Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | ||
Sep. 30, 2015 | Nov. 06, 2015 | Nov. 05, 2015 | |
Document Information [Line Items] | |||
Entity Registrant Name | J.G. Wentworth Co | ||
Entity Central Index Key | 1,580,185 | ||
Document Type | 10-Q | ||
Document Period End Date | Sep. 30, 2015 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | Q3 | ||
Common Stock - Class A | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 15,972,555 | ||
Common Stock- Class B | |||
Document Information [Line Items] | |||
Entity Common Stock, Shares Outstanding | 8,998,199 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 | |
ASSETS | |||
Cash and cash equivalents | $ 35,697 | $ 41,648 | |
Restricted cash and investments | 198,374 | 198,206 | |
VIE finance receivables, at fair market value | [1] | 4,521,327 | 4,422,033 |
Other finance receivables, at fair value | 33,800 | 101,802 | |
VIE finance receivables, net of allowances for losses of $8,560 and $7,674, respectively | [1] | 106,513 | 113,489 |
Other finance receivables, net of allowances for losses of $2,539 and $2,454, respectively | 11,725 | 17,803 | |
Other receivables, net of allowances for losses of $273 and $204, respectively | 16,124 | 14,165 | |
Mortgage loans held for sale, at fair value | [2] | 130,189 | 0 |
Mortgage servicing rights, at fair value | [2] | 28,186 | 0 |
Premises and equipment, net of accumulated depreciation of $7,274 and $5,976, respectively | 5,860 | 3,758 | |
Intangible assets, net of accumulated amortization of $21,556 and $20,273, respectively | 32,292 | 45,436 | |
Goodwill | 98,008 | 84,993 | |
Marketable securities | 85,879 | 103,419 | |
Deferred tax assets, net | 0 | 2,170 | |
Other assets | 75,192 | 33,787 | |
Total Assets | 5,379,166 | 5,182,709 | |
Liabilities | |||
Accrued expenses and account payables | 30,497 | 19,256 | |
Accrued interest | 21,416 | 17,416 | |
Term loan payable | 439,431 | 437,183 | |
VIE derivative liabilities, at fair value | 74,687 | 75,706 | |
VIE borrowings under revolving credit facilities and other similar borrowings | 82,987 | 19,339 | |
Other borrowings under revolving credit facilities and other similar borrowings | 126,494 | 0 | |
VIE long-term debt | 201,464 | 181,558 | |
VIE long-term debt issued by securitization and permanent financing trusts, at fair value | 4,074,210 | 4,031,864 | |
Other liabilities | 59,585 | 6,677 | |
Deferred tax liabilities, net | 18,788 | 36,656 | |
Installment obligations payable | 85,879 | 103,419 | |
Total Liabilities | $ 5,215,438 | $ 4,929,074 | |
Commitments and contingent liabilities | |||
Equity | |||
Additional paid-in-capital | $ 104,575 | $ 95,453 | |
Retained earnings (accumulated deficit) | (15,791) | 25,634 | |
Total stockholders' equity including treasury stock | 88,784 | 121,087 | |
Less: treasury stock at cost, 542,072 and 600,755 shares as of September 30, 2015 and December 31, 2014, respectively. | (2,138) | (2,443) | |
Total stockholders’ equity, The J.G. Wentworth Company | 86,646 | 118,644 | |
Non-controlling interests | 77,082 | 134,991 | |
Total Stockholders’ Equity | 163,728 | 253,635 | |
Total Liabilities and Stockholders’ Equity | 5,379,166 | 5,182,709 | |
Common Stock - Class A | |||
Equity | |||
Common stock | 0 | 0 | |
Common Stock- Class B | |||
Equity | |||
Common stock | 0 | 0 | |
Common Stock - Class C | |||
Equity | |||
Common stock | $ 0 | $ 0 | |
[1] | Pledged as collateral to VIE credit and long-term debt facilities. Refer to Note 6 “VIE and Other Finance Receivables, at Fair Value” and Note 7 “VIE and Other Finance Receivables, net of Allowance for Losses.” | ||
[2] | Pledged as collateral to Other Borrowings Under Revolving Credit Facilities and Other Similar Borrowings. Refer to Note 8 “Mortgage Loans Held for Sale, at Fair Value” and Note 9 “Mortgage Servicing Rights, at Fair Value.” |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
VIE finance receivables, allowances for losses | $ 8,560 | $ 7,674 |
Other finance receivables, allowances for losses | 2,539 | 2,454 |
Other receivables, allowance for losses | 273 | 204 |
Fixed assets, accumulated depreciation | 7,274 | 5,976 |
Accumulated Amortization | $ 21,556 | $ 20,273 |
Treasury stock at cost (in shares) | 542,072 | 600,755 |
Common Stock - Class A | ||
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Common stock, authorized shares (in shares) | 500,000,000 | 500,000,000 |
Common stock, shares issued (in shares) | 15,972,555 | 15,021,147 |
Common stock, shares outstanding (in shares) | 15,430,483 | 14,420,392 |
Common Stock - Class B | ||
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Common stock, authorized shares (in shares) | 500,000,000 | 500,000,000 |
Common stock, shares issued (in shares) | 8,997,232 | 9,963,750 |
Common stock, shares outstanding (in shares) | 8,997,232 | 9,963,750 |
Common Stock - Class C | ||
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Common stock, authorized shares (in shares) | 500,000,000 | 500,000,000 |
Common stock, shares issued (in shares) | 0 | 0 |
Common stock, shares outstanding (in shares) | 0 | 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
REVENUES | ||||
Interest income | $ 50,170 | $ 44,644 | $ 140,129 | $ 139,104 |
Unrealized gains on VIE and other finance receivables, long-term debt and derivatives | 7,556 | 63,731 | 62,559 | 221,359 |
Realized and unrealized gains on sale of mortgage loans held for sale, net of direct costs | 8,946 | 0 | 8,946 | 0 |
Changes in mortgage servicing rights, net | 548 | 0 | 548 | 0 |
Loss on swap terminations, net | 0 | (54) | (275) | (628) |
Servicing, broker, and other fees, net of direct costs | 2,144 | 1,049 | 4,153 | 3,221 |
Loan origination fees | 1,032 | 0 | 1,032 | 0 |
Realized and unrealized (losses) gains on marketable securities, net | (6,871) | (2,615) | (5,957) | 1,741 |
Realized gain on notes receivable, at fair value | 0 | 0 | 0 | 2,098 |
Gain on extinguishment of debt | 0 | 270 | 593 | 270 |
Other | (3) | (1) | (11) | (63) |
Total Revenues | 63,522 | 107,024 | 211,717 | 367,102 |
EXPENSES | ||||
Advertising | 16,946 | 18,416 | 49,728 | 52,341 |
Interest expense | 55,606 | 48,813 | 154,509 | 150,743 |
Compensation and benefits | 14,210 | 11,096 | 36,426 | 30,865 |
General and administrative | 5,307 | 4,858 | 14,679 | 13,941 |
Professional and consulting | 6,542 | 4,520 | 15,841 | 13,482 |
Debt issuance | 2,220 | 2,936 | 5,092 | 5,956 |
Securitization debt maintenance | 1,463 | 1,551 | 4,453 | 4,672 |
Provision for losses | 1,653 | 1,055 | 4,610 | 3,273 |
Depreciation and amortization | 966 | 961 | 2,961 | 3,163 |
Impairment charges | 29,860 | 0 | 29,860 | 0 |
Installment obligations (income) expense, net | (6,372) | (2,047) | (4,300) | 3,567 |
Total Expenses | 128,401 | 92,159 | 313,859 | 282,003 |
(Loss) income before income taxes | (64,879) | 14,865 | (102,142) | 85,099 |
(Benefit) provision for income taxes | (7,252) | 2,176 | (12,422) | 16,169 |
Net (Loss) Income | (57,627) | 12,689 | (89,720) | 68,930 |
Less net (loss) income attributable to non-controlling interests | (30,930) | 8,597 | (49,382) | 49,548 |
Net (loss) income attributable to The J.G. Wentworth Company | (26,697) | 4,092 | (40,338) | 19,382 |
Common Stock - Class A | ||||
EXPENSES | ||||
Net (loss) income attributable to The J.G. Wentworth Company | $ (26,697) | $ 4,092 | $ (40,338) | $ 19,382 |
Weighted average shares of Class A common stock outstanding: | ||||
Basic (in shares) | 14,918,415 | 13,095,194 | 14,437,117 | 12,438,143 |
Diluted (in shares) | 14,918,415 | 13,098,995 | 14,437,117 | 12,440,327 |
Net income per share attributable to stockholders of Class A common stock of The J.G. Wentworth Company | ||||
Basic (in dollars per share) | $ (1.79) | $ 0.31 | $ (2.79) | $ 1.56 |
Diluted (in dollars per share) | $ (1.79) | $ 0.31 | $ (2.79) | $ 1.56 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Statement of Comprehensive Income [Abstract] | ||||
Net (loss) income | $ (57,627) | $ 12,689 | $ (89,720) | $ 68,930 |
Other comprehensive gain (loss): | ||||
Reclassification adjustment for gain included in net income | 0 | 0 | 0 | (2,098) |
Unrealized gains on notes receivable arising during the year | 0 | 0 | 0 | 480 |
Total other comprehensive loss | 0 | 0 | 0 | (1,618) |
Total comprehensive (loss) income | (57,627) | 12,689 | (89,720) | 67,312 |
Less: comprehensive (loss) income allocated to non-controlling interests | (30,930) | 8,597 | (49,382) | 48,542 |
Comprehensive (loss) income attributable to The J.G. Wentworth Company | $ (26,697) | $ 4,092 | $ (40,338) | $ 18,770 |
Condensed Consolidated Stateme6
Condensed Consolidated Statement of Changes in Stockholders' Equity (Unaudited) - 9 months ended Sep. 30, 2015 - USD ($) $ in Thousands | Total | Common Stock - Class A | Common Stock- Class B | Non-controlling Interests | Retained Earnings (Accumulated Deficit) | Additional Paid-In-Capital | Treasury Stock |
Balance at Dec. 31, 2014 | $ 253,635 | $ 134,991 | $ 25,634 | $ 95,453 | $ (2,443) | ||
Balance (in shares) at Dec. 31, 2014 | 14,420,392 | 9,963,750 | 600,755 | ||||
Increase (Decrease) in Stockholders' Equity | |||||||
Net (loss) income | (89,720) | (49,382) | (40,338) | ||||
Share-based compensation | 1,389 | 684 | 705 | ||||
Share-based compensation (in shares) | 4,310 | (19,420) | |||||
Repurchases of Class A common stock | (14,471) | (7,113) | 0 | $ (7,358) | |||
Repurchase of Class A common stock (in shares) | (1,513,644) | 1,513,644 | |||||
Equity financing costs | (61) | (30) | (31) | ||||
Re-issuance of Treasury stock in connection with acquisition | 12,956 | 6,380 | (1,087) | $ 7,663 | |||
Issuance of Treasury stock in connection with acquisition | 1,572,327 | (1,572,327) | |||||
Exchange of The J.G. Wentworth LLC common interests into Class A common stock | (8,448) | 8,448 | |||||
Exchange of JGW LLC Common Interests into Class A common stock (in shares) | 947,098 | (947,098) | |||||
Balance at Sep. 30, 2015 | $ 163,728 | $ 77,082 | $ (15,791) | $ 104,575 | $ (2,138) | ||
Balance (in shares) at Sep. 30, 2015 | 15,430,483 | 8,997,232 | 542,072 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Cash flows from operating activities: | ||
Net (loss) income | $ (89,720) | $ 68,930 |
Adjustments to reconcile net (loss) income to net cash used in operating activities: | ||
Provision for losses | 4,610 | 3,273 |
Depreciation | 1,677 | 1,215 |
Loss on disposal of fixed assets | 0 | 69 |
Impairment charges | 29,860 | 0 |
Changes in mortgage servicing rights, net | (548) | 0 |
Amortization of finance receivables acquisition costs | 446 | 355 |
Amortization of intangibles | 1,284 | 1,948 |
Amortization of debt issuance costs | 5,914 | 5,911 |
Proceeds from sale and principal payments on mortgage loans held for sale | 362,723 | 0 |
Originations and purchases of mortgage loans held for sale | (352,641) | 0 |
Change in unrealized gains/losses on finance receivables | 5,320 | (398,987) |
Change in unrealized gains/losses on long-term debt | (66,711) | 177,690 |
Change in unrealized gains/losses on derivatives | (1,168) | (62) |
Gain on notes receivable, at fair value | 0 | (2,098) |
Realized and unrealized gains on sale of mortgage loans held for sale, net of direct costs | (8,946) | 0 |
Purchases of finance receivables | (307,381) | (342,347) |
Collections on finance receivables | 417,362 | 389,080 |
Recoveries of finance receivables | 1 | 69 |
Accretion of interest income | (139,811) | (138,817) |
Accretion of interest expense | (30,677) | (25,931) |
Gain on extinguishment of debt | (593) | (270) |
Share-based compensation expense | 1,389 | 1,732 |
Change in marketable securities, net | 5,957 | (1,741) |
Installment obligations (income) expense, net | (4,300) | 3,567 |
Decrease in fair value of life settlement contracts | 13 | 116 |
Premiums and other costs paid, and proceeds from sale of life settlement contracts | (13) | (116) |
Deferred income taxes | (15,698) | 15,811 |
Other | 3 | 0 |
(Increase) decrease in operating assets: | ||
Restricted cash and investments | 4,588 | (8,682) |
Other assets | (1,547) | 1,276 |
Other receivables | 16 | 1,091 |
Increase (decrease) in operating liabilities: | ||
Accrued expenses and account payables | 7,928 | 7,542 |
Accrued interest | 3,694 | 2,628 |
Other liabilities | 1,642 | (681) |
Net cash used in operating activities | (165,327) | (237,429) |
Cash flows from investing activities: | ||
Purchase of Home Lending, net of cash acquired | (46,595) | 0 |
Receipts from notes receivable | 0 | 6,093 |
Purchase of intangible assets | 0 | (50) |
Purchases of premises and equipment, net of sales proceeds | (2,871) | (1,586) |
Net cash (used in) provided by investing activities | (49,466) | 4,457 |
Cash flows from financing activities: | ||
Payments of equity financing costs | (61) | (792) |
Purchases of treasury stock | (14,471) | (917) |
Issuance of VIE long-term debt | 407,332 | 583,782 |
Payments for debt issuance costs | (703) | (2,767) |
Repayments of long-term debt and derivatives | (244,910) | (293,411) |
Gross proceeds from revolving credit facilities | 538,755 | 223,834 |
Repayments of revolving credit facilities | (477,100) | (239,750) |
Issuance of installment obligations payable | 998 | 100 |
Purchase of marketable securities | (998) | (100) |
Repayments of installment obligations payable | (14,238) | (19,131) |
Proceeds from sale of marketable securities | 14,238 | 19,131 |
Net cash provided by financing activities | 208,842 | 269,979 |
Net (decrease) increase in cash | (5,951) | 37,007 |
Cash and cash equivalents at beginning of the period | 41,648 | 39,061 |
Cash and cash equivalents at the end of the period | 35,697 | 76,068 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 175,570 | 167,686 |
Cash paid for income taxes | 127 | 4 |
Retained mortgage servicing rights in connection with sale of mortgage loans | 1,298 | 0 |
Mortgage loans subject to repurchase rights from GNMA | 39,125 | 0 |
Exchange of LLC Common Interests for shares of Class A common stock | 8,448 | 0 |
Re-issuance of Treasury stock in connection with acquisition | 12,956 | 0 |
Liabilities assumed in connection with acquisition | $ 6,383 | $ 0 |
Basis of Presentation and Accou
Basis of Presentation and Accounting Policies | 9 Months Ended |
Sep. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Accounting Policies | Basis of Presentation and Accounting Policies Organization and Description of Business Activities The J.G. Wentworth Company (the “Corporation”) is a Delaware holding company that was incorporated on June 21, 2013. The Corporation operates through its managing membership in The J.G. Wentworth Company, LLC (“JGW LLC”), the Corporation's sole operating asset. JGW LLC is a controlled and consolidated subsidiary of the Corporation whose sole asset is its membership interest in J.G. Wentworth, LLC. As used in these notes, the “Company” refers collectively to the Corporation, and unless otherwise stated, all of its subsidiaries. The Company, operating through its subsidiaries and affiliates, has its principal office in Radnor, Pennsylvania. The Company provides liquidity to individuals with financial assets such as structured settlements, annuities, and lottery winnings by either purchasing these financial assets for a lump-sum payment, issuing installment obligations payable over time, or serving as a broker to other purchasers of those financial assets. The Company also provides access to funding to people with pending personal injury claims. The Company engages in warehousing and subsequent resale or securitization of these various financial assets. The Company also engages in the origination and servicing of mortgage loans. On July 31, 2015 (the "acquisition date"), the Company acquired (the "Home Lending Acquisition") all of the issued and outstanding capital stock of WestStar Mortgage Inc. (“WestStar”), a company primarily engaged in originating, selling and servicing residential mortgage loans, for a preliminary purchase price of $72.5 million . Immediately following the acquisition date, WestStar began to operate as the newly-branded subsidiary J.G. Wentworth Home Lending, Inc. ("Home Lending"). Home Lending was incorporated under the laws and provisions of the Commonwealth of Virginia and is primarily engaged in retail lending, originating primarily Federal Housing Administration (“FHA”), Veterans Administration ("VA") and conventional loans and is approved as a Title II, non-supervised direct endorsement mortgagee with the United States Department of Housing and Urban Development. In addition, Home Lending is an approved issuer with the Government National Mortgage Association (“GNMA”), Federal Home Loan Mortgage Corporation ("FHLMC"), U.S. Department of Agriculture ("USDA") as well as an approved seller and servicer with the Federal National Mortgage Association (“FNMA”). Refer to Note 3 for a discussion of the Company’s consolidation and accounting for its acquisition of Home Lending in accordance with Accounting Standards Codification (“ASC”) 805, Business Combinations. As a result of the Home Lending Acquisition the Company has identified the following two reportable segments: (i) Structured Settlement and Annuity Purchasing and (ii) Home Lending. Refer to Note 22 for a discussion of the Company's segment reporting. Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and Article 10 of Regulation S-X and do not include all of the information required by GAAP for complete financial statements. In the opinion of management, the unaudited condensed consolidated financial statements reflect all adjustments which are necessary for a fair presentation of financial position, results of operations and cash flows for the interim periods presented. All such adjustments are of a normal, recurring nature. The results of operations for interim periods are not necessarily indicative of the results for the entire year. The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the unaudited condensed consolidated financial statements and the amounts of revenues and expenses during the reporting periods. The most significant balance sheet accounts that could be affected by such estimates are variable interest entity (“VIE”) and other finance receivables, at fair value, mortgage servicing rights, at fair value, mortgage loans held for sale, at fair value, VIE derivative liabilities, at fair value, VIE long-term debt issued by securitization and permanent financing trusts, at fair value, intangible assets and goodwill. Actual results could differ from those estimates and such differences could be material. These interim financial statements should be read in conjunction with the Company’s 2014 audited consolidated financial statements that are included in its Annual Report on Form 10-K. The accompanying unaudited condensed consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries, including those entities that are considered VIEs, and where the Company has been determined to be the primary beneficiary in accordance with ASC 810, " Consolidation" ("ASC 810"). JGW LLC meets the definition of a VIE under ASC 810. Further, the Corporation is the primary beneficiary of JGW LLC as a result of its control over JGW LLC. As the primary beneficiary of JGW LLC, the Corporation consolidates the financial results of JGW LLC and records a non-controlling interest for the economic interest in JGW LLC not owned by the Corporation. The Corporation’s and the non-controlling interests' economic interest in JGW LLC was 53.6% and 46.4% , respectively, as of September 30, 2015 . The Corporation’s and the non-controlling interests' economic interest in JGW LLC was 50.2% and 49.8% , respectively, as of December 31, 2014 . Net (loss) income attributable to the non-controlling interests in the unaudited condensed consolidated statements of operations represents the portion of earnings (loss) attributable to the economic interest in JGW LLC held by the non-controlling holders of JGW LLC common membership interests (the “Common Interestholders”). The allocation of net (loss) income to the non-controlling interests is based on the weighted average percentage of JGW LLC owned by the non-controlling interests during the reporting period. The non-controlling Common Interestholders’ weighted average economic interests in JGW LLC for the three months ended September 30, 2015 and 2014 were 47.3% and 55.3% , respectively. The non-controlling Common Interestholders’ weighted average economic interests in JGW LLC for the nine months ended September 30, 2015 and 2014 were 49.0% and 57.8% , respectively. The net (loss) income attributable to The J.G. Wentworth Company in the unaudited condensed consolidated statement of operations for the three months and nine months ended September 30, 2015 and 2014 does not necessarily reflect the Corporation’s weighted average economic interests in JGW LLC for the respective periods because the majority of the provision (benefit) for income taxes was specifically attributable to the legal entity The J.G. Wentworth Company, and thus was not allocated to the non-controlling interests. For the three months ended September 30, 2015 and 2014 , $(7.8) million and $2.6 million of the $(7.3) million and $2.2 million total tax (benefit) provision, respectively, was specifically attributable to The J.G. Wentworth Company. For the nine months ended September 30, 2015 and 2014 , $(13.3) million and $15.9 million of the $(12.4) million and $16.2 million total tax (benefit) provision, respectively, was specifically attributable to The J.G. Wentworth Company. Refer to Note 16 for a description of the Company's income taxes. Non-controlling interests in the condensed consolidated balance sheets represents the portion of equity attributable to the non-controlling common membership interests in JGW LLC (the “Common Interests”). The allocation of equity to the non-controlling interests in JGW LLC is based on the percentage owned by the non-controlling Common Interests in the entity during the reporting period. Refer to Note 18 for more details. All material inter-company balances and transactions are eliminated in consolidation. Significant Accounting Policies As of September 30, 2015 there have been no significant changes to the Company's accounting policies as disclosed in the Annual Report on Form 10-K for the year ended December 31, 2014, except for the following policies that have been adopted as a result of the Home Lending Acquisition. Business Combinations The Company records the identifiable assets acquired, the liabilities assumed, and any non-controlling interests of companies that are acquired at their estimated fair value as of the date of acquisition, and includes the results of operations of the acquired companies in the unaudited condensed consolidated statement of operations from the date of the acquisition. The Company recognizes, as goodwill, the excess of the acquisition price over the estimated fair value of the net assets acquired. The Company has accounted for its acquisition of Home Lending as a business combination. Refer to Note 3 for a detailed discussion of this transaction. Mortgage loans held for sale Mortgage loans held for sale are carried at fair value under the fair value option with changes in the fair value recognized in current period earnings and included within realized and unrealized gains on sale of mortgage loans held for sale, net of direct costs on the unaudited condensed consolidated statement of operations. At the date of funding of the mortgage loan held for sale, the funded amount of the loan plus the related derivative asset or liability of the associated interest rate lock commitment (“IRLC”) becomes the initial recorded investment in the mortgage loan held for sale. Such amount is expected to approximate the fair value of the loan. The Company chooses to fair value these mortgage loans held for sale in order to better align reported results with the underlying economic changes in value of the loans and related hedge instruments without incurring the additional complexity of applying hedge accounting. This election impacts the timing and recognition of origination fees and costs. Specifically, origination fees and costs are recognized as part of the gain/loss at the time of funding. The fair value of mortgage loans held for sale is calculated using observable market information including pricing from actual market transactions, investor commitment prices, or broker quotations. Gains and losses from the sale of mortgages are recognized based upon the difference between the sales proceeds and carrying value of the related loans upon sale, and are recorded in realized and unrealized gains on sale of mortgage loans held for sale, net of direct costs in the unaudited condensed consolidated statements of operations. Mortgage loans held for sale are considered sold when the Company surrenders control over the financial assets. Control is considered to have been surrendered when: (1) the transferred assets have been isolated from the Company, beyond the reach of the Company and its creditors; (2) the purchaser obtains the right (free of conditions that constraint it from taking advantage of that right) to pledge or exchange the transferred assets; and (3) the Company does not maintain effective control over the transferred assets through an agreement that both entitles and obligates the Company to repurchase or redeem the transferred assets before their maturity or grants the Company the ability to unilaterally cause the holder to return specific assets. The Company typically considers the above criteria to have been met upon acceptance and receipt of purchase advice from the purchaser. Mortgage Servicing Rights Mortgage servicing rights ("MSRs") are contractual arrangements where the rights to service existing mortgages are sold by the original lender to other parties who specialize in the various functions of servicing mortgages. MSRs are initially recorded at fair value at the time the underlying loans are sold. The Company records the changes in fair value in changes in mortgage servicing rights, net. To determine the fair value of the servicing right created, the Company uses discounted cash flow approach incorporating assumptions that management believes market participants would use in estimating future net servicing income, including estimates of the contractual service fees, ancillary income and late fees, the cost of servicing, the discount rate, float value, the inflation rate, prepayment speeds and default rates. The Company has elected to subsequently measure our existing MSRs portfolio using the fair value method, in which MSRs are measured at fair value each reporting period and changes in fair value are recorded in earnings in the period in which changes in value occur. Loans Eligible for Repurchase from GNMA For certain loans that the Company pooled and securitized with GNMA, the Company as the issuer has the unilateral right to repurchase any individual loan in a GNMA securitization pool if that loan meets certain criteria, including being delinquent greater than 90 days . As a result of this unilateral right, the Company must recognize the delinquent loan on its consolidated balance sheets and establish a corresponding liability regardless of the Company’s intention to repurchase the loan. As of September 30, 2015 , delinquent or defaulted mortgage loans currently in GNMA pools that the Company has the unilateral right to repurchase totaled $39.1 million . The amount of loans eligible for repurchase from GNMA and the liability for loans eligible for repurchase from GNMA are included in other assets and other liabilities on the Company’s condensed consolidated balance sheet, respectively. Interest Income Interest income on mortgage loans is accrued and is based upon the principal amount outstanding and contractual interest rates. Income recognition is discontinued when loans become 90 days delinquent or when in management’s opinion, the collectability of principal and interest becomes doubtful and the mortgage loans held for sale are put on a non-accrual basis. When the loan is placed on non-accrual status, the related interest receivable is reversed against interest income of the current period. If a non-accrual loan is returned to accruing status, the accrued interest existing at the date the residential loan is placed on non-accrual status and interest during the non-accrual period are recorded as interest income as of the date the loan no longer meets the non-accrual criteria. Loans Servicing Fees Loan servicing fees represent revenue earned for servicing loans for various investors. The loan servicing fees are based on a contractual percentage of the outstanding principal balance and are recognized into income when earned. Loan servicing expenses are charged to operations as incurred. Loan servicing fees are included in servicing, broker, and other fees, net of direct costs in the unaudited condensed consolidated statement of operations. Servicing Advances Servicing advances represent escrows and principal and interest advances on behalf of customers and for investors to cover delinquent balances for property taxes, insurance premiums and other out-of-pocket costs. Advances are made in accordance with the servicing agreements and are recoverable upon liquidation. The Company periodically reviews the advances for collectability and amounts are written-off when they are deemed uncollectible. Servicing advances are recorded in other assets in the condensed consolidated balance sheet. Derivative Instruments and Hedging Activity The Company enters into derivative instruments to reduce its exposure to fluctuations in interest rates. The Company enters into commitments to originate and purchase mortgage loans at interest rates that are determined prior to the funding or purchase of the loan. IRLCs are considered freestanding derivatives and are recorded at fair value at inception. Changes in fair value subsequent to inception are based on the change in fair value of the underlying loan and changes in the probability that the loan will fund within the terms of the commitment. The Company uses derivative financial instruments, primarily forward sales commitments, to manage exposure to interest rate risk and changes in the fair value of IRLCs and mortgage loans held for sale. The Company may also enter into commitments to sell mortgage backed securities ("MBSs") as part of its overall hedging strategy. The Company has elected not to designate these freestanding derivatives as hedging instruments under GAAP. The fair value of freestanding derivatives is recorded in other assets or other liabilities on the condensed consolidated balance sheets with changes in fair value included in net gains on sales of mortgage loans on the unaudited condensed consolidated statements of operations. Cash flows related to freestanding derivatives are included in operating activities on the unaudited condensed consolidated statements of cash flows. Risks and Uncertainties In the normal course of business, companies in the mortgage banking industry encounter certain economic and regulatory risks. Economic risks include interest rate and credit risk. The Company is subject to interest rate risk to the extent that in a rising interest rate environment, the Company may experience a decrease in loan production, as well as decreases in the value of mortgage loans held for sale and in commitments to originate loans, which may negatively impact the Company's operations. Credit risk is the risk of default that may result from the borrowers' inability or unwillingness to make contractually required payments during the period in which loans are being held for sale. The Company sells loans to investors without recourse. As such, the investors have assumed the risk of loss or default by the borrower. However, the Company is usually required by these investors to make certain standard representations and warranties relating to credit information, loan documentation and collateral. To the extent that the Company does not comply with such representations, or there are early payment defaults, the Company may be required to repurchase the loans or indemnify these investors for any losses from borrower defaults. In addition, if loans pay-off within a specified time frame, the Company may be required to refund a portion of the sales proceeds to the investors. |
