EFH Empire Financial Holding

Quarter Reflects Revenue Increase of 56% and EPS Of $0.19 Including One Time Gain LONGWOOD, Fla., Nov. 15 /PRNewswire-FirstCall/ -- Empire Financial Holding Company (AMEX:EFH), a full service brokerage firm, today reported financial results for the third quarter and nine months ended September 30, 2005. Net income for the third quarter was $1,565,144 or $0.19 per share fully diluted, compared to a net loss of ($387,240) or ($0.12) loss per share fully diluted for the same period in 2004. The net income for the quarter includes a one time gain from a deferred tax asset of $1,396,000. The third quarter 2005 results increased shareholder equity by $1,539,345. Total shareholder equity is $2,944,059. For the nine months ended September 30, 2005 net income was $1,853,070, or $0.34 per share fully diluted, compared to a net loss of $1,259,963, restated, or ($0.39) loss per share fully diluted, for the same period in 2004. Total revenues for the three months ended September 30, 2005 were $6,447,000 for an increase of 57%, compared to revenues of 4,142,861 for the same period in 2004. Total operating expenses for the three months ended September 30, 2005 were $6,247,364 compared to total operating expenses of $4,523,351 for the same period in 2004. The increase in expenses was primarily due to higher commissions and clearing costs and general and administrative expenses compared to the same period last year. Total revenues for the nine months ended September 30, 2005 were $17,699,996 an increase of $2,561,764, or 16.9%, compared to revenues of $15,138,232 restated, for the same period in 2004. Total operating expenses for the nine months ended Sept. 30, 2005 were $17,193,797 compared to total operating expenses of $16,377,945 for the same period in 2004. At September 30, 2005, the Company had total assets of $6,395,082 the majority of which consisted of cash and cash equivalents, trading account securities purchased not yet sold and receivables from brokers, dealers and clearing organizations arising from customer-related securities transactions. Stockholders' equity was $2,944,059 at September 30, 2005, representing an improvement of $1,539,345 from a stockholders' equity of $1,404,714, at June 30, 2005, primarily due a one time gain from a net deferred tax asset of $1,396,000 and to improved earnings. Empire Financial Holding Company President and CEO Donald A. Wojnowski Jr. commented, "We are pleased with our progress, and we are focused on executing our plan. For the quarter we realized continued profitability and improvement to the balance sheet. During the quarter we continued to invest in our infrastructure and opened up three new offices and expanded our investment banking division in New York City. Our experienced management team closely monitors business and market conditions and expenses, and will work to improve margins and profits for our shareholders." About Empire Financial Holding Company Empire Financial Holding Company, through its wholly owned subsidiary, Empire Financial Group, Inc., provides full-service retail brokerage services through its network of independently owned and operated offices and discount retail securities brokerage via both the telephone and the Internet. Through its market-making and trading division, the Company offers securities order execution services for unaffiliated broker dealers and makes markets in domestic and international securities. Empire Financial also provides Investment Banking services for clients as well as turn-key fee based investment advisory and registered investment advisor custodial services through its wholly owned subsidiary, Empire Investment Advisors, Inc. Forward-Looking Statement Disclaimer This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties or other factors which may cause actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Factors that might cause such a difference include, without limitation, fluctuations in the volume of transactional services provided by the Company, competition with respect to financial services commission rates, the effect of general economic and market conditions, factors affecting the securities brokerage industry as well as other risks and uncertainties detailed from time to time in the Company's Securities and Exchange Commission filings. Contact. Donald A. Wojnowski Jr. President Empire Financial Holding Company Phone: 407-774-1300 Fax: 407-830-5078 EMPIRE FINANCIAL HOLDING COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENT OF FINANCIAL CONDITION (Unaudited) SEPTEMBER 30, 2005 ASSETS Cash and cash equivalents................................. $ 1,060,968 Trading account securities purchased not yet sold, at fair value............................................ 1,276,270 Receivables from brokers and dealers and clearing organizations................................... 1,537,909 Deposits at clearing organization......................... 613,619 Furniture and equipment, net of accumulated depreciation.. 156,617 Prepaid expenses and other assets......................... 78,699 Deferred tax asset........................................ 