JMP Group LLC (NYSE:JMP), an investment banking and alternative
asset management firm, reported financial results today for the
quarter ended March 31, 2016.
- Operating net income was $2.2 million,
or $0.10 per diluted share, a decrease of 57.9% from
$5.1 million, or $0.23 per share, for the first quarter of
2015. For more information about operating net income, including a
reconciliation to net income attributable to JMP Group, see the
section below titled “Non-GAAP Financial Measures.”
- Adjusted net revenues, which exclude
certain non-cash items and non-controlling interests, were $36.6
million, a decrease of 2.6% from $37.6 million for the first
quarter of 2015. For more information about adjusted net revenues,
including a reconciliation to net revenues, see the section below
titled “Non-GAAP Financial Measures.”
- Net income attributable to JMP Group
under generally accepted accounting principles, or GAAP, was $1.8
million, or $0.08 per diluted share, compared to a net loss of $1.9
million, or $0.09 per share, for the first quarter of 2015.
- Total net revenues on a GAAP basis were
$38.6 million, compared to $41.0 million for the first quarter of
2015.
“JMP Group produced a better-than-expected first quarter,
despite the continued headwind of a volatile capital markets
environment, thanks to record quarterly strategic advisory
revenues,” said Chairman and Chief Executive Officer Joe Jolson.
“Operating earnings per share were $0.10, more than double the
$0.04 we made in the fourth quarter of last year. The sharp
sell-off in the markets to start 2016 primarily hurt our equity
capital markets revenues and our returns on our principal
investment activities. Our ECM fees for the quarter fell more than
60% from near-record levels a year earlier, while net corporate
income, which is net investment income less corporate costs, was
modestly above break-even after contributing significantly to
earnings in 2015. The recent upswing in the capital markets, if
sustained, could bode well for our ECM business later in 2016.
Meanwhile, the investment we have been making to grow our strategic
advisory business appears to be gaining traction.”
Segment Results of Operations
At JMP Securities, the broker-dealer segment, adjusted net
revenues were $24.4 million, a decrease of 8.8% from $26.8 million
for the first quarter of 2015. JMP Securities’ operating margin on
adjusted net revenues was 9.8%, compared to 17.0% for first quarter
of 2015.
For the asset management segment, adjusted net revenues were
$10.2 million, an increase of 59.7% from $6.4 million for first
quarter of 2015. JMP Group lost 0.8% for the quarter on the capital
invested by the company in hedge funds managed by Harvest Capital
Strategies, compared to declines of 1.7% and 1.5% by the HFRI
Equity Hedge (Total) and Russell 2000 indices, respectively. JMP
Group’s net return on invested capital managed by JMP Credit
Advisors was 4.7%, compared to 5.6% for the first quarter of
2015.
A summary of JMP Group’s operating net income per share by
segment for the quarter ended March 31, 2016, and for comparable
prior periods is set forth below.
Quarter Ended ($ as shown) Mar. 31, 2016 Dec. 31,
2015 Mar. 31, 2015 Broker-dealer $0.07 ($0.14 ) $0.13 Asset
management 0.02 0.05 0.02 Operating platform EPS 0.09 (0.10
) 0.14 Net corporate income 0.01 0.14 0.09 Operating EPS
(diluted) $0.10 $0.04 $0.23
Note: Due to
rounding, numbers in columns above may not sum to totals
presented.
For more information about 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 Banking
Investment banking revenues were $18.3 million, a decrease of
11.6% from $20.7 million for the first quarter of 2015.
A summary of the company’s investment banking revenues and
transaction counts for the quarter ended March 31, 2016, and for
comparable prior periods is set forth below.
Quarter Ended Mar. 31, 2016 Dec. 31, 2015 Mar.
31, 2015 ($ in thousands) Count Revenues Count
Revenues Count Revenues Public equity 10 $6,224 11 $4,682 34
$16,595 Debt and convertible securities - 50 2 1,021 5 857 Private
capital markets and other - 4 1 (79 ) 1 547
Strategic advisory
4 12,018 2 3,549 4 2,695 Total 14 $18,296 16 $9,173
44 $20,694
Brokerage
Net brokerage revenues were $6.1 million, in line with $6.1
million for the first quarter of 2015.
Asset Management
Asset management-related fee revenues were $8.9 million, an
increase of 81.9% from $4.9 million for the first quarter of 2015.
For more information about asset management-related fee revenues,
see the section below titled “Non-GAAP Financial Measures.”