Recently Adopted Accounting Pro
Recently Adopted Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2015 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
Recent Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements Effective January 1, 2014, the Company adopted ASU No. 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (“ASU 2013-11”). ASU 2013-11 requires, unless certain conditions exist, an unrecognized tax benefit, or a portion of an unrecognized tax benefit, to be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, similar tax loss, or a tax credit carryforward. This adoption of ASU 2013-11 did not materially impact the Company’s financial statements. |
Business Combinations
Business Combinations | 9 Months Ended |
Sep. 30, 2015 | |
Business Combinations [Abstract] | |
Business Combinations | Business Combinations In accordance with ASC 805, “ Business Combinations ” (“ASC 805”), the Company accounts for acquisitions by applying the acquisition method of accounting. The acquisition method of accounting requires, among other things, that the assets acquired and liabilities assumed in a business combination be measured at their fair values as of the closing date of the acquisition. On July 31, 2015, the Company completed its acquisition of Home Lending (formerly WestStar). The results of Home Lending are included in the Company's unaudited condensed consolidated statement of operations from the date of acquisition and are reported as a separate reportable segment. Home Lending is primarily engaged in originating, selling and servicing residential mortgage loans, and its acquisition represented a major step in the Company's strategy to become a more diversified financial services company. The preliminary acquisition-date fair value of the consideration was $72.5 million , which consisted of $53.2 million that was paid in cash and $13.0 million that was paid through the issuance of 1,572,327 shares of the Company's Class A common stock. The fair value of the 1,572,327 Class A common shares issued was calculated using the closing trading price of the Company’s common shares as of the acquisition date. An additional $6.4 million of consideration was accrued to reflect the estimated outcome of certain post close-adjustments included in the stock purchase agreement that are expected to be finalized and adjusted for during the three months ended December 31, 2015. The following table sets forth the acquisition-date fair value of the consideration and the preliminary identified net assets acquired and liabilities assumed as of July 31, 2015. The Company is in the process of finalizing its valuation of the intangible assets; thus, the provisional measurement of intangible assets and goodwill are subject to change. As of July 31, 2015 (In thousands) Consideration: Cash $ 53,205 Equity instruments issued (1,572,327 shares of Class A common stock) 12,956 Post close adjustment liabilities 6,383 Fair value of total consideration $ 72,544 Recognized amounts of identifiable assets acquired and liabilities assumed: Cash and cash equivalents, $ 6,610 Restricted cash 4,756 Mortgage loans held for sale 131,325 Mortgage servicing rights 27,638 Premises and equipment 908 Intangible assets 18,000 Other assets 31,536 Borrowings and other debt obligations (128,487 ) Other liabilities (32,757 ) Total identifiable net assets 59,529 Goodwill $ 13,015 Of the $18.0 million of acquired intangible assets, $12.5 million was provisionally assigned to licenses and approvals that are not subject to amortization. The remaining $5.5 million of acquired intangible assets are subject to a weighted-average useful life of of approximately 8.7 years. These finite-lived assets include affinity relationships of $4.5 million ( 10 -year useful life) and a trade name of $1.0 million ( 3 -year useful life). The $13.0 million of goodwill was assigned to the Home Lending reporting segment and is expected to be deductible for income tax purposes. The goodwill recognized is attributable to the expected synergies from applying the Company's brand name to the acquired entity's mortgage business as well as from Home Lending's assembled workforce. Acquisition related costs of $2.9 million were included in professional and consulting fees in the Company's unaudited condensed consolidated statements of operations for the nine months ending September 30, 2015 . The following table summarizes the actual unaudited amounts of Home Lending's revenues and earnings included in the Company's unaudited condensed consolidated statement of operations from July 31, 2015: Home Lending amounts included in the results of operations for Three and Nine Months Ended September 30, 2015 (In thousands) Total revenue $ 11,747 Net income (loss) before income taxes $ 1,950 The following table summarizes the supplemental pro forma information of the combined Company for the nine months ended September 30, 2015 and 2014 , respectively, as if the Home Lending Acquisition occurred on January 1, 2014. Nine Months Ended September 30, 2015 2014 (In thousands) Pro forma total revenues $ 257,048 $ 411,451 Pro forma net income (loss) before income taxes (1) $ (92,642 ) $ 98,460 (1) Includes adjustments for acquisition related costs of $3.8 million for nine months ended September 30, 2014. These pro forma results are presented for illustrative purposes and are not intended to represent or be indicative of the actual consolidated results of operations of the Company that would have been achieved had the acquisition been consummated on January 1, 2014, nor are they intended to represent or be indicative of future results of operations. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Sep. 30, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill by business segment include the following as of: September 30, 2015 December 31, 2014 (In thousands) Structured Settlement and Annuity Purchasing $ 84,993 $ 84,993 Home Lending 13,015 — Total Goodwill $ 98,008 $ 84,993 Intangible assets subject to amortization include the following as of: Structured Settlement and Annuity Purchasing Home Lending Cost Accumulated Amortization Cost Accumulated Amortization (In thousands) September 30, 2015: Database $ 4,609 $ (4,227 ) $ — $ — Customer relationships 18,844 (15,059 ) — — Domain names 1,635 (449 ) — — Non-compete agreements 1,821 (1,821 ) — — Trade name — — 1,000 — Affinity relationships — — 4,500 — Intangible assets subject to amortization $ 26,909 $ (21,556 ) $ 5,500 $ — December 31, 2014: Database $ 4,609 $ (4,011 ) $ — $ — Customer relationships 18,844 (14,114 ) — — Domain names 1,635 (327 ) — — Non-compete agreements 1,821 (1,821 ) — — Intangible assets subject to amortization $ 26,909 $ (20,273 ) $ — $ — Amortization expense for the three months ended September 30, 2015 and 2014 was $0.4 million and $0.6 million , respectively. Amortization expense for the nine months ended September 30, 2015 and 2014 was $1.3 million and $1.9 million , respectively. Amortization of intangible assets is included in depreciation and amortization in the Company's unaudited condensed consolidated statement of operations. Estimated future amortization expense for amortizable intangible assets for the three months ending December 31, 2015 and for each of the succeeding five calendar years and thereafter is as follows: Estimated Future Amortization Expense (In thousands) Three months ending December 31, 2015 $ 744 2016 2,137 2017 1,841 2018 1,674 2019 1,096 2020 908 Thereafter 2,453 Total future amortization expense $ 10,853 As of September 30, 2015 and December 31, 2014, the carrying value of the Company's unamortized trade name, acquired in connection with the Company's 2011 acquisition of Orchard Acquisition Company ("OAC"), was $8.9 million and $38.8 million , respectively. As of September 30, 2015, the carrying value of Home Lending's unamortized licenses and approvals intangible asset was $12.5 million . We evaluate the carrying value of our long-term assets, including finite and indefinite-lived intangible assets, when events or circumstances warrant such a review. During the three months ended September 30, 2015, the Company re-evaluated its internal projections for its Structured Settlement and Annuity Purchasing reporting unit based on lower than anticipated results, a significant decline in the stock price of the Company's Class A common stock, and a re-assessment of the reporting unit's brand strategy. Accordingly, the Company determined these events constituted a triggering event requiring the Company to: (i) test for potential impairment for the related indefinite-lived trade name acquired in connection with the 2011 acquisition of OAC; and (ii) perform a step 1 impairment analysis on the goodwill for the reporting unit. The fair value of the indefinite-lived trade name asset was determined primarily using a discounted cash flow approach that required considerable management judgment and long-term assumptions, and is considered a Level 3 (unobservable) fair value determination in the fair value hierarchy. Specifically, the "relief from royalty" method was used that incorporated multi-year revenue projections. Key assumptions utilized in the fair value analysis included the following: (i) projected long-term growth rates in revenues directly attributable to the trade name; (ii) a discount rate, developed using a weighted average cost of capital analysis; and (iii) a royalty rate based on an analysis of royalty licensing data. As a result of this analysis, the Company determined the trade name within the reporting unit was impaired and recorded an impairment charge of $29.9 million in its unaudited condensed consolidated statements of operations for the three and nine months ended September 30, 2015. While management believes its assumptions are reasonable and will continuously evaluate for future potential impairment indicators, there can be no assurance that estimates and assumptions made for purposes of its trade name impairment testing will prove to be accurate predictions of the future. Less than anticipated revenues generated by the trade name, an increase in discount rate, and/or a decrease in our internal projected growth rates used in the discounted cash flow model could result in future impairment charges. Step 1 of the two-step goodwill impairment test involves calculating the fair value of the associated reporting unit and comparing it to the reporting unit's carrying value. If the fair value of the reporting unit is less than its carrying value, step 2 of the impairment test must be performed. Step 2 involves calculating and comparing the implied fair value of the reporting unit's goodwill with its carrying value. If the implied fair value of the goodwill is less than its carrying value, an impairment loss is recognized in an amount equal to the difference. The Company used a combination of income (i.e., discounted cash flow) and market approaches (i.e., guideline public company and guideline transactions) to estimate the fair value of the Structured Settlement and Annuity Purchasing reporting unit as of July 1, 2015. The income approach utilized multi-year cash flow projections that incorporated projected long-term growth rates and a discount rate based on a cost of equity analysis. The market approach estimated the reporting unit's fair value based on various prices and financial ratios from similar publicly traded companies and market transactions. Based on the Company's goodwill assessment, the fair value of the Structured Settlement and Annuity Purchasing reporting unit exceeded its carrying value by $17.4 million , or 9.6% . The Company believes the assumptions used in the goodwill assessment are reasonable; however, similar to the trade name impairment test, there can be no assurance that the estimates and assumptions made for purposes of goodwill impairment testing will prove to be accurate predictions of the future. Less than anticipated cash flows generated by the reporting unit, an increase in discount rate, and/or a decrease in our internal projected growth rates used in the discounted cash flow model, among other changes, could result in future goodwill impairment charges. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Under ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The standard focuses on the exit price in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. GAAP establishes a fair value reporting hierarchy to maximize the use of observable inputs when measuring fair value and defines the three levels of inputs as noted below: • Level 1 — inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that are accessible at the measurement date. • Level 2 — inputs to the valuation methodology include quoted prices in markets that are not active or quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. • Level 3 — inputs to the valuation methodology are unobservable, reflecting the entity’s own assumptions about assumptions market participants would use in pricing the asset or liability. A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Fair value is a market based measure considered from the perspective of a market participant who holds the asset or owes the liability rather than an entity specific measure. Therefore, even when market assumptions are not readily available, the Company’s own assumptions are set to reflect those that market participants would use in pricing the assets or liabilities at the measurement date. The Company uses valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs. The Company also evaluates various factors to determine whether certain transactions are orderly and may make adjustments to transactions or quoted prices when the volume and level of activity for an asset or liability have decreased significantly. The above conditions could cause certain assets and liabilities to be reclassified from Level 1 to Level 2 or Level 3 or reclassified from Level 2 to Level 3. The inputs or methodology used for valuing the assets or liabilities are not necessarily an indication of the risk associated with the assets and liabilities. The following describes the methods used in estimating the fair values of certain financial statement items: For assets and liabilities measured at fair value in the unaudited condensed consolidated financial statements : Marketable securities — The fair value of investments in marketable securities is based on quoted market prices. VIE and other finance receivables and VIE long-term debt issued by securitization and permanent financing trusts, at fair value — The estimated fair value of VIE and other finance receivables and VIE long- term debt issued by securitization and permanent financing trusts is determined based on a discounted cash flow model using expected future collections discounted at a calculated rate as described below. For guaranteed structured settlements and annuities, the Company allocates the projected cash flows based on the waterfall of the securitization and permanent financing trusts (collectivity the “Trusts”). The waterfall includes fees to operate the Trusts (servicing fees, admin fees, etc.), note holder principal and note holder interest. Many of the Trusts have various tranches of debt that have varying subordinations in the waterfall calculation. Refer to Note 14 for additional information. The remaining cash flows, net of those obligations, are considered a residual interest which is projected to be paid to the Company as the retained interest holder. The projected finance receivable cash flows used to pay the obligations of the Trusts are discounted using a calculated rate derived from the fair value interest rates of the debt in the Trusts. The fair value interest rate of the debt is derived using a swap curve and applying a calculated spread that is based on either: (i) market indices that are highly correlated with the spreads from the Company’s previous securitizations or (ii) the Company's most recent securitization if it occurs within close proximity to the reporting date. The calculated spread is adjusted for the specific attributes of the debt in the Trusts, such as years to maturity and credit grade. The debt’s fair value interest rates are applied to the projected future cash payments paid on the principal and interest to derive the debt’s fair value. The debt’s fair value interest rates are blended using the debt’s principal balance to obtain a weighted average fair value interest rate which is used to determine the value of the finance receivables’ asset cash flows. In addition, the Company considers transformation cost and profit margin associated with its securitizations to derive the fair value of its finance receivables’ asset cash flows. The finance receivables’ residual cash flows remaining after the projected obligations of the Trusts are satisfied and are discounted using a separate yield based on an assumed rating of the residual tranche ( 8.03% and 5.97% as of September 30, 2015 and December 31, 2014 , respectively, with a weighted average life of 20 years as of both dates). The residual cash flows are adjusted for a loss assumption of 0.25% over the life of the finance receivables in its fair value calculation. Finance receivable cash flows, including the residual asset cash flows, are included in VIE and other finance receivables, at fair value in the Company’s condensed consolidated balance sheets. The associated debt’s projected future cash payments for principal and interest are included in VIE long-term debt issued by securitization and permanent financing trusts, at fair value. For finance receivables not yet securitized, the Company uses the calculated spreads based on market indices, while also considering transformation costs and profit margin to determine the fair value yield adjusting for expected losses and applying the residual yield for the cash flows the Company projects would make up the retained interest in a securitization. For the Company’s Life Contingent Structured Settlements (“LCSS”) receivables and long-term debt issued by its related permanent financing trusts, the blended weighted average discount rate of the LCSS receivables at the time of borrowing (which occurs frequently throughout the year) is used to determine the fair value of the receivables’ cash flows. The residual cash flows relating to the LCSS receivables are discounted using a separate yield based on the assumed rating of the residual tranche reflecting the life contingent feature of these receivables. Life settlement contracts, at fair value — The fair values of life settlement contracts are determined by reference to the transfer price of similar contracts under a discounted cash flow calculation that takes into account the net death benefit under the policy, estimated future premium payments and the life expectancy of the insured, as well as other qualitative factors regarding market participants’ assumptions. Life expectancy is determined on a policy-by-policy basis using the results of medical underwriting performed by independent agencies. VIE derivative liabilities, at fair value — The fair value of interest rate swaps is based on pricing models which consider current interest rates and the amount and timing of cash flows. Refer to Note 15 for additional information. Mortgage loans held for sale — The fair value of mortgage loans held for sale is calculated using observable market information including pricing from actual market transactions, investor commitment prices, or broker quotations. Mortgage servicing rights — The Company uses a discounted cash flow approach to estimate the fair value of MSRs incorporating assumptions management believes market participants would use in their determination of value. The assumptions used in the estimation of the fair value of MSRs include the contractual service fees, ancillary income and late fees, the cost of servicing, the discount rate, float rate, the inflation rate, prepayment speeds and default rates. Derivative financial instruments — The Company estimates the fair value of IRLCs based on the value of the underlying mortgage loan, quoted MBS prices and estimates of the fair value of the MSRs and the probability that the mortgage loan will close within the terms of the IRLCs. These “pull-through” rates are based on the Company’s historical data and reflect the Company’s best estimate of the likelihood that a commitment will ultimately result in a closed loan. The Company estimates fair value of forward sales commitments based on quoted prices. Assets and liabilities for which fair value is only disclosed : VIE and other finance receivables, net of allowance for losses — The fair value of structured settlement, annuity, and lottery receivables is estimated based on the present value of future expected cash flows using discount rates commensurate with the risks involved. The fair value of pre-settlement funding transactions and attorney cost financing is based on expected losses and historical loss experience associated with the respective receivables using management’s best estimates of the key assumptions regarding credit losses. Other receivables, net of allowance for losses — The estimated fair value of advances receivable and certain other receivables, which are generally recovered in less than three months , is equal to the carrying amount. The carrying value of other receivables which have expected recoverability of greater than three months , which consist primarily of a note receivable, are estimated based on the present value of future expected cash flows using management’s best estimate of certain key assumptions, including discount rates commensurate with the risks involved. Installment obligations payable — Installment obligations payable are reported at contract value determined based on changes in the measuring indices selected by the obligees under the terms of the obligations over the length of the obligation. The fair value of installment obligations payable is estimated to be equal to carrying value. Term loan payable — The estimated fair value of the term loan payable is based on recently executed transactions and market price quotations obtained from third-parties. Refer to Note 10 for additional information. VIE borrowings under revolving credit facilities and other similar borrowings — The estimated fair value of borrowings under revolving credit facilities and other similar borrowings is based on the borrowing rates currently available to the Company for debt with similar terms and remaining maturities. VIE long-term debt — The estimated fair value of VIE long-term debt is based on fair value borrowing rates available to the Company based on recently executed transactions with similar underlying collateral characteristics, reflecting the specific terms and conditions of the debt. Other borrowings under revolving credit facilities and similar borrowings — The estimated fair value of borrowings under revolving credit facilities and similar borrowings is based on the borrowing rates currently available to the Company for debt with similar terms and remaining maturities. The following table sets forth the Company’s assets and liabilities that are carried at fair value on the Company’s condensed consolidated balance sheets as of: Quoted Prices in Active Markets for Identical Assets Level 1 Significant Other Observable Inputs Level 2 Significant Unobservable Inputs Level 3 Total at Fair Value (In thousands) September 30, 2015: Assets Marketable Securities: Equity securities US large cap $ 31,469 $ — $ — $ 31,469 US mid cap 4,900 — — 4,900 US small cap 8,394 — — 8,394 International 16,007 — — 16,007 Other equity 767 — — 767 Total equity securities 61,537 — — 61,537 Fixed income securities: US fixed income 17,883 — — 17,883 International fixed income 1,303 — — 1,303 Other fixed income — — — — Total fixed income securities 19,186 — — 19,186 Other securities: Cash & cash equivalents 2,650 — — 2,650 Alternative investments 221 — — 221 Annuities 2,285 — — 2,285 Total other securities 5,156 — — 5,156 Total marketable securities 85,879 — — 85,879 VIE and other finance receivables, at fair value — — 4,555,127 4,555,127 Life settlements contracts, at fair value (1) — — — — Mortgage loans held for sale, at fair value — 130,189 — 130,189 Mortgage service rights, at fair value — — 28,186 28,186 Derivative assets, at fair value (1) — — 7,822 7,822 Total Assets $ 85,879 $ 130,189 $ 4,591,135 $ 4,807,203 Liabilities VIE long-term debt issued by securitization and permanent financing trusts, at fair value $ — $ — $ 4,074,210 $ 4,074,210 VIE derivative liabilities, at fair value — 74,687 — 74,687 Other derivative liabilities, at fair value (2) — 1,929 — 1,929 Total Liabilities $ — $ 76,616 $ 4,074,210 $ 4,150,826 (1) Included in other assets on the Company’s condensed consolidated balance sheet. (2) Included in other liabilities on the Company’s condensed consolidated balance sheet. Quoted Prices in Active Markets for Identical Assets Level 1 Significant Other Observable Inputs Level 2 Significant Unobservable Inputs Level 3 Total at Fair Value (In thousands) December 31, 2014 Assets Marketable Securities: Equity securities US large cap $ 41,246 $ — $ — $ 41,246 US mid cap 8,192 — — 8,192 US small cap 7,586 — — 7,586 International 14,123 — — 14,123 Other equity 1,051 — — 1,051 Total equity securities 72,198 — — 72,198 Fixed income securities: US fixed income 16,699 — — 16,699 International fixed income 3,526 — — 3,526 Other fixed income 27 — — 27 Total fixed income securities 20,252 — — 20,252 Other securities: Cash & cash equivalents 6,629 — — 6,629 Alternative investments 1,829 — — 1,829 Annuities 2,511 — — 2,511 Total other securities 10,969 — — 10,969 Total marketable securities 103,419 — — 103,419 VIE and other finance receivables, at fair value — — 4,523,835 4,523,835 Life settlements contracts, at fair value (1) — — — — Total Assets $ 103,419 $ — $ 4,523,835 $ 4,627,254 Liabilities VIE long-term debt issued by securitization and permanent financing trusts, at fair value $ — $ — $ 4,031,864 $ 4,031,864 VIE derivative liabilities, at fair value — 75,706 — 75,706 Total Liabilities $ — $ 75,706 $ 4,031,864 $ 4,107,570 (1) Included in other assets on the Company’s condensed consolidated balance sheet. The following table sets forth the Company’s quantitative information about its Level 3 fair value measurements as of: Fair Value Valuation Technique Significant Unobservable Inputs Range (Weighted Average) (Dollars in thousands) September 30, 2015 Assets VIE and other finance receivables, at fair value $ 4,555,127 Discounted cash flow Discount rate 2.58% - 12.42% (3.82%) Life settlement contracts, at fair value — Model actuarial pricing Life expectancy Discount rate 36 to 335 months (210) 18.00% (18.00%) Mortgage servicing rights, at fair value 28,186 Discounted cash flow Discount rate 9.50% - 14.00% (10.30%) Prepayment speed 8.50% - 22.00% (10.71%) Cost of servicing $65 - $90 ($75) Total Assets $ 4,583,313 Liabilities VIE long-term debt issued by securitization and permanent financing trusts, at fair value 4,074,210 Discounted cash flow Discount rate 0.92% - 12.42% (3.44%) Total Liabilities $ 4,074,210 Fair Value Valuation Technique Significant Unobservable Inputs Range (Weighted Average) (Dollars in thousands) December 31, 2014 Assets VIE and other finance receivables, at fair value $ 4,523,835 Discounted cash flow Discount rate 2.55% - 12.60% (3.43%) Life settlement contracts, at fair value — Model actuarial pricing Life expectancy Discount rate 45 to 344 months (219) 18.00% (18.00%) Total Assets $ 4,523,835 Liabilities VIE long-term debt issued by securitization and permanent financing trusts, at fair value 4,031,864 Discounted cash flow Discount rate 0.74% - 12.32% (3.16%) Total Liabilities $ 4,031,864 A significant unobservable input used in the fair value measurement of all of the Company’s assets and liabilities measured at fair value using unobservable inputs (Level 3) is the discount rate. Significant increases (decreases) in the discount rate used to estimate fair value in isolation would result in a significantly lower (higher) fair value measurement of the corresponding asset or liability. An additional significant unobservable input used in the fair value measurement of the mortgage servicing rights, at fair value, is prepayment speed. Significant increases (decreases) in the prepayment speed used to estimate the fair value of mortgage servicing rights in isolation would result in a significantly lower (higher) fair value measurement. The changes in assets measured at fair value using significant unobservable inputs (Level 3) during the nine months ended September 30, 2015 and 2014 were as follows: VIE and other finance receivables, at fair value Mortgage Servicing Rights Life settlement contracts, at fair value Notes receivable, at fair value Total (In thousands) Balance as of December 31, 2014 $ 4,523,835 $ — $ — $ — $ 4,523,835 Total gains (losses): Included in earnings / losses (5,320 ) 548 (13 ) — (4,785 ) Included in other comprehensive gain — — — — — Purchases of finance receivables 296,468 — — — 296,468 Life insurance premiums paid — — 13 — 13 Interest accreted 124,870 — — — 124,870 Payments received (384,726 ) — — — (384,726 ) MSR acquired in connection with the Home Lending acquisition — 27,638 — — 27,638 Transfers in and/or out of Level 3 — — — — — Balance as of September 30, 2015 $ 4,555,127 $ 28,186 $ — $ — $ 4,583,313 The amount of net gains (losses) for the period included in revenues attributable to the change in unrealized gains or losses relating to assets still