JMP Group LLC (NYSE:JMP), an investment banking and alternative
asset management firm, reported financial results today for the
quarter ended March 31, 2015.
- On January 1, 2015, JMP Group completed
a corporate restructuring transaction whereby it converted from a
C-corporation (JMP Group Inc.) to a publicly traded partnership
(JMP Group LLC); in its first quarter under the new structure, the
company made three cash distributions totaling $0.105 per share, an
increase of 50% from the dividend of $0.07 per share paid in the
fourth quarter of 2014.
- Adjusted net revenues, which exclude
certain non-cash items and non-controlling interests, were $37.6
million, a decrease of 14.2% from $43.8 million for the first
quarter of 2014. For more information on adjusted net revenues,
including a reconciliation to net revenues, see the section below
titled “Non-GAAP Financial Measures.”
- Operating net income was $5.1 million,
or $0.23 per diluted share, an increase of 17.1% from
$4.4 million, or $0.19 per share, for the first quarter of
2014. For more information on operating net income, including a
reconciliation to net income attributable to JMP Group, see the
section below titled “Non-GAAP Financial Measures.”
- Total net revenues under generally
accepted accounting principles, or GAAP, were $41.0 million,
compared to $37.7 million for the first quarter of 2014.
- The net loss attributable to JMP Group
on a GAAP basis was $1.9 million, or $0.09 per diluted share,
compared to net income of $4.0 million, or $0.17 per share, for the
first quarter of 2014. Excluding a one-time tax liability of $0.31
per share for recognizing previously unrealized gains in the
transfer of CLO securities and hedge fund limited partnership
interests to the new holding company as part of JMP Group’s
corporate restructuring, GAAP net income would have been $0.22 per
share for the first quarter of 2015.
“JMP Group got off to a good start in 2015, with operating
earnings per share increasing 21% year over year to $0.23 in our
first quarter as a publicly traded partnership,” said Chairman and
Chief Executive Officer Joe Jolson. “Excluding net investment
income and corporate costs, our fully-taxed operating subsidiaries
earned a solid $0.14 per share, an increase of 27% from the
previous quarter but a decrease of 22% from the first quarter of
last year, when JMP Securities produced record results. Our return
on equity improved to 15.6% for the quarter, though our book value
per share fell slightly to $6.14 per share, due to a one-time tax
liability related to our restructuring transaction.
“For the first quarter, we paid out roughly 45% of our operating
EPS in cash distributions, increasing the payout ratio from 35% in
the fourth quarter of last year. We recently increased our
quarterly distribution to $0.111 per share, declaring three monthly
cash distributions of $0.037 per share for the second quarter,
representing an increase of 122% from the dividend paid in the
second quarter of 2014, when the company was a C-corporation. We
continue to anticipate that our payout ratio will be between 50%
and 70% of operating earnings this year, compared to approximately
30% in 2014. The upper end of that range could take the form of one
or more special distributions based on our actual investment income
as the year progresses.”
Segment Results of OperationsAt JMP Securities, the
broker-dealer segment, adjusted net revenues were $26.8 million, a
decrease of 16.0% from $31.8 million for the first quarter of 2014.
The broker-dealer segment’s operating margin on adjusted net
revenues was 17.0%, compared to 10.8% for the prior quarter and
20.5% for the first quarter of 2014.
At Harvest Capital Strategies, the asset management segment,
adjusted net revenues of $5.0 million decreased 19.5% from $6.2
million for the first quarter of 2014. JMP Group’s return on its
capital invested in hedge funds managed by Harvest Capital
Strategies was 1.8% for the quarter.
At JMP Credit Advisors, the corporate credit management segment,
adjusted net revenues totaled $1.4 million, an increase of
29.1% from $1.1 million for the first quarter of 2014.
A summary of JMP Group’s operating net income per share by
segment for the quarter ended March 31, 2015, and for comparable
prior periods is set forth below.
Quarter Ended ($ as shown) Mar. 31, 2015 Dec. 31,
2014 Mar. 31, 2014 Broker-dealer $0.13 $0.07 $0.18 Asset
management 0.01 0.04 0.00 Corporate credit management 0.01 0.00
0.00 Operating platform EPS 0.14 0.11 0.18 Net corporate income
0.09 0.09 0.01 Operating EPS (diluted) $0.23 $0.20 $0.19
Note: Due to rounding, numbers in
columns above may not sum to totals presented.
