 | ||||||||||||||
Less: Noncontrolling interest (5) | - | - | 403 | - | - | 403 | (879 | ) | (476 | ) | |||||||||||||
Operating income before taxes | 5,118 | 2,976 | 23,313 | (7,459 | ) | - | 23,948 | - | 23,948 | ||||||||||||||
Income tax expense (assumed rate of 42%) |
2,149 |
1,250 |
9,791 |
(3,132 |
) | - | 10,058 | - | 10,058 | ||||||||||||||
Operating net income |
|
|
|
( |
) | - |
|
- |
|
||||||||||||||
Operating net income per share: | |||||||||||||||||||||||
Basic |
|
|
|
( |
) | - |
|
- |
|
||||||||||||||
Diluted |
|
|
|
( |
) | - |
|
- |
|
||||||||||||||
Reconciliation to Adjusted Operating Net Income | |||||||||||||||||||||||
Operating income before taxes |
|
|
|
||||||||||||||||||||
Less: Earnings contribution from gain on loan portfolio acquired |
7,775 |
7,775 |
7,775 | ||||||||||||||||||||
Adjusted operating income before taxes |
15,538 | 16,173 | 16,173 | ||||||||||||||||||||
Income tax expense (assumed rate of 42%) |
6,526 | 6,793 | 6,793 | ||||||||||||||||||||
Adjusted operating net income |
|
|
|
||||||||||||||||||||
Adjusted operating net income per share: |
|||||||||||||||||||||||
Basic |
|
|
|
( |
) | - |
|
- |
|
||||||||||||||
Diluted |
|
|
|
( |
) | - |
|
- |
|
||||||||||||||
(1) |
Reflects revenues detailed in section above titled "Asset
Management-Related Fee Revenues;" management fees of |
(2) |
Reverses net unrealized gains and losses on strategic equity
investments and warrants and excludes noncontrolling interests in
net unrealized gains and losses related to |
(3) |
Excludes expense related to the non-cash net amortization of
liquidity discounts at |
(4) |
Reverses stock-based compensation expense and excludes fund-related
expenses of |
(5) |
Excludes noncontrolling interests of |
Adjusted Tangible Book Value per Share
At
(in thousands, except per share amounts) |
|
|
|
||||||
Total |
|
|
|
||||||
Goodwill and intangible assets | - | - | (1,000 | ) | |||||
Tangible stockholders' equity | 128,448 | 132,360 | 121,124 | ||||||
Liquidity discount on loans | 18,392 | 20,880 | 51,603 | ||||||
Liquidity discount on asset-backed securities issued | (57,284 | ) | (64,923 | ) | (86,836 | ) | |||
Net liquidity discount | (38,892 | ) | (44,043 | ) | (35,233 | ) | |||
Income tax benefit (assumed rate of 42%) | 16,335 | 18,498 | 14,798 | ||||||
Net after-tax liquidity discount | (22,557 | ) | (25,545 | ) | (20,435 | ) | |||
Adjusted tangible stockholders' equity |
|
|
|
||||||
Adjusted tangible book value per share |
|
|
|
||||||
Basic shares outstanding | 22,147 | 22,388 | 21,733 | ||||||
Quarterly operating ROATE* | 10.0 | % | 18.2 | % | 14.6 | % | |||
LTM operating ROATE* | 21.5 | % | 22.6 | % | 17.0 | % | |||
Quarterly operating ROATE* excluding the financial impact of gains on acquired loans |
8.7 | % | 10.2 | % | 5.2 | % | |||
LTM operating ROATE* excluding the financial impact of gains on acquired loans |
13.0 | % | 12.1 | % | 6.8 | % | |||
* Return on adjusted tangible equity = annualized operating net income / average adjusted tangible stockholders' equity. | |||||||||
Share Repurchase Activity
During the quarter,
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 stemming from sales of or prepayments on, or losses stemming from defaults on, loans underlying the company's collateralized loan obligation or in its small business lending portfolio; 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 particular quarter depending upon the amount and sorts of revenue recognized as well as other factors. The amount of compensation and benefits expense recognized in any particular quarter may not be indicative of such expense in a future period. As a result, the company suggests that 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 contains 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, such as the potential for market share gains and outcomes of
strategic initiatives. 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
