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First Islamic Investment Bank E.C., established in 1997, headquartered in Bahrain, with a U.S. subsidiary based in Atlanta, operates under an Investment Banking license granted by the Bahrain Monetary Agency. The Company has paid-up share capital of US$112.5 million provided by over 80 prominent individuals and institutions from the Middle East and Malaysia. The Bank's main lines of business are direct investment, real estate and asset management. Direct investment is operated through the US subsidiary, Crescent Capital Investments Inc. The Bank acts as principal and arranger in the acquisition of controlling interests in the United States, with the aim of achieving above average risk-adjusted returns upon divestiture. The Year in Brief Overall net income for the year increased by 28.3% to US$20.5 million (1999: US$16.0 million. Total revenues increased by 22.9% to US$41.3 million (1999: US$33.6 million. Total expenses increased by 17.8% to US$20.7 million (1999: US$17.6 million. Headcount increased from 61 to 69 during the year, reflecting current and expected business growth. Expenses as a ratio of net income were .50 (1999: .52). Total assets increased by 13.4% to US$193.4 million (1999: US$170.6 million). Return on average total assets was 11.3% (1999: 10.8%), while total equity increased by 6.9% to US$128.6 million (1999: US$120.3 million). A dividend of US$11.3 million, representing 10% of paid-in capital, was paid. The Bank contributed US$0.411 million to charity funds (1999: US$0.320 million) Business Highlights Two new direct investment transactions totalling US$109 million were completed. In October, the purchase of a 73% stake in Transportation Safety Technologies Inc., a manufacturer of specialty electrical components for the automotive industry in the U.S., for US$25.2 million; in December, the acquisition of an 88% stake in Caribou Coffee Company Inc., a leading non-franchised specialty retailer of premium coffee in the U.S. for US$83.8 million. To date, the Bank has acquired, together with co-investors, a portfolio of six companies in the U.S., run in partnership with existing management. The sale of Computer Generation Incorporated for a total of US$248 million was completed - an important milestone being the first investment cycle to be closed, generating an attractive return for clients. The remaining three direct investments continued to trade satisfactorily. Perception Group Inc., a major manufacturer of canoes and kayaks, performed well, achieving consistent growth with each major product line. DVT Corporation, a manufacturer of image sensors, showed a steady increase in sales. For B.R. Lee Industries Inc., a manufacture of commercial paving and road building equipment, efforts were focused on strengthening the management team and reorganising the sales and marketing operation. Real Estate was introduced during the year as a line of business. The first two transactions, totalling US$251.0 million, were joint ventures with Archstone Communities Trust, a leading developer and operator in the U.S. multi-family real estate sector, which historically has generated stable, risk-adjusted returns for investors. The Bank's infrastructure and resources were strengthened during the year with critical investments made in information technology and communications capabilities, as well as expansion of the Atlanta office.
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