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, see the
section below titled “Non-GAAP Financial Measures.”
Composition of Revenues
Investment BankingInvestment banking revenues were $20.7
million, a decrease of 17.4% from $25.1 million for the first
quarter of 2014.
A summary of the company’s investment banking revenues and
transaction counts for the quarter ended March 31, 2015, and for
comparable prior periods is set forth below.
Quarter Ended Mar. 31, 2015 Dec. 31, 2014 Mar.
31, 2014 ($ in thousands) Count Revenues Count
Revenues Count Revenues Public equity 34 $16,595 27 $10,714
33 $19,521 Debt and convertible securities 5 857 5 1,670 6 1,571
Private capital markets and other 1 547 2 1,685 1 698 Strategic
advisory 4 2,695 2 1,824 3 3,263 Total 44 $20,694 36 $15,893 43
$25,053
BrokerageNet brokerage revenues were $6.1 million, a decrease of
8.9% from $6.7 million for the first quarter of 2014.
Asset ManagementAsset management-related fee revenues were $4.9
million, a decrease of 19.9% from $6.1 million for the first
quarter of 2014. For more information on asset management-related
fee revenues, see the section below titled “Non-GAAP Financial
Measures.”
Client assets under management at March 31, 2015, totaled $2.0
billion, including $0.9 billion of funds managed by Harvest Capital
Strategies and HCAP Advisors and $1.1 billion par value of loans
and cash managed by JMP Credit Advisors. Client assets under
management were $2.1 billion at December 31, 2014, and $1.8 billion
at March 31, 2014. Including sponsored funds in which Harvest
Capital Strategies owns an economic interest, client assets under
management totaled $2.5 billion at March 31, 2015.
At March 31, 2015, private capital, including corporate credit,
small business lending, venture capital and real estate-related
advisory services, represented 63.0% of client assets under
management, including sponsored funds.
Principal TransactionsPrincipal transactions generated net
realized and unrealized gains of $3.7 million, compared to net
realized and unrealized losses of $3.7 million for the quarter
ended March 31, 2014.
A summary of the company’s principal transaction revenues for
the quarter ended March 31, 2015, and for comparable prior
periods is set forth below.
Quarter Ended
(in thousands) Mar. 31, 2015 Dec. 31, 2014 Mar. 31,
2014 Hedge fund investments $1,313 $1,366 $1,707 Investment in
Harvest Capital Credit Corporation 999 (1,129 ) (163 ) Investment
in Harvest Growth Capital funds (22 ) 438 (302 ) Other principal
investments 1,454 491 344 Principal
transaction revenues before non-controlling interests 3,744 1,166
1,586 Non-controlling interests – Harvest Growth Capital funds -
10,963 (5,279 ) Total principal transaction revenues
$3,744 $12,129 ($3,693 )
Due to Harvest Capital Strategies’ role as the manager and
managing member of Harvest Growth Capital and Harvest Growth
Capital II, GAAP previously required that JMP Group consolidate the
two venture capital funds, despite the company’s very limited
ownership of each one. Following a recent amendment to GAAP
standards regarding consolidation, JMP Group no longer consolidates
the funds; the company elected to adopt the new standards early, as
they are not effective until 2016. In the table above, principal
transaction revenues before non-controlling interests are presented
so that all periods are comparable. Total principal transaction
revenues, while not comparable across periods due to the recently
revised accounting standards, reflect GAAP for each of the periods
shown.
Collateralized Loan ObligationsThe net return on invested
capital managed by JMP Credit Advisors was 4.6%, compared to 4.3%
for the quarter ended March 31, 2014.
At March 31, 2015, discounts and reserves (including liquidity
discounts, allowances for loan losses and deferred loan fees)
equaled $12.1 million, or 1.2% of gross performing loans
outstanding at JMP Credit. At March 31, 2014, such discounts and
reserves equaled $9.1 million, or 1.2% of gross performing loans
outstanding. There were no impaired loans at either March 31, 2015,
or March 31, 2014.
The net loan loss provision for the quarter totaled $0.1
million, and at March 31, 2015, general loan loss reserves equaled
0.4% of gross performing loans at JMP Credit.
Net Interest IncomeNet interest income was $5.5 million,
compared to $3.8 million for the first quarter of 2014.
