Quarterly report pursuant to Section 13 or 15(d)

RECAST

v3.23.1
RECAST
 9 Months Ended
Dec. 31, 2021
Accounting Changes and Error Corrections [Abstract]  
Recast RECAST
When preparing the condensed consolidated financial statements as of September 30, 2022 and for the three and six months ended September 30, 2022, management determined that certain amounts included in the Company’s condensed consolidated financial statements as of December 31, 2021, and 2020, required revision, because the assets and liabilities to be disposed of in connection with the planned sale of Freedom RU and Freedom Bank RU met the held for sale criteria, such subsidiaries are presented as discontinued operations in accordance with ASC 205 and 360 in the condensed consolidated financial statements as of December 31, 2021 and for the three and nine months ended December 31, 2021 and in the corresponding periods of 2020 for comparative purposes. For additional information see Note 22 Assets and Liabilities held for sale to the condensed consolidated financial statements.

The previously issued Condensed Consolidated Balance Sheets as of December 31, 2021, and March 31, 2021 and Condensed Consolidated Statement of Operations and Statements of Other Comprehensive Income for the three and nine months ended December 31, 2021, and 2020 have been revised as follows:
As of December 31, 2021
As previously reported Recast discontinued operations As recasted
ASSETS
Cash and cash equivalents $ 493,263  $ (346,905) $ 146,358 
Trading securities 1,348,656  (400,823) 947,833 
Restricted cash 404,718  12,025  416,743 
Brokerage and other receivables, net 302,403  (108,245) 194,158 
Loans issued 44,995  (2,556) 42,439 
Other assets 30,321  (6,291) 24,030 
Fixed assets, net 21,221  (3,822) 17,399 
Right-of-use asset 17,830  (10,904) 6,926 
Intangible assets, net 8,703  (5,031) 3,672 
Goodwill 7,840  —  7,840 
Available-for-sale securities, at fair value 1  —  1 
Assets held for sale —  919,592  919,592 
TOTAL ASSETS $ 2,679,951  $ 47,040  $ 2,726,991 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Securities repurchase agreement obligations $ 710,284  $ (82,791) $ 627,493 
Customer liabilities 1,145,070  (592,055) 553,015 
Trade payables 51,031  (656) 50,375 
Current income tax liability 20,620  (41) 20,579 
Securities sold, not yet purchased – at fair value 15,167  —  15,167 
Loans received 3,497  —  3,497 
Debt securities issued 105,363  (71,716) 33,647 
Lease liability 17,573  (10,542) 7,031 
Deferred income tax liabilities 1  1,485  1,486 
Deferred distribution payments 8,534  —  8,534 
Liabilities held for sale —  809,727  809,727 
Other liabilities 11,321  (6,371) 4,950 
TOTAL LIABILITIES 2,088,461  47,040  2,135,501 
Commitments and Contingent Liabilities (Note 30) —  —  — 
SHAREHOLDERS’ EQUITY
Preferred stock - $0.001 par value; 20,000,000 shares authorized, no shares issued or outstanding
 —  —  — 
Common stock - $0.001 par value; 500,000,000 shares authorized;
59  —  59 
Additional paid in capital 115,278  —  115,278 
Retained earnings 516,149  —  516,149 
Accumulated other comprehensive loss (39,152) —  (39,152)
TOTAL EQUITY ATTRIBUTABLE TO THE COMPANY 592,334  —  592,334 
Non-controlling interest (844) —  (844)
TOTAL SHAREHOLDERS’ EQUITY 591,490  —  591,490 
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 2,679,951  $ 47,040  $ 2,726,991 
As of March 31, 2021
As previously reported Recast discontinued operations As recasted
ASSETS
Cash and cash equivalents $ 698,828  $ (530,811) $ 168,017 
Trading securities 736,188  (148,642) 587,546 
Restricted cash 437,958  52,733  490,691 
Brokerage and other receivables, net 64,801  (15,283) 49,518 
Loans issued 11,667  (2,041) 9,626 
Other assets 19,902  (4,263) 15,639 