Client assets under management at March 31, 2016, totaled $2.3
billion, including $1.2 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 $2.3 billion at December 31,
2015, and $2.0 billion at March 31, 2015. Including sponsored funds
in which Harvest Capital Strategies owns an economic interest,
client assets under management totaled $2.7 billion at March 31,
2016.
At March 31, 2016, private capital, including corporate credit,
small business lending, venture capital and real estate-related
advisory services, represented 68.4% of client assets under
management, including sponsored funds.
Principal Transactions
Principal transactions generated a net realized and unrealized
gain of $0.9 million, compared to $3.7 million for the first
quarter of 2015. For more information about principal transaction
revenues, see the section below titled “Non-GAAP Financial
Measures.”
Collateralized Loan Obligations
At March 31, 2016, discounts and reserves (including liquidity
discounts, allowances for loan losses and deferred loan fees)
equaled $15.5 million, or 1.6% of gross performing loans managed by
JMP Credit Advisors. At March 31, 2015, such discounts and reserves
equaled $12.1 million, or 1.2% of gross performing loans
outstanding. There were no impaired loans at the end of either
period.
The net loan loss provision for the quarter was $0.6 million,
and at March 31, 2016, general loan loss reserves equaled 0.6% of
gross performing loans managed by JMP Credit Advisors.
Net Interest Income
Net interest income was $4.4 million, compared to $5.5 million
for the first quarter of 2015.
Expenses
Compensation and Benefits
Compensation and benefits expense was $27.4 million, compared to
$27.1 million for the first quarter of 2015. 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 74.1% of adjusted net
revenues, compared to 66.1% for the first quarter of 2015. Further
excluding compensation expense related to hedge fund incentive
fees, the compensation ratio was 70.7%, compared to 66.0% for the
first quarter of 2015.
For more information about compensation ratios, see the section
below titled “Non-GAAP Financial Measures.”
Non-Compensation Expense
Non-compensation expense was $7.8 million, compared to $6.9
million for the first quarter of 2015.
Book Value per Share
At March 31, 2016, JMP Group’s book value per share was $5.79,
as set forth below.
(in thousands, except per share amounts) Mar. 31, 2016
Dec. 31, 2015 Mar. 31, 2015 Shareholders'
equity $122,736 $125,112 $130,431 Book value per share $5.79
$5.77 $6.14 Basic shares outstanding 21,201 21,681 21,229
Quarterly operating ROE (1) 7.0% 3.2% 15.6% LTM operating
ROE (1) 7.2% 9.3% 12.9% (1) Operating return on equity (ROE)
equals operating net income divided by average shareholders’
equity. For more information about operating net income, including
a reconciliation to net income attributable to JMP Group, see the
section below titled “Non-GAAP Financial Measures.”
Share Repurchase Activity
During the quarter ended March 31, 2016, JMP Group repurchased
487,417 shares of its common stock at an aggregate price of $2.6
million, or $5.39 per share. At quarter-end, 794,613 shares
remained eligible for repurchase under the company's repurchase
authorization.
Personnel
At March 31, 2016, the company had 232 full-time employees,
compared to 247 at December 31, 2015, and 233 at March 31,
2015.
Non-GAAP Financial Measures
In 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 a more 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 Revenue
Adjusted net revenue is a non-GAAP financial measure that (i)
reverses the general loan loss provision taken with regard to
certain CLOs, (ii) excludes real estate-related depreciation
expense, (iii) reverses net unrealized gains or losses on strategic
equity investments and warrants, (iv) reverses net unrealized
mark-to-market gains or losses on investments related to deferred
compensation, and (v) excludes non-controlling interests in various
sources of revenue that are consolidated according to GAAP. In
particular, adjusted net revenue adjusts for:
- the non-specific loss provision
recorded with regard to loans held by JMP Credit Advisors CLO II
and JMP Credit Advisors III, which is required by GAAP;
- property depreciation expense resulting
from a commercial real estate investment;
- unrealized mark-to-market gains or
losses on the company’s strategic equity investments as well as
certain warrant positions;
- 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; and
- non-controlling interests in revenues
generated by consolidated entities, including HCAP Advisors and
CLOs managed by JMP Credit Advisors.
A reconciliation of JMP Group’s net revenues to its adjusted net
revenues for the quarter ended March 31, 2016, and for comparable
prior periods is set forth below.
