If you need an argument for securitizing your unguaranteed small business loans, PMC Capital can give you millions of them.

Thanks to a $3.3 million gain from selling the unguaranteed portion its loan portfolio, the Dallas-based nonbank lender reported record earnings of $4.7 million in the fourth quarter. That was an increase of 111% over the $2.2 million the company earned in the year-earlier period. For the year, the company earned $12 million, a 29% gain over 1993.

Earnings per share for the fourth quarter amounted to 44 cents, up from 21 cents a year earlier. For the year, PMC earned $1.12 a share, a 25-cent increase.

The boost in earnings was aided by a $3.3 million after-tax gain from the securitization and December sale of $25 million of the unguaranteed portion of loans backed by the U.S. Small Business Administration. The company had already sold the guaranteed portion of those same SBA loans into the secondary market.

The securities were rated Aaa by Moody's Investors Service. The sale was handled by Llama Co. of Fayetteville, Ark., an investment banking firm owned by Alice Walton, heiress to the Wal-Mart fortune, and SunTrust Bank in Atlanta.

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