held as of: September 30, 2015 $ (5,320 ) $ 548 $ (13 ) $ — $ (4,785 ) Balance as of December 31, 2013 $ 3,870,649 $ — $ — $ 5,610 $ 3,876,259 Total gains (losses): Included in earnings / losses 398,987 — (116 ) 2,098 400,969 Included in other comprehensive gain — — — (1,615 ) (1,615 ) Purchases of finance receivables 320,485 — — — 320,485 Life insurance premiums paid — — 116 — 116 Interest accreted 123,140 — — — 123,140 Payments received (356,803 ) — — (6,093 ) (362,896 ) Transfers in and/or out of Level 3 — — — — — Balance as of September 30, 2014 $ 4,356,458 $ — $ — $ — $ 4,356,458 The amount of net gains (losses) for the period included in revenues attributable to the change in unrealized gains or losses relating to assets still held as of: September 30, 2014 $ 398,987 $ — $ (116 ) $ — $ 398,871 The changes in liabilities measured at fair value using significant unobservable inputs (Level 3) during the nine months ended September 30, 2015 and 2014 were as follows: VIE long-term debt issued by securitizations and permanent financing trusts, at fair value (In thousands) Balance as of December 31, 2014 $ 4,031,864 Net (gains) losses: Included in earnings / losses (67,305 ) Issuances 380,417 Interest accreted (33,659 ) Repayments (237,107 ) Fair value adjustment — Transfers in and/or out of Level 3 — Balance as of September 30, 2015 $ 4,074,210 The amount of net (gains) losses for the period included in revenues attributable to the change in unrealized gains or losses relating to long-term debt still held as of: September 30, 2015 $ (66,712 ) Balance as of December 31, 2013 $ 3,431,283 Net (gains) losses: Included in earnings / losses 177,420 Issuances 473,782 Interest accreted (28,944 ) Repayments (216,685 ) Transfers in and/or out of Level 3 — Balance as of September 30, 2014 $ 3,836,856 The amount of net losses for the period included in revenues attributable to the change in unrealized gains or losses relating to long-term debt still held as of: September 30, 2014 $ 177,667 Realized and unrealized gains and losses included in revenues in the accompanying unaudited condensed consolidated statements of operations for the three and nine months ended September 30, 2015 and 2014 are reported in the following revenue categories: VIE and other finance receivables and long- term debt Mortgage servicing rights Life settlement contracts income (In thousands) Net gains (losses) included in revenues in the three months ended September 30, 2015 $ 13,952 $ 845 $ (3 ) Unrealized gains (losses) for the three months ended September 30, 2015 relating to assets and long-term debt still held as of September 30, 2015 $ 13,952 $ 548 $ (3 ) Net gains (losses) included in revenues in the nine months ended September 30, 2015 $ 61,985 $ 845 $ (13 ) Unrealized gains (losses) for the nine months ended September 30, 2015 relating to assets and long-term debt still held as of September 30, 2015 $ 61,392 $ 548 $ (13 ) Net gains (losses) included in revenues in the three months ended September 30, 2014 $ 59,467 $ — $ — Unrealized gains (losses) for the three months ended September 30, 2014 relating to assets and long-term debt still held as of September 30, 2014 $ 59,197 $ — $ — Net gains (losses) included in revenues in the nine months ended September 30, 2014 $ 221,567 $ — $ (116 ) Unrealized gains (losses) for the nine months ended September 30, 2014 relating to assets and long-term debt still held as of September 30, 2014 $ 221,320 $ — $ (116 ) The Company discloses fair value information about financial instruments, whether or not recognized at fair value in the Company’s condensed consolidated balance sheets, for which it is practicable to estimate that value. As such, the estimated fair values of the Company’s financial instruments are as follows: September 30, 2015 December 31, 2014 (In thousands) Estimated Fair Value Carrying Amount Estimated Fair Value Carrying Amount Financial assets: VIE and other finance receivables, at fair value $ 4,555,127 $ 4,555,127 $ 4,523,835 $ 4,523,835 VIE and other finance receivables, net of allowance for losses (1) 110,927 118,238 123,765 131,292 Other receivables, net of allowance for losses (1) 16,124 16,124 14,165 14,165 Mortgage loans held for sale, at fair value 130,189 130,189 — — Mortgage servicing rights, at fair value 28,186 28,186 — — Marketable securities 85,879 85,879 103,419 103,419 Derivative assets (2) 7,822 7,822 — — Financial liabilities: Term loan payable (1) 380,996 439,431 433,904 437,183 VIE derivative liabilities, at fair value 74,687 74,687 75,706 75,706 VIE borrowings under revolving credit facilities and other similar borrowings (1) 87,241 82,987 21,415 19,339 Other borrowings under revolving credit facilities and other similar borrowings 126,494 126,494 — — VIE long-term debt (1) 195,967 201,464 176,635 181,558 VIE long-term debt issued by securitization and permanent financing trusts, at fair value 4,074,210 4,074,210 4,031,864 4,031,864 Installment obligations payable (1) 85,879 85,879 103,419 103,419 Other derivative liabilities (3) 1,929 1,929 — — (1) These represent financial instruments that are recorded in the condensed consolidated balance sheets at cost. Such financial instruments would be classified as Level 3 within the fair value hierarchy. (2) Included in the other assets on the Company's condensed consolidated balance sheets. (3) Included in the other liabilities on the Company's condensed consolidated balance sheets. |
VIE and Other Finance Receivabl
VIE and Other Finance Receivables, at Fair Value | 9 Months Ended |
Sep. 30, 2015 | |
VIE and Other Finance Receivables, at Fair Market Value | |
VIE and Other Finance Receivables, at Fair Value | VIE and Other Finance Receivables, at Fair Value The Company has elected to fair value newly originated guaranteed structured settlements in accordance with ASC 825 Financial Instruments ("ASC 825"). Additionally, as a result of the Company including lottery winning finance receivables starting with its 2013-1 asset securitization, the Company also elected to fair value newly originated lottery winnings effective January 1, 2013. VIE and other finance receivables for which the fair value option was elected consist of the following: September 30, 2015 December 31, 2014 (In thousands) Maturity value $ 6,843,129 $ 6,492,863 Unearned income (2,288,002 ) (1,969,028 ) Net carrying amount $ 4,555,127 $ 4,523,835 Encumbrances on VIE and other finance receivables, at fair value were as follows: Encumbrance September 30, 2015 December 31, 2014 (In thousands) VIE securitization debt (2) $ 4,333,342 $ 4,357,456 $100 million credit facility (JGW-S III) (1) 34,649 2 $50 million credit facility (JGW IV) (1) — — $300 million credit facility (JGW V) (1) 40,213 — $300 million credit facility (JGW VII) (1) 35,092 — $100 million permanent financing related to 2011-A (2) 78,031 64,575 Encumbered VIE finance receivables, at fair value 4,521,327 4,422,033 Not encumbered 33,800 101,802 Total VIE and other finance receivables, at fair value $ 4,555,127 $ 4,523,835 (1) Refer to Note 11. (2) Refer to Note 14. As of September 30, 2015 and December 31, 2014 , the residual cash flows from the Company’s finance receivables, at fair value, were pledged as collateral for the Residual Term Facility. Refer to Note 13 for additional information. The Company is engaged to service certain finance receivables it sells to third parties. Servicing fee revenue related to those receivables are included in servicing, broker, and other fees in the Company’s unaudited condensed consolidated statements of operations and were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 (In thousands) Servicing fee income $ 199 $ 230 $ 614 $ 691 |
VIE and Other Finance Receiva14
VIE and Other Finance Receivables, net of Allowance for Losses | 9 Months Ended |
Sep. 30, 2015 | |
VIE and Other Finance Receivables, net of Allowance for Losses | |
VIE and Other Finance Receivables, net of Allowance for Losses | VIE and Other Finance Receivables, net of Allowance for Losses VIE and other finance receivables, net of allowance for losses consist of the following: September 30, 2015 December 31, 2014 (In thousands) Structured settlements and annuities $ 73,059 $ 76,253 Less: unearned income (46,687 ) (49,270 ) 26,372 26,983 Lottery winnings 76,184 81,169 Less: unearned income (21,550 ) (24,389 ) 54,634 56,780 Pre-settlement funding transactions 48,768 57,886 Less: deferred revenue (1,397 ) (1,563 ) 47,371 56,323 Attorney cost financing 960 1,334 Less: deferred revenue — — 960 1,334 VIE and other finance receivables, gross 129,337 141,420 Less: allowance for losses (11,099 ) (10,128 ) VIE and other finance receivables, net of allowances $ 118,238 $ 131,292 Encumbrances on VIE and other finance receivables, net of allowance for losses are as follows: Encumbrance September 30, 2015 December 31, 2014 (In thousands) VIE long-term debt (2) $ 72,757 $ 74,973 $35.0 million pre-settlement credit facility (1) 28,461 30,423 $45.1 million long-term pre-settlement facility (2) 4,004 6,453 $2.5 million long-term facility (2) 1,291 1,640 Encumbered VIE finance receivables, net of allowances 106,513 113,489 Not encumbered 11,725 17,803 Total VIE and other finance receivables, net of allowances $ 118,238 $ 131,292 (1) Refer to Note 11. (2) Refer to Note 13. Activity in the allowance for losses for VIE and other finance receivables were as follows : Structured Settlement and Annuity Purchasing Lottery Pre-settlement funding transactions Attorney cost financing Total (In thousands) Three Months Ended September 30, 2015 Allowance for losses: Balance as of June 30, 2015 $ (50 ) $ (3 ) $ (10,632 ) $ (283 ) $ (10,968 ) Provision for loss (21 ) — (1,190 ) — (1,211 ) Charge-offs 32 — 1,057 — 1,089 Recoveries (5 ) — (3 ) (1 ) (9 ) Balance as of September 30, 2015 $ (44 ) $ (3 ) $ (10,768 ) $ (284 ) $ (11,099 ) Nine Months Ended September 30, 2015 Allowance for losses: Balance as of December 31, 2014 $ (56 ) $ (3 ) $ (9,786 ) $ (283 ) $ (10,128 ) Provision for loss (129 ) (69 ) (3,970 ) — (4,168 ) Charge-offs 149 69 2,991 — 3,209 Recoveries (8 ) — (3 ) (1 ) (12 ) Balance as of September 30, 2015 $ (44 ) $ (3 ) $ (10,768 ) $ (284 ) $ (11,099 ) Individually evaluated for impairment $ (44 ) $ (3 ) $ (2,212 ) $ — $ (2,259 ) Collectively evaluated for impairment — — (8,556 ) (284 ) (8,840 ) Balance as of September 30, 2015 $ (44 ) $ (3 ) $ (10,768 ) $ (284 ) $ (11,099 ) VIE and other finance receivables, net: Individually evaluated for impairment $ 26,328 $ 54,631 $ 184 $ — $ 81,143 Collectively evaluated for impairment — — 36,419 676 37,095 Balance as of September 30, 2015 $ 26,328 $ 54,631 $ 36,603 $ 676 $ 118,238 Three Months Ended September 30, 2014 Allowance for losses: Balance as of June 30, 2014 $ (55 ) $ (4 ) $ (8,642 ) $ (283 ) $ (8,984 ) Provision for loss (6 ) — (1,049 ) — (1,055 ) Charge-offs 6 — 598 — 604 Recoveries — — (22 ) — (22 ) Balance as of September 30, 2014 $ (55 ) $ (4 ) $ (9,115 ) $ (283 ) $ (9,457 ) Nine Months Ended September 30, 2014 Allowance for losses: Balance as of December 31, 2013 $ (48 ) $ — $ (8,011 ) $ (283 ) $ (8,342 ) Provision for loss (14 ) (8 ) (3,251 ) — (3,273 ) Charge-offs 110 29 2,169 — 2,308 Recoveries (103 ) (25 ) (22 ) — (150 ) Balance as of September 30, 2014 $ (55 ) $ (4 ) $ (9,115 ) $ (283 ) $ (9,457 ) Individually evaluated for impairment $ (55 ) $ (4 ) $ (2,874 ) $ — $ (2,933 ) Collectively evaluated for impairment — — (6,241 ) (283 ) (6,524 ) Balance as of September 30, 2014 $ (55 ) $ (4 ) $ (9,115 ) $ (283 ) $ (9,457 ) VIE and other finance receivables, net: Individually evaluated for impairment $ 26,915 $ 57,842 $ 3,346 $ — $ 88,103 Collectively evaluated for impairment — — 43,647 1,138 44,785 Balance as of September 30, 2014 $ 26,915 $ 57,842 $ 46,993 $ 1,138 $ 132,888 Management makes significant estimates in determining the allowance for losses on finance receivables. Consideration is given to a variety of factors in establishing these estimates, including current economic conditions and anticipated delinquencies. Because the allowance for losses is dependent on general and other economic conditions beyond the Company’s control, it is at least reasonably possible that the estimate for the allowance for losses could differ materially from the currently reported amount in the near term. The Company suspends recognizing interest income on a receivable when it is probable that the Company will be unable to collect all payments according to the contractual terms of the underlying agreement. Management considers all information available in assessing collectability. Collectability is measured on a receivable-by-receivable basis by either the present value of estimated future cash flows discounted at the effective rate, the observable market price for the receivable or the fair value of the collateral if the receivable is collateral dependent. Large groups of smaller balance homogeneous receivables, such as pre-settlement funding transactions, are collectively assessed for collectability. Payments received on past due receivables and finance receivables on which the Company has suspended recognizing revenue are applied first to principal and then to accrued interest. Additionally, the Company generally does not resume recognition of interest income once it has been suspended. As of September 30, 2015 , the Company had discontinued recognition of income on pre-settlement funding transactions and attorney cost financing receivables totaling $13.4 million and $0.5 million , respectively. As of December 31, 2014 , the Company had discontinued recognition of income on pre-settlement funding transactions and attorney cost financing receivables totaling $14.0 million and $0.6 million , respectively. Pre-settlement funding transactions and attorney cost financing are usually outstanding for a period of time exceeding one year. The Company assesses the status of the individual pre-settlement funding transactions to determine whether there are any case specific concerns that need to be addressed and included in the allowance for losses on finance receivables. The Company also analyzes pre-settlement funding transactions on a portfolio basis based on the advances’ age as the ability to collect is correlated to the duration of time the advances are outstanding. The following table presents gross finance receivables related to pre-settlement funding transactions based on their year of origination: Year of Origination September 30, 2015 December 31, 2014 (In thousands) 2009 $ 1,324 $ 2,618 2010 3,224 4,251 2011 5,932 6,938 2012 7,070 10,687 2013 7,432 11,335 2014 19,192 22,057 2015 4,594 — Total $ 48,768 $ 57,886 Based on historical portfolio experience, the Company reserved for pre-settlement funding transactions and attorney cost financing $10.8 million and $0.3 million as of September 30, 2015 , and $9.8 million and $0.3 million as of December 31, 2014 , respectively. The following table presents portfolio delinquency status excluding pre-settlement funding transactions and attorney cost financing as of: 30-59 Days Past Due 60-89 Days Past Due Greater than 90 Days Total Past Due Current VIE and Other Finance Receivables, net VIE and Other Finance Receivables, net > 90 days accruing (In thousands) September 30, 2015 Structured settlements and annuities $ 5 $ 4 $ 128 $ 137 $ 26,191 $ 26,328 $ — Lottery winnings — 1 131 132 54,499 54,631 — Total $ 5 $ 5 $ 259 $ 269 $ 80,690 $ 80,959 $ — December 31, 2014 Structured settlements and annuities $ 6 $ 12 $ 208 $ 226 $ 26,701 $ 26,927 $ — Lottery winnings 2 6 120 128 56,649 56,777 — Total $ 8 $ 18 $ 328 $ 354 $ 83,350 $ 83,704 $ — Pre-settlement funding transactions and attorney cost financing do not have set due dates as payment is dependent on the underlying case settling. |
Mortgage Loans Held for Sale, a
Mortgage Loans Held for Sale, at Fair Value | 9 Months Ended |
Sep. 30, 2015 | |
Receivables [Abstract] | |
Mortgage Loans, Held for Sale, at Fair Value | Mortgage Loans Held For Sale, at Fair Value Mortgage loans held for sale, at fair value were as follows: September 30, 2015 (In thousands) Unpaid principal balance of mortgage loans held for sale $ 124,779 Fair value adjustment 5,410 Mortgage loans held for sale, at fair value $ 130,189 A reconciliation of the changes in mortgage loans held for sale, at fair value is presented in the following table: Three Months Ended September 30, 2015 (In thousands) Acquired through Home Lending acquisition $ 131,325 Mortgage loans originated, net of fees 352,641 Proceeds from sale of and principal payments on mortgage loans held for sale (362,723 ) Realized and unrealized gains on sale of mortgage loans held for sale, net of direct costs 8,946 As of September 30, 2015 $ 130,189 Included in mortgage loans held for sale, at fair value are loans repurchased out of GNMA pools where we are the named servicer. As the named servicer, the Company has the right to repurchase any individual loan in a GNMA securitization pool if that loan meets certain criteria, including being delinquent greater than 90 days . The majority of GNMA repurchased loans are repurchased solely with the intent to repool into new GNMA securitizations or to otherwise sell to third-party investors. Since the acquisition date, the Company has repurchased $3.2 million of mortgage loans from GNMA securitization pools. The Company did not have any mortgage loans held for sale on non-accrual status as of September 30, 2015 . Loan Indemnification Reserve Mortgage loans sold to investors by the Company and which met investor and agency underwriting guidelines at the time of sale may be subject to repurchase in the event of specific default by the borrower or subsequent discovery that underwriting standards were not met. The Company may, upon mutual agreement, indemnify the investor against future losses on such loans. The Company has established a reserve for potential losses related to these representations and warranties. In assessing the adequacy of the reserve, the Company evaluates various factors including actual write-offs during the period, historical loss experience, known delinquent and other problem loans, and economic trends and conditions in the industry. Actual losses incurred are reflected as charge-offs against the reserve liability. The loan indemnification reserve is included in other liabilities on the Company’s condensed consolidated balance sheets . The activity in the loan indemnification reserve was as follows: Loan Indemnification Reserve (In thousands) Acquired through Home Lending acquisition $ 3,031 Provision for loan losses 409 Write-offs (520 ) Balance as of September 30, 2015 $ 2,920 Due to the uncertainty in the various estimates underlying the loan indemnification reserve, there is a range of losses in excess of the recorded loan indemnification reserve that is reasonably possible. The estimate of the range of possible loss for representations and warranties does not represent a probable loss, and is based on current available information, significant judgment, and a number of assumptions that are subject to change. |
Mortgage Servicing Rights, at F
Mortgage Servicing Rights, at Fair Value | 9 Months Ended |
Sep. 30, 2015 | |
Transfers and Servicing [Abstract] | |
Mortgage Servicing Rights, at Fair Value | Mortgage Servicing Rights, at Fair Value The activity of MSRs were as follows: MSR (In thousands) Acquired through Home Lending acquisition $ 27,638 Additions due to loans sold, servicing retained 1,298 Reductions due to loan payoffs and foreclosures (631 ) Fair value adjustment (119 ) Balance as of September 30, 2015 $ 28,186 The unpaid principal balance of mortgage loans serviced was $2.8 billion as of September 30, 2015 . Conforming conventional loans serviced by the Company are sold to FNMA on a non-recourse basis, whereby foreclosure losses are generally the responsibility of FNMA, and not the Company. Similarly, the government loans serviced by the Company are secured through GNMA, whereby the Company is insured against loss by the FHA or partially guaranteed against loss by the VA. The key assumptions used in determining the fair value of the Company's MSRs were as follows: September 30, 2015 Discount rates 9.5% - 14.0% Annual prepayment speeds 8.5% - 22.0% Cost of servicing $65 - $90 The hypothetical effect of an adverse change in these key assumptions that would result in a decrease in fair values are as follows: September 30, 2015 Discount rate: Effect on value - 100 basis points adverse change $ (1,038 ) Effect on value - 200 basis points adverse change $ (2,004 ) Prepayment speeds: Effect on value - 5% adverse change $ (523 ) Effect on value - 10% adverse change $ (1,048 ) Cost of servicing: Effect on value - 5% adverse change $ (193 ) Effect on value - 10% adverse change $ (386 ) These sensitivities are hypothetical and should be used with caution. As the table demonstrates, the Company's methodology for estimating the fair value of MSRs is highly sensitive to changes in assumptions. For example, actual prepayment experience may differ and any difference may have a material effect on MSR fair value. Changes in fair value resulting from changes in assumptions generally cannot be extrapolated because the relationship of the change in assumption to the change in fair value may not be linear. Also, in the table, the effect of a variation in a particular assumption on the fair value of the MSRs is calculated without changing any other assumption; however, changes in one factor may be associated with changes in another (for example, decreases in market interest rates may indicate higher prepayments; however, this may be partially offset by lower prepayment due to other factors such as a borrower's diminished opportunity to refinance), which may magnify or counteract the sensitivities. Thus, any measurement of MSR fair value is limited by the conditions existing and assumptions made as of a particular point in time. Those assumptions may not be appropriate if they are applied to a different point in time. |
Term Loan Payable
Term Loan Payable | 9 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
Term Loan Payable | Term Loan Payable The Company has a senior secured credit facility (the “Credit Facility”) that consists of a term loan (the “New Term Loan”) with an outstanding principal balance of $449.5 million as of September 30, 2015 and December 31, 2014 , and a $20.0 million revolving commitment maturing in August 2017. Certain of the Company's subsidiaries are guarantors of the Credit Facility and substantially all of the non-securitized and non-collateralized assets of the Company are pledged as security for the repayment of borrowings outstanding under the Credit Facility. There are no principal payments due on the New Term Loan until its maturity in February 2019. At each interest reset date, the Company has the option to elect that the New Term Loan be either a Eurodollar loan or a Base Rate loan. If a Eurodollar loan, interest on the New Term Loan accrues at either Libor or 1.00% (whichever is greater) plus a spread of 6.00% . If a Base Rate loan, interest accrues at prime or 2.00% (whichever is greater) plus a spread of 5.00% . As of September 30, 2015 , the interest rate on the New Term Loan was 7.00% . The revolving commitment has the same interest rate terms as the New Term Loan. In addition, the revolving commitment is subject to an unused fee of 0.5% per annum and provides for the issuance of letters of credit equal to $10.0 million , subject to customary terms and fees. The Credit Facility requires the Company, to the extent that as of the last day of any fiscal quarter outstanding balances on the revolving commitment exceed specific thresholds, to comply with a maximum total leverage ratio . As of September 30, 2015 and December 31, 2014 , there were no outstanding borrowings under the revolving commitment, and, as a result, the maximum total leverage ratio requirement pertaining to the $20.0 million revolving commitment was not applicable. The Credit Facility also limits the Company and certain of its subsidiaries from engaging in certain activities, including incurrence of additional indebtedness, incurring liens, making investments, transacting with affiliates, disposing of assets, and various other activities. In addition, the Credit Facility limits, with certain exceptions, certain of the Company’s subsidiaries from paying cash dividends and making loans to the Company, the calculation of which is performed annually as of the end of each fiscal year. Interest expense relating to the New Term Loan for the three months ended September 30, 2015 and 2014 was approximately $10.2 million and $10.1 million , respectively. Interest expense relating to the New Term Loan for the nine months ended September 30, 2015 and 2014 was approximately $30.2 million and $30.1 million , respectively. On July 15, 2015, the Credit Facility was amended to permit mortgage financing indebtedness in connection with the Home Lending acquisition. The Company accounted for this amendment as a debt modification. In connection with the amendment, the Company incurred $0.7 million in consent fees which will be deferred and amortized as an adjustment to interest expense over the remaining life of the modified debt. In addition, the Company paid $0.2 million in fees which were included in professional and consulting fees in the Company's unaudited condensed consolidated statement of operations. |
VIE Borrowings Under Revolving
VIE Borrowings Under Revolving Credit Facilities and Other Similar Borrowings | 9 Months Ended |
Sep. 30, 2015 | |
VIE Borrowings Under Revolving Credit Facilities and Other Similar Borrowings | |
VIE Borrowings Under Revolving Credit Facilities and Other Similar Borrowings | VIE Borrowings Under Revolving Credit Facilities and Other Similar Borrowings VIE borrowings under revolving credit facilities and other similar borrowings on the condensed consolidated balance sheets consist of the following: Entity September 30, 2015 December 31, 2014 (In thousands) $100 million variable funding note facility with interest payable monthly (6.5% as of September 30, 2015 and 9.0% as of December 31, 2014), collateralized by JGW-S III, LLC's (“JGW-S III”) structured settlement receivables, 2-year revolving period with 18 months amortization period thereafter upon notice by the issuer or the note holder with all principal and interest outstanding payable no later than October 15, 2048. JGW-S III is charged monthly an unused fee (0.75% as of September 30, 2015 and 1.0% as of December 31, 2014) per annum for the undrawn balance of its line of credit. JGW-S III $ 22,247 $ — $50 million credit facility, interest payable monthly at the rate of LIBOR plus an applicable margin (3.45% as of September 30, 2015 and 3.42% as of December 31, 2014) maturing on October 2, 2016, collateralized by JGW IV, LLC's (“JGW IV”) structured settlement and annuity receivables. JGW IV is charged monthly an unused fee of 0.50% per annum for the undrawn balance of its line of credit. JGW IV — 6 $300 million multi-tranche and lender credit facility with interest payable monthly as follows: Tranche A rate comprises 3.0% and either the LIBOR or the Commercial Paper rate depending on the lender (3.20% and 3.37% as of September 30, 2015 and 3.17% and 3.26% at December 31, 2014). Tranche B rate is 5.5% plus LIBOR (5.70% as of September 30, 2015, 5.67% at December 31, 2014). The facility matures on July 24, 2016 and is collateralized by JGW V, LLC's (“JGW V”) structured settlement, annuity and lottery receivables. JGW V is charged monthly an unused fee of 0.625% per annum for the undrawn balance of its line of credit. JGW V 25,784 — $300 million credit facility, interest payable monthly at 2.75% plus an applicable margin (3.09% as of September 30, 2015 and 2.92% at December 31, 2014), maturing on November 15, 2016, collateralized by JGW VII, LLC's (“JGW VII”) structured settlement, annuity and lottery receivables. JGW VII is charged monthly an unused fee of 0.50% per annum for the undrawn balance of its line of credit. JGW VII 22,059 — $35 million multi class credit facility with interest payable monthly as follows: Class A rate comprises the lender’s “prime rate” plus 1.00%, subject to a floor of 4.50% (4.50% as of September 30, 2015 and December 31, 2014). Class B rate comprises the Class A rate plus 1.00% (5.50% as of September 30, 2015 and December 31, 2014). The facility matures on December 31, 2015 and is collateralized by certain pre-settlement receivables. Peach One is charged monthly an unused fee of 0.50% per annum for the undrawn balance of its line of credit. Peach One 12,897 19,333 Total VIE borrowings under revolving credit facilities and other similar borrowings $ 82,987 $ 19,339 In June 2015, the Company amended its $100 million variable funding note facility to reduce the unused fee from 1.0% to 0.75% and to reduce the interest rate from 9.0% to 6.5% for outstanding borrowings less than $50.0 million . If outstanding borrowings under the facility exceed $50.0 million , the interest rate increases to 9.0% on the total outstanding balance. In June 2015, the counterparty to the $35.0 million Peach One credit facility notified the Company it would not extend the facility's revolving maturity date past December 31, 2015. As a result, the principal amount outstanding under the facility as of December 31, 2015 will convert into a "term advance" requiring minimum principal payments over the subsequent 24 months amortization period with interest payable monthly and calculated in the same manner as the original credit facility. Interest expense, including unused fees, for the three months ended September 30, 2015 and 2014 related to VIE borrowings under revolving credit facilities and other borrowings was $2.3 million and $2.2 million , respectively. Interest expense, including unused fees, for the nine months ended September 30, 2015 and 2014 related to VIE borrowings under revolving credit facilities and other similar borrowings was $6.7 million and $6.7 million , respectively. The weighted average interest rate on outstanding VIE borrowings under revolving credit facilities and other similar borrowings as of September 30, 2015 and December 31, 2014 was 4.36% and 4.63% , respectively. |
Other Borrowings Under Revolvin
Other Borrowings Under Revolving Credit Facilities and Other Similar Borrowings | 9 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