Quarter Ended (in thousands) Mar. 31, 2016 Dec. 31,
2015 Mar. 31, 2015 Revenues: Non-interest revenues
$34,760 $27,755 $35,518 Net interest income 4,426 5,005 5,489 Loan
loss provision (631 ) (1,015 ) (57 ) Total net revenues 38,555
31,745 40,950 Add back/(subtract):
General loan loss provision –
collateralized loan obligations
407 602 91 Property depreciation – commercial real estate 330 102 -
Net unrealized (gain)/loss – strategic
equity investments and warrants
(329 ) 128 (1,020 )
Net unrealized mark-to-market (gain)/loss
– deferred compensation
(77 ) (390 ) 195 Non-controlling interests (2,270 ) (2,518 ) (2,619
) Adjusted net revenues $36,616 $29,669
$37,597
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 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.
A statement of JMP Group’s asset management-related fee revenues
for the quarter ended March 31, 2016, and for comparable prior
periods is set forth below.
Quarter Ended (in thousands) Mar. 31, 2016 Dec. 31,
2015 Mar. 31, 2015 Base management fees: Fees
reported as asset management fees $4,135 $4,172 $3,710 Less:
Non-controlling interest in HCAP Advisors (364 ) (362 ) (300 )
Total base management fees 3,771 3,810 3,410
Incentive fees: Fees reported as asset management fees 5,191
4,274 952 Less: Non-controlling interest in HCAP Advisors (263 )
(420 ) (194 ) Total incentive fees 4,928 3,854 758
Other fee income: Total fundraising and other fees
227 418 740 Asset management-related
fee revenues $8,926 $8,082 $4,908
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.
Adjusted Principal Transaction Revenues
Adjusted principal transaction revenue is a non-GAAP financial
measure that (i) reverses net unrealized gains and losses on
strategic equity investments and warrants and on investments
related to deferred compensation and (ii) excludes real
estate-related depreciation expense, in keeping with the
calculation of adjusted net revenue, as detailed above.
A summary of the company’s principal transaction revenues for
the quarter ended March 31, 2016, and for comparable prior
periods is set forth below.
Quarter Ended (in thousands) Mar. 31, 2016 Dec. 31,
2015 Mar. 31, 2015 Hedge fund investments ($600 )
$3,145 $1,379 Investment in Harvest Capital Credit Corporation 314
(128 ) 999 Investment in Harvest Growth Capital funds (7 ) (20 )
(22 ) Other principal investments 1,223 (749 ) 1,388
Total principal transaction revenues 930 2,248 3,744
Add back/(subtract):
Unrealized mark-to-market loss – strategic
equity investments and warrants
(329 ) 128 (1,020 )
Unrealized mark-to-market (gain) – net
deferred compensation
(77 ) (389 ) 194 Property depreciation – commercial real estate 330
102 - Total operating adjustments (76 ) (159 )
(826 ) Total adjusted principal transaction revenues $854
$2,089 $2,918
Company management utilizes adjusted principal transaction
revenue because it is a component of adjusted net revenue. The
exclusion of certain elements of principal transaction revenues, as
presented above, results in an adjusted measure that is included as
“Principal transactions” among JMP Group’s revenues in the non-GAAP
presentation of segment results of operations that appears below.
Management believes that adjusting principal transaction revenues
and total revenues in these ways is useful in that it allows for a
clearer understanding and comparison of JMP Group’s financial
results for the periods presented.
Compensation Ratio
A compensation ratio expresses compensation expense as a
percentage of net revenues in a given period. As utilized by JMP
Group, an adjusted compensation ratio is a non-GAAP financial
measure that employs adjusted net revenues as the denominator in
its calculation. Furthermore, this ratio adjusts the financial
impact of certain compensation-related and transaction-related
expenses that are or are not recognized under GAAP. In particular,
the adjusted compensation ratio reverses compensation expense and
unrealized mark-to-market gains or losses related to share-based
awards, deferred compensation and non-controlling interests (so
that the compensation expenses used in the numerator correspond to
the adjusted net revenues generated in the periods presented). In
addition, the company presents a further adjusted compensation
ratio that excludes any compensation related to incentive fees
generated by hedge funds, a majority of which is passed through to
the funds’ investment teams if earned.
A statement of JMP Group’s compensation ratio for the quarter
ended March 31, 2016, and for comparable prior periods is set forth
below.
