Emergent Capital, Inc. Announces Second Quarter 2017 Results

BOCA RATON, Fla., Aug. 14, 2017 /PRNewswire/ -- Emergent Capital, Inc. (OTCQB: EMGC) ("Emergent" or the "Company"), today announced its financial results for the three and six month periods ended June 30, 2017.

Three Months Ended June 30, 2017

Total income from continuing operations was $3.5 million for the three month period ended June 30, 2017 compared to a loss of $15.8 million for the same period in 2016. Income from continuing operations for the three months ended June 30, 2016 was significantly impacted by the adoption of the U.S. Society of Actuaries 2015 Valuation Basic Table("2015 VBT"), which resulted in a reduction in the fair value of the Company's life settlements by approximately $17.6 million. Income was also impacted by a $2.7 million gain on the maturity of three policies during the quarter ended June 30, 2017 compared to a $2.5 million gain on maturity of two policies for the same period in 2016.

The following table provides a summary of the components of income from the Company's life settlements.

Total expenses from continuing operations were $9.9 million for the three month period ended June 30, 2017 compared to income of $6.0 million for the same period in 2016. Expenses for the quarter ended June 30, 2016 were primarily impacted by the adoption of the 2015 VBT, which resulted in a  $15.7 million reduction for the change in the fair value of the White Eagle and Red Falcon Revolving Credit Facilities (together, the "Revolving Credit Facilities".) Expenses for the quarter ended June 30, 2017 were also impacted by a $778,000 increase in interest expense associated with increased borrowings on the Company's White Eagle Revolving Credit Facility, which was offset by a reduction in operating expenses of $2.7 million primarily related to a decrease in legal fees and personnel costs.

The Company reported a net loss from continuing operations of $6.5 million, or $(0.23) per diluted share for the three month period ended June 30, 2017, compared to $9.8 million, or $(0.36) per diluted share for the same period in 2016.

Six Months Ended June 30, 2017

Total income from continuing operations for the six month period ended June 30, 2017 was $29.0 million compared to a loss of $7.3 million during the same period in 2016. The increase is primarily due to the adoption of the 2015 VBT during the six months ended June 30, 2016, which reduced the fair value of the Company's life settlements by $17.6 million, and an $8.2 million increase in realized gains due to policy maturities.

The following table provides a summary of the components of income from the Company's life settlements.

Total expenses from continuing operations were $33.6 million for the six month period ended June 30, 2017 compared to $9.9 million for the same period in 2016. Expenses during the six months ended June 30, 2016 were significantly impacted by the adoption of the 2015 VBT, which resulted in a $15.7 million reduction in the fair value of the Revolving Credit Facilities. The Company's expenses for the six months ended June 30, 2017 were impacted by an increase of $2.3 million in interest expense associated primarily with increased borrowings on the White Eagle Revolving Credit Facility and the 8.5% Senior Unsecured Convertible Notes, which was offset by a $4.1 million reduction in operating expenses primarily due to a $1.9 million and $1.7 million decrease in legal expenses and personnel costs, respectively, compared to the six month period ended June 30, 2016.

The Company reported a net loss from continuing operations of $4.6 million, or $(0.16) per fully diluted share, for the six month period ended June 30, 2017 compared to a net loss of $17.2 million, or $(0.63) per fully diluted share, for the same period in 2016.

Life Settlements Portfolio Highlights

On June 30, 2017, the estimated fair value of the Company's 614 life insurance policies was $526.3 million compared to $498.4 million for 621 life insurance policies at December 31, 2016. The weighted average discount rate was 16.39% and 16.37% at June 30, 2017 and December 31, 2016, respectively. The aggregate face value of the Company's portfolio of life insurance policies was approximately $2.9 billion on June 30, 2017.

During the quarter, three life insurance policies that served as collateral under the revolving credit facility matured with a face value totaling $5.2 million.

As of June 30, 2017, the Company had cash and cash equivalents and certificates of deposit of $23.7 million and a Book Value per share of $5.92.

About Emergent Capital, Inc.

Emergent (OTCQB: EMGC) is a specialty finance company that invests in life settlements. More information about Emergent can be found at www.emergentcapital.com. 

Safe Harbor Statement

This press release may contain certain "forward-looking statements" relating to the business of Emergent Capital, Inc. and its subsidiary companies. All statements, other than statements of historical fact included herein are "forward-looking statements." These forward-looking statements are often identified by the use of forward-looking terminology such as "believes," "expects" or similar expressions, and involve known and unknown risks and uncertainties. Although Emergent believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Other than as required under the securities laws, Emergent does not assume a duty to update these forward-looking statements.

-SELECTED FINANCIAL TABLES FOLLOW-

SOURCE Emergent Capital, Inc.

Related Links

http://www.emergentcapital.com