Other Borrowings Under Revolving Credit Facilities and Other Similar Borrowings | Other Borrowings Under Revolving Credit Facilities and Other Similar Borrowings Lines of Credit The Company had the following lines of credit with various financial institutions: September 30, 2015 (In thousands) $35 million warehouse line of credit maturing on November 9, 2015, with an interest rate of 3.50% as of September 30, 2015 and a non-usage fee of 0.25%. $ 23,524 $60 million warehouse line of credit maturing on December 23, 2015 with an interest rate of 2.50% as of September 30, 2015 and a non-usage fee of 0.25%. (1) 41,121 $45 million warehouse line of credit maturing on September 1, 2016 with an interest rate of 2.25% as of September 30, 2015. (2) 23,717 $20 million warehouse line of credit maturing on July 6, 2016 with an interest rate of 2.50% as of September 30, 2015. (2) — $50 million warehouse line of credit maturing April 11, 2016 with an interest rate of 2.50% as of September 30, 2015 and a non-usage fee of 0.25%. 34,119 $6 million operating line of credit maturing July 6, 2016 with an interest rate of 5.00% as of September 30, 2015 and a non-usage fee of 0.50%. 4,013 Total other borrowings under revolving credit facilities and other similar borrowings $ 126,494 (1) Under the terms of the loan agreement, the availability was automatically reduced to $50.0 million as of October 15, 2015. (2) These facilities do not incur fees for non-usage. Interest expense, including unused fees, for the three and nine months ended September 30, 2015 related to other borrowings under revolving credit facilities was $0.5 million . The weighted average interest rate on outstanding other borrowings under revolving credit facilities as of September 30, 2015 was 2.61% . As of September 30, 2015 , the Company had pledged mortgage loans held for sale as collateral under the above warehouse lines of credit. The above agreements also contain covenants which include certain financial requirements, including maintenance of maximum adjusted leverage ratio, minimum net worth, minimum tangible net worth, minimum liquidity, minimum current ratio, minimum unencumbered cash, positive net income, and limitations on additional indebtedness and sale of assets, as defined in the agreements. The Company was in compliance with its debt covenants as of September 30, 2015 . Additionally, as of September 30, 2015, the Company had pledged MSRs as collateral under the above operating line of credit. |
VIE Long-Term Debt
VIE Long-Term Debt | 9 Months Ended |
Sep. 30, 2015 | |
VIE Long-Term Debt | |
VIE Long-Term Debt | VIE Long-Term Debt The VIE long-term debt consisted of the following: September 30, 2015 December 31, 2014 (In thousands) PLMT Permanent Facility $ 42,443 $ 44,277 Residual Term Facility 131,096 107,043 Long-Term Pre-settlement Facility 7,050 8,884 2012-A Facility 1,072 1,357 LCSS Facility (2010-C) 12,644 12,838 LCSS Facility (2010-D) 7,159 7,159 Total VIE long-term debt $ 201,464 $ 181,558 PLMT Permanent Facility The Company has a $75.0 million floating rate asset backed loan with interest payable monthly at one-month LIBOR plus 1.25% which is currently in a runoff mode with the outstanding balance being reduced by periodic cash collections on the underlying lottery receivables. The loan matures on October 30, 2040. The debt agreement with the counterparty requires Peachtree Lottery Master Trust (“PLMT”) to hedge each lottery receivable with a pay fixed and receive variable interest rate swap with the counterparty. The swaps are included within VIE derivative liabilities, at fair value on the condensed consolidated balance sheets. Residual Term Facility On August 13, 2015, the Company amended its Residual Term Facility (the "Residual Term Facility") to increase the term debt by $ 25.0 million to $133.0 million . The amendment was treated as a debt modification. In connection with the modification, the Company paid $0.6 million in fees that were included in professional and consulting fees in the Company's unaudited condensed consolidated statement of operations. The Residual Term Facility is collateralized by the cash flows from residual interests related to certain securitizations. Interest accrues on the notes at a rate of 7.25% per annum with interest and principal payable monthly from cash flows from these collateralized residual interests. Prior to this amendment, interest accrued on the notes at a rate of 7.00% per annum. The Residual Term Facility matures on May 15, 2021. Long-Term Pre-settlement Facility In 2011, the Company issued three fixed rate notes totaling $45.1 million collateralized by pre-settlement funding transactions. Interest accrues on the notes at a rate of 9.25% per annum with interest and principal payable monthly from the cash receipts of collateralized pre-settlement funding transactions. The notes mature on June 6, 2016. 2012-A Facility In December 2012, the Company issued a series of notes collateralized by structured settlements. The proceeds to the Company from the issuance of the notes were $2.5 million and interest accrues on the notes at a fixed interest rate of 9.25% . Interest and principal are payable monthly from cash receipts of collateralized structured settlement receivables. The notes mature on June 15, 2024. Long-Term Debt for Life Contingent Structured Settlements (2010-C & 2010-D) Long-Term Debt (2010-C) In November 2010, the Company issued a private asset class securitization note (“2010-C”) under Rule 144A under the Securities Act of 1933, as amended (“Rule 144A”). The 2010-C bond issuance of $12.9 million is collateralized by life-contingent structured settlements. 2010-C accrues interest at 10% per annum and matures on March 15, 2039. The interest and, if available, principal payments are payable monthly from cash receipts of collateralized life-contingent structured settlements receivables. Long-Term Debt (2010-D) In December 2010, the Company paid $0.2 million to purchase the membership interests of LCSS, LLC from JLL Partners. LCSS, LLC owns 100% of the membership interests of LCSS II, LLC, which owns 100% of the membership interests of LCSS III, LLC (“LCSS III”). In November 2010, LCSS III issued $7.2 million long-term debt (“2010-D”) collateralized by life-contingent structured settlements. 2010-D accrues interest at 10% per annum and matures on July 15, 2040. The interest and, if available, principal payments are payable monthly from cash receipts of collateralized life-contingent structured settlements receivables. Interest expense for the three months ended September 30, 2015 and 2014 related to VIE long-term debt was $4.3 million and $3.7 million , respectively. Interest expense for the nine months ended September 30, 2015 and 2014 related to VIE long-term debt was $12.4 million and $11.2 million , respectively. |
VIE Long-Term Debt Issued by Se
VIE Long-Term Debt Issued by Securitization and Permanent Financing Trusts, at Fair Value | 9 Months Ended |
Sep. 30, 2015 | |
VIE Long-term Debt Issued by Securitization and Permanent Financing trusts, at Fair Value | |
VIE Long-term Debt Issued by Securitization and Permanent Financing Trusts, at Fair Value | VIE Long-Term Debt Issued by Securitization and Permanent Financing Trusts, at Fair Value Securitization Debt The Company elected fair value option under ASC 825 to measure the securitization issuer debt and related finance receivables. The Company has determined that measurement of the securitization debt issued by special purpose entities ("SPEs") at fair value better correlates with the value of the finance receivables held by SPEs, which are held to provide the cash flows for the note obligations. Debt issued by SPEs is non-recourse to other subsidiaries. Certain subsidiaries of the Company continue to receive fees for servicing the securitized assets which are eliminated upon consolidation. In addition, the risk to the Company’s non-SPE subsidiaries from SPE losses is limited to cash reserves and residual interest amounts. During the nine months ended September 30, 2015 , the Company completed two asset securitization transaction that were registered under Rule 144A. The following table summarizes this securitization SPE transactions: 2015-2 2015-1 (Bond proceeds in $ millions) Issue date 7/28/2015 3/31/2015 Bond proceeds $158.4 $214.0 Receivables securitized 2,489 3,422 Deal discount rate 4.18% 3.64% Retained interest % 5.50% 5.50% Class allocation (Moody’s) Aaa 84.75% 85.25% Baa2 9.75% 9.25% During the nine months ended September 30, 2014 , the Company also completed two asset securitization transactions that were registered under Rule 144A. The following table summarizes these securitization SPE transactions: 2014-2 2014-1 (Bond proceeds in $ millions) Issue date 7/23/2014 2/18/2014 Bond proceeds $227.4 $233.9 Receivables securitized 3,744 4,128 Deal discount rate 3.95% 4.24% Retained interest % 5.50% 6.00% Class allocation (Moody’s) Aaa 84.00% 85.25% Baa2 10.50% 8.75% The following table summarizes notes issued by securitization trusts and permanent financing trusts for which the Company elected the fair value option and which are recorded as VIE long-term debt issued by securitization and permanent financing trusts, at fair value in the Company’s condensed consolidated balance sheets: Outstanding Outstanding Principal as of December 31, 2014 Fair Value as of Fair Value as of December 31, 2014 (In thousands) Securitization trusts $ 3,609,467 $ 3,462,225 $ 3,828,933 $ 3,774,902 Permanent financing VIEs 250,591 253,955 245,277 256,962 Total VIE long-term debt issued by securitization and permanent financing trusts, at fair value $ 3,860,058 $ 3,716,180 $ 4,074,210 $ 4,031,864 Interest expense for the three months ended September 30, 2015 and 2014 related to VIE long-term debt issued by securitization trusts and permanent financing facilities, at fair value, was $38.2 million and $32.9 million , respectively. Interest expense for the nine months ended September 30, 2015 and 2014 related to VIE long-term debt issued by securitization trusts and permanent financing facilities, at fair value, was $104.6 million and $102.8 million , respectively. |
Derivative Financial Instrument
Derivative Financial Instruments | 9 Months Ended |
Sep. 30, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | Derivative Financial Instruments Interest Rate Swaps The Company utilizes interest rate swaps to manage its exposure to changes in interest rates related to borrowings on its revolving credit facilities. Hedge accounting has not been applied to any of the Company’s interest rate swaps. As of September 30, 2015 , the Company did not have any outstanding interest rate swaps related to its borrowings on revolving credit facilities. During the three months ended September 30, 2015, the Company did not terminate any interest rate swaps. During the three months ended September 30, 2014, and in connection with its securitizations, the Company terminated interest rate swaps with notional values of $11.6 million . During the nine months ended September 30, 2015 and 2014 , and in connection with its securitizations, the Company terminated interest rate swaps with notional values of $18.7 million and $46.5 million , respectively. The total loss on the termination of these interest rate swaps for the three months ended September 30, 2015 and 2014 was $0 and $0.1 million , respectively. The total loss on the termination of these interest rate swaps for the nine months ended September 30, 2015 and 2014 , was $0.3 million and $0.6 million , respectively. These losses were recorded in loss on swap terminations, net in the Company's unaudited condensed consolidated statements of operations. The unrealized loss for these swaps for the three and nine months ended September 30, 2015 and 2014 was $0 and less than $0.1 million , respectively. These losses were recorded in unrealized gains (losses) on VIE and other finance receivables, long-term debt and derivatives in the Company’s unaudited condensed consolidated statements of operations. The Company also has interest-rate swaps to manage its exposure to changes in interest rates related to its borrowings on certain VIE long-term debt issued by securitization and permanent financing trusts; refer to Note 14 for more information. As of September 30, 2015 , the Company had 8 outstanding swaps with a total notional amount of approximately $202.0 million . The Company pays fixed rates ranging from 4.50% to 5.77% and receives floating rates equal to 1-month LIBOR plus applicable margin. These interest rate swaps were designed to closely match the borrowings under the respective floating rate asset backed loans in amortization. As of September 30, 2015 , the term of these interest rate swaps range from approximately 7 to 20 years. For the three months ended September 30, 2015 and 2014, the amount of unrealized gain (loss) recognized was $(1.7) million and $3.2 million , respectively. For the nine months ended September 30, 2015 and 2014 , the amount of unrealized gain recognized was $1.8 million and $3.6 million , respectively. These gains (losses) were recorded in unrealized gains on VIE and other finance receivables, long-term debt and derivatives in the Company’s unaudited condensed consolidated statements of operations. Additionally, the Company has interest-rate swaps to manage its exposure to changes in interest rates related to its borrowings under Peachtree Structured Settlements, LLC (“PSS”), a permanent financing VIE (refer to Note 14), and PLMT (Refer to Note 13). As of September 30, 2015 , the Company had 148 outstanding swaps with a total notional value of approximately $215.6 million . The Company pays fixed rates ranging from 4.80% to 8.70% and receives floating rates equal to 1-month LIBOR rate plus applicable margin. The PSS and PLMT interest rate swaps were designed to closely match the borrowings under the respective floating rate asset backed loans in amortization. As of September 30, 2015 , the term of the interest rate swaps for PSS and PLMT range from approximately less than 1 month to approximately 19 years. For the three months ended September 30, 2015 and 2014, the amount of unrealized gain (loss) recognized was $(4.7) million and $1.3 million , respectively. For the nine months ended September 30, 2015 and 2014 , the amount of unrealized loss recognized was $0.7 million and $3.5 million , respectively. These gains (losses) were included in unrealized gains on VIE and other finance receivables, long-term debt and derivatives in the Company’s unaudited condensed consolidated statements of operations. The notional amounts and fair values of interest rate swaps were as follows: Entity Securitization Notional as of Fair Value as of September 30, 2015 Notional as of December 31, 2014 Fair Value as of December 31, 2014 (In thousands) 321 Henderson I, LLC 2004-A A-1 $ 27,593 $ (2,824 ) $ 32,628 $ (3,019 ) 321 Henderson I, LLC 2005-1 A-1 50,296 (7,099 ) 58,735 (7,435 ) 321 Henderson II, LLC 2006-1 A-1 11,748 (1,292 ) 15,571 (1,509 ) 321 Henderson II, LLC 2006-2 A-1 16,007 (2,550 ) 18,859 (2,718 ) 321 Henderson II, LLC 2006-3 A-1 17,215 (2,252 ) 21,361 (2,475 ) 321 Henderson II, LLC 2006-4 A-1 16,242 (1,768 ) 19,719 (2,056 ) 321 Henderson II, LLC 2007-1 A-2 28,175 (5,478 ) 32,994 (5,624 ) 321 Henderson II, LLC 2007-2 A-3 34,746 (8,801 ) 37,592 (8,966 ) PSS — 165,571 (32,841 ) 176,943 (31,807 ) PLMT — 50,041 (9,782 ) 52,907 (10,097 ) Total $ 417,634 $ (74,687 ) $ 467,309 $ (75,706 ) Interest Rate Lock Commitments and Forward Sale Commitments The Company enters into IRLCs to originate residential mortgage loans held for sale, at specified interest rates and within a specified period of time (generally between 30 and 90 days), with customers who have applied for a loan and meet certain credit and underwriting criteria. These IRLCs meet the definition of a derivative and are reflected in the condensed consolidated balance sheets at fair value with changes in fair value recognized in the realized and unrealized gains on sale of mortgage loans held for sale, net of direct costs in the unaudited condensed consolidated statements of operations. The fair value of the IRLCs are measured based on the value of the underlying mortgage loan, quoted GSE MBS prices, estimates of the fair value of the MSRs and the probability that the mortgage loan will fund within the terms of the IRLC, net of commission expense and broker fees. The Company manages the interest rate price risk associated with its outstanding IRLCs and mortgage loans held for sale by entering into derivative loan instruments such as forward loan sales commitments and mandatory delivery commitments. Management expects these derivatives will experience changes in fair value opposite to changes in fair value of the derivative loan commitments and mortgage loans held for sale, thereby reducing earnings volatility. The Company takes into account various factors and strategies in determining the portion of the mortgage pipeline (derivative loan commitments) and mortgage loans held for sale it wants to economically hedge. The notional amounts and fair values associated with IRLCs and Forward Sale Commitments were as follows: September 30, 2015 Fair Value Notional Amount (In thousands) Derivative Assets: IRLCs $ 7,822 $ 309,434 Total $ 7,822 $ 309,434 Derivative Liabilities: Forward sale commitments and mandatory sale commitments $ 1,929 $ 280,903 Total $ 1,929 $ 280,903 The Company has exposure to credit loss in the event of contractual non-performance by its trading counterparties in derivative financial instruments that the Company uses in its interest rate risk management activities. The Company manages this credit risk by selecting only counterparties that the Company believes to be financially strong, spreading the risk among multiple counterparties, by placing contractual limits on the amount of unsecured credit extended to any single counterparty and by entering into netting agreements with counterparties, as appropriate. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Corporation is required to file federal and applicable state corporate income tax returns and recognizes income taxes on its pre-tax income, which to-date has consisted primarily of its share of JGW LLC’s pre-tax income. JGW LLC is organized as a limited liability company which is treated as a “flow-through” entity for income tax purposes and therefore is generally not subject to income taxes. As a result, the Company’s unaudited condensed consolidated financial statements do not reflect a provision or benefit for income taxes on the pre-tax income or loss attributable to the non-controlling interests in JGW LLC. The Company’s overall effective tax rate was 12.2% for the nine months ended September 30, 2015 , as compared to an overall effective rate of 19.0% for the nine months ended September 30, 2014 . The effective tax rate for the Corporation for the nine months ended September 30, 2015 and 2014 was 25.0% and 44.8% , respectively. The effective tax rate for JGW LLC for the nine months ended September 30, 2015 and 2014 was (1.7)% and 0.9% , respectively. The change in the Company's and the Corporation's effective tax rates was primarily the result of the following: (i) the Company reported a $102.1 million pre-tax loss for the nine months ended September 30, 2015 compared to $85.1 million in pre-tax income for the nine months ended September 30, 2014; (ii) the impact of permanent differences between book and taxable income, including a $29.9 million impairment charge on an intangible asset recorded during the three months ended September 30, 2015; and (iii) a greater share of the Company’s pre-tax book income/(loss) is attributable to separate subsidiary entities that are taxed as corporations, of which most record a full valuation allowance. The variance in effective tax rates between the two legal entities exists because JGW LLC is treated as a “flow-through” entity for income tax purposes and therefore is generally not subject to income taxes. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2015 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Stockholders’ Equity On November 14, 2013, the Corporation consummated an initial public offering ("IPO") and amended and restated its certificate of incorporation to provide for, among other things, the authorization of 500,000,000 shares of Class A common stock (the "Class A common stock"), par value $.00001 per share, 500,000,000 shares of Class B common stock (the "Class B common stock"), par value $.00001 per share, 500,000,000 shares of Class C "non-voting" common stock, par value $.00001 per share (the "Class C common stock"), and 100,000,000 shares of blank check preferred stock. Also concurrent with the consummation of the Corporation's IPO, JGW LLC merged with and into a newly formed subsidiary of the Corporation. As of September 30, 2015 , there were 15,972,555 shares of Class A common stock issued and 15,430,483 shares outstanding. Additionally, there were 8,997,232 shares of Class B common stock issued and outstanding, respectively, as of September 30, 2015 . Class A Common Stock Repurchase Program On May 2, 2014, the Company’s Board of Directors approved the repurchase of an aggregate of $15.0 million of Class A common stock (the “Stock Repurchase Program”) under Rule 10b5-1 of the Securities Exchange Act of 1934, as amended. Purchases under the Stock Repurchase Program may be made from time to time in open market purchases, privately negotiated transactions, accelerated stock repurchase programs, issuer self-tender offers or otherwise in accordance with applicable federal securities laws. The Stock Repurchase Program does not obligate the Company to acquire any particular amount of Class A common stock and the pace of repurchase activity will depend on factors such as levels of cash generation from operations, cash requirements for investment in the Company’s business, repayment of debt, current stock price, market conditions and other factors. The Stock Repurchase Program may be suspended, modified or discontinued at any time and has no set expiration date. During the nine months ended September 30, 2015 , the Company repurchased 1,087,312 shares of Class A common stock under the Stock Repurchase Program for an aggregate purchase price of $10.5 million , or $9.69 per share. The repurchased shares are classified as treasury stock at cost on the Company’s condensed consolidated balance sheets. Since the inception of the Stock Repurchase Program, the Company has repurchased 1,546,017 shares of Class A common stock for an aggregate purchase price of $15.0 million . On July 31, 2015, the Company issued 1,572,327 shares of Treasury stock as partial consideration for the Home Lending acquisition. Refer to Note 3. Class A Common Stock Privately Negotiated Transaction On May 26, 2015, the Company repurchased in a privately negotiated transaction 426,332 shares of its Class A common stock held by the former President and Chief Operating Officer of the Company for an aggregate purchase price of $3.9 million . The purchase price of $9.24 per share represented a 3.0% discount from the closing price of the Company's Class A common stock on May 22, 2015, the date the parties executed the associated agreement. Class A Common Stock Holders of Class A common stock are entitled to one vote for each share held of record on all matters submitted to a vote of stockholders. Holders of Class A common stock are entitled to share ratably (based on the number of shares of Class A common stock held) if and when any dividend is declared by the Company’s board of directors. Upon dissolution, liquidation or winding up, holders of Class A common stock are entitled to a pro rata distribution of any assets available for distribution to common stockholders, and do not have preemptive, subscription, redemption or conversion rights. Class B Common Stock Shares of Class B common stock will only be issued in the future to the extent that additional Common Interests are issued by JGW LLC, in which case the Company would issue a corresponding number of shares of Class B common stock. Holders of Class B common stock are entitled to ten votes for each share held of record on all matters submitted to a vote of stockholders. Holders of Class B common stock do not have any right to receive dividends and upon liquidation, dissolution or winding up will only be entitled to receive an amount per share equal to the $0.00001 par value. Holders of Class B common stock do not have preemptive rights to purchase additional shares of Class B common stock. Subject to the terms and conditions of the operating agreement of JGW LLC, each Common Interest holder has the right to exchange their Common Interests in JGW LLC together with the corresponding number of shares of Class B common stock, for shares of Class A common stock, or at the option of JGW LLC, cash equal to the market value of one share of Class A common stock. Class C Common Stock Holders of Class C common stock generally are not entitled to vote on any matters. Holders of Class C common stock are entitled to share ratably (based on the number of shares of Class C common stock held) if and when any dividend is declared by the Company’s board of directors. Upon dissolution, liquidation or winding up, holders of Class C common stock will be entitled to a pro rata distribution of any assets available for distribution to common stockholders (except the de minimis par value of the Class B common stock), and do not have preemptive rights to purchase additional shares of Class C common stock. Subject to the terms and conditions of the operating agreement of JGW LLC, Peach Group Holdings, Inc. (“PGHI Corp.”) and its permitted transferees have the right to exchange the non-voting Common Interests in JGW LLC they hold for shares of Class C common stock, or at the option of JGW LLC, cash equal to the market value of Class C common stock. Each share of Class C common stock may, at the option of the holder, be converted at any time into a share of Class A common stock on a one -for- one basis. Preferred Stock The Company’s certificate of incorporation provides that the board of directors has the authority, without action by the stockholders, to designate and issue up to 100,000,000 shares of preferred stock in one or more classes or series and to fix the powers, rights, preferences, and privileges of each class or series of preferred stock, including dividend rights, conversion rights, voting rights, terms of redemption, liquidation preferences, and the number of shares constituting any class or series, which may be greater than the rights of the holders of the common stock. No preferred stock had been issued or was outstanding as of September 30, 2015 . Warrants Issued to PGHI Corp. In connection with the IPO, the Class C profits interests of JGW LLC held by PGHI Corp. were canceled and holders received in exchange warrants to purchase shares of Class A common stock. The warrants issued in respect of the Tranche C-1 profit interests of JGW LLC entitled the holders thereof to purchase up to 483,217 shares of Class A common stock and have an exercise price of $35.78 per share. The warrants issued in respect of the Tranche C-2 profits interests of JGW LLC also entitle the holders thereof to purchase up to 483,217 shares of Class A common stock and have an exercise price of $63.01 per share. All of the warrants issued are currently exercisable, terminate on January 8, 2022, and may not be transferred. JGW LLC Operating Agreement Pursuant to the operating agreement of JGW LLC, the holders of JGW LLC Common Interests (other than the Company) have the right, subject to terms of the operating agreement as described therein, to exchange their Common Interests and an equal number of shares of Class B common stock for an equivalent number of shares of Class A common stock, or in the case of PGHI Corp., an equivalent number of shares of Class C common stock. During the nine months ended September 30, 2015 and 2014 , 947,098 and 3,123,517 Common Interests in JGW LLC, in addition to an equal number of shares of Class B common stock, were exchanged for 947,098 and 3,123,517 shares of the Class A common stock pursuant to the operating agreement, respectively. Amounts Reclassified Out of Accumulated Other Comprehensive Income ASU 2013-2, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income requires entities to report, either on the face of the income statement or in the notes, the effect of significant reclassifications out of accumulated other comprehensive income (“AOCI”) on the respective line items in net income if the amount being reclassified is required under GAAP to be reclassified in its entirety to net income. During the nine months ended September 30, 2014 , the Company recorded reclassifications out of accumulated other comprehensive income that are included in the table below. There were no such reclassifications made during the nine months ended September 30, 2015. Period Details about accumulated Amount reclassified from Affected line item in the (In thousands) Three and Nine Months Ended September 30, 2014 Unrealized gains and losses on available-for-sale securities $ 2,098 Realized gain on notes receivable, at fair value |
Non-Controlling Interests
Non-Controlling Interests | 9 Months Ended |
Sep. 30, 2015 | |
Noncontrolling Interest [Abstract] | |
