Actionable news
All posts from Actionable news
Actionable news in JGW: THE J.G. WENTWORTH COMPANY,

JGWPT Holdings: The J.G. Wentworth Company® Reports Third Quarter 2015 Results

The following excerpt is from the company's SEC filing.

Diversification Strategy Surpasses Another Milestone with Establishment of J.G. Wentworth Home Lending

Reports Adjusted Total Revenue of $65.9 Million, Adjusted Net Income of $5.2 Million

The J.G. Wentworth Company

(‘J.G. Wentworth’ or the ‘Company’) ( NYSE:

), a diversified consumer financial services company specializing in structured settlement payment purchasing, home lending, prepaid cards, and personal lending, today reported financial results for the third quarter of 2015.

Third Quarter Highlights

J.G. Wentwo rth became a more diversified consumer financial services company by acquiring WestStar Mortgage Inc. and establishing the J.G. Wentworth Home Lending (‘Home Lending’) segment on July 31, 2015 which represents the accomplishment of a significant step in our strategy. The overall strategy continues to build on our recognizable brand and direct-to-consumer experience by expanding into growth markets.

Key integration tasks have been completed in the quarter. The 300+ employees now in our J.G. Wentworth Home Lending division operating in 39 states and the District of Columbia bring a wealth of deep mortgage industry experience. For the two months of the quarter, post acquisition, they contributed $2.0 Million of Adjusted Net Income (‘ANI’).

The Company completed the initial close of the 2015-2 securitization on July 28, 2015 which consisted of approximately $158.5 Million of fixed rate notes with an average annual yield of 4.18%.

The Structured Settlement and Annuity Purchasing (‘Structured Settlements’) segment reported Total Receivables Balance (‘TRB’) Purchases of $240.4 Million, Adjusted Total Revenues* of $54.1 Million, and $3.2 Million of ANI*.

"Closing of the acquisition and the establishment of J.G. Wentworth Home Lending was a significant milestone in our vision to diversify the company," said Stewart A. Stockdale, Chief Executive Officer, The J.G. Wentworth Company®. “We are excited to have such a talented group of mortgage professionals helping to drive business growth. In our Structured Settlements segment, focused TRB production and close attention on expense management generated positive ANI for the quarter. As we continue to assess and manage through the segment’s changing and highly competitive nature, we look to refine our strategy and take out cost from the operation and focus on overall profitability."

GAAP Third Quarter 2015 Results:

Consolidated Revenues were $63.5 Million, a decrease of $43.5 Million in third quarter when compared to the third quarter 2014 of $107.0 Million. The decrease was primarily due to a $56.2 Million decline in our Structured Settlements segment unrealized gains on VIE and other finance receivables, long-term debt and derivatives (totaling $4.6 Billion), and a $4.3 Million increase in realized and unrealized losses on marketable securities which were partially offset by a $5.2 Million increase in interest income, and $11.7 Million increase in our Home Lending segment.

Consolidated Net Income decreased to a loss of $57.6 Million, a decrease of $70.3 Million in third quarter compared to the third quarter 2014. In our Structured Settlements segment the decline was primarily due to a

$56.2 Million decrease in unrealized gains on VIE and other finance receivables, long term debt and derivatives that resulted from a decrease in spread margin and TRB purchases from the prior year, and a $29.9 Million third quarter 2015 non-cash impairment charge to reduce a trade name intangible asset that had been acquired in

Exhibit 99.1

connection with the prior Peachtree acquisition to its fair value. This was partially offset by an increase of $5.2 Million in Structured Settlements interest income, $2.0 Million increase in pre-tax income generated by our Home Lending segment, and by a $9.4 Million reduction in our consolidated tax provision expense.