(in thousands) |
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Assets | ||||
Cash and cash equivalents |
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Restricted cash and deposits | 31,829 | 47,718 | ||
Receivable from clearing broker | 2,009 | 1,331 | ||
Marketable securities owned, at fair value | 24,781 | 23,748 | ||
Other investments | 47,927 | 38,702 | ||
Loans held for sale | 2,943 | - | ||
Loans held for investment, net of allowance for loan losses | - | 813 | ||
Loans collateralizing asset-backed securities issued, net of purchase discounts and allowance for loan losses |
427,028 | 400,763 | ||
Small business loans, net of allowance for loan losses | 1,953 | - | ||
Deferred tax assets | 24,279 | 32,507 | ||
Other assets | 16,493 | 21,169 | ||
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 | 32,988 | 37,424 | ||
Asset-backed securities issued, net of purchase discounts | 373,719 | 351,322 | ||
Note payable | 21,406 | 26,209 | ||
Deferred tax liability | 26,329 | 36,176 | ||
Other liabilities | 33,969 | 34,013 | ||
Total liabilities | 499,369 | 495,813 | ||
Redeemable noncontrolling interest | 11 | - | ||
Stockholders' Equity: | ||||
Total |
128,448 | 130,596 | ||
Noncontrolling interest | 19,134 | 11,456 | ||
Total equity | 147,582 | 142,052 | ||
Total liabilities and stockholders' equity |
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Quarter Ended | Nine Months Ended | |||||||||||
(in thousands, except per share amounts) |
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Revenues: | ||||||||||||
Investment banking |
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Brokerage | 6,898 | 5,895 | 19,370 | 21,255 | ||||||||
Asset management fees | 5,694 | 3,283 | 14,893 | 9,316 | ||||||||
Principal transactions | (6,290 | ) | 1,055 | (106 | ) | 2,887 | ||||||
Gain on sale and payoff of loans | 1,373 | 6,990 | 14,981 | 26,231 | ||||||||
Net dividend income | 322 | 357 | 870 | 1,472 | ||||||||
Other income | 1,026 | 292 | 2,536 | 1,095 | ||||||||
Non-interest revenues | 19,071 | 30,204 | 92,876 | 90,692 | ||||||||
Interest income | 7,451 | 11,502 | 25,799 | 36,083 | ||||||||
Interest expense | (9,024 | ) | (8,539 | ) | (26,460 | ) | (25,089 | ) | ||||
Net interest (expense)/income | (1,573 | ) | 2,963 | (661 | ) | 10,994 | ||||||
Provision for loan losses | (123 | ) | (509 | ) | (477 | ) | (964 | ) | ||||
Total net revenues | 17,375 | 32,658 | 91,738 | 100,722 | ||||||||
Non-interest expenses: | ||||||||||||
Compensation and benefits | 15,970 | 19,361 | 66,218 | 65,474 | ||||||||
Administration | 2,246 | 1,328 | 5,060 | 4,324 | ||||||||
Brokerage, clearing and exchange fees | 1,275 | 1,177 | 3,552 | 3,752 | ||||||||
Travel and business development | 1,107 | 711 | 2,568 | 2,632 | ||||||||
Communications and technology | 1,013 | 990 | 2,929 | 3,136 | ||||||||
Occupancy | 774 | 672 | 2,216 | 1,994 | ||||||||
Professional fees | 806 | 818 | 2,311 | 2,606 | ||||||||
Depreciation | 192 | 158 | 529 | 495 | ||||||||
Impairment loss on intangible asset | - | 2,750 | 700 | 2,750 | ||||||||
Other | 105 | 137 | 343 | 479 | ||||||||
Total non-interest expenses | 23,488 | 28,102 | 86,426 | 87,642 | ||||||||
(Loss)/income before income tax expense | (6,113 | ) | 4,556 | 5,312 | 13,080 | |||||||
Income tax (benefit)/expense | (1,410 | ) | 1,536 | 2,354 | 5,026 | |||||||
Net (loss)/income | (4,703 | ) | 3,020 | 2,958 | 8,054 | |||||||
Less: Net (loss)/income attributable to noncontrolling interest | (3,080 | ) | 1,205 | (475 | ) | 2,305 | ||||||
Net (loss)/income attributable to |
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Diluted |
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Weighted average common shares outstanding: | ||||||||||||
Basic | 22,354 | 21,583 | 22,152 | 21,616 | ||||||||
Diluted | 22,493 | 22,114 | 22,634 | 22,243 |
Investor Relations & Media Contact
apalmer@jmpg.com
Source:
News Provided by Acquire Media