Non-Controlling Interests | Non-Controlling Interests The Corporation consolidates the financial results of JGW LLC whereby it records a non-controlling interest for the economic interest in JGW LLC held by the Common Interestholders; refer to Note 1 for more information. Pursuant to an agreement between the Corporation and JGW LLC, any time the Corporation cancels, issues or repurchases shares of Class A common stock, JGW LLC cancels, issues or repurchases, as applicable, an equivalent number of Common Interests. In addition, any time Common Interestholders exchange their Common Interests for shares of Class A common stock, JGW LLC is required to transfer an equal number of Common Interests to the Corporation. Changes in the non-controlling and the Corporation's interest in JGW LLC are presented in the following table: Total Common Interests Held By: The J.G. Wentworth Company Non-controlling Interests Total Balance as of December 31, 2014 14,420,392 14,324,373 28,744,765 Common interests acquired by The J.G. Wentworth Company as a result of the issuance of restricted common stock 4,310 — 4,310 Common interests acquired by The J.G. Wentworth Company as a result of the exchange of units for shares of Class A common stock. 947,098 (947,098 ) — Common interests repurchased as a result of Class A common stock repurchased (1,513,644 ) — (1,513,644 ) Common interests re-issued as a result of the Home Lending Acquisition 1,572,327 — 1,572,327 Common interests forfeited — (19,420 ) (19,420 ) Balance as of September 30, 2015 15,430,483 13,357,855 28,788,338 The non-controlling interests include the Common Interestholders who were issued shares of Class B common stock in connection with the IPO as well as other Common Interestholders who may convert their Common Interests into 4,360,623 shares of Class C common stock. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Arrangements The Company had an arrangement (the “Arrangement”) with a counterparty for the sale of LCSS assets that met certain eligibility criteria, which expired on June 30, 2012. Pursuant to the Arrangement, the Company also had a borrowing agreement (the “Borrowing Agreement”) with the counterparty that gave the counterparty a borrowing base to draw on from the Company for the purchase of LCSS assets. As of September 30, 2015 and December 31, 2014, the amount owed from the counterparty pursuant to this Borrowing Agreement is approximately $10.1 million and $9.7 million , respectively, and is earning interest at an annual rate of 5.35% and is included in other receivables, net of allowance for losses in the Company’s condensed consolidated balance sheets. The Arrangement also has put options, which expire on December 30, 2019 and 2020, that gives the counterparty the option to sell purchased LCSS assets back to the Company. The put options, if exercised by the counterparty, require the Company to purchase LCSS assets at a target internal rate of return (“IRR”) of 3.5% above the original target IRR paid by the counterparty. Tax Receivable Agreement Common Interestholders may exchange their Common Interests for shares of Class A common stock or, in the case of PGHI Corp., shares of Class C common stock, on a one -for- one basis or, in each case, at the option of JGW LLC, cash. For income tax purposes, such exchanges are treated as sales of Common Interests in JGW LLC to the Corporation. JGW LLC made an election under Section 754 of the Internal Revenue Code of 1986 in connection with the filing of its 2014 federal income tax return which, upon each exchange, effectively treats the Corporation as having purchased an undivided interest in each of the assets owned by JGW LLC. As such, each exchange may result in increases (or decreases) in the Corporation’s tax basis in the tangible and intangible assets of JGW LLC that otherwise would not have been available. Any such increases (decreases) in tax basis are, in turn, anticipated to create incremental tax deductions (income) that would reduce (increase) the amount of income tax the Corporation would otherwise be required to pay in the future. In connection with the IPO, the Corporation entered into a tax receivable agreement ("TRA") with Common Interestholders who held in excess of approximately 1% of the Common Interests outstanding immediately prior to the IPO. The TRA requires the Company to pay those Common Interestholders 85% of the amount of cash savings, if any, in U.S. federal, state and local income tax that the Company actually realizes in any tax year from increases in tax basis realized as a result of any future exchanges by Common Interestholders of their Common Interests for shares of Class A or Class C common stock (or cash). The cash savings in income tax paid to any such Common Interestholders will reduce the cash that may otherwise be available to the Corporation for operations and to make future distributions to holders of Class A common stock. For purposes of TRA, cash savings in income tax will be computed by comparing the Corporation’s actual income tax liability for a covered tax year to the amount of such taxes that the Corporation would have been required to pay for such covered tax year had there been no increase to the Corporation’s share of the tax basis of the tangible and intangible assets of JGW LLC as a result of such sale and any such exchanges and had the Corporation not entered into the TRA. The TRA continues until all such tax benefits have been utilized or expired, unless the Corporation exercises its right to terminate the TRA upon a change of control for an amount based on the remaining payments expected to be made under the TRA. The exchange of Common Interests for shares of Class A common stock in 2014 resulted in a $207.0 million increase in the Corporation’s share of the tax basis of JGW LLC’s assets, which created current and future income tax deductions for the Corporation. The increase in tax basis, however, did not result in an income tax cash savings for the year ended December 31, 2014, because the Corporation would not have been a tax payer in the absence of such tax basis increase. Consequently, there is no liability associated with the 2014 exchanges pursuant to the TRA. Loss on Contingencies In the normal course of business, the Company is subject to various legal proceedings and claims. These proceedings and claims have not been finally resolved and the Company cannot make any assurances as to their ultimate disposition. It is in management’s opinion, based on the information currently available at this time, that the expected outcome of these matters will not have a material adverse effect on the financial position, the results of operations or cash flows of the Company. Commitments to Extend Credit The Company enters into IRLCs with customers who have applied for residential mortgage loans and meet certain credit and underwriting criteria. These commitments expose the Company to market risk if interest rates change, and the loan is not economically hedged or committed to an investor. The Company is also exposed to credit loss if the loan is originated and not sold to an investor and the mortgagor does not perform. The collateral upon extension of credit typically consists of a first deed of trust in the mortgagor's residential property. Commitments to originate loans do not necessarily reflect future cash requirements as some commitments are expected to expire without being drawn upon. Total commitments to originate loans approximated $309.4 million as of September 30, 2015. |
Share-Based Compensation
Share-Based Compensation | 9 Months Ended |
Sep. 30, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Compensation | Share-Based Compensation Under the Company’s 2013 Omnibus Incentive Plan (the “Plan”), stock options, restricted stock, restricted stock units and stock appreciation rights units may be granted to officers, employees, non-employee directors and consultants of the Company. As of September 30, 2015 , 1.2 million shares of unissued Class A common stock were available for granting under this plan. As of September 30, 2015 , the Company had granted non-qualified stock options and performance-based restricted stock units to its employees and restricted stock shares to independent directors under the Plan. The Company recognizes compensation cost net of a forfeiture rate in compensation and benefits expense in the unaudited condensed consolidated statement of operations for only those awards expected to vest. The Company estimates the forfeiture rate based on its expectations about future forfeitures. Stock Options Options were granted to purchase Class A common stock at exercise prices equal to the fair value on the date of grant, have a contractual term of ten years, and vest generally in equal annual installments over a five year period following the date of grant, subject to the holder's continued employment with the Company through the applicable vesting date. The fair value of stock options awarded was estimated using the Black-Scholes valuation model with the following assumptions and weighted average fair values: Nine Months Ended September 30, 2015 Weighted average fair value of grant $ 4.80 Risk-free interest rate 1.63 % Expected volatility 47.1 % Expected life of options in years 6.5 Expected dividend yield — The Company recognizes share-based compensation expense for the fair value of the stock options on a straight-line basis over the requisite service period of the awards. During the nine months ended September 30, 2015 and 2014 , the Company recognized $1.0 million and $0.4 million of share-based compensation expense in connection with the stock options issued under the Plan, respectively. A summary of stock option activity for the nine months ended September 30, 2015 is as follows: Shares Weighted - Average Exercise Price Weighted - Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (Dollars in Millions) Outstanding as of December 31, 2014 1,376,932 $ 11.44 9.44 $ 0.1 Granted 256,000 9.98 Exercised — — Forfeited (109,317 ) 11.01 Expired (6,857 ) 13.34 Outstanding as of September 30, 2015 1,516,758 $ 11.22 8.84 $ — Outstanding, vested and expected to vest as of September 30, 2015 1,462,246 11.23 8.84 $ — Vested as of September 30, 2015 252,714 11.47 8.70 $ — The aggregate intrinsic value represents the total pre-tax value of the difference between the closing price of Class A common stock on the last trading day of the period and the exercise price of the options, multiplied by the number of in-the-money stock options that would have been received by the option holders had all the option holders exercised their options on September 30, 2015 . The intrinsic value of the Company’s stock options changes based on the closing price of the Company’s stock. As of September 30, 2015 , $5.9 million of total unrecognized compensation expense related to the outstanding stock options is expected to be recognized over a weighted average period of 3.9 years. Performance-Based Restricted Stock Units A summary of performance-based restricted stock units for the nine months ended September 30, 2015 is as follows: Performance- Based Restricted Stock Units Weighted - Average Grant - Date Fair Value Outstanding as of December 31, 2014 130,250 $ 10.60 Granted 127,500 9.98 Vested — — Forfeited (43,000 ) 10.20 Outstanding as of September 30, 2015 214,750 $ 10.31 Outstanding and expected to vest as of September 30, 2015 119,228 9.98 Each performance-based unit will vest into 0 to 1.5 shares of Class A common stock depending to the degree to which the performance goals are met. Compensation expense resulting from these awards is: (i) recognized ratably from the date of the grant until the date the restrictions lapse; (ii) based on the trading price of the Class A common stock on the date of grant; and (iii) based on the probability of achievement of the specific performance-based goals. During the nine months ended September 30, 2015 and 2014, the Company recognized $(0.1) million and $0.2 million , respectively, of share-based compensation expense in connection with these performance-based units. The negative expense recognized during the nine months ended September 30, 2015 was due to management concluding in the third quarter of 2015 that it was no longer probable that the performance goals associated with performance-based units granted in 2014 would vest. Consequently the Company reversed the expense previously recognized in connection with the 87,750 units granted in 2014 and outstanding as of September 30, 2015. The aggregate grant-date fair value of the performance-based restricted stock units granted during the nine months ended September 30, 2015 was $1.3 million . As of September 30, 2015 , there was $1.5 million of total unrecognized compensation cost relating to outstanding performance-based units that is expected to be recognized over a weighted average period of 1.9 years. None of the performance-based restricted stock units were vested as of September 30, 2015 . Unvested Restricted Common Interests in JGW LLC The following table summarizes the activities of unvested Restricted Common Interests in JGW LLC for the nine months ended September 30, 2015 : Unvested Restricted Common Interests Weighted - Average Grant - Date Fair Value Outstanding as of December 31, 2014 157,112 $ 9.86 Vested in period (57,944 ) 8.99 Forfeited (19,420 ) 2.60 Outstanding as of September 30, 2015 79,748 12.29 Outstanding and expected to vest as of September 30, 2015 79,302 12.28 As of September 30, 2015 , there was $0.9 million of unrecognized compensation cost related to outstanding unvested Restricted Common Interests that is expected to be recognized over a weighted average period of 2.6 years. Total share-based compensation expense recognized for the nine months ended September 30, 2015 and 2014 related to the Restricted Common Interests was $0.4 million and $1.0 million , respectively. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2015 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Basic earnings per share (“EPS”) measures the performance of an entity over the reporting period. Diluted EPS measures the performance of an entity over the reporting period while giving effect to all potentially dilutive common shares that were outstanding during the period. In accordance with ASC 260 Earnings Per Share , all outstanding unvested share-based payments that contain rights to non-forfeitable dividends and participate in the undistributed earnings with the common stockholders are considered participating securities. The shares of Class B common stock do not share in the earnings of the Company and are therefore not considered participating securities. Accordingly, basic and diluted net earnings per share of Class B common stock have not been presented. In connection with the IPO, Class C profit interests of JGW LLC held by PGHI Corp. were exchanged for a total of 966,434 warrants to purchase shares of Class A common stock; refer to Note 17 for more information. For the three and nine months ended September 30, 2015 and 2014 , these warrants were not included in the computation of diluted earnings (loss) per common share because they were antidilutive under the treasury stock method. During the nine months ended September 30, 2015 and 2014 , 1,461,407 and 602,596 weighted-average stock options outstanding, respectively, were not included in the computation of diluted earnings (loss) per common share because they were antidilutive under the treasury stock method. During the nine months ended September 30, 2015 and 2014 , 183,069 and 72,352 weighted-average performance-based restricted stock units were antidilutive under the treasury stock method. The operating agreement of JGW LLC gives Common Interestholders the right (subject to the terms of the operating agreement as described therein) to exchange their Common Interests for shares of Class A common stock on a one -for- one basis at fair value, subject to customary conversion rate adjustments for stock splits, stock dividends and reclassifications. The Company applies the “if-converted” method to the Common Interests and vested Restricted Common Interests in JGW LLC to determine the dilutive weighted average shares of Class A common stock outstanding. The Company applies the treasury stock method to the unvested Restricted Common Interests and the “if-converted” method on the resulting number of additional Common Interests to determine the dilutive weighted average shares of Class A common stock outstanding represented by these interests. In computing the dilutive effect that the exchange of Common Interests and Restricted Common Interests would have on EPS, the Company considered that net income (loss) attributable to holders of Class A common stock would increase due to the elimination of non-controlling interests (including any tax impact). Based on these calculations, for the nine months ended September 30, 2015 and 2014 , 13,745,165 and 16,318,829 weighted average Common Interests and vested Restricted Common Interests outstanding, respectively, and 124,341 and 707,028 weighted average unvested Restricted Common Interests outstanding, respectively, were antidilutive and excluded from the computation of diluted earnings (loss) per common share. The following table is a reconciliation of the numerator and denominator used in the basic and diluted EPS calculations: Three Months Ended Nine Months Ended 2015 2014 2015 2014 (In thousands, except share and per share data) Numerator: Numerator for basic EPS- Net (loss) income attributable to holders of The J.G. Wentworth Company Class A common stock $ (26,697 ) $ 4,092 $ (40,338 ) $ 19,382 Effect of dilutive securities: JGW LLC Common Interests and vested Restricted Common Interests — — — — JGW LLC unvested Restricted Common Interests — — — — Numerator for diluted EPS- Net (loss) income attributable to holders of The J.G. Wentworth Company Class A common stock $ (26,697 ) $ 4,092 $ (40,338 ) $ 19,382 Denominator: Denominator for basic EPS - Weighted average shares of Class A common stock 14,918,415 13,095,194 14,437,117 12,438,143 Effect of dilutive securities: Stock options — — — — Warrants — — — — Restricted common stock and performance-based restricted stock units — 3,801 — 2,184 JGW LLC Common Interests and vested Restricted Common Interests — — — — JGW LLC unvested Restricted Common Interests — — — — Dilutive potential common shares — 3,801 — 2,184 Denominator for diluted EPS - Adjusted weighted average shares of Class A common stock 14,918,415 13,098,995 14,437,117 12,440,327 Basic (loss) income per share of Class A common stock $ (1.79 ) $ 0.31 $ (2.79 ) $ 1.56 Diluted (loss) income per share of Class A common stock $ (1.79 ) $ 0.31 $ (2.79 ) $ 1.56 |
Business Segments
Business Segments | 9 Months Ended |
Sep. 30, 2015 | |
Segment Reporting [Abstract] | |
Business Segments | Business Segments The Company's business segments are determined based on products and services offered, as well as the nature of the related business activities and they reflect the manner in which financial information is currently evaluated by management. The Company has identified the following two reportable segments: (i) Structured Settlement and Annuity Purchasing and (ii) Home Lending. Refer to Note 1. The Company's Chief Operating Decision Maker evaluates our reportable segments using two metrics for purposes of making decisions about allocating resources to the segments of the Company and assessing their performance. The Company uses both GAAP and Adjusted Net Income (“ANI”) as measures of results from operations, which the Company defines as its net income (loss) under GAAP before non-cash compensation expenses, certain other expenses, provision for or benefit from income taxes and for the Structured Settlement and Annuity Purchasing segment, the amounts related to the consolidation of the securitization and permanent financing trusts the Company uses to finance its business. The Company uses ANI to measure its segments performance because it believes it represents the best measure of its core operating performance, as the operations of these variable interest entities do not impact business performance. In addition, the add-backs described above are consistent with adjustments permitted under the Company's New Term Loan agreement. The application and development of management reporting methodologies is a dynamic process and is subject to periodic enhancements. The implementation of these enhancements to the internal management reporting methodology may materially affect the results disclosed for each segment with no impact on consolidated results. Whenever significant changes to management reporting methodologies take place, prior period information is reclassified whenever practicable. Selected financial data for each reportable segment of the Company was as follows: Structured Settlement and Annuity Purchasing Home Lending Consolidated (In thousands) Three Months Ended September 30, 2015: Total revenues $ 51,775 $ 11,747 $ 63,522 Net (loss) income before income taxes (66,829 ) 1,950 (64,879 ) Total assets 5,128,902 250,264 5,379,166 Three Months Ended September 30, 2014: Total revenues 107,024 — 107,024 Net income before income taxes 14,865 — 14,865 Total assets 4,971,572 — 4,971,572 Structured Settlement and Annuity Purchasing Home Lending Consolidated (In thousands) Nine Months Ended September 30, 2015: Total revenues $ 199,970 $ 11,747 $ 211,717 Net (loss) income before income taxes (104,092 ) 1,950 (102,142 ) Total assets 5,128,902 250,264 5,379,166 Nine Months Ended September 30, 2014: Total revenues 367,102 — 367,102 Net income before income taxes 85,099 — 85,099 Total assets 4,971,572 — 4,971,572 |
Basis of Presentation and Acc30
Basis of Presentation and Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and Article 10 of Regulation S-X and do not include all of the information required by GAAP for complete financial statements. In the opinion of management, the unaudited condensed consolidated financial statements reflect all adjustments which are necessary for a fair presentation of financial position, results of operations and cash flows for the interim periods presented. All such adjustments are of a normal, recurring nature. The results of operations for interim periods are not necessarily indicative of the results for the entire year. The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the unaudited condensed consolidated financial statements and the amounts of revenues and expenses during the reporting periods. The most significant balance sheet accounts that could be affected by such estimates are variable interest entity (“VIE”) and other finance receivables, at fair value, mortgage servicing rights, at fair value, mortgage loans held for sale, at fair value, VIE derivative liabilities, at fair value, VIE long-term debt issued by securitization and permanent financing trusts, at fair value, intangible assets and goodwill. Actual results could differ from those estimates and such differences could be material. These interim financial statements should be read in conjunction with the Company’s 2014 audited consolidated financial statements that are included in its Annual Report on Form 10-K. The accompanying unaudited condensed consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries, including those entities that are considered VIEs, and where the Company has been determined to be the primary beneficiary in accordance with ASC 810, " Consolidation" ("ASC 810"). |
Business Combinations | The Company records the identifiable assets acquired, the liabilities assumed, and any non-controlling interests of companies that are acquired at their estimated fair value as of the date of acquisition, and includes the results of operations of the acquired companies in the unaudited condensed consolidated statement of operations from the date of the acquisition. The Company recognizes, as goodwill, the excess of the acquisition price over the estimated fair value of the net assets acquired. The Company has accounted for its acquisition of Home Lending as a business combination. |
Mortgage loans held for sale | Mortgage loans held for sale are carried at fair value under the fair value option with changes in the fair value recognized in current period earnings and included within realized and unrealized gains on sale of mortgage loans held for sale, net of direct costs on the unaudited condensed consolidated statement of operations. At the date of funding of the mortgage loan held for sale, the funded amount of the loan plus the related derivative asset or liability of the associated interest rate lock commitment (“IRLC”) becomes the initial recorded investment in the mortgage loan held for sale. Such amount is expected to approximate the fair value of the loan. The Company chooses to fair value these mortgage loans held for sale in order to better align reported results with the underlying economic changes in value of the loans and related hedge instruments without incurring the additional complexity of applying hedge accounting. This election impacts the timing and recognition of origination fees and costs. Specifically, origination fees and costs are recognized as part of the gain/loss at the time of funding. The fair value of mortgage loans held for sale is calculated using observable market information including pricing from actual market transactions, investor commitment prices, or broker quotations. Gains and losses from the sale of mortgages are recognized based upon the difference between the sales proceeds and carrying value of the related loans upon sale, and are recorded in realized and unrealized gains on sale of mortgage loans held for sale, net of direct costs in the unaudited condensed consolidated statements of operations. Mortgage loans held for sale are considered sold when the Company surrenders control over the financial assets. Control is considered to have been surrendered when: (1) the transferred assets have been isolated from the Company, beyond the reach of the Company and its creditors; (2) the purchaser obtains the right (free of conditions that constraint it from taking advantage of that right) to pledge or exchange the transferred assets; and (3) the Company does not maintain effective control over the transferred assets through an agreement that both entitles and obligates the Company to repurchase or redeem the transferred assets before their maturity or grants the Company the ability to unilaterally cause the holder to return specific assets. The Company typically considers the above criteria to have been met upon acceptance and receipt of purchase advice from the purchaser. |
Mortgage Servicing Rights | Mortgage servicing rights ("MSRs") are contractual arrangements where the rights to service existing mortgages are sold by the original lender to other parties who specialize in the various functions of servicing mortgages. MSRs are initially recorded at fair value at the time the underlying loans are sold. The Company records the changes in fair value in changes in mortgage servicing rights, net. To determine the fair value of the servicing right created, the Company uses discounted cash flow approach incorporating assumptions that management believes market participants would use in estimating future net servicing income, including estimates of the contractual service fees, ancillary income and late fees, the cost of servicing, the discount rate, float value, the inflation rate, prepayment speeds and default rates. The Company has elected to subsequently measure our existing MSRs portfolio using the fair value method, in which MSRs are measured at fair value each reporting period and changes in fair value are recorded in earnings in the period in which changes in value occur. |
Revenue Recognition Policy | Interest Income Interest income on mortgage loans is accrued and is based upon the principal amount outstanding and contractual interest rates. Income recognition is discontinued when loans become 90 days delinquent or when in management’s opinion, the collectability of principal and interest becomes doubtful and the mortgage loans held for sale are put on a non-accrual basis. When the loan is placed on non-accrual status, the related interest receivable is reversed against interest income of the current period. If a non-accrual loan is returned to accruing status, the accrued interest existing at the date the residential loan is placed on non-accrual status and interest during the non-accrual period are recorded as interest income as of the date the loan no longer meets the non-accrual criteria. Loans Servicing Fees Loan servicing fees represent revenue earned for servicing loans for various investors. The loan servicing fees are based on a contractual percentage of the outstanding principal balance and are recognized into income when earned. Loan servicing expenses are charged to operations as incurred. Loan servicing fees are included in servicing, broker, and other fees, net of direct costs in the unaudited condensed consolidated statement of operations. Servicing Advances Servicing advances represent escrows and principal and interest advances on behalf of customers and for investors to cover delinquent balances for property taxes, insurance premiums and other out-of-pocket costs. Advances are made in accordance with the servicing agreements and are recoverable upon liquidation. The Company periodically reviews the advances for collectability and amounts are written-off when they are deemed uncollectible. Servicing advances are recorded in other assets in the condensed consolidated balance sheet. |
Derivative Instruments and Hedging Activity | The Company enters into derivative instruments to reduce its exposure to fluctuations in interest rates. The Company enters into commitments to originate and purchase mortgage loans at interest rates that are determined prior to the funding or purchase of the loan. IRLCs are considered freestanding derivatives and are recorded at fair value at inception. Changes in fair value subsequent to inception are based on the change in fair value of the underlying loan and changes in the probability that the loan will fund within the terms of the commitment. The Company uses derivative financial instruments, primarily forward sales commitments, to manage exposure to interest rate risk and changes in the fair value of IRLCs and mortgage loans held for sale. The Company may also enter into commitments to sell mortgage backed securities ("MBSs") as part of its overall hedging strategy. The Company has elected not to designate these freestanding derivatives as hedging instruments under GAAP. The fair value of freestanding derivatives is recorded in other assets or other liabilities on the condensed consolidated balance sheets with changes in fair value included in net gains on sales of mortgage loans on the unaudited condensed consolidated statements of operations. Cash flows related to freestanding derivatives are included in operating activities on the unaudited condensed consolidated statements of cash flows. |
Recently Adopted Accounting Pronouncements | Effective January 1, 2014, the Company adopted ASU No. 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (“ASU 2013-11”). ASU 2013-11 requires, unless certain conditions exist, an unrecognized tax benefit, or a portion of an unrecognized tax benefit, to be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, similar tax loss, or a tax credit carryforward. This adoption of ASU 2013-11 did not materially impact the Company’s financial statements. |
Business Combinations (Tables)
Business Combinations (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Business Combinations [Abstract] | |
Schedule of business combination information | The following table sets forth the acquisition-date fair value of the consideration and the preliminary identified net assets acquired and liabilities assumed as of July 31, 2015. The Company is in the process of finalizing its valuation of the intangible assets; thus, the provisional measurement of intangible assets and goodwill are subject to change. As of July 31, 2015 (In thousands) Consideration: Cash $ 53,205 Equity instruments issued (1,572,327 shares of Class A common stock) 12,956 Post close adjustment liabilities 6,383 Fair value of total consideration $ 72,544 Recognized amounts of identifiable assets acquired and liabilities assumed: Cash and cash equivalents, $ 6,610 Restricted cash 4,756 Mortgage loans held for sale 131,325 Mortgage servicing rights 27,638 Premises and equipment 908 Intangible assets 18,000 Other assets 31,536 Borrowings and other debt obligations (128,487 ) Other liabilities (32,757 ) Total identifiable net assets 59,529 Goodwill $ 13,015 |