Expenses
Compensation and BenefitsCompensation and benefits expense was
$27.1 million, compared to $31.4 million for the first quarter of
2014. With regard to annually awarded compensation, a concept which
excludes amortization expense from share-based awards but
accelerates and recognizes the cost of net deferred compensation
related to the period, compensation and benefits expense was 66.1%
of adjusted net revenues, compared to 69.3% for the first quarter
of 2014. Further excluding compensation expense related to
strategic initiatives and hedge fund incentive fees, the
compensation ratio was 66.0%, in line with 66.0% for the first
quarter of 2014. For more information on compensation ratios, see
the section below titled “Non-GAAP Financial Measures.”
Non-Compensation ExpenseNon-compensation expense was $6.9
million, compared to $6.5 million for the first quarter of
2014.
PersonnelAt March 31, 2015, the company had 233 full-time
employees, compared to 235 at December 31, 2014, and 232 at March
31, 2014.
Non-GAAP Financial MeasuresIn addition to the GAAP
financial results presented in this press release, JMP Group
presents the non-GAAP financial measures discussed below. These
non-GAAP measures are provided to enhance investors’ overall
understanding of the company’s current financial performance.
Furthermore, company management believes that this presentation
enables more a meaningful comparison of JMP Group’s financial
performance in various periods. However, the non-GAAP financial
results presented should not be considered a substitute for results
that are presented in a manner consistent with GAAP. A limitation
of the non-GAAP financial measures presented is that the
adjustments concern gains, losses or expenses that JMP Group
generally expects to continue to recognize. The adjustment of these
non-GAAP items should not be construed as an inference that these
gains or expenses are unusual, infrequent or non-recurring.
Therefore, both GAAP measures of JMP Group’s financial performance
and the respective non-GAAP measures should be considered together.
The non-GAAP measures presented herein may not be comparable to
similarly titled measures presented by other companies.
Adjusted Net RevenueAdjusted net revenue is a non-GAAP financial
measure that (i) includes asset management fees, net interest
income, and other revenues eliminated upon the consolidation of
Harvest Growth Capital and Harvest Growth Capital II (prior to the
early adoption of a new GAAP consolidation standard as of January
1, 2015), (ii) reverses the general loan loss provision taken with
regard to certain CLOs, (iii) reverses net unrealized gains and
losses on strategic equity investments and warrants, (iv) excludes
non-controlling interests in net unrealized gains and losses on
Harvest Growth Capital and Harvest Growth Capital II (prior to the
early adoption of a new GAAP consolidation standard as of January
1, 2015), (v) excludes non-controlling interests in other sources
of revenue that are consolidated according to GAAP, and (vi)
reverses unrealized mark-to-market gains or losses on investments
related to deferred compensation. In particular, adjusted net
revenue adjusts for:
- base management and incentive fees
earned by Harvest Capital Strategies as manager of Harvest Growth
Capital and Harvest Growth Capital II, both venture capital funds;
Harvest Capital Strategies is managing member of Harvest Growth
Capital and Harvest Growth Capital II and, as a result of its
ownership, JMP Group consolidated the two funds and eliminated the
fees in consolidation until adopting an amended GAAP standard as of
January 1, 2015; presenting these fees in prior periods as though
Harvest Growth Capital and Harvest Growth Capital II were
deconsolidated presented the entities’ results in a manner similar
to those of the other investment funds managed by Harvest Capital
Strategies;
- the non-specific, non-cash loan loss
provision recorded with regard to loans acquired during the period
by JMP Credit Advisors CLO II and JMP Credit Advisors III, which is
required by GAAP;
- unrealized mark-to-market gains or
losses on the company’s strategic equity investments as well as
certain warrant positions;
- 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; JMP Group consolidated the two funds
under GAAP until January 1, 2015, when an amended GAAP standard no
longer required consolidation; in prior periods, unrealized gains
and losses that did not accrue to the company were reversed;
and
- unrealized mark-to-market gains or
losses on investments in the company’s hedge funds that are made on
behalf of employees who opt for such investments under the terms of
their deferred compensation agreements; any gains or losses will
accrue to the individual employee once the deferred compensation is
released to that individual.
A reconciliation of JMP Group’s net revenues to its adjusted net
revenues for the quarter ended March 31, 2015, and for comparable
prior periods is set forth below.
