Company Reports Book Value of $0.37 per Share

BOCA RATON, FL / ACCESSWIRE / October 15, 2020 / Emergent Capital, Inc. (OTCQX:EMGC) ('Emergent' or the 'Company'), today reported its financial results for the third fiscal quarter ended August 31, 2020.

Emergent indirectly owns a 27.5% equity investment, having an estimated fair value of approximately $152.5 million at August 31, 2020, in White Eagle Asset Portfolio, LP ('White Eagle'), which holds a portfolio of life settlements and was previously a wholly-owned subsidiary of the Company. The Company primarily earns income through change in fair value and distributions from its equity investment in White Eagle.

Third Quarter 2020 and Recent Highlights

• Total income from continuing operations was $4.3 million as compared to income of $86.9 million in the prior year quarter;
• Net loss from continuing operations was $1.0 million, or $0.01 loss per diluted share, as compared to a net income from continuing operations of $80.2 million, or $0.41 per diluted share in the prior year quarter;
• White Eagle had 13 policies maturity with a face value of approximately $43.2 million, gain on maturity of $30.0 million, and weighted average age at maturity of 88.9 years with an average remaining life expectancy of 54 months or 4.5 years;

White Eagle Portfolio Highlights

'White Eagle performed well in the third quarter with 13 policy maturities that yielded an aggregate benefit of $43.2 million,' said Pat Curry, Emergent's Chairman and Chief Executive Officer. 'While COVID-19 has slowed the processing times to produce and confirm death certificates in certain states, which has impacted White Eagle collections, we believe this to be a temporary issue that will not have a lasting or material impact on distributions.'

Three Months Ended August 31, 2020 Financial Results Summary

• Income from continuing operations was $4.3 million, a decrease of $82.6 million from the prior year quarter, primarily driven by:
  • $2.0 million distribution from the investment in the limited partnership;
  • $2.3 million change in the fair value of the investment in limited partnership excluding distribution; and
  • $90.7 million reduction in change in fair value gain for deconsolidated subsidiaries included in prior year quarter due to the re-consolidation of Lamington and related subsidiaries.
• Total expense from continuing operations was $5.3 million, a decrease of $1.4 million from the prior year quarter, primarily due to:
  • $1.3 million decrease in SG&A expenses attributable to a decrease in legal expense, a decrease in professional fees, a decrease in personnel costs.
• Net loss from continuing operations of $1.0 million, or $0.01 loss per diluted share, for the three months ended August 31, 2020, compared to a net income from continuing operations of $80.2 million, or $0.41 loss per diluted share for the three months ended August 31, 2019.

Nine Months Ended August 31, 2020 Financial Results Summary

• Total income from continuing operations was $32.2 million as compared to income of $34.2 million in the prior year;
• Net income from continuing operations was $16.1 million, or $0.09 per diluted share, as compared to a net income from continuing operations of $16.9 million, or $0.10 per diluted share in the prior year;
• White Eagle had 33 policies maturity with a face value of approximately $133.3 million, gain on maturity of $78.5 million, weighted average age at maturity of 88.6 years with an average remaining LE of 49 months or 4.1 years;
  • Income from continuing operations was $32.2 million, a decrease of $2.0 million from the prior year, primarily driven by:
    • $11.4 million net proceeds from the Sun Life settlement;
    • $6.0 million distribution from the investment in the limited partnership;
    • $14.6 million change in the fair value of the investment limited partnership excluding distribution; and
    • $37.9 million reduction in change in fair value gain for deconsolidated subsidiaries included in prior year due to the re-consolidation of Lamington and related subsidiaries.
• Total expense from continuing operations was $13.7 million, an decrease of $476,000 from the prior year, primarily due to a combination of:
  • $2.8 million gain on extinguishment of the Convertible Notes; and
  • $3.1 million increase in SG&A expenses attributable in part to one time executive retention agreements and legal and professional fees.