Schedule of pro forma information | The following table summarizes the actual unaudited amounts of Home Lending's revenues and earnings included in the Company's unaudited condensed consolidated statement of operations from July 31, 2015: Home Lending amounts included in the results of operations for Three and Nine Months Ended September 30, 2015 (In thousands) Total revenue $ 11,747 Net income (loss) before income taxes $ 1,950 The following table summarizes the supplemental pro forma information of the combined Company for the nine months ended September 30, 2015 and 2014 , respectively, as if the Home Lending Acquisition occurred on January 1, 2014. Nine Months Ended September 30, 2015 2014 (In thousands) Pro forma total revenues $ 257,048 $ 411,451 Pro forma net income (loss) before income taxes (1) $ (92,642 ) $ 98,460 (1) Includes adjustments for acquisition related costs of $3.8 million for nine months ended September 30, 2014. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill by segment | Goodwill by business segment include the following as of: September 30, 2015 December 31, 2014 (In thousands) Structured Settlement and Annuity Purchasing $ 84,993 $ 84,993 Home Lending 13,015 — Total Goodwill $ 98,008 $ 84,993 |
Schedule of intangible assets subject to amortization | Intangible assets subject to amortization include the following as of: Structured Settlement and Annuity Purchasing Home Lending Cost Accumulated Amortization Cost Accumulated Amortization (In thousands) September 30, 2015: Database $ 4,609 $ (4,227 ) $ — $ — Customer relationships 18,844 (15,059 ) — — Domain names 1,635 (449 ) — — Non-compete agreements 1,821 (1,821 ) — — Trade name — — 1,000 — Affinity relationships — — 4,500 — Intangible assets subject to amortization $ 26,909 $ (21,556 ) $ 5,500 $ — December 31, 2014: Database $ 4,609 $ (4,011 ) $ — $ — Customer relationships 18,844 (14,114 ) — — Domain names 1,635 (327 ) — — Non-compete agreements 1,821 (1,821 ) — — Intangible assets subject to amortization $ 26,909 $ (20,273 ) $ — $ — |
Schedule of estimated future amortization expense | Estimated future amortization expense for amortizable intangible assets for the three months ending December 31, 2015 and for each of the succeeding five calendar years and thereafter is as follows: Estimated Future Amortization Expense (In thousands) Three months ending December 31, 2015 $ 744 2016 2,137 2017 1,841 2018 1,674 2019 1,096 2020 908 Thereafter 2,453 Total future amortization expense $ 10,853 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value of assets and liabilities | The following table sets forth the Company’s assets and liabilities that are carried at fair value on the Company’s condensed consolidated balance sheets as of: Quoted Prices in Active Markets for Identical Assets Level 1 Significant Other Observable Inputs Level 2 Significant Unobservable Inputs Level 3 Total at Fair Value (In thousands) September 30, 2015: Assets Marketable Securities: Equity securities US large cap $ 31,469 $ — $ — $ 31,469 US mid cap 4,900 — — 4,900 US small cap 8,394 — — 8,394 International 16,007 — — 16,007 Other equity 767 — — 767 Total equity securities 61,537 — — 61,537 Fixed income securities: US fixed income 17,883 — — 17,883 International fixed income 1,303 — — 1,303 Other fixed income — — — — Total fixed income securities 19,186 — — 19,186 Other securities: Cash & cash equivalents 2,650 — — 2,650 Alternative investments 221 — — 221 Annuities 2,285 — — 2,285 Total other securities 5,156 — — 5,156 Total marketable securities 85,879 — — 85,879 VIE and other finance receivables, at fair value — — 4,555,127 4,555,127 Life settlements contracts, at fair value (1) — — — — Mortgage loans held for sale, at fair value — 130,189 — 130,189 Mortgage service rights, at fair value — — 28,186 28,186 Derivative assets, at fair value (1) — — 7,822 7,822 Total Assets $ 85,879 $ 130,189 $ 4,591,135 $ 4,807,203 Liabilities VIE long-term debt issued by securitization and permanent financing trusts, at fair value $ — $ — $ 4,074,210 $ 4,074,210 VIE derivative liabilities, at fair value — 74,687 — 74,687 Other derivative liabilities, at fair value (2) — 1,929 — 1,929 Total Liabilities $ — $ 76,616 $ 4,074,210 $ 4,150,826 (1) Included in other assets on the Company’s condensed consolidated balance sheet. (2) Included in other liabilities on the Company’s condensed consolidated balance sheet. Quoted Prices in Active Markets for Identical Assets Level 1 Significant Other Observable Inputs Level 2 Significant Unobservable Inputs Level 3 Total at Fair Value (In thousands) December 31, 2014 Assets Marketable Securities: Equity securities US large cap $ 41,246 $ — $ — $ 41,246 US mid cap 8,192 — — 8,192 US small cap 7,586 — — 7,586 International 14,123 — — 14,123 Other equity 1,051 — — 1,051 Total equity securities 72,198 — — 72,198 Fixed income securities: US fixed income 16,699 — — 16,699 International fixed income 3,526 — — 3,526 Other fixed income 27 — — 27 Total fixed income securities 20,252 — — 20,252 Other securities: Cash & cash equivalents 6,629 — — 6,629 Alternative investments 1,829 — — 1,829 Annuities 2,511 — — 2,511 Total other securities 10,969 — — 10,969 Total marketable securities 103,419 — — 103,419 VIE and other finance receivables, at fair value — — 4,523,835 4,523,835 Life settlements contracts, at fair value (1) — — — — Total Assets $ 103,419 $ — $ 4,523,835 $ 4,627,254 Liabilities VIE long-term debt issued by securitization and permanent financing trusts, at fair value $ — $ — $ 4,031,864 $ 4,031,864 VIE derivative liabilities, at fair value — 75,706 — 75,706 Total Liabilities $ — $ 75,706 $ 4,031,864 $ 4,107,570 (1) Included in other assets on the Company’s condensed consolidated balance sheet. |
Schedule of the Company's quantitative information about Level 3 fair value measurements | The following table sets forth the Company’s quantitative information about its Level 3 fair value measurements as of: Fair Value Valuation Technique Significant Unobservable Inputs Range (Weighted Average) (Dollars in thousands) September 30, 2015 Assets VIE and other finance receivables, at fair value $ 4,555,127 Discounted cash flow Discount rate 2.58% - 12.42% (3.82%) Life settlement contracts, at fair value — Model actuarial pricing Life expectancy Discount rate 36 to 335 months (210) 18.00% (18.00%) Mortgage servicing rights, at fair value 28,186 Discounted cash flow Discount rate 9.50% - 14.00% (10.30%) Prepayment speed 8.50% - 22.00% (10.71%) Cost of servicing $65 - $90 ($75) Total Assets $ 4,583,313 Liabilities VIE long-term debt issued by securitization and permanent financing trusts, at fair value 4,074,210 Discounted cash flow Discount rate 0.92% - 12.42% (3.44%) Total Liabilities $ 4,074,210 Fair Value Valuation Technique Significant Unobservable Inputs Range (Weighted Average) (Dollars in thousands) December 31, 2014 Assets VIE and other finance receivables, at fair value $ 4,523,835 Discounted cash flow Discount rate 2.55% - 12.60% (3.43%) Life settlement contracts, at fair value — Model actuarial pricing Life expectancy Discount rate 45 to 344 months (219) 18.00% (18.00%) Total Assets $ 4,523,835 Liabilities VIE long-term debt issued by securitization and permanent financing trusts, at fair value 4,031,864 Discounted cash flow Discount rate 0.74% - 12.32% (3.16%) Total Liabilities $ 4,031,864 |
Schedule of changes in assets measured at fair value using significant unobservable inputs (Level 3) | The changes in assets measured at fair value using significant unobservable inputs (Level 3) during the nine months ended September 30, 2015 and 2014 were as follows: VIE and other finance receivables, at fair value Mortgage Servicing Rights Life settlement contracts, at fair value Notes receivable, at fair value Total (In thousands) Balance as of December 31, 2014 $ 4,523,835 $ — $ — $ — $ 4,523,835 Total gains (losses): Included in earnings / losses (5,320 ) 548 (13 ) — (4,785 ) Included in other comprehensive gain — — — — — Purchases of finance receivables 296,468 — — — 296,468 Life insurance premiums paid — — 13 — 13 Interest accreted 124,870 — — — 124,870 Payments received (384,726 ) — — — (384,726 ) MSR acquired in connection with the Home Lending acquisition — 27,638 — — 27,638 Transfers in and/or out of Level 3 — — — — — Balance as of September 30, 2015 $ 4,555,127 $ 28,186 $ — $ — $ 4,583,313 The amount of net gains (losses) for the period included in revenues attributable to the change in unrealized gains or losses relating to assets still held as of: September 30, 2015 $ (5,320 ) $ 548 $ (13 ) $ — $ (4,785 ) Balance as of December 31, 2013 $ 3,870,649 $ — $ — $ 5,610 $ 3,876,259 Total gains (losses): Included in earnings / losses 398,987 — (116 ) 2,098 400,969 Included in other comprehensive gain — — — (1,615 ) (1,615 ) Purchases of finance receivables 320,485 — — — 320,485 Life insurance premiums paid — — 116 — 116 Interest accreted 123,140 — — — 123,140 Payments received (356,803 ) — — (6,093 ) (362,896 ) Transfers in and/or out of Level 3 — — — — — Balance as of September 30, 2014 $ 4,356,458 $ — $ — $ — $ 4,356,458 The amount of net gains (losses) for the period included in revenues attributable to the change in unrealized gains or losses relating to assets still held as of: September 30, 2014 $ 398,987 $ — $ (116 ) $ — $ 398,871 |
Schedule of changes in liabilities measured at fair value using significant unobservable inputs (Level 3) | The changes in liabilities measured at fair value using significant unobservable inputs (Level 3) during the nine months ended September 30, 2015 and 2014 were as follows: VIE long-term debt issued by securitizations and permanent financing trusts, at fair value (In thousands) Balance as of December 31, 2014 $ 4,031,864 Net (gains) losses: Included in earnings / losses (67,305 ) Issuances 380,417 Interest accreted (33,659 ) Repayments (237,107 ) Fair value adjustment — Transfers in and/or out of Level 3 — Balance as of September 30, 2015 $ 4,074,210 The amount of net (gains) losses for the period included in revenues attributable to the change in unrealized gains or losses relating to long-term debt still held as of: September 30, 2015 $ (66,712 ) Balance as of December 31, 2013 $ 3,431,283 Net (gains) losses: Included in earnings / losses 177,420 Issuances 473,782 Interest accreted (28,944 ) Repayments (216,685 ) Transfers in and/or out of Level 3 — Balance as of September 30, 2014 $ 3,836,856 The amount of net losses for the period included in revenues attributable to the change in unrealized gains or losses relating to long-term debt still held as of: September 30, 2014 $ 177,667 |
Schedule of realized and unrealized gains and losses included in revenues in the accompanying consolidated statements of operations | Realized and unrealized gains and losses included in revenues in the accompanying unaudited condensed consolidated statements of operations for the three and nine months ended September 30, 2015 and 2014 are reported in the following revenue categories: VIE and other finance receivables and long- term debt Mortgage servicing rights Life settlement contracts income (In thousands) Net gains (losses) included in revenues in the three months ended September 30, 2015 $ 13,952 $ 845 $ (3 ) Unrealized gains (losses) for the three months ended September 30, 2015 relating to assets and long-term debt still held as of September 30, 2015 $ 13,952 $ 548 $ (3 ) Net gains (losses) included in revenues in the nine months ended September 30, 2015 $ 61,985 $ 845 $ (13 ) Unrealized gains (losses) for the nine months ended September 30, 2015 relating to assets and long-term debt still held as of September 30, 2015 $ 61,392 $ 548 $ (13 ) Net gains (losses) included in revenues in the three months ended September 30, 2014 $ 59,467 $ — $ — Unrealized gains (losses) for the three months ended September 30, 2014 relating to assets and long-term debt still held as of September 30, 2014 $ 59,197 $ — $ — Net gains (losses) included in revenues in the nine months ended September 30, 2014 $ 221,567 $ — $ (116 ) Unrealized gains (losses) for the nine months ended September 30, 2014 relating to assets and long-term debt still held as of September 30, 2014 $ 221,320 $ — $ (116 ) |
Schedule of estimated fair values of financial instruments | As such, the estimated fair values of the Company’s financial instruments are as follows: September 30, 2015 December 31, 2014 (In thousands) Estimated Fair Value Carrying Amount Estimated Fair Value Carrying Amount Financial assets: VIE and other finance receivables, at fair value $ 4,555,127 $ 4,555,127 $ 4,523,835 $ 4,523,835 VIE and other finance receivables, net of allowance for losses (1) 110,927 118,238 123,765 131,292 Other receivables, net of allowance for losses (1) 16,124 16,124 14,165 14,165 Mortgage loans held for sale, at fair value 130,189 130,189 — — Mortgage servicing rights, at fair value 28,186 28,186 — — Marketable securities 85,879 85,879 103,419 103,419 Derivative assets (2) 7,822 7,822 — — Financial liabilities: Term loan payable (1) 380,996 439,431 433,904 437,183 VIE derivative liabilities, at fair value 74,687 74,687 75,706 75,706 VIE borrowings under revolving credit facilities and other similar borrowings (1) 87,241 82,987 21,415 19,339 Other borrowings under revolving credit facilities and other similar borrowings 126,494 126,494 — — VIE long-term debt (1) 195,967 201,464 176,635 181,558 VIE long-term debt issued by securitization and permanent financing trusts, at fair value 4,074,210 4,074,210 4,031,864 4,031,864 Installment obligations payable (1) 85,879 85,879 103,419 103,419 Other derivative liabilities (3) 1,929 1,929 — — (1) These represent financial instruments that are recorded in the condensed consolidated balance sheets at cost. Such financial instruments would be classified as Level 3 within the fair value hierarchy. (2) Included in the other assets on the Company's condensed consolidated balance sheets. (3) Included in the other liabilities on the Company's condensed consolidated balance sheets. |
VIE and Other Finance Receiva34
VIE and Other Finance Receivables, at Fair Value (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
VIE and Other Finance Receivables, at Fair Market Value | |
Schedule of VIE and other finance receivables for which the fair value option was elected | VIE and other finance receivables for which the fair value option was elected consist of the following: September 30, 2015 December 31, 2014 (In thousands) Maturity value $ 6,843,129 $ 6,492,863 Unearned income (2,288,002 ) (1,969,028 ) Net carrying amount $ 4,555,127 $ 4,523,835 |
Schedule of encumbrances on VIE and other finance receivables, at fair value | Encumbrances on VIE and other finance receivables, at fair value were as follows: Encumbrance September 30, 2015 December 31, 2014 (In thousands) VIE securitization debt (2) $ 4,333,342 $ 4,357,456 $100 million credit facility (JGW-S III) (1) 34,649 2 $50 million credit facility (JGW IV) (1) — — $300 million credit facility (JGW V) (1) 40,213 — $300 million credit facility (JGW VII) (1) 35,092 — $100 million permanent financing related to 2011-A (2) 78,031 64,575 Encumbered VIE finance receivables, at fair value 4,521,327 4,422,033 Not encumbered 33,800 101,802 Total VIE and other finance receivables, at fair value $ 4,555,127 $ 4,523,835 (1) Refer to Note 11. (2) Refer to Note 14. |
Schedule of servicing fee | Servicing fee revenue related to those receivables are included in servicing, broker, and other fees in the Company’s unaudited condensed consolidated statements of operations and were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2015 2014 2015 2014 (In thousands) Servicing fee income $ 199 $ 230 $ 614 $ 691 |
VIE and Other Finance Receiva35
VIE and Other Finance Receivables, net of Allowance for Losses (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
VIE and Other Finance Receivables, net of Allowance for Losses | |
Schedule of VIE and other finance receivables, net of allowance for losses | VIE and other finance receivables, net of allowance for losses consist of the following: September 30, 2015 December 31, 2014 (In thousands) Structured settlements and annuities $ 73,059 $ 76,253 Less: unearned income (46,687 ) (49,270 ) 26,372 26,983 Lottery winnings 76,184 81,169 Less: unearned income (21,550 ) (24,389 ) 54,634 56,780 Pre-settlement funding transactions 48,768 57,886 Less: deferred revenue (1,397 ) (1,563 ) 47,371 56,323 Attorney cost financing 960 1,334 Less: deferred revenue — — 960 1,334 VIE and other finance receivables, gross 129,337 141,420 Less: allowance for losses (11,099 ) (10,128 ) VIE and other finance receivables, net of allowances $ 118,238 $ 131,292 |
Schedule of encumbrances on VIE and other finance receivables, net of allowance for losses | Encumbrances on VIE and other finance receivables, net of allowance for losses are as follows: Encumbrance September 30, 2015 December 31, 2014 (In thousands) VIE long-term debt (2) $ 72,757 $ 74,973 $35.0 million pre-settlement credit facility (1) 28,461 30,423 $45.1 million long-term pre-settlement facility (2) 4,004 6,453 $2.5 million long-term facility (2) 1,291 1,640 Encumbered VIE finance receivables, net of allowances 106,513 113,489 Not encumbered 11,725 17,803 Total VIE and other finance receivables, net of allowances $ 118,238 $ 131,292 (1) Refer to Note 11. (2) Refer to Note 13 |
Schedule of activity in the allowance for losses for VIE and other finance receivables | Activity in the allowance for losses for VIE and other finance receivables were as follows : Structured Settlement and Annuity Purchasing Lottery Pre-settlement funding transactions Attorney cost financing Total (In thousands) Three Months Ended September 30, 2015 Allowance for losses: Balance as of June 30, 2015 $ (50 ) $ (3 ) $ (10,632 ) $ (283 ) $ (10,968 ) Provision for loss (21 ) — (1,190 ) — (1,211 ) Charge-offs 32 — 1,057 — 1,089 Recoveries (5 ) — (3 ) (1 ) (9 ) Balance as of September 30, 2015 $ (44 ) $ (3 ) $ (10,768 ) $ (284 ) $ (11,099 ) Nine Months Ended September 30, 2015 Allowance for losses: Balance as of December 31, 2014 $ (56 ) $ (3 ) $ (9,786 ) $ (283 ) $ (10,128 ) Provision for loss (129 ) (69 ) (3,970 ) — (4,168 ) Charge-offs 149 69 2,991 — 3,209 Recoveries (8 ) — (3 ) (1 ) (12 ) Balance as of September 30, 2015 $ (44 ) $ (3 ) $ (10,768 ) $ (284 ) $ (11,099 ) Individually evaluated for impairment $ (44 ) $ (3 ) $ (2,212 ) $ — $ (2,259 ) Collectively evaluated for impairment — — (8,556 ) (284 ) (8,840 ) Balance as of September 30, 2015 $ (44 ) $ (3 ) $ (10,768 ) $ (284 ) $ (11,099 ) VIE and other finance receivables, net: Individually evaluated for impairment $ 26,328 $ 54,631 $ 184 $ — $ 81,143 Collectively evaluated for impairment — — 36,419 676 37,095 Balance as of September 30, 2015 $ 26,328 $ 54,631 $ 36,603 $ 676 $ 118,238 Three Months Ended September 30, 2014 Allowance for losses: Balance as of June 30, 2014 $ (55 ) $ (4 ) $ (8,642 ) $ (283 ) $ (8,984 ) Provision for loss (6 ) — (1,049 ) — (1,055 ) Charge-offs 6 — 598 — 604 Recoveries — — (22 ) — (22 ) Balance as of September 30, 2014 $ (55 ) $ (4 ) $ (9,115 ) $ (283 ) $ (9,457 ) Nine Months Ended September 30, 2014 Allowance for losses: Balance as of December 31, 2013 $ (48 ) $ — $ (8,011 ) $ (283 ) $ (8,342 ) Provision for loss (14 ) (8 ) (3,251 ) — (3,273 ) Charge-offs 110 29 2,169 — 2,308 Recoveries (103 ) (25 ) (22 ) — (150 ) Balance as of September 30, 2014 $ (55 ) $ (4 ) $ (9,115 ) $ (283 ) $ (9,457 ) Individually evaluated for impairment $ (55 ) $ (4 ) $ (2,874 ) $ — $ (2,933 ) Collectively evaluated for impairment — — (6,241 ) (283 ) (6,524 ) Balance as of September 30, 2014 $ (55 ) $ (4 ) $ (9,115 ) $ (283 ) $ (9,457 ) VIE and other finance receivables, net: Individually evaluated for impairment $ 26,915 $ 57,842 $ 3,346 $ — $ 88,103 Collectively evaluated for impairment — — 43,647 1,138 44,785 Balance as of September 30, 2014 $ 26,915 $ 57,842 $ 46,993 $ 1,138 $ 132,888 |
Schedule of gross pre-settlement funding transactions based on their year of origination | The following table presents gross finance receivables related to pre-settlement funding transactions based on their year of origination: Year of Origination September 30, 2015 December 31, 2014 (In thousands) 2009 $ 1,324 $ 2,618 2010 3,224 4,251 2011 5,932 6,938 2012 7,070 10,687 2013 7,432 11,335 2014 19,192 22,057 2015 4,594 — Total $ 48,768 $ 57,886 |
Schedule of portfolio delinquency status excluding presettlement funding transactions and attorney cost financing | The following table presents portfolio delinquency status excluding pre-settlement funding transactions and attorney cost financing as of: 30-59 Days Past Due 60-89 Days Past Due Greater than 90 Days Total Past Due Current VIE and Other Finance Receivables, net VIE and Other Finance Receivables, net > 90 days accruing (In thousands) September 30, 2015 Structured settlements and annuities $ 5 $ 4 $ 128 $ 137 $ 26,191 $ 26,328 $ — Lottery winnings — 1 131 132 54,499 54,631 — Total $ 5 $ 5 $ 259 $ 269 $ 80,690 $ 80,959 $ — December 31, 2014 Structured settlements and annuities $ 6 $ 12 $ 208 $ 226 $ 26,701 $ 26,927 $ — Lottery winnings 2 6 120 128 56,649 56,777 — Total $ 8 $ 18 $ 328 $ 354 $ 83,350 $ 83,704 $ — |
Mortgage Loans Held for Sale,36
Mortgage Loans Held for Sale, at Fair Value (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Receivables [Abstract] | |
Schedule of Mortgage Loans Held For Sale | Mortgage loans held for sale, at fair value were as follows: September 30, 2015 (In thousands) Unpaid principal balance of mortgage loans held for sale $ 124,779 Fair value adjustment 5,410 Mortgage loans held for sale, at fair value $ 130,189 A reconciliation of the changes in mortgage loans held for sale, at fair value is presented in the following table: Three Months Ended September 30, 2015 (In thousands) Acquired through Home Lending acquisition $ 131,325 Mortgage loans originated, net of fees 352,641 Proceeds from sale of and principal payments on mortgage loans held for sale (362,723 ) Realized and unrealized gains on sale of mortgage loans held for sale, net of direct costs 8,946 As of September 30, 2015 $ 130,189 |
Schedule of Activity in the Loan Indemnification Reserve | The activity in the loan indemnification reserve was as follows: Loan Indemnification Reserve (In thousands) Acquired through Home Lending acquisition $ 3,031 Provision for loan losses 409 Write-offs (520 ) Balance as of September 30, 2015 $ 2,920 |
Mortgage Servicing Rights, at37
Mortgage Servicing Rights, at Fair Value (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Transfers and Servicing [Abstract] | |
Summary of Activity of Mortgage Servicing Rights | The activity of MSRs were as follows: MSR (In thousands) Acquired through Home Lending acquisition $ 27,638 Additions due to loans sold, servicing retained 1,298 Reductions due to loan payoffs and foreclosures (631 ) Fair value adjustment (119 ) Balance as of September 30, 2015 $ 28,186 |
Schedule of Assumptions for Fair Value of Mortgage Servicing Rights | The key assumptions used in determining the fair value of the Company's MSRs were as follows: September 30, 2015 Discount rates 9.5% - 14.0% Annual prepayment speeds 8.5% - 22.0% Cost of servicing $65 - $90 |
Schedule of Sensitivity Analysis of Fair Value of Mortgage Servicing Rights | The hypothetical effect of an adverse change in these key assumptions that would result in a decrease in fair values are as follows: September 30, 2015 Discount rate: Effect on value - 100 basis points adverse change $ (1,038 ) Effect on value - 200 basis points adverse change $ (2,004 ) Prepayment speeds: Effect on value - 5% adverse change $ (523 ) Effect on value - 10% adverse change $ (1,048 ) Cost of servicing: Effect on value - 5% adverse change $ (193 ) Effect on value - 10% adverse change $ (386 ) |
VIE Borrowings Under Revolvin38
VIE Borrowings Under Revolving Credit Facilities and Other Similar Borrowings (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
VIE Borrowings Under Revolving Credit Facilities and Other Similar Borrowings | |
Schedule of VIE borrowings under revolving credit facilities and other similar borrowings | VIE borrowings under revolving credit facilities and other similar borrowings on the condensed consolidated balance sheets consist of the following: Entity September 30, 2015 December 31, 2014 (In thousands) $100 million variable funding note facility with interest payable monthly (6.5% as of September 30, 2015 and 9.0% as of December 31, 2014), collateralized by JGW-S III, LLC's (“JGW-S III”) structured settlement receivables, 2-year revolving period with 18 months amortization period thereafter upon notice by the issuer or the note holder with all principal and interest outstanding payable no later than October 15, 2048. JGW-S III is charged monthly an unused fee (0.75% as of September 30, 2015 and 1.0% as of December 31, 2014) per annum for the undrawn balance of its line of credit. JGW-S III $ 22,247 $ — $50 million credit facility, interest payable monthly at the rate of LIBOR plus an applicable margin (3.45% as of September 30, 2015 and 3.42% as of December 31, 2014) maturing on October 2, 2016, collateralized by JGW IV, LLC's (“JGW IV”) structured settlement and annuity receivables. JGW IV is charged monthly an unused fee of 0.50% per annum for the undrawn balance of its line of credit. JGW IV — 6 $300 million multi-tranche and lender credit facility with interest payable monthly as follows: Tranche A rate comprises 3.0% and either the LIBOR or the Commercial Paper rate depending on the lender (3.20% and 3.37% as of September 30, 2015 and 3.17% and 3.26% at December 31, 2014). Tranche B rate is 5.5% plus LIBOR (5.70% as of September 30, 2015, 5.67% at December 31, 2014). The facility matures on July 24, 2016 and is collateralized by JGW V, LLC's (“JGW V”) structured settlement, annuity and lottery receivables. JGW V is charged monthly an unused fee of 0.625% per annum for the undrawn balance of its line of credit. JGW V 25,784 — $300 million credit facility, interest payable monthly at 2.75% plus an applicable margin (3.09% as of September 30, 2015 and 2.92% at December 31, 2014), maturing on November 15, 2016, collateralized by JGW VII, LLC's (“JGW VII”) structured settlement, annuity and lottery receivables. JGW VII is charged monthly an unused fee of 0.50% per annum for the undrawn balance of its line of credit. JGW VII 22,059 — $35 million multi class credit facility with interest payable monthly as follows: Class A rate comprises the lender’s “prime rate” plus 1.00%, subject to a floor of 4.50% (4.50% as of September 30, 2015 and December 31, 2014). Class B rate comprises the Class A rate plus 1.00% (5.50% as of September 30, 2015 and December 31, 2014). The facility matures on December 31, 2015 and is collateralized by certain pre-settlement receivables. Peach One is charged monthly an unused fee of 0.50% per annum for the undrawn balance of its line of credit. Peach One 12,897 19,333 Total VIE borrowings under revolving credit facilities and other similar borrowings $ 82,987 $ 19,339 The Company had the following lines of credit with various financial institutions: September 30, 2015 (In thousands) $35 million warehouse line of credit maturing on November 9, 2015, with an interest rate of 3.50% as of September 30, 2015 and a non-usage fee of 0.25%. $ 23,524 $60 million warehouse line of credit maturing on December 23, 2015 with an interest rate of 2.50% as of September 30, 2015 and a non-usage fee of 0.25%. (1) 41,121 $45 million warehouse line of credit maturing on September 1, 2016 with an interest rate of 2.25% as of September 30, 2015. (2) 23,717 $20 million warehouse line of credit maturing on July 6, 2016 with an interest rate of 2.50% as of September 30, 2015. (2) — $50 million warehouse line of credit maturing April 11, 2016 with an interest rate of 2.50% as of September 30, 2015 and a non-usage fee of 0.25%. 34,119 $6 million operating line of credit maturing July 6, 2016 with an interest rate of 5.00% as of September 30, 2015 and a non-usage fee of 0.50%. 4,013 Total other borrowings under revolving credit facilities and other similar borrowings $ 126,494 (1) Under the terms of the loan agreement, the availability was automatically reduced to $50.0 million as of October 15, 2015. (2) These facilities do not incur fees for non-usage. |
Other Borrowings Under Revolv39
Other Borrowings Under Revolving Credit Facilities and Other Similar Borrowings (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
Schedule of warehouse lines of credit | VIE borrowings under revolving credit facilities and other similar borrowings on the condensed consolidated balance sheets consist of the following: Entity September 30, 2015 December 31, 2014 (In thousands) $100 million variable funding note facility with interest payable monthly (6.5% as of September 30, 2015 and 9.0% as of December 31, 2014), collateralized by JGW-S III, LLC's (“JGW-S III”) structured settlement receivables, 2-year revolving period with 18 months amortization period thereafter upon notice by the issuer or the note holder with all principal and interest outstanding payable no later than October 15, 2048. JGW-S III is charged monthly an unused fee (0.75% as of September 30, 2015 and 1.0% as of December 31, 2014) per annum for the undrawn balance of its line of credit. JGW-S III $ 22,247 $ — $50 million credit facility, interest payable monthly at the rate of LIBOR plus an applicable margin (3.45% as of September 30, 2015 and 3.42% as of December 31, 2014) maturing on October 2, 2016, collateralized by JGW IV, LLC's (“JGW IV”) structured settlement and annuity receivables. JGW IV is charged monthly an unused fee of 0.50% per annum for the undrawn balance of its line of credit. JGW IV — 6 $300 million multi-tranche and lender credit facility with interest payable monthly as follows: Tranche A rate comprises 3.0% and either the LIBOR or the Commercial Paper rate depending on the lender (3.20% and 3.37% as of September 30, 2015 and 3.17% and 3.26% at December 31, 2014). Tranche B rate is 5.5% plus LIBOR (5.70% as of September 30, 2015, 5.67% at December 31, 2014). The facility matures on July 24, 2016 and is collateralized by JGW V, LLC's (“JGW V”) structured settlement, annuity and lottery receivables. JGW V is charged monthly an unused fee of 0.625% per annum for the undrawn balance of its line of credit. JGW V 25,784 — $300 million credit facility, interest payable monthly at 2.75% plus an applicable margin (3.09% as of September 30, 2015 and 2.92% at December 31, 2014), maturing on November 15, 2016, collateralized by JGW VII, LLC's (“JGW VII”) structured settlement, annuity and lottery receivables. JGW VII is charged monthly an unused fee of 0.50% per annum for the undrawn balance of its line of credit. JGW VII 22,059 — $35 million multi class credit facility with interest payable monthly as follows: Class A rate comprises the lender’s “prime rate” plus 1.00%, subject to a floor of 4.50% (4.50% as of September 30, 2015 and December 31, 2014). Class B rate comprises the Class A rate plus 1.00% (5.50% as of September 30, 2015 and December 31, 2014). The facility matures on December 31, 2015 and is collateralized by certain pre-settlement receivables. Peach One is charged monthly an unused fee of 0.50% per annum for the undrawn balance of its line of credit. Peach One 12,897 19,333 Total VIE borrowings under revolving credit facilities and other similar borrowings $ 82,987 $ 19,339 The Company had the following lines of credit with various financial institutions: September 30, 2015 (In thousands) $35 million warehouse line of credit maturing on November 9, 2015, with an interest rate of 3.50% as of September 30, 2015 and a non-usage fee of 0.25%. $ 23,524 $60 million warehouse line of credit maturing on December 23, 2015 with an interest rate of 2.50% as of September 30, 2015 and a non-usage fee of 0.25%. (1) 41,121 $45 million warehouse line of credit maturing on September 1, 2016 with an interest rate of 2.25% as of September 30, 2015. (2) 23,717 $20 million warehouse line of credit maturing on July 6, 2016 with an interest rate of 2.50% as of September 30, 2015. (2) — $50 million warehouse line of credit maturing April 11, 2016 with an interest rate of 2.50% as of September 30, 2015 and a non-usage fee of 0.25%. 34,119 $6 million operating line of credit maturing July 6, 2016 with an interest rate of 5.00% as of September 30, 2015 and a non-usage fee of 0.50%. 4,013 Total other borrowings under revolving credit facilities and other similar borrowings $ 126,494 (1) Under the terms of the loan agreement, the availability was automatically reduced to $50.0 million as of October 15, 2015. (2) These facilities do not incur fees for non-usage. |
