RECAST (Tables)

9 Months Ended

Dec. 31, 2022

Accounting Changes and Error Corrections [Abstract]

The previously issued Condensed Consolidated Balance Sheet as of March 31, 2022, and Condensed Consolidated Statement of Operations and Statements of Other Comprehensive Income for the three and nine months ended December 31, 2021, have been revised as follows:


	As of March 31, 2022
	As previously reported		FF Life acquisition		Elimi-nations		FF Insurance acquisition		Elimi-nations		Recast discontinued operations		As recasted
ASSETS
Cash and cash equivalents	$	625,547	$	1,427	$	(901)	$	371	$	(82)	$	(400,898)	$	225,464
Trading securities	1,203,479		8,875		—		68,520		—		(122,497)		1,158,377
Restricted cash	553,680		—		—		—		—		(5,730)		547,950
Margin lending, brokerage and other receivables, net	357,567		173		(34)		60		(20)		(210,087)		147,659
Loans issued	94,797		44		—		—		—		(2,395)		92,446
Other assets	37,725		7,267		—		427		—		(18,375)		27,044
Fixed assets, net	21,365		182		—		254		—		(3,978)		17,823
Right-of-use asset	15,669		532		—		152		—		(8,922)		7,431
Intangible assets, net	5,791		1,489		—		161		—		(2,278)		5,163
Goodwill	5,388		359		—		151		—		—		5,898
Available-for-sale securities, at fair value	1		161,363		—		—		—		—		161,364
Insurance contract assets	—		3,555		—		2,157		—		—		5,712
Assets held for sale	—		—		—		—		—		825,419		825,419


TOTAL ASSETS	$	2,921,009	$	185,266	$	(935)	$	72,253	$	(102)	$	50,259	$	3,227,750

LIABILITIES AND SHAREHOLDERS’ EQUITY
Securities repurchase agreement obligations	$	775,178	$	47,691	$	—	$	49,824	$	—	$	(32,469)	$	840,224
Customer liabilities	1,417,937		—		(901)		—		(82)		(651,326)		765,628
Margin lending and trade payables	45,229		—		—		21		(20)		(147)		45,083
Liabilities from insurance activity	—		106,329		—		13,161		—		—		119,490
Current income tax liability	14,556		—		—		—		—		—		14,556
Securities sold, not yet purchased – at fair value	14,103		—		—		—		—		(238)		13,865
Debt securities issued	99,027		—		—		—		—		(64,637)		34,390
Lease liability	15,315		543		—		176		—		(8,530)		7,504
Liability arising from continuing involvement	6,447		—		—		—		—		—		6,447
Other liabilities	25,542		550		(35)		292		—		(4,872)		21,477
Liabilities held for sale	—		—		—		—		—		812,478		812,478
TOTAL LIABILITIES	$	2,413,334	$	155,113	$	(936)	$	63,474	$	(102)	$	50,259	$	2,681,142
Commitments and Contingent Liabilities (Note 26)	—		—		—		—		—		—		—

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		9,465		(9,465)		15,577		(15,577)		—		59
Additional paid in capital	141,340		—		16,499		—		16,906		—		174,745
Retained earnings	426,563		28,131		(6,666)		(4,811)		(1,293)		—		441,924
Accumulated other comprehensive loss	(53,291)		(7,443)		(368)		(1,987)		(36)		—		(63,125)
TOTAL FRHC SHAREHOLDERS’ EQUITY	$	514,671	$	30,153	$	—	$	8,779	$	—	$	—	$	553,603

Non-controlling interest	(6,996)		1		—		—		—		—		(6,995)
TOTAL SHAREHOLDERS’ EQUITY	$	507,675	$	30,154	$	—	$	8,779	$	—	$	—	$	546,608

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	2,921,009	$	185,267	$	(936)	$	72,253	$	(102)	$	50,259	$	3,227,750


	Three months ended December 31, 2021
	As previously reported *		FF Life acquisition		Elimi-nations		FF Insurance acquisition		Elimi-nations		Recast discontinued operations		As restated
Revenue:
Fee and commission income	$	117,316	$	—	$	—	$	(3)	$	—	$	(25,905)	$	91,408
Net gain on trading securities	403		490		—		159		—		6,611		7,663
Interest income	27,828		6,534		—		2,324		—		(3,029)		33,657
Insurance underwriting income	—		18,030		—		3,364		—		—		21,394
Net gain on foreign exchange operations	451		239		—		16		—		655		1,361
Net loss on derivative	(314)		—		—		—		—		—		(314)
TOTAL REVENUE, NET	145,684		25,293		—		5,860		—		(21,668)		155,169



Expense:
Fee and commission expense	22,716		3,946		—		196		—		(2,076)		24,782
Interest expense	20,799		1,606		—		1,850		—		(2,365)		21,890
Insurance claims incurred, net of reinsurance	—		13,246		—		3,040		—		—		16,286
Operating expense	50,496		1,681		—		1,657		—		(22,253)		31,581
Provision for impairment losses	45		—		—		(365)		—		(13)		(333)
Other expense, net	(64)		1,073		—		—		—		(30)		979
TOTAL EXPENSE	93,992		21,552		—		6,378		—		(26,737)		95,185

INCOME/(LOSS) BEFORE INCOME TAX	51,692		3,741		—		(518)		—		5,069		59,984

Income tax (expense)/benefit	(806)		12				(50)				(962)		(1,806)

