Empire Financial Reports Results for 2006

* 2006 Record Revenues up 59% over 2005




LONGWOOD, Fla., April 2  /PRNewswire-FirstCall/ -- Empire Financial Holding Company (AMEX:EFH), a brokerage and investment banking firm serving retail and institutional clients, today reported financial results for the year ended December 31, 2006.  Income from operations was $489,938 compared to $112,349 in 2005.

Revenues for the year ended December 31, 2006 increased by 59% to $35,642,045 from $22,485,731 in 2005.  Net income was $10,651 compared to $2,462,481 in 2005, a year which included a one time tax benefit of $2,117,000 and a one time gain of $452,000 from the sale of a customer list.  Net loss applicable to common shareholders, after preferred stock dividends of $231,372, was ($220,721) in 2006 compared to net income applicable to common shareholders of $2,294,969 in 2005 or ($0.03) per basic and diluted share in 2006 and $0.44 and $0.38 during 2005.

Shareholder equity improved by 247% in 2006 to $17.96 million from $5.17 million in 2005.

Revenues for the fourth quarter ended December 31, 2006 increased by 167% to $12.8 million from $4.8 million in 2005.

For the fourth quarter ended December 31, 2006 the Company had a net loss applicable to common shareholders of ($105,041) or ($0.01) per share compared to net income of $441,899, or $0.09 per basic share and $0.08 per diluted share, during the same period in 2005, which included a one time tax benefit of $733,000 and a one time gain of $452,000 from the sale of a customer list during the quarter.  For the fourth quarter ended December 31, 2006 the Company incurred non-cash charges approximating $822,000 related primarily to warrant and stock option amortization, compared to $64,000 during the same period in 2005.

"We believe 2006 was a seminal year in our growth and development as a company," commented Donald A. Wojnowski Jr., President and CEO.  "The Company's merger with Jesup & Lamont, the growth of our Trading and execution business, the first year of Investment Banking revenues and the continued development of infrastructure has laid the base for continued growth in 2007," Wojnowski added, "We believe we are making significant strides in building a model that through varied but symbiotic business lines we can produce systematic revenue and profit growth both organically and through acquisition allowing us to continue to build shareholders value."

About Empire Financial Holding Company:

Empire Financial Holding Company, through its wholly owned subsidiaries, Empire Financial Group, Inc., and Jesup & Lamont Securities Corporation, provides full-service retail brokerage services through its network of employee and independently 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 investment advisor custodial services through its wholly owned subsidiaries, Empire Investment Advisors, Inc., and Jesup & Lamont Securities Corporation.

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 risks, 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
                CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
                              December 31, 2006

  Assets:

    Cash and cash equivalents ................................    $990,085
    Marketable securities owned, at market value .............   4,893,488
    Securities not readily marketable, at estimated
     fair value ..............................................     882,005
    Commissions receivable from clearing organizations .......   2,081,806
    Other receivables ........................................   1,306,468
    Deposits at clearing organizations .......................   1,533,774
    Furniture and equipment, net .............................     636,621
    Prepaid expenses and other assets ........................   1,352,396
    Deferred tax assets ......................................   2,117,000
    Cash in escrow ...........................................     350,000
    Notes receivable .........................................   4,792,578
    Intangible assets, net ...................................  12,849,529
                                                               -----------

        Total assets ......................................... $33,785,750
                                                               ===========

  Liabilities and stockholders' equity

  Liabilities:

    Accounts payable, accrued expenses and other
     liabilities .............................................  $4,790,974
    Due to clearing organizations ............................   2,161,881
    Securities sold, but not yet purchased, at
     market value ............................................   1,399,230
    Notes payable ............................................   7,473,200
                                                               -----------

         Total liabilities ................................... $15,825,285
                                                               -----------

  Commitments and contingencies

  Stockholders' equity:

    Convertible preferred stock, series C and F
     $.01 par value 1,000,000 shares authorized
     873,201 issued and outstanding ..........................      $8,732
    Common stock, $.01 par value
     100,000,000 shares authorized 10,365,216
     shares issued and outstanding ...........................     103,649
    Additional paid-in capital ...............................  23,808,181
    Accumulated deficit ......................................  (5,960,097)
                                                               -----------

        Total stockholders' equity ........................... $17,960,465
                                                               -----------

        Total liabilities and stockholders' equity ........... $33,785,750
                                                               ===========



               EMPIRE FINANCIAL HOLDING COMPANY AND SUBSIDIARIES
                    CONSOLIDATED STATEMENTS OF OPERATIONS

                                      TWELVE MONTHS         TWELVE MONTHS
                                          ENDED                 ENDED
                                       December 31,          December 31,
                                           2006                  2005
                                      -------------         -------------

  Revenues:
    Commissions and fees ..........     $20,373,890           $16,767,506
    Trading income ................      11,724,530             5,451,815
    Investment banking income .....       3,543,625               266,410
                                      -------------          ------------

                                         35,642,045            22,485,731
                                       ------------          ------------

  Expenses:
    Employee compensation
     and benefits .................      10,927,254             4,789,976
    Commissions and clearing
     costs ........................      19,181,312            15,070,113
    General and administrative ....       4,662,492             2,287,449
    Communications and data
     processing ...................         381,049               225,844
                                       ------------          ------------

                                         35,152,107            22,373,382
                                       ------------          ------------

  Income from operations ..........         489,938               112,349
                                       ------------          ------------

  Other income (expenses):
    Interest income ...............         432,949               210,386
    Interest expense ..............        (912,236)             (154,254)
    Income from sale of customer
     list .........................              --               452,000
    Provision for SEC settlement ..              --              (275,000)
                                       ------------          ------------

                                           (479,287)              233,132
                                       ------------          ------------

  Income before income taxes ......          10,651               345,481
  Income tax benefit ..............              --             2,117,000
                                       ------------          ------------
  Net income ......................          10,651             2,462,481

  Preferred stock dividends .......        (231,372)             (167,512)
                                       ------------          ------------

  Net income (loss) applicable to
   common shareholders ............       $(220,721)           $2,294,969
                                       ============          ============

  Basic and diluted earnings (loss)
   per share applicable to common
   stockholders:

    Earnings (loss) per share-basic
     and diluted ..................          $(0.03)                $0.44
                                       ============          ============
    Earnings (loss) per share
     diluted ......................          $(0.03)                $0.38
                                       ============          ============

  Weighted average shares outstanding:
    Basic .........................       7,102,379             5,160,133
                                       ============          ============
    Diluted .......................       7,102,379             6,084,538
                                       ============          ============


DATASOURCE: Empire Financial Holding Company



CONTACT:  Donald A. Wojnowski, Jr., President of Empire Financial Holding

Company, [phone], ext. 1141, or fax, [phone],

 

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