VIE Long-Term Debt (Tables)
VIE Long-Term Debt (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
VIE Long-Term Debt | |
Schedule of VIE long-term debt | The VIE long-term debt consisted of the following: September 30, 2015 December 31, 2014 (In thousands) PLMT Permanent Facility $ 42,443 $ 44,277 Residual Term Facility 131,096 107,043 Long-Term Pre-settlement Facility 7,050 8,884 2012-A Facility 1,072 1,357 LCSS Facility (2010-C) 12,644 12,838 LCSS Facility (2010-D) 7,159 7,159 Total VIE long-term debt $ 201,464 $ 181,558 |
VIE Long-Term Debt Issued by 41
VIE Long-Term Debt Issued by Securitization and Permanent Financing Trusts, at Fair Value (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
VIE Long-term Debt Issued by Securitization and Permanent Financing trusts, at Fair Value | |
Summary of securitization SPE transaction | During the nine months ended September 30, 2015 , the Company completed two asset securitization transaction that were registered under Rule 144A. The following table summarizes this securitization SPE transactions: 2015-2 2015-1 (Bond proceeds in $ millions) Issue date 7/28/2015 3/31/2015 Bond proceeds $158.4 $214.0 Receivables securitized 2,489 3,422 Deal discount rate 4.18% 3.64% Retained interest % 5.50% 5.50% Class allocation (Moody’s) Aaa 84.75% 85.25% Baa2 9.75% 9.25% During the nine months ended September 30, 2014 , the Company also completed two asset securitization transactions that were registered under Rule 144A. The following table summarizes these securitization SPE transactions: 2014-2 2014-1 (Bond proceeds in $ millions) Issue date 7/23/2014 2/18/2014 Bond proceeds $227.4 $233.9 Receivables securitized 3,744 4,128 Deal discount rate 3.95% 4.24% Retained interest % 5.50% 6.00% Class allocation (Moody’s) Aaa 84.00% 85.25% Baa2 10.50% 8.75% |
Summary of notes issued by securitization trusts and permanent financing trusts for which the Company has elected the fair value option | The following table summarizes notes issued by securitization trusts and permanent financing trusts for which the Company elected the fair value option and which are recorded as VIE long-term debt issued by securitization and permanent financing trusts, at fair value in the Company’s condensed consolidated balance sheets: Outstanding Outstanding Principal as of December 31, 2014 Fair Value as of Fair Value as of December 31, 2014 (In thousands) Securitization trusts $ 3,609,467 $ 3,462,225 $ 3,828,933 $ 3,774,902 Permanent financing VIEs 250,591 253,955 245,277 256,962 Total VIE long-term debt issued by securitization and permanent financing trusts, at fair value $ 3,860,058 $ 3,716,180 $ 4,074,210 $ 4,031,864 |
Derivative Financial Instrume42
Derivative Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of notional amounts and fair values of the Company's interest rate swaps | The notional amounts and fair values of interest rate swaps were as follows: Entity Securitization Notional as of Fair Value as of September 30, 2015 Notional as of December 31, 2014 Fair Value as of December 31, 2014 (In thousands) 321 Henderson I, LLC 2004-A A-1 $ 27,593 $ (2,824 ) $ 32,628 $ (3,019 ) 321 Henderson I, LLC 2005-1 A-1 50,296 (7,099 ) 58,735 (7,435 ) 321 Henderson II, LLC 2006-1 A-1 11,748 (1,292 ) 15,571 (1,509 ) 321 Henderson II, LLC 2006-2 A-1 16,007 (2,550 ) 18,859 (2,718 ) 321 Henderson II, LLC 2006-3 A-1 17,215 (2,252 ) 21,361 (2,475 ) 321 Henderson II, LLC 2006-4 A-1 16,242 (1,768 ) 19,719 (2,056 ) 321 Henderson II, LLC 2007-1 A-2 28,175 (5,478 ) 32,994 (5,624 ) 321 Henderson II, LLC 2007-2 A-3 34,746 (8,801 ) 37,592 (8,966 ) PSS — 165,571 (32,841 ) 176,943 (31,807 ) PLMT — 50,041 (9,782 ) 52,907 (10,097 ) Total $ 417,634 $ (74,687 ) $ 467,309 $ (75,706 ) |
Schedule of derivative instruments | The notional amounts and fair values associated with IRLCs and Forward Sale Commitments were as follows: September 30, 2015 Fair Value Notional Amount (In thousands) Derivative Assets: IRLCs $ 7,822 $ 309,434 Total $ 7,822 $ 309,434 Derivative Liabilities: Forward sale commitments and mandatory sale commitments $ 1,929 $ 280,903 Total $ 1,929 $ 280,903 |
Stockholders' Equity - Accumula
Stockholders' Equity - Accumulated Other Comprehensive Income (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Stockholders' Equity Note [Abstract] | |
Reclassification out of Accumulated Other Comprehensive Income [Table Text Block] | During the nine months ended September 30, 2014 , the Company recorded reclassifications out of accumulated other comprehensive income that are included in the table below. There were no such reclassifications made during the nine months ended September 30, 2015. Period Details about accumulated Amount reclassified from Affected line item in the (In thousands) Three and Nine Months Ended September 30, 2014 Unrealized gains and losses on available-for-sale securities $ 2,098 Realized gain on notes receivable, at fair value |
Non-Controlling Interests (Tabl
Non-Controlling Interests (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Noncontrolling Interest [Abstract] | |
Schedule of changes in the non-controlling and JGWPT Holdings Inc.'s interests in Holdings LLC | Changes in the non-controlling and the Corporation's interest in JGW LLC are presented in the following table: Total Common Interests Held By: The J.G. Wentworth Company Non-controlling Interests Total Balance as of December 31, 2014 14,420,392 14,324,373 28,744,765 Common interests acquired by The J.G. Wentworth Company as a result of the issuance of restricted common stock 4,310 — 4,310 Common interests acquired by The J.G. Wentworth Company as a result of the exchange of units for shares of Class A common stock. 947,098 (947,098 ) — Common interests repurchased as a result of Class A common stock repurchased (1,513,644 ) — (1,513,644 ) Common interests re-issued as a result of the Home Lending Acquisition 1,572,327 — 1,572,327 Common interests forfeited — (19,420 ) (19,420 ) Balance as of September 30, 2015 15,430,483 13,357,855 28,788,338 |
Share-based Compensation (Table
Share-based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of assumptions used to estimate the fair value of stock option awards using the Black-Scholes valuation model | The fair value of stock options awarded was estimated using the Black-Scholes valuation model with the following assumptions and weighted average fair values: Nine Months Ended September 30, 2015 Weighted average fair value of grant $ 4.80 Risk-free interest rate 1.63 % Expected volatility 47.1 % Expected life of options in years 6.5 Expected dividend yield — |
Summary of stock option activity | A summary of stock option activity for the nine months ended September 30, 2015 is as follows: Shares Weighted - Average Exercise Price Weighted - Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (Dollars in Millions) Outstanding as of December 31, 2014 1,376,932 $ 11.44 9.44 $ 0.1 Granted 256,000 9.98 Exercised — — Forfeited (109,317 ) 11.01 Expired (6,857 ) 13.34 Outstanding as of September 30, 2015 1,516,758 $ 11.22 8.84 $ — Outstanding, vested and expected to vest as of September 30, 2015 1,462,246 11.23 8.84 $ — Vested as of September 30, 2015 252,714 11.47 8.70 $ — |
Summary of performance-based restricted stock units | A summary of performance-based restricted stock units for the nine months ended September 30, 2015 is as follows: Performance- Based Restricted Stock Units Weighted - Average Grant - Date Fair Value Outstanding as of December 31, 2014 130,250 $ 10.60 Granted 127,500 9.98 Vested — — Forfeited (43,000 ) 10.20 Outstanding as of September 30, 2015 214,750 $ 10.31 Outstanding and expected to vest as of September 30, 2015 119,228 9.98 |
Summary of Restricted Common Interests in JGW, LLC | The following table summarizes the activities of unvested Restricted Common Interests in JGW LLC for the nine months ended September 30, 2015 : Unvested Restricted Common Interests Weighted - Average Grant - Date Fair Value Outstanding as of December 31, 2014 157,112 $ 9.86 Vested in period (57,944 ) 8.99 Forfeited (19,420 ) 2.60 Outstanding as of September 30, 2015 79,748 12.29 Outstanding and expected to vest as of September 30, 2015 79,302 12.28 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Earnings Per Share [Abstract] | |
Schedule of reconciliation of the numerator and denominator used in the basic and diluted EPS calculations | The following table is a reconciliation of the numerator and denominator used in the basic and diluted EPS calculations: Three Months Ended Nine Months Ended 2015 2014 2015 2014 (In thousands, except share and per share data) Numerator: Numerator for basic EPS- Net (loss) income attributable to holders of The J.G. Wentworth Company Class A common stock $ (26,697 ) $ 4,092 $ (40,338 ) $ 19,382 Effect of dilutive securities: JGW LLC Common Interests and vested Restricted Common Interests — — — — JGW LLC unvested Restricted Common Interests — — — — Numerator for diluted EPS- Net (loss) income attributable to holders of The J.G. Wentworth Company Class A common stock $ (26,697 ) $ 4,092 $ (40,338 ) $ 19,382 Denominator: Denominator for basic EPS - Weighted average shares of Class A common stock 14,918,415 13,095,194 14,437,117 12,438,143 Effect of dilutive securities: Stock options — — — — Warrants — — — — Restricted common stock and performance-based restricted stock units — 3,801 — 2,184 JGW LLC Common Interests and vested Restricted Common Interests — — — — JGW LLC unvested Restricted Common Interests — — — — Dilutive potential common shares — 3,801 — 2,184 Denominator for diluted EPS - Adjusted weighted average shares of Class A common stock 14,918,415 13,098,995 14,437,117 12,440,327 Basic (loss) income per share of Class A common stock $ (1.79 ) $ 0.31 $ (2.79 ) $ 1.56 Diluted (loss) income per share of Class A common stock $ (1.79 ) $ 0.31 $ (2.79 ) $ 1.56 |
Business Segments (Tables)
Business Segments (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Segment Reporting [Abstract] | |
Operating data by reportable segment | Selected financial data for each reportable segment of the Company was as follows: Structured Settlement and Annuity Purchasing Home Lending Consolidated (In thousands) Three Months Ended September 30, 2015: Total revenues $ 51,775 $ 11,747 $ 63,522 Net (loss) income before income taxes (66,829 ) 1,950 (64,879 ) Total assets 5,128,902 250,264 5,379,166 Three Months Ended September 30, 2014: Total revenues 107,024 — 107,024 Net income before income taxes 14,865 — 14,865 Total assets 4,971,572 — 4,971,572 Structured Settlement and Annuity Purchasing Home Lending Consolidated (In thousands) Nine Months Ended September 30, 2015: Total revenues $ 199,970 $ 11,747 $ 211,717 Net (loss) income before income taxes (104,092 ) 1,950 (102,142 ) Total assets 5,128,902 250,264 5,379,166 Nine Months Ended September 30, 2014: Total revenues 367,102 — 367,102 Net income before income taxes 85,099 — 85,099 Total assets 4,971,572 — 4,971,572 |
Basis of Presentation and Acc48
Basis of Presentation and Accounting Policies (Details) $ in Thousands | Jul. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($)segment | Sep. 30, 2014USD ($) | Dec. 31, 2014 |
Basis of Presentation [Line Items] | |||||||
Number of reportable segments | segment | 2 | ||||||
Tax provision attributable to The J.G. Wentworth Company | $ (7,800) | $ 2,600 | $ (13,300) | $ 15,900 | |||
Total tax provision | (7,252) | $ 2,176 | $ (12,422) | $ 16,169 | |||
Threshold period past due for interest income recognition | 90 days | ||||||
Real Estate Loan | Government National Mortgage Association (GNMA) Insured Loans | |||||||
Basis of Presentation [Line Items] | |||||||
Duration for delinquency consideration for GNMA insured loans | 90 days | ||||||
Mortgage loans considered delinquent or defaulted | $ 39,100 | $ 39,100 | $ 39,100 | ||||
Mortgage loans repurchased as a result of the modification process | $ 3,200 | ||||||
Home Lending | |||||||
Basis of Presentation [Line Items] | |||||||
Fair value of total consideration | $ 72,544 | ||||||
Merger Sub | |||||||
Basis of Presentation [Line Items] | |||||||
Percentage of voting interest acquired | 53.60% | 53.60% | 53.60% | 50.20% | |||
Non-controlling interest (as a percent) | 46.40% | 46.40% | 46.40% | 49.80% | |||
Ownership percentage of weighted average economic interests | 47.30% | 49.00% | |||||
Ownership percentage of weighted average economic interests by non-controlling owners | 55.30% | 57.80% |
Business Combinations (Details)
Business Combinations (Details) - USD ($) $ in Thousands | Jul. 31, 2015 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 98,008 | $ 84,993 | ||
Home Lending | ||||
Business Acquisition [Line Items] | ||||
Fair value of total consideration | $ 72,544 | |||
Cash | 53,205 | |||
Equity instruments issued (1,572,327 shares of Class A common stock) | 12,956 | |||
Post close adjustment liabilities | 6,383 | |||
Intangible assets | 18,000 | |||
Intangible assets acquired - finite lived | $ 5,500 | |||
Weighted average useful life | 8 years 8 months 12 days | |||
Goodwill | $ 13,015 | |||
Transaction costs | $ 3,800 | |||
Home Lending | Professional and Consulting Fees | ||||
Business Acquisition [Line Items] | ||||
Transaction costs | $ 2,900 | |||
Home Lending | Licensing Agreements | ||||
Business Acquisition [Line Items] | ||||
Intangible assets acquired - indefinite lived | 12,500 | |||
Home Lending | Customer relationships | ||||
Business Acquisition [Line Items] | ||||
Intangible assets acquired - finite lived | $ 4,500 | |||
Weighted average useful life | 10 years | |||
Home Lending | Trade name | ||||
Business Acquisition [Line Items] | ||||
Intangible assets acquired - finite lived | $ 1,000 | |||
Weighted average useful life | 3 years | |||
Home Lending | Common Stock - Class A | ||||
Business Acquisition [Line Items] | ||||
Shares issued as consideration | 1,572,327 |
Business Combinations - Purchas
Business Combinations - Purchase Price Allocation (Details) - USD ($) $ in Thousands | Jul. 31, 2015 | Sep. 30, 2015 | Dec. 31, 2014 |
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||
Goodwill | $ 98,008 | $ 84,993 | |
Home Lending | |||
Business Combination, Consideration Transferred [Abstract] | |||
Cash | $ 53,205 | ||
Equity instruments issued (1,572,327 shares of Class A common stock) | 12,956 | ||
Post close adjustment liabilities | 6,383 | ||
Fair value of total consideration | 72,544 | ||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Net [Abstract] | |||
Cash and cash equivalents, | 6,610 | ||
Restricted cash | 4,756 | ||
Mortgage loans held for sale | 131,325 | ||
Mortgage servicing rights | 27,638 | ||
Premises and equipment | 908 | ||
Intangible assets | 18,000 | ||
Other assets | 31,536 | ||
Borrowings and other debt obligations | (128,487) | ||
Other liabilities | (32,757) | ||
Total identifiable net assets | 59,529 | ||
Goodwill | $ 13,015 |
Business Combinations - Additio
Business Combinations - Additional Information (Details) - Home Lending - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2015 | Sep. 30, 2014 | |
Business Acquisition [Line Items] | |||
Total revenue | $ 11,747 | $ 11,747 | |
Net income (loss) before income taxes | $ 1,950 | 1,950 | |
Pro forma total revenues | 257,048 | $ 411,451 | |
Pro forma net income (loss) before income taxes | $ (92,642) | $ 98,460 |
Goodwill and Intangible Asset52
Goodwill and Intangible Assets - Goodwill by Segment (Details) - USD ($) $ in Thousands | Sep. 30, 2015 | Jul. 01, 2015 | Dec. 31, 2014 |
Goodwill [Line Items] | |||
Goodwill | $ 98,008 | $ 84,993 | |
Structured Settlement and Annuity Purchasing | |||
Goodwill [Line Items] | |||
Goodwill | 84,993 | 84,993 | |
Amount of fair value in excess of carrying value | $ 17,400 | ||
Amount of fair value in excess of carrying value, percent | 9.60% | ||
Home Lending | |||
Goodwill [Line Items] | |||
Goodwill | $ 13,015 | $ 0 |
Goodwill and Intangible Asset53
Goodwill and Intangible Assets - Intangible assets subject to amortization (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Finite-Lived Intangible Assets [Line Items] | |||||
Accumulated Amortization | $ (21,556) | $ (21,556) | $ (20,273) | ||
Amortization of intangibles | 400 | $ 600 | 1,284 | $ 1,948 | |
Structured Settlement and Annuity Purchasing | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Cost | 26,909 | 26,909 | 26,909 | ||
Accumulated Amortization | (21,556) | (21,556) | (20,273) | ||
Structured Settlement and Annuity Purchasing | Database | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Cost | 4,609 | 4,609 | 4,609 | ||
Accumulated Amortization | (4,227) | (4,227) | (4,011) | ||
Structured Settlement and Annuity Purchasing | Customer relationships | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Cost | 18,844 | 18,844 | 18,844 | ||
Accumulated Amortization | (15,059) | (15,059) | (14,114) | ||
Structured Settlement and Annuity Purchasing | Domain names | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Cost | 1,635 | 1,635 | 1,635 | ||
Accumulated Amortization | (449) | (449) | (327) | ||
Structured Settlement and Annuity Purchasing | Non-compete agreements | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Cost | 1,821 | 1,821 | 1,821 | ||
Accumulated Amortization | (1,821) | (1,821) | $ (1,821) | ||
Home Lending | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Cost | 5,500 | 5,500 | |||
Home Lending | Customer relationships | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Cost | 4,500 | 4,500 | |||
Home Lending | Trade name | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Cost | $ 1,000 | $ 1,000 |
Goodwill and Intangible Asset54
Goodwill and Intangible Assets - Intangible assets not subject to amortization (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Indefinite-lived Intangible Assets [Line Items] | |||||
Impairment charges | $ 29,860 | $ 0 | $ 29,860 | $ 0 | |
Home Lending | |||||
Indefinite-lived Intangible Assets [Line Items] | |||||
Impairment charges | 29,900 | 29,900 | |||
Orchard Acquisition Company | Trade name | |||||
Indefinite-lived Intangible Assets [Line Items] | |||||
Indefinite-lived intangible assets | 8,900 | 8,900 | $ 38,800 | ||
Home Lending | Licensing Agreements | |||||
Indefinite-lived Intangible Assets [Line Items] | |||||
Indefinite-lived intangible assets | $ 12,500 | $ 12,500 |
Goodwill and Intangible Asset55
Goodwill and Intangible Assets - Estimated Future Amortization Expense (Details) $ in Thousands | Sep. 30, 2015USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Three months ending December 31, 2015 | $ 744 |
2,016 | 2,137 |
2,017 | 1,841 |
2,018 | 1,674 |
2,019 | 1,096 |
2,020 | 908 |
Thereafter | 2,453 |
Total future amortization expense | $ 10,853 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |||||
Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | Jun. 30, 2015 | ||||
Assets and liabilities that are carried at fair value | |||||||
Maximum recovery period of other receivables | 3 months | ||||||
Marketable securities: | |||||||
Total marketable securities | $ 85,879 | $ 103,419 | |||||
VIE and other finance receivables at fair market value | 4,555,127 | 4,523,835 | |||||
Mortgage loans held for sale, at fair value | 130,189 | [1] | 0 | [1] | $ 131,325 | ||
Mortgage servicing rights, at fair value | [1] | 28,186 | 0 | ||||
Liabilities | |||||||
VIE long-term debt issued by securitization and permanent financing trusts, at fair value | 4,074,210 | 4,031,864 | |||||
VIE derivative liabilities, at fair value | 74,687 | 75,706 | |||||
Total at Fair Value | |||||||
Marketable securities: | |||||||
Total equity securities | 61,537 | 72,198 | |||||
Total fixed income securities | 19,186 | 20,252 | |||||
Total other securities | 5,156 | 10,969 | |||||
Total marketable securities | 85,879 | 103,419 | |||||
VIE and other finance receivables at fair market value | 4,555,127 | 4,523,835 | |||||
Mortgage loans held for sale, at fair value | 130,189 | 0 | |||||
Mortgage servicing rights, at fair value | 28,186 | 0 | |||||
Derivative assets, at fair value | 7,822 | 0 | |||||
Total Assets | 4,807,203 | 4,627,254 | |||||
Liabilities | |||||||
VIE long-term debt issued by securitization and permanent financing trusts, at fair value | 4,074,210 | 4,031,864 | |||||
VIE derivative liabilities, at fair value | 74,687 | 75,706 | |||||
Other derivative liabilities | 1,929 | 0 | |||||
Total Liabilities | 4,150,826 | 4,107,570 | |||||
US large cap | Total at Fair Value | |||||||
Marketable securities: | |||||||
Total equity securities | 31,469 | 41,246 | |||||
US mid cap | Total at Fair Value | |||||||
Marketable securities: | |||||||
Total equity securities | 4,900 | 8,192 | |||||
US small cap | Total at Fair Value | |||||||
Marketable securities: | |||||||
Total equity securities | 8,394 | 7,586 | |||||
International | Total at Fair Value | |||||||
Marketable securities: | |||||||
Total equity securities | 16,007 | 14,123 | |||||
Other equity | Total at Fair Value | |||||||
Marketable securities: | |||||||
Total equity securities | 767 | 1,051 | |||||
US fixed income | Total at Fair Value | |||||||
Marketable securities: | |||||||
Total fixed income securities | 17,883 | 16,699 | |||||
International fixed income | Total at Fair Value | |||||||
Marketable securities: | |||||||
Total fixed income securities | 1,303 | 3,526 | |||||
Other fixed income | Total at Fair Value | |||||||
Marketable securities: | |||||||
Total fixed income securities | 0 | 27 | |||||
Cash & cash equivalents | Total at Fair Value | |||||||
Marketable securities: | |||||||
Total other securities | 2,650 | 6,629 | |||||
Alternative investments | Total at Fair Value | |||||||
Marketable securities: | |||||||
Total other securities | 221 | 1,829 | |||||
Annuities | Total at Fair Value | |||||||
Marketable securities: | |||||||
Total other securities | $ 2,285 | $ 2,511 | |||||
VIE and other finance receivables, at fair market value | |||||||
Assets and liabilities that are carried at fair value | |||||||
Discount rate for discounting residual cash flows (as a percent) | 8.03% | 5.97% | |||||
Expected weighted average life (in years) | 20 years | 20 years | |||||
Loss assumption (as a percent) | 0.25% | ||||||
Quoted Prices in Active Markets for Identical Assets Level 1 | |||||||
Marketable securities: | |||||||
Total equity securities | $ 61,537 | $ 72,198 | |||||
Total fixed income securities | 19,186 | 20,252 | |||||
Total other securities | 5,156 | 10,969 | |||||
Total marketable securities | 85,879 | 103,419 | |||||
Total Assets | 85,879 | 103,419 | |||||
Quoted Prices in Active Markets for Identical Assets Level 1 | US large cap | |||||||
Marketable securities: | |||||||
Total equity securities | 31,469 | 41,246 | |||||
Quoted Prices in Active Markets for Identical Assets Level 1 | US mid cap | |||||||
Marketable securities: | |||||||
Total equity securities | 4,900 | 8,192 | |||||
Quoted Prices in Active Markets for Identical Assets Level 1 | US small cap | |||||||
Marketable securities: | |||||||
Total equity securities | 8,394 | 7,586 | |||||
Quoted Prices in Active Markets for Identical Assets Level 1 | International | |||||||
Marketable securities: | |||||||
Total equity securities | 16,007 | 14,123 | |||||
Quoted Prices in Active Markets for Identical Assets Level 1 | Other equity | |||||||
Marketable securities: | |||||||
Total equity securities | 767 | 1,051 | |||||
Quoted Prices in Active Markets for Identical Assets Level 1 | US fixed income | |||||||
Marketable securities: | |||||||
Total fixed income securities | 17,883 | 16,699 | |||||
Quoted Prices in Active Markets for Identical Assets Level 1 | International fixed income | |||||||
Marketable securities: | |||||||
Total fixed income securities | 1,303 | 3,526 | |||||
Quoted Prices in Active Markets for Identical Assets Level 1 | Other fixed income | |||||||
Marketable securities: | |||||||
Total fixed income securities | 0 | 27 | |||||
Quoted Prices in Active Markets for Identical Assets Level 1 | Cash & cash equivalents | |||||||
Marketable securities: | |||||||
Total other securities | 2,650 | 6,629 | |||||
Quoted Prices in Active Markets for Identical Assets Level 1 | Alternative investments | |||||||
Marketable securities: | |||||||
Total other securities | 221 | 1,829 | |||||
Quoted Prices in Active Markets for Identical Assets Level 1 | Annuities | |||||||
Marketable securities: | |||||||
Total other securities | 2,285 | 2,511 | |||||
Significant Other Observable Inputs Level 2 | |||||||
Marketable securities: | |||||||
Mortgage loans held for sale, at fair value | 130,189 | ||||||
Total Assets | 130,189 | ||||||
Liabilities | |||||||
VIE derivative liabilities, at fair value | 74,687 | 75,706 | |||||
Other derivative liabilities | 1,929 | ||||||
Total Liabilities | 76,616 | 75,706 | |||||
Significant Unobservable Inputs Level 3 | |||||||
Marketable securities: | |||||||
VIE and other finance receivables at fair market value | 4,555,127 | 4,523,835 | |||||
Mortgage servicing rights, at fair value | 28,186 | ||||||
Derivative assets, at fair value | 7,822 | ||||||
Total Assets | 4,591,135 | 4,523,835 | |||||
Liabilities | |||||||
VIE long-term debt issued by securitization and permanent financing trusts, at fair value | 4,074,210 | 4,031,864 | |||||
Total Liabilities | $ 4,074,210 | $ 4,031,864 | |||||
[1] | Pledged as collateral to Other Borrowings Under Revolving Credit Facilities and Other Similar Borrowings. Refer to Note 8 “Mortgage Loans Held for Sale, at Fair Value” and Note 9 “Mortgage Servicing Rights, at Fair Value.” |
Fair Value Measurements (Deta57
Fair Value Measurements (Details 2) - Level 3 - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2015 | Dec. 31, 2014 | |
Quantitative information about fair value measurements | ||
Fair value of assets | $ 4,583,313,000 | $ 4,523,835,000 |
Fair value of liabilities | 4,074,210,000 | 4,031,864,000 |
VIE long-term debt issued by securitization and permanent financing trusts, at fair market value | ||
Quantitative information about fair value measurements | ||
Fair value of liabilities | $ 4,074,210,000 | $ 4,031,864,000 |
VIE long-term debt issued by securitization and permanent financing trusts, at fair market value | Discounted cash flow | Minimum | ||
Unobservable Input | ||
Discount rate (as a percent) | 0.92% | 0.74% |
VIE long-term debt issued by securitization and permanent financing trusts, at fair market value | Discounted cash flow | Maximum | ||
Unobservable Input | ||
Discount rate (as a percent) | 12.42% | 12.32% |
VIE long-term debt issued by securitization and permanent financing trusts, at fair market value | Discounted cash flow | Weighted Avg | ||
Unobservable Input | ||
Discount rate (as a percent) | 3.44% | 3.16% |
VIE and other finance receivables, at fair market value | ||
Quantitative information about fair value measurements | ||
Fair value of assets | $ 4,555,127,000 | $ 4,523,835,000 |
VIE and other finance receivables, at fair market value | Discounted cash flow | Minimum | ||
Unobservable Input | ||
Discount rate (as a percent) | 2.58% | 2.55% |
VIE and other finance receivables, at fair market value | Discounted cash flow | Maximum | ||
Unobservable Input | ||
Discount rate (as a percent) | 12.42% | 12.60% |
VIE and other finance receivables, at fair market value | Discounted cash flow | Weighted Avg | ||
Unobservable Input | ||
Discount rate (as a percent) | 3.82% | 3.43% |
Life settlement contracts, at fair market value | ||
Quantitative information about fair value measurements | ||
Fair value of assets | $ 0 | $ 0 |
Life settlement contracts, at fair market value | Model actuarial pricing | ||
Unobservable Input | ||
Discount rate (as a percent) | 18.00% | 18.00% |
Life settlement contracts, at fair market value | Model actuarial pricing | Minimum | ||
Unobservable Input | ||
Life expectancy | 36 months | 45 months |
Life settlement contracts, at fair market value | Model actuarial pricing | Maximum | ||
Unobservable Input | ||
Life expectancy | 335 months | 344 months |
Life settlement contracts, at fair market value | Model actuarial pricing | Weighted Avg | ||
Unobservable Input | ||
Discount rate (as a percent) | 18.00% | 18.00% |
Life expectancy | 210 months | 219 months |
Mortgage servicing rights | ||
Quantitative information about fair value measurements | ||
Fair value of assets | $ 28,186,000 | |
Mortgage servicing rights | Discounted cash flow | Minimum | ||
Unobservable Input | ||
Discount rate (as a percent) | 9.50% | |
Prepayment rate (as a percent) | 8.50% | |
Cost of servicing | $ 65 | |
Mortgage servicing rights | Discounted cash flow | Maximum | ||
Unobservable Input | ||
Discount rate (as a percent) | 14.00% | |
Prepayment rate (as a percent) | 22.00% | |
Cost of servicing | $ 90 | |
Mortgage servicing rights | Discounted cash flow | Weighted Avg | ||
Unobservable Input | ||
Discount rate (as a percent) | 10.30% | |
Prepayment rate (as a percent) | 10.71% | |
Cost of servicing | $ 75 |
Fair Value Measurements (Deta58
Fair Value Measurements (Details 3) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Changes in assets | ||
Balance at the beginning of the period | $ 4,523,835 | $ 3,876,259 |
Total gains (losses) included in earnings / losses | (4,785) | 400,969 |
Total gains (losses) included in other comprehensive gain | 0 | (1,615) |
Purchases of finance receivables | 296,468 | 320,485 |
