Fifth Street Finance: The Best Surprise Is No Surprise

No great surprise in Fifth Street Finance’s (FSC) results for the quarter ended December 2009 (see press release here). As expected, Net Investment Income Per Share (NIIPS) dropped from $0.26 to $0.22, thanks to the dilution from the company’s extra shares: up 24% on average shares outstanding. Yes, the earnings per share are 8 cents below the recently announced 30 cents a quarter dividend, but FSC has plenty of dry powder to spend to bring the two metrics back in sync before long. FSC has been adding assets at a rapid clip: $138mn in just the last 3 months. The momentum should continue in the months ahead. We calculate that the company only needs to add that many more assets in the next quarter to bring earnings in line with the dividend. (Of course that doesn’t take into account the new equity raised just a few weeks ago). FSC has $150mn in SBIC money to spend, $11mn in cash, undrawn amounts on its revolver and another line of credit being negotiated. [Read the full article]

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Student loan company Nelnet Inc. has approved a new executive bonus plan that’s not tied to the company’s credit rating, so it will be easier for the company’s leaders to receive bonuses.

Nelnet said in documents filed with the Securities and Exchange Commission Tuesday that the Lincoln, Neb.-based company’s board had approved a new bonus plan.

Nelnet says CEO Michael Dunlap didn’t receive a bonus in 2008 or 2009 because his incentive plan said no bonuses would be paid unless the company maintained its investment-grade credit ratings. Nelnet’s credit was downgraded in October 2008.

Nelnet says the board will now determine Dunlap’s bonus based on his performance, but his bonus cannot exceed his $500,000 salary. [Read the full article]

The newly released Javelin Strategy & Research 2010 Identity Fraud Survey Report reveals that the number of identity fraud victims in the United States has jumped by 12 percent to 11.1 million adults” the  highest increase to-date since the survey started in 2003″ while the total overall fraud amount increased by 12.5 percent to $54 billion.  An increase in non-card frauds and computer-based crimes confirms recent trends of increasingly sophisticated criminal activity.

Intersections Inc. (Nasdaq: INTX) a leading provider of consumer and corporate identity theft prevention services, is a co-sponsor of Javelin’s Identity Fraud Survey Report for the second year in a row.  The survey is the nation’s longest-running study of identity fraud, with more than 29,000 U.S. respondents over the past seven years.  In November 2009, Javelin conducted telephone interviews with 5,000 U.S. [Read the full article]

CapitalSource Inc. (NYSE: CSE) will issue its earnings results for the fourth quarter and full year of 2009 on Thursday, February 25, 2010 before the markets open.

A conference call to discuss the results will be hosted on Thursday, February 25, 2010 at 8:30 a.m. EST. Analysts and investors interested in participating are invited to call (866) 843-0890 from within the United States or (412) 317-9250 from outside the United States, with passcode 8576523. A webcast of the call will be available on the Investor Relations section of the CapitalSource web site at

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A telephonic replay will also be available from approximately 12 noon EST February 25, 2010 through March 5, 2010. Please call (877) 344-7529 from the United States or (412) 317-0088 from outside the United States with passcode 437836.  An audio replay will also be available on the Investor Relations section of the CapitalSource website. [Read the full article]

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