Fixed assets, net 18,385  (2,814) 15,571 
Right-of-use asset 13,262  (8,636) 4,626 
Intangible assets, net 9,785  (5,883) 3,902 
Goodwill 7,868  (731) 7,137 
Available-for-sale securities, at fair value 1  —  1 
Assets held for sale —  748,048  748,048 
TOTAL ASSETS $ 2,018,645  $ 81,677  $ 2,100,322 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Securities repurchase agreement obligations $ 426,715  $ (51,997) $ 374,718 
Customer liabilities 1,163,697  (491,872) 671,825 
Trade payables 22,304  (302) 22,002 
Current income tax liability 14,843  (644) 14,199 
Securities sold, not yet purchased – at fair value 8,592  (23) 8,569 
Loans received 3,373  —  3,373 
Debt securities issued 68,443  (37,094) 31,349 
Lease liability 13,249  (8,438) 4,811 
Deferred income tax liabilities 4,385  (378) 4,007 
Deferred distribution payments 8,534  —  8,534 
Liabilities held for sale —  676,568  676,568 
Other liabilities 8,850  (4,143) 4,707 
TOTAL LIABILITIES 1,742,985  81,677  1,824,662 
Commitments and Contingent Liabilities (Note 30) —  —  — 
SHAREHOLDERS’ EQUITY
Preferred stock - $0.001 par value; 20,000,000 shares authorized, no shares issued or outstanding
 —  —  — 
Common stock - $0.001 par value; 500,000,000 shares authorized;
58  —  58 
Additional paid in capital 104,672  —  104,672 
Retained earnings 208,617  —  208,617 
Accumulated other comprehensive loss (36,046) —  (36,046)
TOTAL EQUITY ATTRIBUTABLE TO THE COMPANY 277,301  —  277,301 
Non-controlling interest (1,641) —  (1,641)
TOTAL SHAREHOLDERS’ EQUITY 275,660  —  275,660 
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 2,018,645  $ 81,677  $ 2,100,322 
Three months ended December 31, 2021
As previously reported* Recast discontinued operations As recasted
Revenue:
Fee and commission income $ 117,316  $ (25,905) $ 91,411 
Net gain on trading securities 403  6,611  7,014 
Interest income 27,828  (3,029) 24,799 
Net (loss)/gain on foreign exchange operations 451  655  1,106 
Net loss on derivative (314) —  (314)
TOTAL REVENUE, NET 145,684  (21,668) 124,016 
Expense:
Fee and commission expense 22,716  (2,076) 20,640 
Interest expense 20,799  (2,365) 18,434 
Operating expense 50,496  (22,253) 28,243 
Provision for impairment losses 45  (13) 32 
Other expense, net (64) (30) (94)
TOTAL EXPENSE 93,992  (26,737) 67,255 
INCOME BEFORE INCOME TAX 51,692  5,069  56,761 
Income tax expense (806) (962) (1,768)
INCOME FROM CONTINUING OPERATIONS 50,886  4,107  54,993 
Income/(loss) before income tax (expense)/benefit of discontinued operations —  (5,067) (5,067)
Income tax (expense)/benefit of discontinued operations —  962  962 
Income/(loss) from discontinued operation —  (4,105) (4,105)
NET INCOME 50,886  2  50,888 
Less: Net loss attributable to non-controlling interest in subsidiary (343) —  (343)
NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS $ 51,229  $ 2  $ 51,231 
OTHER COMPREHENSIVE INCOME
Reclassification adjustment for net realized gain on available-for-sale investments disposed of in the period, net of tax effect —  —  — 
Foreign currency translation adjustments, net of tax effect (7,336) 2,672  (4,664)
OTHER COMPREHENSIVE INCOME/(LOSS) (7,336) 2,672  (4,664)
COMPREHENSIVE INCOME BEFORE NON-CONTROLLING INTERESTS $ 43,550  $ 2,674  $ 46,224 
Less: Comprehensive loss attributable to non-controlling interest in subsidiary (343) —  (343)
COMPREHENSIVE INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS $ 43,893  $ 2,674  $ 46,567 
For the three months ended December 31, 2021, the Company’s EPS as reported was 0.86 for basic and diluted EPS. Due to the items noted above, the Company’s EPS has been recast to 0.93, (0.07), and 0.86 for basic and diluted EPS for continuing operations, discontinued operations, and total EPS, respectively.