Quarter Ended (in thousands) Mar. 31, 2015 Dec. 31,
2014 Mar. 31, 2014 Revenues: Non-interest revenues
$35,518 $47,665 $34,397 Net interest income 5,489 4,737 3,760 Loan
loss (provision)/credit (57 ) 1,229 (497 ) Total net
revenues 40,950 53,631 37,660 Add back/(subtract):
General loan loss provision/(credit) –
collateralized loan obligations
91 (487 ) 545
Net unrealized (gain)/loss on strategic
equity investments and warrants
(1,020 ) 1,073 174 Non-controlling interests – Harvest Growth
Capital funds - (10,675 ) 5,675 Non-controlling interests – other
revenues (2,619 ) (1,805 ) (189 )
Unrealized mark-to-market loss/(gain) –
deferred compensation
195 (321 ) (70 ) Adjusted net revenues $37,597
$41,416 $43,795
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 RevenuesAsset 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 JMP Securities, loan fees,
and revenues from fee-sharing arrangements with other asset
managers) that are reported in JMP Group’s financial statements as
other income. In addition, until January 1, 2015, JMP Group
consolidated Harvest Growth Capital and Harvest Growth Capital II
in accordance with GAAP; for prior periods, asset management fees
generated by the two funds were included in asset
management-related fee revenues as though deconsolidated.
A statement of JMP Group’s asset management-related fee revenues
for the quarter ended March 31, 2015, and for comparable prior
periods is set forth below.
Quarter Ended (in thousands) Mar. 31, 2015 Dec. 31,
2014 Mar. 31, 2014 Base management fees: Fees
reported as asset management fees $3,710 $ 3,576 $2,984
Fees earned at Harvest Growth Capital and
Harvest Growth Capital II
- 281 378 Less: Non-controlling interest in HCAP Advisors (300 )
(267 ) (191 ) Total base management fees 3,410 3,590
3,171 Incentive fees: Fees reported as asset
management fees 952 7,013 2,561 Less: Non-controlling interest in
HCAP Advisors (194 ) (558 ) 175 Total incentive fees 758
6,455 2,736 Other fee income: Total
fundraising and other fees 740 1,769 222
Asset management-related fee revenues $4,908 $ 11,814
$6,129
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.
Compensation RatioA compensation ratio expresses compensation
expense as a percentage of net revenues in a given period. As
utilized by JMP Group, an adjusted compensation ratio is a non-GAAP
financial measure that employs adjusted net revenues as the
denominator in its calculation. Furthermore, this ratio adjusts the
financial impact of certain compensation-related and
transaction-related expenses that are or are not recognized under
GAAP. In particular, the adjusted compensation ratio reverses
compensation expense and unrealized mark-to-market gains or losses
related to stock-based awards, deferred compensation and
non-controlling interests (so that the compensation expenses used
in the numerator correspond to the adjusted net revenues generated
in the periods presented). The adjusted compensation ratio is
further adjusted by excluding compensation paid to employees hired
in connection with JMP Group’s strategic investments in new
business initiatives. In addition, the company presents an adjusted
compensation ratio that excludes any compensation related to
incentive fees generated by hedge funds, a majority of which is
passed through to the funds’ investment teams if earned.
A statement of JMP Group’s compensation ratio for the quarter
ended March 31, 2015, and for comparable prior periods is set forth
below.
Quarter Ended ($ in thousands) Mar. 31, 2015 Dec. 31, 2014
Mar. 31, 2014 Compensation Ratios Adjusted net
revenues $37,597 $41,416 $43,795 Compensation and benefits
$27,064 $25,910 $31,376 Subtract/(add back): Compensation expense –
stock options and SARs 674 509 395 Compensation expense – RSUs 407
1,181 853 Compensation expense – net deferred compensation 1,069
(2,004) (597) Unrealized mark-to-market gain – deferred
compensation (195) 321 70 Compensation expense – non-controlling
interest 267 (289) 322 Adjusted compensation and benefits 24,842
26,192 30,333 Subtract: Compensation expense – strategic
initiatives - (850) 610 Adjusted compensation and benefits,
excluding strategic initiatives $24,842 $27,042 $29,723
Adjusted ratio of compensation expense to revenues 66.1% 63.2%
69.3%
Adjusted ratio of compensation expense to
revenues, excluding strategic initiatives
66.1% 65.3% 67.9% Compensation Ratios Excluding Hedge Fund
Incentive Fees Adjusted net revenues $37,597 $41,416 $43,795
Subtract: Compensation expense – hedge fund incentive fees 68 5,477
2,445 Adjusted net revenues, excluding hedge fund incentive fees
$37,529 $35,939 $41,350 Adjusted compensation and benefits,
excluding strategic initiatives $24,842 $27,042 $29,723 Subtract:
Compensation expense – hedge fund incentive fees 68 5,477 2,445
Adjusted compensation and benefits,
excluding strategic initiatives and hedge fund incentive fees
$24,774 $21,565 $27,278
Adjusted ratio of compensation expense to
revenues, excluding strategic initiatives and hedge fund incentive
fees
66.0% 60.0% 66.0%
Company management has utilized compensation ratios, adjusted in
the manners described above, to assess JMP Group’s personnel
expenses as they relate to its revenues for the periods presented.