INCOME/(LOSS) FROM CONTINUING OPERATIONS	50,886		3,753		—		(568)		—		4,107		58,178

Loss before income tax (expense)/benefit of discontinued operation	—		—		—		—		—		(5,067)		(5,067)

Income tax benefit of discontinued operations	—		—		—		—		—		962		962

Loss from discontinued operation	—		—		—		—				(4,105)		(4,105)

NET INCOME/LOSS	$	50,886	$	3,753	$	—	$	(568)	$	—	$	2	$	54,073

Less: Net loss attributable to non-controlling interest in subsidiary	(343)		—		—		—		—		—		(343)

NET INCOME/(LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	51,229	$	3,753	$	—	$	(568)	$	—	$	2	$	54,416

OTHER COMPREHENSIVE INCOME
Change in unrealized gain on investments available-for-sale, net of tax effect	—		(1,063)		—		—		—		—		(1,063)
Reclassification adjustment for net realized gain on available-for-sale investments disposed of in the period, net of tax effect	—		953		—		—		—		—		953
Foreign currency translation adjustments	(7,336)		(1,284)		—		(2,702)		—		2,672		(8,650)

OTHER COMPREHENSIVE LOSS	(7,336)		(1,394)		—		(2,702)		—		2,672		(8,760)


COMPREHENSIVE INCOME/(LOSS) BEFORE NON-CONTROLLING INTERESTS	$	43,550	$	2,359	$	—	$	(3,270)	$	—	$	2,674	$	45,313

Less: Comprehensive loss attributable to non-controlling interest in subsidiary	(343)		—		—		—		—		—		(343)

COMPREHENSIVE INCOME/(LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	43,893	$	2,359	$	—	$	(3,270)	$	—	$	2,674	$	45,656

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 0.98, (0.09), and 0.91 for basic and diluted EPS for continuing operations, discontinued operations, and total EPS, respectively.


	Nine months ended December 31, 2021
	As previously reported *		FF Life acquisition		Elimi-nations		FF Insurance acquisition		Elimi-nations		Recast discontinued operations		As restated
Revenue:
Fee and commission income	$	327,966	$	—	$	(91)	$	86	$	(161)	$	(65,251)	262,549
Net gain on trading securities	185,554		1,090		—		1,587		—		9,716		197,947
Net realized loss on investments available for sale	—				—		—		—		—		—
Interest income	69,259		16,634		—		6,541		—		(9,920)		82,514
Insurance underwriting income	—		42,091		—		9,400		—		—		51,491
Net gain on foreign exchange operations	885		277		—		26		—		2,888		4,076
Net loss on derivative	(1,028)		—		—		—		—		—		(1,028)
TOTAL REVENUE, NET	582,636		60,092		(91)		17,640		(161)		(62,567)		597,549

Expense:
Fee and commission expense	67,547		7,074		(91)		558		(161)		(6,301)		68,626
Interest expense	51,256		3,604		—		4,816		—		(6,824)		52,852
Insurance claims incurred, net of reinsurance	—		31,862		—		9,234		—		—		41,096
Operating expense	117,384		4,293		—		4,935		—		(53,840)		72,772
Provision for impairment losses	704		—		—		297		—		(90)		911
Other expense/(income), net	600		1,949		—		(3)		—		(120)		2,426
TOTAL EXPENSE	237,491		48,782		(91)		19,837		(161)		(67,175)		238,683

INCOME BEFORE INCOME TAX	345,145		11,310		—		(2,197)		—		4,608		358,866

Income tax expense	(38,037)		11		—		(57)		—		(943)		(39,026)

INCOME FROM CONTINUING OPERATIONS	307,108		11,321		—		(2,254)		—		3,665		319,840

Income/(loss) before income tax(expense)/benefit of discontinued operation	—		—		—		—		—		(4,609)		(4,609)

Income tax (expense)/benefit of discontinued operations	—		—		—		—		—		953		953



Income from discontinued operation	—		—		—		—		—		(3,656)		(3,656)

NET INCOME	$	307,108	$	11,321	$	—	$	(2,254)	$	—	$	9	$	316,184

Less: Net loss attributable to non-controlling interest in subsidiary	(415)		—		—		—		—		—		(415)
NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	307,523	11,321		—		(2,254)		—		$	9	$	316,599

OTHER COMPREHENSIVE INCOME
Change in unrealized gain on investments available-for-sale, net of tax effect	—		(1,789)		—		—		—		—		(1,789)
Reclassification adjustment relating to available-for-sale investments disposed of in the period, net of tax effect	—		1,606		—		—		—		—		1,606
Foreign currency translation adjustments	(3,106)		(1,213)		—		(2,702)				2,574		(4,447)

OTHER COMPREHENSIVE INCOME	(3,106)		(1,396)		—		(2,702)		—		2,574		(4,630)

COMPREHENSIVE INCOME BEFORE NON-CONTROLLING INTERESTS	$	304,002	$	9,925	$	—	$	(4,956)	$	—	$	2,583	$	311,554

Less: Comprehensive loss attributable to non-controlling interest in subsidiary	(415)		—		—		—		—		—		(415)

COMPREHENSIVE INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS	304,417		9,925		—		(4,956)		—		2,583		311,969

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 5.40, (0.08), and 5.34 for 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.