Adjusted Non-GAAP* Third Quarter 2015 Results:

Consolidated Adjusted Total Revenues* were $65.9 Million, an increase of $2.9 Million when compared to the third quarter 2014 of $63.0 Million. The increase in revenue was due to the addition of our Home Lending segment which contributed $11.7 Million in Adjusted Total Revenues* for August and September. Total Adjusted Revenue* declined for the Structured Settlements segment primarily due to a decline in Spread Revenue* (Adjusted unrealized gains on VIE and other finance receivables, long term debt and derivatives, net of the gain (loss) on swap terminations) which decreased to $42.6 Million, as compared to the third quarter 2014 of $51.3 Million which was driven by a decrease in TRB Purchases and spread margin.

Consolidated ANI* decreased to $5.2 Million from $7.2 Million, a decrease of $2.0 Million in the third quarter when compared to the third quarter 2014. In our Structured Settlements segment the decrease was due to the $8.7 Million decline in unrealized revenue on unsecuritized finance receivables which resulted from a reduction in spread margin and a decrease in TRB Purchases. This was partially offset by a $4.9 Million decrease in Adjusted Total Expenses*. In addition, our Home Lending segment contributed $2.0 Million in ANI*.

Structured Settlements segment: TRB Purchases were $240.4 Million, as compared to $263.3 Million in the third quarter of 2014. TRB Purchases declined primarily due to a selective reduction of pre-settlement and wholesale purchases.

J.G. Wentworth Home Lending: Closed mortgage loan origination volume was $522.0 Million for the third quarter of 2015 with $352.6 Million for August and September of 2015.

Other Items:

The company is targeting $12 to $15 Million in cost savings next year from marketing and other operational efficiencies while investing in growth at the newly acquired Home Lending division.

The Company named Scott Stevens as its new Executive Vice President and Chief Financial Officer on October 5, 2015.

Scott Stevens, J.G. Wentworth's Chief Financial Officer, said, "I am pleased to be joining Stewart and the entire J.G. Wentworth team as we implement our strategy to diversify into adjacent consumer financial services markets. We believe the strategy is built on a strong funding platform and capital markets success. While the Structured Settlements business continues to operate in a highly competitive and rate sensitive industry, one of my first initiatives is to complement Home Lending's interest rate hedging program. We believe that once implemented, the new strategic Structured Settlements interest rate hedging program will reduce earnings volatility by partially mitigating the general level of interest rates."

Stockdale concluded, "We are confident 'J.G. Wentworth Cash Now' is a strong, overarching brand positioning that resonates with consumers across all our markets. For years it has performed well in Structured Settlements, and all indications suggest it is now being embraced by consumers of Home Lending."

* This earnings press release contains non-GAAP measures, which as calculated by the Company are not necessarily comparable to similarly titled measures reported by other companies. Results for the three and nine month periods ended September 30, 2015 and 2014, as well as our reconciliation of non-GAAP measures and historic financial information from 2014 to the present, are included in the accompanying financial information.

About The J.G. Wentworth Company®

The J.G. Wentworth Company

is a diversified consumer financial services company. The Company is focused on providing direct-to-consumer access to financing needs through a variety of solutions, including: mortgage lending and refinancing, personal lending, structured settlements payment purchasing, and prepaid cards. Through the J.G. Wentworth, Peachtree Financial Solutions, and Olive Branch Funding brands, the Company is the leading purchaser of structured settlement payments.

Mortgage loans are offered by J.G. Wentworth Home Lending, Inc. NMLS ID # 2925 (

), 3350 Commission Court, Woodbridge, VA 22192; 888-349-3773.

For more information about The J.G. Wentworth Company

, visit

or use the information provided below.

Conference Call and Webcast

Management will host a webcast to discuss the third quarter 2015 financial results at 10:00 AM Eastern Time today, November 9, 2015. The webcast will include remarks from J.G. Wentworth's Chief Executive Officer, Stewart Stockdale, and Chief Financial Officer, Scott Stevens.

This call will be accompanied by a presentation and will be available via a webcast of the conference call live on the Investor Relations section of the Company's website:

The J.G. Wentworth Company® Third Quarter...