Management believes that adjusted compensation ratios provide
useful information by including or excluding certain expenses as a
means of representing the company’s ongoing personnel costs
resulting from its core business activities. Management also
believes that compensation ratios are useful measures because they
allow and facilitate meaningful comparisons of the company’s
personnel expenses in a given period to those in prior and future
periods.
Operating Net IncomeOperating net income is a non-GAAP financial
measure that (i) reverses compensation expense related to
stock-based awards and deferred compensation, (ii) reverses the
general loan loss provision taken with regard to certain CLOs,
(iii) reverses net unrealized gains and losses on strategic equity
investments and warrants, and (iv) assumes an effective tax rate.
In particular, operating net income adjusts for:
- the grant of RSUs and stock
options;
- net deferred compensation, which
consists of (a) deferred compensation awarded at year-end 2012 and
2013 and reflected in operating net income for 2012 and 2013,
though recognized as a GAAP expense in 2013, 2014 and 2015, less
(b) compensation awarded at year-end 2013 and year-end 2014 and
deferred into 2014, 2015 and 2016;
- the non-specific, non-cash loan loss
provision recorded with regard to loans acquired during the period
by JMP Credit Advisors CLO II and JMP Credit Advisors III, which is
required by GAAP;
- 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% at the taxable direct subsidiary of parent
company JMP Group, while applying a tax rate of 0% to the company’s
other direct subsidiary, which is a “pass-through entity” for tax
purposes.
A reconciliation of JMP Group’s net income to its operating net
income for the quarter ended March 31, 2015, and for comparable
prior periods is set forth below.
Quarter Ended (in thousands, except per share amounts) Mar.
31, 2015 Dec. 31, 2014 Mar. 31, 2014 Net
income attributable to JMP Group LLC ($1,892) $4,664 $3,998
Add back: Income tax expense 7,000 2,409 1,696 Income before taxes
5,108 7,073 5,694 Add back/(subtract): Compensation expense
– stock options and SARs 674 509 395 Compensation expense – RSUs
407 1,181 853 Compensation expense – net deferred compensation
1,069 (2,004) (597) General loan loss provision – collateralized
loan obligations 91 (487) 545
Unrealized mark-to-market loss/(gain) –
strategic equity investments and warrants
(1,020) 1,073 174 Operating income before taxes 6,329 7,345 7,064
Income tax expense 1,198 2,792 2,684 Operating net income
$5,131 $4,553 $4,380 Operating net income per share: Basic
$0.24 $0.22 $0.20 Diluted (1) $0.23 $0.20 $0.19 Weighted
average shares outstanding: Basic 21,216 20,716 21,820 Diluted (1)
22,218 22,502 22,806
(1)
In 2013 and the first quarter of 2014, JMP
Group issued restricted share units, or RSUs, bearing
non-forfeitable distribution equivalent rights. GAAP requires RSUs
with non-forfeitable distribution equivalent rights to be included
in the diluted share count (without applying the treasury method).
Management presents a non-GAAP diluted share count for the period,
in keeping with the presentation for quarters not impacted by this
GAAP requirement for such RSUs. The non-GAAP diluted share count
reflects the impact of such RSUs under the treasury method, which
is consistent with the calculation of the dilutive impact of all
other RSUs outstanding. On a GAAP basis, diluted EPS for the
quarter ended March 31, 2015, was calculated using the weighted
average number of basic shares outstanding, instead of diluted
shares outstanding, because the company had a net loss and was thus
required to use the less dilutive share count. The weighted average
number of diluted shares outstanding on for the quarter was
22,728,162; given that denominator, operating net income per
diluted share would remain $0.23.
