WEB NEWS Going Private News
HOUSTON, Sept. 26, 2012 /PRNewswire / -- First Investors Financial Services Group, Inc. ("FIFS.PK") ("First Investors" or the "Company") today announced that it has entered into a definitive merger agreement with FIFS Holdings Corp. ("FIFS Holdings"), a company controlled by Aquiline Capital Partners LLC, a New York-based private equity firm investing in the financial services sector ("Aquiline"). Under the merger agreement, FIFS Holdings will acquire all of the outstanding shares of First Investors common stock in an all-cash transaction valuing First Investors at $100 million . Stockholders of First Investors will receive $13.87 for each share of First Investors common stock they hold.
"The acquisition by Aquiline is the result of a thorough and competitive process focused on maximizing value for our stockholders," said Tommy A. Moore, Jr., President and CEO of the Company. "Our board unanimously supports this transaction and believes that the acquisition will continue to expand the Company's leadership position in the market it serves. As a management team, we are very excited to be partnering with Aquiline, a firm with an outstanding reputation, valuable industry expertise and capital resources that will enhance our ability to grow our company."
Jeff Greenberg, Chief Executive of Aquiline, stated, "We are excited to partner with Tommy Moore and his management team. They have an impeccable reputation and the track record at First Investors is outstanding throughout their 23-year history."
GeoBargain Notes
On 12/06/2011 we added FIFS to the GeoBargain list @ $8.25
Catalyst : Strong first quarter 20 12 results. Reported EPS of $0.34 versus $0.06 in prior year period.
We are now removing FIFS from the GeoBargain List @ $9.40
Potential road block : Has not been able to break out of $13 to $16 million revenue range in past 11 quarters; Last four quarters have EPS have not shown sequential growth; Without an increasse in sales beyond normal revenue ranges we do not see how they can meet our minimum EPS growth requirments 20% to 30%, as m any of the margin expansion initiatives have been already implemented; Tough near-term EPS comparisons could lead to a low GeoPowerRanking (GPR).
We will revisit after the release of the fourth quarter 2012 results (April) to determine if they can surpass the EPS range of first 3 quarters of 2012. We believe that FIFS could be an eventual acquisition target.
Peak performance: Reached a high (on very little volume) of $12.00 on 10/13 /2011 for a maiximum potential return of 45%
Current Price : $9.40
Comments & Business Outlook
Third Quarter 2012 Results
Net income of $1,885,108 , or $0.28 per fully-diluted share, for the three months ended January 31, 2012 , and $5,869,028 , or $0.97 per fully-diluted share , for the nine months ended January 31, 2012 . This compares to net income of $741,717 , or $0.15 , per fully-diluted share and net income of $2,023,096 , or $0.42 , per fully-diluted share reported for the three and nine months ended January 31, 2011 .
Tommy A. Moore, Jr. , President and CEO, stated, "We continue to see strong operating results in fiscal year 2012 and are particularly pleased with the operating results for the three and nine month months ended January 31, 2012 . Our origination growth rates continue to improve in both our indirect and direct lending segments and we have invested significantly in our marketing infrastructure to support our growth initiatives. We continue to see year-over-year improvements in credit quality, particularly annualized net losses, while the competitive environment remains manageable. The completion of the term note issuance in March increases our available warehouse capacity and allows us to lock in our net interest margin. We are also extremely pleased with the execution we were able to achieve, both in terms of pricing and enhancement levels and believe this demonstrates both our commitment to strong underwriting standards but also our ability to appropriately price for the type of credit that we originate. With the closing of this transaction, First Investors will have issued $400 million in asset-backed securities since January, 2011. " e and nine months ended January 31, 2011 .
Comments & Business Outlook
Second Quarter 2012 Results
Net income of $2,102,813 , or $0.37 per fully-diluted share, for the three months ended October 31, 2011 , and $3,983,920 , or $0.70 per fully-diluted share, for the six months ended October 31 , 2011. This compares to $1,005,324 , or $0.21 per fully-diluted share, for the three months ended October 31, 2010 , and $1,281,379 , or $0.26 per fully-diluted share, for the six months ended October 31 , 2010.
The Company also announced that it completed the second tranche of the previously announced sale of 1,666,667 shares of its common stock to certain accredited investors affiliated with the Company. Gross proceeds from the sale of the remaining one million shares, which closed on October 25, 2011 , totaled $7.5 million . The proceeds will be used to fund growth in the Company's portfolio of receivables held for investment. Further, the Company announced that on October 20, 2011 , it issued $100 million in term asset-backed notes in a private placement transaction. The notes consisted of six, sequential pay classes and carried a weighted average yield at issuance of 3.25%. Initial credit enhancement consists of a cash reserve account equal to 1.5% of the outstanding principal balance of the receivables pool and an initial overcollateralization of 1.75%. The structure also included a $15 million prefunding tranche which will be used to fund additional loan originations. The issuance represented the Company's second term securitization in calendar 2011. Proceeds from the issuance were used to reduce the amount of borrowings outstanding under the Company's warehouse credit facility in order to allow room for growth in the Company's portfolio of receivables held for investment.
Tommy A. Moore, Jr. , President and CEO, stated, "We continue to be very pleased with our net earnings for both the three and six month periods ended October 31 , 2011. Our origination volume continues to show solid growth over last year and our credit quality, as evidenced by both our delinquency rate and our annualized net loss rate, is outstanding. In October, we completed our second term securitization of the year in a very difficult market and completed the second tranche of our equity sale which was announced in May 2011."
Comments & Business Outlook
First Quarter 2012 Results
Net income of $1,881,107 , or $0.34 per fully-diluted share, for the three months ended July 31, 2011 , as compared to $276,054 , or $0.06 per fully-diluted share, for the three months ended July 31, 2010 .
Tommy A. Moore, Jr. , President and CEO, commenting on the results, noted, "We are extremely pleased with the results of our first fiscal quarter ended July 31, 2011 . From a profitability perspective, it was the highest earning quarter in our history and we believe it sets the stage for a very successful fiscal year. We continue to experience solid growth in both our indirect and direct channels and importantly, have been able to maintain pricing power on our assets despite the low interest rate environment. Our credit quality, particularly our net charge-off rate, continues to be strong despite the seasonal issues that we typically see this time of the year. For the remainder of the year, we will continue to focus on prudently growing our receivables portfolio through both lending channels which will occur through a combination of market expansion, higher mail volumes and the contribution from a third-party affinity relationship we entered into in August, 2011 with a large insurance company under which we will provide financing solutions to a portion of its customer base. We look forward to the remainder of fiscal 2012."
