JMP Group Reports First Quarter 2009 Financial Results

Business Wire, May 07, 2009

SAN FRANCISCO -- JMP Group Inc. (NYSE:JMP), an investment banking and alternative asset management firm, reported financial results today for the quarter ended March 31, 2009.

Financial Highlights

• Net income was $33,945, or $0.00 per diluted share, for the quarter ended March 31, 2009, compared to $0.7 million, or $0.03 per diluted share, for the quarter ended March 31, 2008.
• Operating net income was $0.6 million, or $0.03 per diluted share, for the quarter ended March 31, 2009, compared to $0.9 million, or $0.04 per diluted share, for the quarter ended March 31, 2008. For more information on operating net income, including a reconciliation to net income, please see the sections below titled “Non-GAAP Financial Measures” and “Operating Net Income.”
• Total revenues were $25.0 million for the first quarter of 2009, compared to $19.8 million for the first quarter of 2008.
• Investment banking revenues were $4.1 million for the first quarter of 2009, compared to $8.1 million for the first quarter of 2008.
• Net brokerage revenues were $8.5 million for the first quarter of 2009, compared to $8.1 million for the first quarter of 2008.
• Asset management-related fee revenues were $8.7 million for the first quarter of 2009, compared to $3.3 million for the first quarter of 2008. Asset management-related fee revenues include asset management fees as well as fee revenues reported in the company’s financial statements as other income (comprised of asset management fundraising fees generated by JMP Group’s broker-dealer affiliate, JMP Securities, and revenues from fee-sharing arrangements with other asset managers) but exclude net investment income reported as principal transaction revenues. Fee revenues classified as other income were $0.3 million and $0.5 million for the first quarters of 2009 and 2008, respectively.
• Client assets under management at March 31, 2009 totaled $501.9 million, compared to $356.7 million at March 31, 2008.
• Principal transactions generated a net realized and unrealized gain of $2.9 million for the first quarter of 2009, compared to a net realized and unrealized loss of $1.4 million for the first quarter of 2008.

“While continued distress in the global capital markets is beyond our control, we were able to execute on our plan and achieve modest levels of profitability balanced with opportunistic growth in the first quarter,” said Chairman and Chief Executive Officer Joe Jolson. “Our operating earnings of $0.03 per share were primarily attributable to strong fund performance across the board at our Harvest Capital Strategies subsidiary and continued market share gains in our institutional brokerage business, somewhat offset by depressed investment banking revenues and additions to our loan loss reserve. Since year-end, we have continued to attract senior producers to our platform, as demonstrated by a nine percent year-to-date net increase in headcount. We remain optimistic that efforts to selectively recruit top producers to JMP in investment banking, sales and trading, research and asset management will be successful during the current industry downturn. In the past few months, we have also closed strategic investments in two new growth platforms: HuaMei Capital Company, our joint venture with China Merchants Securities and MVC Capital; and, more recently, Cratos Capital Partners, a middle-market, corporate credit alternative asset manager.”

First Quarter 2009 Revenues

Investment Banking

Total investment banking revenues were $4.1 million for the quarter, a decrease of 49.2% from $8.1 million for the quarter ended March 31, 2008. The company executed six investment banking transactions during the quarter, compared to eight transactions during the first quarter of 2008. Investment banking revenues equaled 16.4% of total revenues, compared to 41.0% in the quarter ended March 31, 2008.

Public equity underwriting revenues were $1.1 million, down from $2.5 million for the first quarter of 2008, as the company executed two public equity offerings, versus four a year ago. Private placement fee revenues were $0.3 million, down from $3.6 million for the first quarter of 2008, with the company executing one private placement, compared to two a year earlier. Strategic advisory revenues were $2.7 million, up from $2.0 million for the first quarter of 2008, with the company acting as a strategic advisor on three completed transactions, versus two a year ago.

Brokerage

Net brokerage revenues were $8.5 million, an increase of 4.9% from $8.1 million for the quarter ended March 31, 2008. Net brokerage revenues equaled 34.1% of total revenues, compared to 41.2% in the first quarter of 2008.