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 ReportingIn 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) reverses the general loan loss
provision taken with regard to certain CLOs, (ii) reverses net
unrealized gains and losses on strategic equity investments and
warrants, (iii) excludes non-controlling interests in other sources
of revenue that are consolidated according to GAAP, and (iv)
reverses unrealized mark-to-market gains or losses on investments
related to deferred compensation. Total non-interest expenses have
been adjusted, in part, as detailed above in the section titled
“Operating Net Income,” and the resulting adjusted non-interest
expense reverses compensation expense related to stock-based awards
and deferred compensation. Expenses derived from non-controlling
interests in entities that are consolidated according to GAAP have
also been reversed. For the purposes of calculating operating net
income, an effective tax rate of 38% is assumed for JMP Group’s
taxable subsidiary.
A statement of JMP Group’s operating net income on a segment
basis for the quarter ended March 31, 2015, is set forth below.
Quarter Ended March 31, 2015 Corporate
Net Broker- Asset Credit Operating Corporate
Elimin- JMP (in thousands, except per share amounts) Dealer Mgmt.
Mgmt. Platforms Income ations Group Revenues:
Investment banking $20,694 - - $20,694 - - $20,694 Brokerage 6,065
- - 6,065 - - 6,065 Asset management-related fees - $5,000 $1,370
6,370 - ($1,462 ) 4,908 Principal transactions - - - - $2,918 -
2,918 Gain on sale and payoff of loans - - - - (390 ) - (390 ) Net
dividend income - - - - 191 - 191 Net interest income - - - - 3,209
- 3,209 Provision for loan losses - - - - 2 - 2
Adjusted net revenues 26,759 5,000 1,370 33,129 5,930 (1,462
) 37,597 Expenses: Non-interest expense/(income) 22,200
4,755 1,022 27,977 4,753 (1,462 ) 31,268 Operating
income before taxes 4,559 245 348 5,152 1,177 - 6,329 Income
tax expense/(benefit) 1,732 93 132 1,957 (759 ) - 1,198
Operating net income $2,827 $152 $216 $3,195 $1,936 -
$5,131 Operating net income per share: Basic
$0.13 $0.01 $0.01 $0.15 $0.09 - $0.24
Diluted (1)
$0.13 $0.01 $0.01 $0.14 $0.09 - $0.23
(1)
In 2013 and the first quarter of 2014, JMP Group issued
restricted share units, or RSUs, bearing non-forfeitable
distribution equivalent rights. GAAP requires RSUs with
non-forfeitable distribution equivalent rights to be included in
the diluted share count (without applying the treasury method).
Management presents a non-GAAP diluted share count for the period,
in keeping with the presentation for quarters not impacted by this
GAAP requirement for such RSUs. The non-GAAP diluted share count
reflects the impact of such RSUs under the treasury method, which
is consistent with the calculation of the dilutive impact of all
other RSUs outstanding. On a GAAP basis, diluted EPS for the
quarter ended March 31, 2015, was calculated using the weighted
average number of basic shares outstanding, instead of diluted
shares outstanding, because the company had a net loss and was thus
required to use the less dilutive share count. The weighted average
number of diluted shares outstanding on for the quarter was
22,728,162; given that denominator, operating net income per
diluted share would remain $0.23.
Book Value per ShareAt March 31, 2015, JMP Group’s book value
per share was $6.14, as set forth below.
(in thousands, except per share amounts) Mar. 31, 2015
Dec. 31, 2014 Mar. 31, 2014 Shareholders'
equity $130,431 $132,597 $130,373 Book value per share $6.14
$6.25 $5.97 Basic shares outstanding 21,229 21,216 21,833
Quarterly operating ROE (1)
15.6% 13.5% 13.6%
LTM operating ROE (1)
12.9% 12.4% 11.4%
(1)
Operating return on equity (ROE) equals operating net income
divided by average shareholders’ equity.
Share Repurchase ActivityJMP Group did not repurchase any
of its common shares during the quarter. At March 31, 2015,
approximately 0.6 million shares remained eligible for
repurchase under the company’s existing repurchase
authorization.
Cautionary Note Regarding Quarterly Financial ResultsDue
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 StatementsThis
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 December 31, 2014, as filed
with the U.S. Securities and Exchange Commission on March 13, 2015,
as well as in the similarly captioned sections of other periodic
reports filed by the company under the Exchange Act. The Form 10-K
for the year ended December 31, 2014, and all other periodic
reports are available on JMP Group’s website at www.jmpg.com and on
the SEC’s website at www.sec.gov. Unless required by law, JMP Group
undertakes no obligation to publicly update or revise any
forward-looking statement to reflect circumstances or events after
the date of this press release.