Quarter Ended ($ in thousands) Mar. 31, 2016 Dec. 31,
2015 Mar. 31, 2015 Compensation Ratio Adjusted net
revenues $36,616 $29,669 $37,597
Compensation and benefits $27,425 $27,023 $27,064
Subtract/(add back): Compensation expense – stock options and SARs
215 417 674 Compensation expense – RSUs 252 588 407 Compensation
expense – deferred compensation (515 ) 2,433 1,069 Unrealized
mark-to-market gain – deferred compensation 77 390 (195 )
Compensation expense – non-controlling interest 278 280
267 Adjusted compensation and benefits $27,118
$22,915 $24,842 Adjusted ratio of
compensation expense to revenues 74.1 % 77.2 % 66.1 %
Compensation Ratio Excluding Hedge Fund Incentive Fees Adjusted net
revenues $36,616 $29,669 $37,597 Subtract: Compensation
expense – hedge fund incentive fees 4,228 3,318 68
Adjusted net revenues, excluding hedge
fund incentive fees
$32,388 $26,351 $37,529 Adjusted
compensation and benefits $27,118 $22,915 $24,842 Subtract:
Compensation expense – hedge fund incentive fees 4,228 3,318
68
Adjusted compensation and benefits,
excluding hedge fund incentive fees
$22,890 $19,597 $24,774
Adjusted ratio of compensation expense to
revenues, excluding hedge fund incentive fees (1)
70.7 % 74.4 % 66.0 % (1) Excluding a compensation charge of
$4.4 million at JMP Securities, the adjusted compensation ratio of
74.4% for the quarter ended December 31, 2015, would have been
61.1%.
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 Income
Operating net income is a non-GAAP financial measure that (i)
reverses compensation expense related to share-based awards and
deferred compensation, (ii) reverses the general loan loss
provision taken with regard to certain CLOs, (iii) excludes real
estate-related depreciation expense, (iv) reverses net unrealized
gains and losses on strategic equity investments and warrants, and
(v) assumes an effective tax rate. In particular, operating net
income adjusts for:
- the grant of RSUs and options;
- net deferred compensation, which
consists of (a) deferred compensation awarded in a given period but
recognized as a GAAP expense over the subsequent three years less
(b) GAAP expense recognized in a given period but already reflected
in the operating income of a prior period; the purpose of this
adjustment is to fully reflect compensation awarded in a given
year, notwithstanding the timing of GAAP expense;
- the non-specific loan loss provision
recorded with regard to loans held by JMP Credit Advisors CLO II
and JMP Credit Advisors III, which is required by GAAP;
- property depreciation expense resulting
from a commercial real estate investment;
- 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, 2016, and for comparable
prior periods is set forth below.
Quarter Ended Mar. 31, 2016 Dec. 31, 2015 Mar.
31, 2015 Net income/(loss) attributable to JMP Group $1,803
($1,151 ) ($1,892 ) Add back: Income tax expense/(benefit)
50 (3,572 ) 7,000 Income/(loss) before taxes 1,853
(4,723 ) 5,108 Add back/(subtract): Compensation expense –
stock options and SARs 215 417 674 Compensation expense – RSUs 252
588 407 Compensation expense – net deferred compensation (515 )
2,433 1,069
General loan loss provision/(reversal) –
collateralized loan obligations
407 602 91 Property depreciation – commercial real estate 330 102 -
Unrealized mark-to-market loss – strategic
equity investments and warrants
(329 ) 128 (1,020 ) Operating income/(loss) before taxes
2,213 (453 ) 6,329 Income tax expense/(benefit) 55
(1,469 ) 1,198 Operating net income $2,158 $1,016
$5,131 Operating net income per share: Basic
$0.10 $0.05 $0.24 Diluted (1) $0.10 $0.04 $0.23 Weighted
average shares outstanding: Basic 21,349 21,257 21,216 Diluted (1)
21,707 22,588 22,218 (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, the weighted average
number of diluted shares outstanding for the quarter ended March
31, 2016, was 21,865,254.
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 presentation of 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 real estate-related
depreciation expense, (iv) excludes non-controlling interests in
various sources of revenue that are consolidated according to GAAP,
and (v) 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
share-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, 2016, is set forth below.