Three months ended December 31, 2020
As previously reported* Recast discontinued operations As recasted
Revenue:
Fee and commission income $ 72,484  $ (14,385) $ 58,099 
Net gain on trading securities 18,944  (4,972) 13,972 
Interest income 9,223  (3,999) 5,224 
Net (loss)/gain on foreign exchange operations (1,413) 1,516  103 
Net gain on derivative 995  (49) 946 
TOTAL REVENUE, NET 100,233  (21,889) 78,344 
Expense:
Fee and commission expense 20,278  (1,983) 18,295 
Interest expense 6,649  (3,426) 3,223 
Operating expense 21,921  (11,583) 10,338 
Provision for impairment losses 1,109  (157) 952 
Other expense, net 244  (229) 15 
TOTAL EXPENSE 50,201  (17,378) 32,823 
INCOME BEFORE INCOME TAX 50,032  (4,511) 45,521 
Income tax expense (7,711) 1,112  (6,599)
INCOME FROM CONTINUING OPERATIONS 42,321  (3,399) 38,922 
Income before income tax expense of discontinued operations —  4,511  4,511 
Income tax expense of discontinued operations —  (1,112) (1,112)
Income from discontinued operations —  3,399  3,399 
NET INCOME 42,321  —  42,321 
Less: Net loss attributable to non-controlling interest in subsidiary (53) —  (53)
NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS $ 42,374  $ —  $ 42,374 
OTHER COMPREHENSIVE INCOME
Reclassification adjustment for net realized gain on available-for-sale investments disposed of in the period, net of tax effect —  —  — 
Foreign currency translation adjustments, net of tax effect 6,851  —  6,851 
OTHER COMPREHENSIVE INCOME 6,851  —  6,851 
COMPREHENSIVE INCOME BEFORE NON-CONTROLLING INTERESTS $ 49,172  $ —  $ 49,172 
Less: Comprehensive loss attributable to non-controlling interest in subsidiary (53) —  (53)
COMPREHENSIVE INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS $ 49,225  $ —  $ 49,225 
For the three months ended December 31, 2020, the Company’s EPS as reported was 0.73 for basic and diluted EPS. Due to the items noted above, the Company’s EPS has been recast to 0.67, 0.06, and for basic and diluted EPS for continuing operations, discontinued operations, and 0.73, 0.72 for basic and diluted total EPS, respectively.