Conference CallJMP Group will hold a conference call to
discuss the results detailed herein at 10:00 a.m. EDT on Friday,
April 24, 2015. To participate in the call, dial (888) 566-6060
(domestic) or (973) 200-3100 (international). The conference
identification number is 32727130.
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 JMP GroupJMP Group LLC is an investment banking and
asset management firm that provides investment banking, equity
research, and sales and trading services to corporate and
institutional clients as well as alternative asset management
products and services to institutional and high-net-worth
investors. JMP Group conducts its investment banking and research,
sales and trading activities through JMP Securities; its hedge fund
and other investment activities though Harvest Capital Strategies;
the underwriting and management of investments in senior secured
debt through JMP Credit Advisors; and the management of Harvest
Capital Credit Corporation (NASDAQ: HCAP), a business development
company that finances small and midsized businesses, through HCAP
Advisors. For more information, visit www.jmpg.com.
JMP GROUP LLC Consolidated Statements of Financial
Condition
(Unaudited)
(in thousands) Mar. 31, 2015 Dec. 31, 2014
Assets Cash and cash equivalents $49,337 $101,362 Restricted
cash and deposits 75,164 67,102 Marketable securities owned, at
fair value 36,952 29,466 Other investments 87,930 208,947 Loans
held for investment, net of allowance for loan losses 1,952 1,997
Loans collateralizing asset-backed
securities issued, net of allowance for loan losses
1,031,613 1,038,848 Deferred tax assets 11,509 10,570 Other assets
44,554 57,900 Total assets $1,339,011 $1,516,192 Liabilities
and Shareholders' Equity Liabilities: Marketable securities
sold, but not yet purchased, at fair value $17,677 $15,048 Accrued
compensation 10,853 54,739 Asset-backed securities issued 995,046
1,001,137 Bond payable 94,300 94,300 Deferred tax liability 21,129
19,161 Other liabilities 39,274 42,878 Total liabilities 1,178,279
1,227,263 Stockholders' Equity: Total JMP Group Inc.
shareholders' equity 130,431 132,597 Non-redeemable non-controlling
interest 30,301 156,332 Total equity 160,732 288,929 Total
liabilities and shareholders' equity $1,339,011 $1,516,192
JMP
GROUP LLC Consolidated Statements of Operations
(Unaudited)
Quarter Ended (in thousands, except per share amounts) Mar.
31, 2015 Mar. 31, 2014 Revenues: Investment banking
$20,694 $25,053 Brokerage 6,065 6,656 Asset management fees 4,662
5,544 Principal transactions 3,744 (3,693 ) Gain/(loss) on sale,
payoff and mark-to-market of loans (578 ) 380 Net dividend income
191 235 Other income 740 222 Non-interest revenues
35,518 34,397 Interest income 12,777 8,588
Interest expense (7,288 ) (4,828 ) Net interest income 5,489
3,760 Provision for loan losses (57 ) (497 ) Total
net revenues 40,950 37,660 Non-interest
expenses: Compensation and benefits 27,064 31,376 Administration
1,692 1,722 Brokerage, clearing and exchange fees 798 925 Travel
and business development 938 851 Communications and technology 970
948 Occupancy 813 825 Professional fees 974 807 Depreciation 226
227 Other 530 212 Total non-interest expense 34,005
37,893 Net income/(loss) before income tax
expense 6,945 (233 ) Income tax expense 7,000 1,696
Net income/(loss) (55 ) (1,929 )
Less: Net income/(loss) attributable to
non-redeemable non-controlling interests
1,837 (5,927 ) Net income/(loss) attributable to JMP Group
LLC ($1,892 ) $3,998 Net income/(loss) attributable
to JMP Group LLC per share: Basic ($0.09 ) $0.17 Diluted ($0.09 )
$0.17 Weighted average common shares outstanding: Basic
21,216 21,820 Diluted 21,216 23,612
Investor Relations ContactJMP Group LLCAndrew Palmer,
415-835-8978apalmer@jmpg.comorMedia Relations ContactsDukas
Public RelationsSeth Linden, 212-704-7385seth@dukaspr.comorZach
Leibowitz, 212-704-7385zach@dukaspr.com
JMP (NYSE:JMP)
Historical Stock Chart
From Jun 2024 to Jul 2024
JMP (NYSE:JMP)
Historical Stock Chart
From Jul 2023 to Jul 2024