EFH Empire Financial Holding

Revenue Increase of 62% LONGWOOD, Fla., May 15 /PRNewswire-FirstCall/ -- Empire Financial Holding Company (AMEX:EFH), a full service brokerage and investment banking firm serving retail and institutional clients, today reported sharply increased revenues in the first quarter ended March 31, 2007. Revenues for the First Quarter ended March 31, 2007 were $13,959,635, an increase of 62% for the same period in 2006. The net loss for the period was $2,088,429 compared to a profit of $548,865 for the same period in 2006 or $(0.20) per basic and diluted share in 2007, compared to $0.08 per basic share and $0.05 fully diluted for the same period in 2006. Total shareholders' equity of $17,585,304 at March 31, 2007 was more than $8.8 million higher than the shareholders' equity reported at March 31, 2006. The Company has withdrawn its earnings guidance for 2007 stating "due to the uncertainty of the timing of regulatory approval to further consolidate its Jesup and Empire brands coupled with the unpredictability of the markets and market conditions that any previously provided guidance cannot be relied upon and we will not be providing any new guidance at this time." The first quarter ended March 31, 2007 included non cash charges of $974,506 compared to $15,626 for the first quarter of 2006. "First quarter results demonstrate the initial success of our merger with Jesup and Lamont in November 2006 but also disappointments accomplishing expense reductions," said Donald A. Wojnowski Jr., Empire Financial Holding Company President and CEO. "We hope to achieve expense reductions as we move forward seeking regulatory approval for the consolidation of certain back office functions and elimination of redundant expenses incurred at our two wholly owned Broker Dealers subsidiaries." The Company will host a conference call on Wed May 16 at 8:30 AM EDT. The dial-in number is 1-800-531-3250 -- PIN-3689703. About Empire Financial Holding Company Empire Financial Holding Company, through its wholly owned subsidiaries, Empire Financial Group, Inc. and Jesup & Lamont, provides full-service retail brokerage services through its network of independently owned and operated and Company owned and operated offices. 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 advisor custodial services through its wholly owned subsidiaries, Empire Investment Advisors, Inc. and Jesup & Lamont. 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 risk, 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. EMPIRE FINANCIAL HOLDING COMPANY CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL CONDITION (UNAUDITED) March 31, 2007 Assets: Cash and cash equivalents ........................... $4,055,566 Marketable securities owned, at market value ........ 3,711,292 Securities not readily marketable, at estimated fair value ......................................... 1,042,108 Commissions and other receivables from clearing organization ....................................... 1,151,275 Deposits at clearing organization ................... 1,550,562 Furniture and equipment, net ........................ 776,416 Prepaid expenses and other assets ................... 3,744,066 Deferred tax assets ................................. 2,117,000 Cash in escrow ...................................... 350,000 Notes receivable .................................... 587,070 Intangible assets, net .............................. 17,213,288 ------------ Total assets ...................................... $36,298,643 ============ Liabilities and stockholders' equity Liabilities: Accounts payable, accrued expenses and other liabilities ........................................ $3,014,889 Due to clearing organizations ....................... 3,072,047 Securities sold, but not yet purchased, at market value .............................................. 563,000 Line of credit payable .............................. 1,800,000 Notes payable ....................................... 10,202,837 Deferred rent payable ............................... 60,566 ------------ Total liabilities ................................. 18,713,339 ------------ Commitments and Contingencies Stockholders' equity: Convertible preferred stock, series C and F, $.01 par value 1,000,000 shares authorized 811,665 issued and outstanding ..................... $8,117 Common stock, $.01 par value 100,000,000 shares authorized 11,008,068 shares issued and outstanding ........................................ 110,081 Additional paid-in capital .......................... 25,515,632 Accumulated deficit ................................. (8,048,526) ------------ Total stockholders' equity ........................ 17,585,304 ------------ Total liabilities and stockholders' equity ........ $ 36,298,643 ============ EMPIRE FINANCIAL HOLDING COMPANY AND SUBSIDIARIES (UNAUDITED) CONDENSED CONSOLIDATED STATEMENTS OF INCOME THREE MONTHS ENDED THREE MONTHS ENDED March 31, March 31, 2007 2006 ------------------ ------------------ Revenues: Commissions and fees ......... $9,945,163 $ 4,577,496 Trading income ............... 2,421,148 3,500,125 Investment banking income .... 1,593,324 535,000 ------------ ------------ 13,959,635 8,612,621 ------------ ------------ Expenses: Employee compensation and benefits .................... 4,037,024 2,566,746 Commissions and clearing costs ....................... 9,215,802 4,109,684 General and administrative 1,952,530 924,674 Communications and data processing .................. 221,104 68,399 ------------ ------------ 15,426,460 7,669,503 ------------ ------------ Income (loss) from operations .. (1,466,825) 943,118 Other income (expenses): Interest income .............. 21,138 57,286 Interest expense ............. (608,709) (28,334) ------------ ------------ (587,571) 28,952 ------------ ------------ Income (loss) before income taxes ......................... (2,054,396) 972,070 Less: Provision for income taxes ....................... 0 (375,164) ------------ ------------ Net income (loss) ............ (2,054,396) 596,906 Preferred stock dividends .... (34,033) (48,041) ------------ ------------ Net income (loss) applicable to common shareholders ...... $ (2,088,429) $ 548,865 ============ ============ Basic and diluted earnings (loss) per share applicable to common shareholders: Earnings (loss) per share-basic and diluted ............... $ (0.20) $ 0.08 ============ ============ Earnings (loss) per share diluted ................... $ (0.20) $ 0.05 ============ ============ Weighted average shares outstanding: Basic .................... 10,519,933 6,853,561 ============ ============ Diluted .................. 10,519,933 10,548,354 ============ ============ DATASOURCE: Empire Financial Holding Company CONTACT: Donald A. Wojnowski, Jr., President of Empire Financial Holding Company, +1-407-774-1300, ext. 1141, or fax, +1-407-774-1300, Web site: http://www.empirenow.com/

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