Nine months ended December 31, 2021
As previously reported* Recast discontinued operations As recasted
Revenue:
Fee and commission income $ 327,966  $ (65,251) $ 262,715 
Net gain on trading securities 185,554  9,716  195,270 
Interest income 69,259  (9,920) 59,339 
Net (loss)/gain on foreign exchange operations 885  2,888  3,773 
Net loss on derivative (1,028) —  (1,028)
TOTAL REVENUE, NET 582,636  (62,567) 520,069 
Expense:
Fee and commission expense 67,547  (6,301) 61,246 
Interest expense 51,256  (6,824) 44,432 
Operating expense 117,384  (53,840) 63,544 
Provision for impairment losses 704  (90) 614 
Other expense, net 600  (120) 480 
TOTAL EXPENSE 237,491  (67,175) 170,316 
INCOME BEFORE INCOME TAX 345,145  4,608  349,753 
Income tax expense (38,037) (943) (38,980)
INCOME FROM CONTINUING OPERATIONS 307,108  3,665  310,773 
Income/(loss) before income tax (expense)/benefit of discontinued operations —  (4,609) (4,609)
Income tax (expense)/benefit of discontinued operations —  953  953 
Income/(loss) from discontinued operations —  (3,656) (3,656)
NET INCOME 307,108  9  307,117 
Less: Net loss attributable to non-controlling interest in subsidiary (415) —  (415)
NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS $ 307,523  $ 9  $ 307,532 
OTHER COMPREHENSIVE INCOME
Reclassification adjustment for net realized gain on available-for-sale investments disposed of in the period, net of tax effect —  —  — 
Foreign currency translation adjustments, net of tax effect (3,106) 2,574  (532)
OTHER COMPREHENSIVE INCOME/(LOSS) (3,106) 2,574  (532)
COMPREHENSIVE INCOME BEFORE NON-CONTROLLING INTERESTS $ 304,002  $ 2,583  $ 306,585 
Less: Comprehensive loss attributable to non-controlling interest in subsidiary (415) —  (415)
COMPREHENSIVE INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS 304,417  2,583  307,000 
For the nine months ended December 31, 2021, the Company’s EPS as reported was 5.18 for basic and diluted EPS. Due to the items noted above, the Company’s EPS has been recast to 5.25, (0.06), and 5.18 for basic and diluted EPS for continuing operations, discontinued operations, and total EPS, respectively.
Nine months ended December 31, 2020
As previously reported* Recast discontinued operations As recasted
Revenue:
Fee and commission income $ 169,590  $ (33,603) $ 135,987 
Net gain on trading securities 36,330  (17,087) 19,243 
Interest income 18,930  (7,168) 11,762 
Net gain on foreign exchange operations 1,359  (1,217) 142 
Net gain on derivative 149  (88) 61 
TOTAL REVENUE, NET 226,358  (59,163) 167,195 
Expense:
Fee and commission expense 50,068  (4,297) 45,771 
Interest expense 15,092  (6,290) 8,802 
Operating expense 52,214  (29,978) 22,236 
Provision for impairment losses 1,775  (202) 1,573 
Other expense/(income), net 149  (206) (57)
TOTAL EXPENSE 119,298  (40,973) 78,325 
INCOME BEFORE INCOME TAX 107,060  (18,190) 88,870 
Income tax expense (16,900) 5,202  (11,698)
INCOME FROM CONTINUING OPERATIONS 90,160  (12,988) 77,172 
Income before income tax expense of discontinued operations —  18,190  18,190 
Income tax expense of discontinued operations —  (5,202) (5,202)
Income from discontinued operations —  12,988  12,988 
NET INCOME 90,160  —  90,160 
Less: Net income attributable to non-controlling interest in subsidiary 243  —  243 
NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS $ 89,917  $ —  $ 89,917 
OTHER COMPREHENSIVE INCOME
Reclassification adjustment for net realized gain on available-for-sale investments disposed of in the period, net of tax effect 71  —  71 
Foreign currency translation adjustments, net of tax effect 4,565  —  4,565 
OTHER COMPREHENSIVE INCOME 4,636  —  4,636 
COMPREHENSIVE INCOME BEFORE NON-CONTROLLING INTERESTS $ 94,796  $ —  $ 94,796 
Less: Comprehensive income attributable to non-controlling interest in subsidiary 243  —  243 
COMPREHENSIVE INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS $ 94,553  $ —  $ 94,553 
For the nine months ended December 31, 2020, the Company’s EPS as reported was 1.54 for both basic and diluted EPS. Due to the items noted above, the Company’s EPS has been recast to 1.32, 0.22, and 1.54 for both basic and diluted EPS for continuing operations, discontinued operations, and total EPS, respectively.
*amounts with restatement in fee and commission income and interest income, for more information please see Note 4 Restatement.