Quarter Ended March 31, 2016 Net
Broker- Asset Operating Corporate Elimin- JMP (in thousands,
except per share amounts) Dealer Mgmt. Platforms Income ations
Group Revenues: Investment banking $18,296 - $18,296 - -
$18,296 Brokerage 6,095 - 6,095 - - 6,095 Asset management-related
fees - $10,176 10,176 $87 ($1,337 ) 8,926 Principal transactions -
- - 854 - 854 Gain on sale and payoff of loans - - - (362 ) - (362
) Net dividend income - - - 424 - 424 Net interest income - - -
2,371 - 2,371 Reversal of loan losses - - - 12 - 12
Adjusted net revenues 24,391 10,176 34,567 3,386 (1,337 )
36,616 Expenses: Non-interest expense/(income) 21,999 9,442
31,441 4,299 (1,337 ) 34,403 Operating income/(loss)
before taxes 2,392 734 3,126 (913 ) - 2,213 Income tax
expense/(benefit) 909 278 1,187 (1,132 ) - 55
Operating net income $1,483 $456 $1,939 $219 - $2,158
Operating net income per share: Basic $0.07 $0.02
$0.09 $0.01 - $0.10 Diluted (1) $0.07 $0.02 $0.09 $0.01 - $0.10 (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, the weighted average
number of diluted shares outstanding for the quarter was
21,865,254.
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 December
31, 2015, as filed with the U.S. Securities and Exchange Commission
on March 12, 2016, 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, 2015, 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 Call
JMP Group will hold a conference call to discuss the results
detailed herein at 10:00 a.m. EDT on Wednesday, April 20, 2016. To
participate in the call, dial (888) 566-6060 (domestic) or (973)
200-3100 (international). The conference identification number is
91810783.
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 Group
JMP 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, 2016 Dec. 31, 2015
Assets Cash and cash equivalents $53,821 $68,551 Restricted
cash and deposits 58,325 52,572 Marketable securities owned, at
fair value 27,438 28,493 Other investments 60,429 68,859 Loans held
for investment, net of allowance for loan losses 2,648 2,595
Loans collateralizing asset-backed
securities issued, net of allowance for loan losses
951,676 969,665 Cash collateral posted for total return swap 25,240
25,000 Deferred tax assets 9,625 8,315 Other assets 43,753 46,808
Total assets $1,232,955 $1,270,858 Liabilities and
Shareholders' Equity Liabilities: Marketable securities
sold, but not yet purchased, at fair value $13,373 $13,284 Accrued
compensation 13,460 39,470 Asset-backed securities issued, net of
issuance costs 918,998 930,224 Bond payable, net of issuance costs
91,470 91,825 Deferred tax liability 14,523 14,693 Other
liabilities 30,888 28,468 Total liabilities 1,082,712 1,117,964
Shareholders' Equity: Total JMP Group LLC shareholders'
equity 122,736 125,112 Non-redeemable non-controlling interest
27,507 27,782 Total equity 150,243 152,894 Total liabilities and
shareholders' equity $1,232,955 $1,270,858
JMP GROUP LLC
Consolidated Statements of Operations
(Unaudited)
Quarter Ended (in thousands, except per share amounts) Mar.
31, 2016 Mar. 31, 2015 Revenues: Investment banking
$18,296 $20,694 Brokerage 6,095 6,065 Asset management fees 9,326
4,662 Principal transactions 930 3,744 (Loss)/gain on sale, payoff
and mark-to-market of loans (376 ) (578 ) Net dividend income 263
191 Other income 226 740 Non-interest revenues 34,760
35,518 Interest income 12,401 12,777 Interest
expense (7,975 ) (7,288 ) Net interest income 4,426 5,489
Provision for loan losses (631 ) (57 ) Total net
revenues 38,555 40,950 Non-interest expenses:
Compensation and benefits 27,425 27,064 Administration 1,818 1,692
Brokerage, clearing and exchange fees 761 798 Travel and business
development 1,291 938 Communications and technology 1,016 970
Occupancy 936 813 Professional fees 1,073 974 Depreciation 332 226
Other 621 530 Total non-interest expense 35,273
34,005 Net income before income tax expense
3,282 6,945 Income tax expense 50 7,000 Net income
3,232 (55 ) Less: Net income attributable to non-redeemable
non-controlling interest 1,429 1,837 Net
income/(loss) attributable to JMP Group $1,803 ($1,892 )
Net income/(loss) attributable to JMP Group per share: Basic
$0.08 ($0.09 ) Diluted $0.08 ($0.09 ) Weighted average
common shares outstanding: Basic 21,349 21,216 Diluted 21,865
21,216
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version on businesswire.com: http://www.businesswire.com/news/home/20160419006562/en/
Investor Relations ContactJMP Group LLCAndrew Palmer,
415-835-8978apalmer@jmpg.comorMedia Relations ContactsDukas
Linden Public Relations, Inc.Seth Linden,
212-704-7385seth@dlpr.comBen Jaffe, 212-704-7385ben@dlpr.com
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