1,396,000 Restricted cash........................................... 275,000 ----------- TOTAL ASSETS.......................................... $ 6,395,082 =========== LIABILITIES AND SHAREHOLDERS' EQUITY LIABILITIES: Notes payable........................................... 1,102,807 Accounts payable, accrued expenses and other liabilities 1,191,851 Trading account securities, sold not yet bought, at fair value.......................................... 409,132 Payable to brokers, dealers and clearing organization... 747,233 ----------- TOTAL LIABILITIES................................. 3,451,023 ----------- CONTINGENCIES SHAREHOLDERS' EQUITY: Convertible preferred stock, series B, C, and D $.01 par value, 1,000,000 shares authorized; 16,062 issued and outstanding........................ 161 Common stock, $.01 par value, 100,000,000 shares authorized; 6,370,170 shares issued and outstanding.............. 63,700 Additional paid-in capital.............................. 9,084,685 Deferred compensation................................... (41,849) Accumulated deficit..................................... (6,162,638) ----------- TOTAL SHAREHOLDERS' EQUITY............................ 2,944,059 ----------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY............. $ 6,395,082 =========== See accompanying selected notes to the consolidated financial statements. EMPIRE FINANCIAL HOLDING COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) THREE MONTHS THREE MONTHS ENDED ENDED September 30, September 30, 2004 2005 (RESTATED) ------------- ------------ REVENUES: Commissions and fees..................... $ 4,143,363 $ 3,188,026 Trading income........................... 2,009,452 885,691 Interest................................. 64,258 39,144 Investment banking income................ 120,000 -- Other.................................... 109,927 30,000 ----------- ----------- 6,447,000 4,142,861 ----------- ----------- EXPENSES: Employee compensation and benefits....... 1,112,805 943,537 Commissions and clearing costs........... 4,452,681 3,184,778 General and administrative............... 576,027 345,156 Interest................................. 38,932 13,895 Communications and data processing....... 66,919 35,985 ----------- ----------- 6,247,364 4,523,351 ----------- ----------- Income (loss) before provision for income tax.............................. 199,636 (380,490) Provision for tax benefits............... 1,384,000 -- ----------- ----------- Net income (loss)........................ 1,583,636 (380,490) Accrued preferred stock dividend......... (18,492) (6,750) ----------- ----------- Net income (loss) applicable to common shareholders............................. $ 1,565,144 $ (387,240) =========== =========== Basic and diluted earnings per share applicable to common shareholders: Earnings (loss) per share-basic and diluted $ 0.25 $ (0.12) =========== =========== Earnings (loss) per share-diluted........ $ 0.19 $ (0.12) =========== =========== Weighted average shares outstanding: Basic................................. 6,370,170 3,194,450 =========== =========== Diluted............................... 8,522,601 3,194,450 =========== =========== See accompanying selected notes to the consolidated financial statements. EMPIRE FINANCIAL HOLDING COMPANY AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) NINE MONTHS NINE MONTHS ENDED ENDED SEPTEMBER 30, SEPTEMBER 30, 2004 2005 (RESTATED) ------------- ------------ REVENUES: Commissions and fees .................... $12,240,206 $11,939,214 Trading income........................... 4,813,481 2,974,360 Interest................................. 151,628 122,204 Investment banking income................ 253,910 -- Other.................................... 240,771 102,454 ----------- ----------- 17,699,996 15,138,232 ----------- ----------- EXPENSES: Employee compensation and benefits....... 3,502,849 2,758,475 Commissions and clearing costs .......... 11,267,691 11,220,519 General and administrative .............. 2,142,770 2,245,753 Interest ................................ 121,481 69,935 Communications and data processing....... 159,006 83,263 ----------- ----------- 17,193,797 16,377,945 ----------- ----------- Income (loss) before provision for income tax.............................. 506,199 (1,239,713) Provision for tax benefits............... 1,384,000 -- ----------- ----------- Net income (loss)........................ 1,890,199 (1,239,713) Accrued preferred stock dividend......... (37,129) (20,250) ----------- ----------- Net income (loss) applicable to common shareholders............................ $ 1,853,070 $(1,259,963) =========== =========== Basic and diluted earnings per share applicable to common shareholders: Earnings (loss) per share-basic.......... $ 0.39 $ (0.39) =========== =========== Earnings (loss) per share-diluted........ $ 0.34 $ (0.39) =========== =========== Weighted average shares outstanding: Basic.............................. 4,772,065 3,194,450 =========== =========== Diluted............................ 5,399,468 3,194,450 =========== =========== See accompanying selected notes to the consolidated financial statement. DATASOURCE: Empire Financial Holding Company CONTACT: Donald A. Wojnowski Jr., President of Empire Financial Holding Company, +1-407-774-1300, or fax, +1-407-830-5078,

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