Life insurance premiums paid | 13 | 116 |
Interest accreted | 124,870 | 123,140 |
Payments received | (384,726) | (362,896) |
MSR acquired in connection with the Home Lending acquisition | 27,638 | |
Balance at the end of the period | 4,583,313 | 4,356,458 |
Amount of net gains (losses) for the period included in revenues attributable to the change in unrealized gains or losses relating to assets still held at the end of the period | (4,785) | 398,871 |
VIE and other finance receivables, at fair market value | ||
Changes in assets | ||
Balance at the beginning of the period | 4,523,835 | 3,870,649 |
Total gains (losses) included in earnings / losses | (5,320) | 398,987 |
Purchases of finance receivables | 296,468 | 320,485 |
Interest accreted | 124,870 | 123,140 |
Payments received | (384,726) | (356,803) |
Balance at the end of the period | 4,555,127 | 4,356,458 |
Amount of net gains (losses) for the period included in revenues attributable to the change in unrealized gains or losses relating to assets still held at the end of the period | (5,320) | 398,987 |
Mortgage servicing rights | ||
Changes in assets | ||
Total gains (losses) included in earnings / losses | 548 | |
MSR acquired in connection with the Home Lending acquisition | 27,638 | |
Balance at the end of the period | 28,186 | 0 |
Amount of net gains (losses) for the period included in revenues attributable to the change in unrealized gains or losses relating to assets still held at the end of the period | 548 | 0 |
Life settlement contracts, at fair market value | ||
Changes in assets | ||
Balance at the beginning of the period | 0 | |
Total gains (losses) included in earnings / losses | (13) | (116) |
Life insurance premiums paid | 13 | 116 |
Balance at the end of the period | 0 | 0 |
Amount of net gains (losses) for the period included in revenues attributable to the change in unrealized gains or losses relating to assets still held at the end of the period | (13) | (116) |
Notes receivable, at fair market value | ||
Changes in assets | ||
Balance at the beginning of the period | 0 | 5,610 |
Total gains (losses) included in earnings / losses | 0 | 2,098 |
Total gains (losses) included in other comprehensive gain | 0 | (1,615) |
Payments received | 0 | (6,093) |
Balance at the end of the period | 0 | 0 |
Amount of net gains (losses) for the period included in revenues attributable to the change in unrealized gains or losses relating to assets still held at the end of the period | $ 0 | $ 0 |
Fair Value Measurements (Deta59
Fair Value Measurements (Details 4) - VIE long-term debt issued by securitization and permanent financing trusts, at fair market value - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Changes in liabilities | ||
Balance at the beginning of the period | $ 4,031,864 | $ 3,431,283 |
Net (gains) losses included in earnings / losses | (67,305) | 177,420 |
Issuances | 380,417 | 473,782 |
Interest accreted | (33,659) | (28,944) |
Repayments | (237,107) | (216,685) |
Balance at the end of the period | 4,074,210 | 3,836,856 |
Amount of net (gains) losses for the period included in revenues attributable to the change in unrealized gains or losses relating to long-term debt still held at the end of the period | $ (66,712) | $ 177,667 |
Fair Value Measurements (Deta60
Fair Value Measurements (Details 5) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
VIE and other finance receivables and long-term debt | ||||
Realized and unrealized gains and losses included in earnings | ||||
Net gains (losses) included in revenues | $ 13,952 | $ 59,467 | $ 61,985 | $ 221,567 |
Unrealized gains (losses) relating to assets still held | 13,952 | 59,197 | 61,392 | 221,320 |
Mortgage servicing rights | ||||
Realized and unrealized gains and losses included in earnings | ||||
Net gains (losses) included in revenues | 845 | 0 | 845 | 0 |
Unrealized gains (losses) relating to assets still held | 548 | 0 | 548 | 0 |
Life settlement contracts income | ||||
Realized and unrealized gains and losses included in earnings | ||||
Net gains (losses) included in revenues | (3) | 0 | (13) | (116) |
Unrealized gains (losses) relating to assets still held | $ (3) | $ 0 | $ (13) | $ (116) |
Fair Value Measurements (Deta61
Fair Value Measurements (Details 6) - USD ($) $ in Thousands | Sep. 30, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | |||
Financial assets | ||||||
VIE and other finance receivables at fair market value | $ 4,555,127 | $ 4,523,835 | ||||
Other receivables, net of allowance for losses | 16,124 | 14,165 | ||||
Mortgage loans held for sale, at fair value | 130,189 | [1] | $ 131,325 | 0 | [1] | |
Mortgage servicing rights, at fair value | [1] | 28,186 | 0 | |||
Marketable securities | 85,879 | 103,419 | ||||
Financial liabilities | ||||||
Term loan payable | 439,431 | 437,183 | ||||
VIE derivative liabilities, at fair value | 74,687 | 75,706 | ||||
VIE borrowings under revolving credit facilities and other similar borrowings | 82,987 | 19,339 | ||||
Other borrowings under revolving credit facilities and other similar borrowings | 126,494 | 0 | ||||
VIE long-term debt | 201,464 | 181,558 | ||||
VIE long-term debt issued by securitization and permanent financing trusts, at fair value | 4,074,210 | 4,031,864 | ||||
Installment obligations payable | 85,879 | 103,419 | ||||
Estimated Fair Value | ||||||
Financial assets | ||||||
VIE and other finance receivables at fair market value | 4,555,127 | 4,523,835 | ||||
VIE and other finance receivables, net of allowance for losses | 110,927 | 123,765 | ||||
Other receivables, net of allowance for losses | 16,124 | 14,165 | ||||
Mortgage loans held for sale, at fair value | 130,189 | 0 | ||||
Mortgage servicing rights, at fair value | 28,186 | 0 | ||||
Marketable securities | 85,879 | 103,419 | ||||
Derivative assets, at fair value | 7,822 | 0 | ||||
Financial liabilities | ||||||
Term loan payable | 380,996 | 433,904 | ||||
VIE derivative liabilities, at fair value | 74,687 | 75,706 | ||||
VIE borrowings under revolving credit facilities and other similar borrowings | 87,241 | 21,415 | ||||
Other borrowings under revolving credit facilities and other similar borrowings | 126,494 | 0 | ||||
VIE long-term debt | 195,967 | 176,635 | ||||
VIE long-term debt issued by securitization and permanent financing trusts, at fair value | 4,074,210 | 4,031,864 | ||||
Installment obligations payable | 85,879 | 103,419 | ||||
Other derivative liabilities | 1,929 | 0 | ||||
Carrying Amount | ||||||
Financial assets | ||||||
VIE and other finance receivables at fair market value | 4,555,127 | 4,523,835 | ||||
VIE and other finance receivables, net of allowance for losses | 118,238 | 131,292 | ||||
Other receivables, net of allowance for losses | 16,124 | 14,165 | ||||
Mortgage loans held for sale, at fair value | 130,189 | 0 | ||||
Mortgage servicing rights, at fair value | 28,186 | 0 | ||||
Marketable securities | 85,879 | 103,419 | ||||
Derivative assets, at fair value | 7,822 | 0 | ||||
Financial liabilities | ||||||
Term loan payable | 439,431 | 437,183 | ||||
VIE derivative liabilities, at fair value | 74,687 | 75,706 | ||||
VIE borrowings under revolving credit facilities and other similar borrowings | 82,987 | 19,339 | ||||
Other borrowings under revolving credit facilities and other similar borrowings | 126,494 | 0 | ||||
VIE long-term debt | 201,464 | 181,558 | ||||
VIE long-term debt issued by securitization and permanent financing trusts, at fair value | 4,074,210 | 4,031,864 | ||||
Installment obligations payable | 85,879 | 103,419 | ||||
Other derivative liabilities | $ 1,929 | $ 0 | ||||
[1] | Pledged as collateral to Other Borrowings Under Revolving Credit Facilities and Other Similar Borrowings. Refer to Note 8 “Mortgage Loans Held for Sale, at Fair Value” and Note 9 “Mortgage Servicing Rights, at Fair Value.” |
VIE and Other Finance Receiva62
VIE and Other Finance Receivables, at Fair Value (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | ||
VIE and other finance receivables, at fair market value | ||||||
Maturity value | $ 6,843,129,000 | $ 6,843,129,000 | $ 6,492,863,000 | |||
Unearned income | (2,288,002,000) | (2,288,002,000) | (1,969,028,000) | |||
Total VIE finance receivables at fair value | [1] | 4,521,327,000 | 4,521,327,000 | 4,422,033,000 | ||
Not encumbered | 33,800,000 | 33,800,000 | 101,802,000 | |||
Total VIE and other finance receivables at fair value | 4,555,127,000 | 4,555,127,000 | 4,523,835,000 | |||
Servicing fee income | 199,000 | $ 230,000 | 614,000 | $ 691,000 | ||
VIE securitization debt | ||||||
VIE and other finance receivables, at fair market value | ||||||
Total VIE finance receivables at fair value | 4,333,342,000 | 4,333,342,000 | 4,357,456,000 | |||
Variable funding note facility | ||||||
VIE and other finance receivables, at fair market value | ||||||
Total VIE finance receivables at fair value | 34,649,000 | 34,649,000 | 2,000 | |||
Variable funding note facility | JGW-S III | ||||||
VIE and other finance receivables, at fair market value | ||||||
Maximum borrowing capacity | 100,000,000 | 100,000,000 | 100,000,000 | |||
Multi-tranche and lender credit facility | ||||||
VIE and other finance receivables, at fair market value | ||||||
Total VIE finance receivables at fair value | 40,213,000 | 40,213,000 | 0 | |||
Multi-tranche and lender credit facility | JGW VII | ||||||
VIE and other finance receivables, at fair market value | ||||||
Maximum borrowing capacity | 300,000,000 | 300,000,000 | 300,000,000 | |||
Credit facility | ||||||
VIE and other finance receivables, at fair market value | ||||||
Total VIE finance receivables at fair value | 0 | 0 | 0 | |||
Credit facility | JGW IV | ||||||
VIE and other finance receivables, at fair market value | ||||||
Maximum borrowing capacity | 50,000,000 | 50,000,000 | 50,000,000 | |||
Credit facility | JGW V | ||||||
VIE and other finance receivables, at fair market value | ||||||
Maximum borrowing capacity | 300,000,000 | 300,000,000 | 300,000,000 | |||
Credit facility | JGW VII | ||||||
VIE and other finance receivables, at fair market value | ||||||
Total VIE finance receivables at fair value | 35,092,000 | 35,092,000 | 0 | |||
Permanent financing related to 2011-A | ||||||
VIE and other finance receivables, at fair market value | ||||||
Total VIE finance receivables at fair value | 78,031,000 | 78,031,000 | 64,575,000 | |||
Maximum borrowing capacity | $ 100,000,000 | $ 100,000,000 | $ 100,000,000 | |||
[1] | Pledged as collateral to VIE credit and long-term debt facilities. Refer to Note 6 “VIE and Other Finance Receivables, at Fair Value” and Note 7 “VIE and Other Finance Receivables, net of Allowance for Losses.” |
VIE and Other Finance Receiva63
VIE and Other Finance Receivables, net of Allowance for Losses (Details) - VIE and Other Finance Receivables, net - USD ($) $ in Thousands | Sep. 30, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Finance receivables, gross | $ 129,337 | $ 141,420 | ||||
Less: allowance for losses | (11,099) | $ (10,968) | (10,128) | $ (9,457) | $ (8,984) | $ (8,342) |
Finance receivables, net | 118,238 | 131,292 | 132,888 | |||
Structured settlements and annuities | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Finance receivable before unearned income or deferred revenue | 73,059 | 76,253 | ||||
Less: unearned income or deferred revenue | (46,687) | (49,270) | ||||
Finance receivables, gross | 26,372 | 26,983 | ||||
Less: allowance for losses | (44) | (50) | (56) | (55) | (55) | (48) |
Finance receivables, net | 26,328 | 26,915 | ||||
Lottery winnings | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Finance receivable before unearned income or deferred revenue | 76,184 | 81,169 | ||||
Less: unearned income or deferred revenue | (21,550) | (24,389) | ||||
Finance receivables, gross | 54,634 | 56,780 | ||||
Less: allowance for losses | (3) | (3) | (3) | (4) | (4) | 0 |
Finance receivables, net | 54,631 | 57,842 | ||||
Pre-settlement funding transactions | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Finance receivable before unearned income or deferred revenue | 48,768 | 57,886 | ||||
Less: unearned income or deferred revenue | (1,397) | (1,563) | ||||
Finance receivables, gross | 47,371 | 56,323 | ||||
Less: allowance for losses | (10,768) | (10,632) | (9,786) | (9,115) | (8,642) | (8,011) |
Finance receivables, net | 36,603 | 46,993 | ||||
Attorney cost financing | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Finance receivable before unearned income or deferred revenue | 960 | 1,334 | ||||
Less: unearned income or deferred revenue | 0 | 0 | ||||
Finance receivables, gross | 960 | 1,334 | ||||
Less: allowance for losses | (284) | $ (283) | $ (283) | (283) | $ (283) | $ (283) |
Finance receivables, net | $ 676 | $ 1,138 |
VIE and Other Finance Receiva64
VIE and Other Finance Receivables, net of Allowance for Losses (Details 2) - VIE and Other Finance Receivables, net - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 | Sep. 30, 2014 |
Encumbrances on financing receivable | |||
Total VIE finance receivables, net of allowances | $ 106,513,000 | $ 113,489,000 | |
Not encumbered | 11,725,000 | 17,803,000 | |
Finance receivables, net | 118,238,000 | 131,292,000 | $ 132,888,000 |
VIE securitization debt | |||
Encumbrances on financing receivable | |||
Total VIE finance receivables, net of allowances | 72,757,000 | 74,973,000 | |
Credit facility | Peach One | |||
Encumbrances on financing receivable | |||
Total VIE finance receivables, net of allowances | 28,461,000 | 30,423,000 | |
Maximum borrowing capacity | 35,000,000 | 35,000,000 | |
$45.1 million long-term pre-settlement facility | |||
Encumbrances on financing receivable | |||
Total VIE finance receivables, net of allowances | 4,004,000 | 6,453,000 | |
Maximum borrowing capacity | 45,100,000 | 45,100,000 | |
$2.5 Long-term facility | |||
Encumbrances on financing receivable | |||
Total VIE finance receivables, net of allowances | 1,291,000 | 1,640,000 | |
Maximum borrowing capacity | $ 2,500,000 | $ 2,500,000 |
VIE and Other Finance Receiva65
VIE and Other Finance Receivables, net of Allowance for Losses (Details 3) - VIE and Other Finance Receivables, net - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Activity in the allowance for losses | |||||
Balance at beginning of year | $ (10,968) | $ (8,984) | $ (10,128) | $ (8,342) | |
Provision for loss | (1,211) | (1,055) | (4,168) | (3,273) | |
Charge-offs | 1,089 | 604 | 3,209 | 2,308 | |
Recoveries | (9) | (22) | (12) | (150) | |
Balance at end of year | (11,099) | (9,457) | (11,099) | (9,457) | |
Individually evaluated for impairment | (2,259) | (2,933) | (2,259) | (2,933) | |
Collectively evaluated for impairment | (8,840) | (6,524) | (8,840) | (6,524) | |
Individually evaluated for impairment | 81,143 | 88,103 | 81,143 | 88,103 | |
Collectively evaluated for impairment | 37,095 | 44,785 | 37,095 | 44,785 | |
Finance receivables, net | 118,238 | 132,888 | 118,238 | 132,888 | $ 131,292 |
Structured settlements and annuities | |||||
Activity in the allowance for losses | |||||
Balance at beginning of year | (50) | (55) | (56) | (48) | |
Provision for loss | (21) | (6) | (129) | (14) | |
Charge-offs | 32 | 6 | 149 | 110 | |
Recoveries | (5) | 0 | (8) | (103) | |
Balance at end of year | (44) | (55) | (44) | (55) | |
Individually evaluated for impairment | (44) | (55) | (44) | (55) | |
Individually evaluated for impairment | 26,328 | 26,915 | 26,328 | 26,915 | |
Finance receivables, net | 26,328 | 26,915 | 26,328 | 26,915 | |
Lottery | |||||
Activity in the allowance for losses | |||||
Balance at beginning of year | (3) | (4) | (3) | 0 | |
Provision for loss | 0 | 0 | (69) | (8) | |
Charge-offs | 0 | 0 | 69 | 29 | |
Recoveries | 0 | 0 | 0 | (25) | |
Balance at end of year | (3) | (4) | (3) | (4) | |
Individually evaluated for impairment | (3) | (4) | (3) | (4) | |
Individually evaluated for impairment | 54,631 | 57,842 | 54,631 | 57,842 | |
Finance receivables, net | 54,631 | 57,842 | 54,631 | 57,842 | |
Pre-settlement funding transactions | |||||
Activity in the allowance for losses | |||||
Balance at beginning of year | (10,632) | (8,642) | (9,786) | (8,011) | |
Provision for loss | (1,190) | (1,049) | (3,970) | (3,251) | |
Charge-offs | 1,057 | 598 | 2,991 | 2,169 | |
Recoveries | (3) | (22) | (3) | (22) | |
Balance at end of year | (10,768) | (9,115) | (10,768) | (9,115) | |
Individually evaluated for impairment | (2,212) | (2,874) | (2,212) | (2,874) | |
Collectively evaluated for impairment | (8,556) | (6,241) | (8,556) | (6,241) | |
Individually evaluated for impairment | 184 | 3,346 | 184 | 3,346 | |
Collectively evaluated for impairment | 36,419 | 43,647 | 36,419 | 43,647 | |
Finance receivables, net | 36,603 | 46,993 | 36,603 | 46,993 | |
Attorney cost financing | |||||
Activity in the allowance for losses | |||||
Balance at beginning of year | (283) | (283) | (283) | (283) | |
Provision for loss | 0 | 0 | |||
Charge-offs | 0 | ||||
Recoveries | (1) | (1) | |||
Balance at end of year | (284) | (283) | (284) | (283) | |
Collectively evaluated for impairment | (284) | (283) | (284) | (283) | |
Individually evaluated for impairment | 0 | 0 | |||
Collectively evaluated for impairment | 676 | 1,138 | 676 | 1,138 | |
Finance receivables, net | $ 676 | $ 1,138 | $ 676 | $ 1,138 |
VIE and Other Finance Receiva66
VIE and Other Finance Receivables, net of Allowance for Losses (Details 4) - VIE and Other Finance Receivables, net - Pre-settlement funding transactions - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Gross financing receivable | $ 48,768 | $ 57,886 |
2,009 | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Gross financing receivable | 1,324 | 2,618 |
2,010 | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Gross financing receivable | 3,224 | 4,251 |
2,011 | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Gross financing receivable | 5,932 | 6,938 |
2,012 | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Gross financing receivable | 7,070 | 10,687 |
2,013 | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Gross financing receivable | 7,432 | 11,335 |
2,014 | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Gross financing receivable | 19,192 | 22,057 |
2,015 | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Gross financing receivable | $ 4,594 | $ 0 |
VIE and Other Finance Receiva67
VIE and Other Finance Receivables, net of Allowance for Losses (Details 5) - VIE and Other Finance Receivables, net - USD ($) $ in Thousands | Sep. 30, 2015 | Dec. 31, 2014 |
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | $ 269 | $ 354 |
Current | 80,690 | 83,350 |
VIE and Other Finance Receivables, net | 80,959 | 83,704 |
30-59 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 5 | 8 |
60-89 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 5 | 18 |
Greater than 90 Days | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 259 | 328 |
Structured settlements and annuities | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 137 | 226 |
Current | 26,191 | 26,701 |
VIE and Other Finance Receivables, net | 26,328 | 26,927 |
Structured settlements and annuities | 30-59 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 5 | 6 |
Structured settlements and annuities | 60-89 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 4 | 12 |
Structured settlements and annuities | Greater than 90 Days | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 128 | 208 |
Lottery winnings | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 132 | 128 |
Current | 54,499 | 56,649 |
VIE and Other Finance Receivables, net | 54,631 | 56,777 |
Lottery winnings | 30-59 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 0 | 2 |
Lottery winnings | 60-89 Days Past Due | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 1 | 6 |
Lottery winnings | Greater than 90 Days | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | $ 131 | $ 120 |
VIE and Other Finance Receiva68
VIE and Other Finance Receivables, net of Allowance for Losses - Narrative (Details) - VIE and Other Finance Receivables, net - USD ($) $ in Thousands | 9 Months Ended | |||||
Sep. 30, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2013 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Receivable allowance | $ 11,099 | $ 10,968 | $ 10,128 | $ 9,457 | $ 8,984 | $ 8,342 |
Pre-settlement funding transactions | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Recorded investment | 13,400 | 14,000 | ||||
Receivable allowance | 10,768 | 10,632 | 9,786 | 9,115 | 8,642 | 8,011 |
Attorney cost financing | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Recorded investment | 500 | 600 | ||||
Receivable allowance | $ 284 | $ 283 | $ 283 | $ 283 | $ 283 | $ 283 |
Pre-settlement funding transactions and attorney cost financing | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Minimum receivable term | 1 year |
Mortgage Loans Held for Sale,69
Mortgage Loans Held for Sale, at Fair Value (Details) - USD ($) $ in Thousands | 2 Months Ended | 3 Months Ended | 9 Months Ended | |||||||
Sep. 30, 2015 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | |||||
Receivables [Abstract] | ||||||||||
Unpaid principal balance of mortgage loans held for sale | $ 124,779 | |||||||||
Fair value adjustment | $ 5,410 | |||||||||
Mortgage loans held for sale, at fair value | $ 130,189 | [1] | 131,325 | $ 0 | [1] | $ 130,189 | [1] | |||
Increase (Decrease) in Mortgage Loans Held-for-sale [Roll Forward] | ||||||||||
Acquired through Home Lending acquisition | 131,325 | 0 | [1] | |||||||
Mortgage loans originated, net of fees | 352,641 | |||||||||
Proceeds from sale of and principal payments on mortgage loans held for sale | (362,723) | |||||||||
Realized and unrealized gains on sale of mortgage loans held for sale, net of direct costs | 8,946 | $ 0 | 8,946 | $ 0 | ||||||
As of September 30, 2015 | [1] | 130,189 | $ 130,189 | $ 130,189 | ||||||
Real Estate Loan | Government National Mortgage Association (GNMA) Insured Loans | ||||||||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||||||||||
Duration for delinquency consideration for Ginne Mae pools | 90 days | |||||||||
Mortgage loans considered delinquent or defaulted | $ 3,200 | |||||||||
[1] | Pledged as collateral to Other Borrowings Under Revolving Credit Facilities and Other Similar Borrowings. Refer to Note 8 “Mortgage Loans Held for Sale, at Fair Value” and Note 9 “Mortgage Servicing Rights, at Fair Value.” |
Mortgage Loans Held for Sale,70
Mortgage Loans Held for Sale, at Fair Value - Loan Indemnification Activity (Details) - Indemnification Agreement - Other Liabilities $ in Thousands | 2 Months Ended |
Sep. 30, 2015USD ($) | |
Indemnification Asset [Roll Forward] | |
Acquired through Home Lending acquisition | $ 3,031 |
Provision for loan losses | 409 |
Write-offs | (520) |
Balance as of September 30, 2015 | $ 2,920 |
Mortgage Servicing Rights, at71
Mortgage Servicing Rights, at Fair Value (Details) | 2 Months Ended | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2015USD ($) | ||||
Servicing Asset at Fair Value, Amount [Roll Forward] | ||||||
Acquired through Home Lending acquisition | $ 0 | [1] | ||||
Balance as of September 30, 2015 | $ 28,186,000 | [1] | $ 28,186,000 | [1] | 28,186,000 | [1] |
Unpaid principal balance of mortgage loans serviced | 2,800,000,000 | $ 2,800,000,000 | 2,800,000,000 | |||
Minimum | ||||||
Servicing Asset at Fair Value, Amount [Roll Forward] | ||||||
Discount rates (in percent) | 9.50% | |||||
Annual prepayment speeds (in percent) | 8.50% | |||||
Cost of servicing | $ 65 | |||||
Maximum | ||||||
Servicing Asset at Fair Value, Amount [Roll Forward] | ||||||
Discount rates (in percent) | 14.00% | |||||
Annual prepayment speeds (in percent) | 22.00% | |||||
Cost of servicing | $ 90 | |||||
Mortgage servicing rights | ||||||
Servicing Asset at Fair Value, Amount [Roll Forward] | ||||||
Acquired through Home Lending acquisition | 27,638,000 | |||||
Additions due to loans sold, servicing retained | 1,298,000 | |||||
Reductions due to loan payoffs and foreclosures | (631,000) | |||||
Fair value adjustment | (119,000) | |||||
Balance as of September 30, 2015 | $ 28,186,000 | $ 28,186,000 | $ 28,186,000 | |||
[1] | Pledged as collateral to Other Borrowings Under Revolving Credit Facilities and Other Similar Borrowings. Refer to Note 8 “Mortgage Loans Held for Sale, at Fair Value” and Note 9 “Mortgage Servicing Rights, at Fair Value.” |
Mortgage Servicing Rights, at72
Mortgage Servicing Rights, at Fair Value - Sensitivity Analysis (Details) $ in Thousands | 3 Months Ended |
Sep. 30, 2015USD ($) | |
Transfers and Servicing [Abstract] | |
Discount Rate: Effect on value - 100 basis points adverse change | $ (1,038) |
Discount Rate: Effect on value - 100 basis points adverse change, percent | 1.00% |
Discount Rate: Effect on value - 200 basis points adverse change | $ (2,004) |
Prepayment Speeds: Effect on value - 5% adverse change | $ (523) |
Prepayment Speeds: Effect on value - 5% adverse change, percent | 5.00% |
Prepayment Speeds: Effect on value - 10% adverse change | $ (1,048) |
Cost of Servicing: Effect on value - 5% adverse change | $ (193) |
Cost of Servicing: Effect on value - 5% adverse change, percent | 5.00% |
Cost of Servicing: Effect on value - 10% adverse change | $ (386) |
Cost of Servicing: Effect on value - 10% adverse change, percent | 10.00% |
Term Loan Payable (Details)
Term Loan Payable (Details) - USD ($) | Jul. 15, 2015 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | Feb. 08, 2013 |
Term loan payable | |||||||
Other borrowings under revolving credit facilities and other similar borrowings | $ 126,494,000 | $ 126,494,000 | $ 0 | ||||
Professional and consulting | 6,542,000 | $ 4,520,000 | 15,841,000 | $ 13,482,000 | |||
New term loan | |||||||
Term loan payable | |||||||
Loan amount | $ 449,500,000 | $ 449,500,000 | 449,500,000 | ||||
Interest rate (as a percent) | 7.00% | 7.00% | |||||
Interest expense | $ 10,200,000 | $ 10,100,000 | $ 30,200,000 | $ 30,100,000 | |||
New term loan | LIBOR | |||||||
Term loan payable | |||||||
Interest rate floor (as a percent) | 1.00% | 1.00% | |||||
Margin on variable rate (as a percent) | 6.00% | ||||||
New term loan | Base rate | |||||||
Term loan payable | |||||||
Interest rate floor (as a percent) | 2.00% | 2.00% | |||||
Margin on variable rate (as a percent) | 5.00% | ||||||
Revolving Credit Facility | |||||||
Term loan payable | |||||||
Revolving commitment | $ 20,000,000 | ||||||
Unused fee (as a percent) | 0.50% | ||||||
Other borrowings under revolving credit facilities and other similar borrowings | $ 0 | $ 0 | $ 0 | ||||
Deferred finance costs | $ 700,000 | ||||||
Professional and consulting | $ 200,000 | ||||||
Revolving Credit Facility | LIBOR | |||||||
Term loan payable | |||||||
Interest rate floor (as a percent) | 1.00% | 1.00% | |||||
Margin on variable rate (as a percent) | 6.00% | ||||||
Revolving Credit Facility | Base rate | |||||||
Term loan payable | |||||||
Interest rate floor (as a percent) | 2.00% | 2.00% | |||||
Margin on variable rate (as a percent) | 5.00% | ||||||
Letters of credit | |||||||
Term loan payable | |||||||
Revolving commitment | $ 10,000,000 | $ 10,000,000 |
VIE Borrowings Under Revolvin74
VIE Borrowings Under Revolving Credit Facilities and Other Similar Borrowings (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 4 Months Ended | 5 Months Ended | 9 Months Ended | 12 Months Ended | ||
Jun. 30, 2015 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | May. 31, 2015 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Line of Credit Facility [Line Items] | ||||||||
Total VIE borrowings under revolving credit facilities and other similar borrowings | $ 82,987,000 | $ 82,987,000 | $ 82,987,000 | $ 19,339,000 | ||||
JGW-S III | Variable funding note facility | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Total VIE borrowings under revolving credit facilities and other similar borrowings | 22,247,000 | 22,247,000 | 22,247,000 | 0 | ||||
JGW IV | Credit facility | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Total VIE borrowings under revolving credit facilities and other similar borrowings | 0 | 0 | 0 | 6,000 | ||||
JGW V | Multi-tranche and lender credit facility | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Total VIE borrowings under revolving credit facilities and other similar borrowings | 25,784,000 | 25,784,000 | 25,784,000 | 0 | ||||
JGW VII | Credit facility | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Total VIE borrowings under revolving credit facilities and other similar borrowings | 22,059,000 | 22,059,000 | 22,059,000 | 0 | ||||
Peach One | Credit facility | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Total VIE borrowings under revolving credit facilities and other similar borrowings | 12,897,000 | $ 12,897,000 | 12,897,000 | $ 19,333,000 | ||||
VIE | Revolving credit facilities and other similar borrowings | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Interest expense related to borrowings | $ 2,300,000 | $ 2,200,000 | $ 6,700,000 | $ 6,700,000 | ||||
Weighted average interest rate on outstanding borrowings (as a percent) | 4.36% | 4.36% | 4.36% | 4.63% | ||||
VIE | JGW-S III | Variable funding note facility | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Maximum borrowing capacity | $ 100,000,000 | $ 100,000,000 | $ 100,000,000 | $ 100,000,000 | ||||
Interest payable monthly (as a percent) | 6.50% | 6.50% | 6.50% | 9.00% | 6.50% | 9.00% | ||
Outstanding balance, threshold for interest rate trigger | $ 50,000,000 | |||||||
Conditional interest rate, stated percentage | 9.00% | |||||||
Revolving period | 2 years | 2 years | ||||||
Amortization period | 18 months | 18 months | ||||||
Monthly unused fee (as a percent) | 0.75% | 1.00% | 0.75% | 1.00% | ||||
VIE | JGW IV | Credit facility | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Maximum borrowing capacity | $ 50,000,000 | $ 50,000,000 | $ 50,000,000 | $ 50,000,000 | ||||
Monthly unused fee (as a percent) | 0.50% | 0.50% | ||||||
VIE | JGW IV | Credit facility | LIBOR | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Margin added to variable interest rate basis (as a percent) | 3.45% | 3.42% | ||||||
VIE | JGW V | Multi-tranche and lender credit facility | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Maximum borrowing capacity | $ 300,000,000 | $ 300,000,000 | $ 300,000,000 | $ 300,000,000 | ||||
Monthly unused fee (as a percent) | 0.625% | 0.625% | ||||||
VIE | JGW V | Multi-tranche and lender credit facility | Tranche A | LIBOR | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Margin added to variable interest rate basis (as a percent) | 3.00% | 3.00% | ||||||
Interest rate (as a percent) | 3.20% | 3.20% | 3.20% | 3.17% | ||||
VIE | JGW V | Multi-tranche and lender credit facility | Tranche A | Commercial Paper rate | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Margin added to variable interest rate basis (as a percent) | 3.00% | 3.00% | ||||||
Interest rate (as a percent) | 3.37% | 3.37% | 3.37% | 3.26% | ||||
VIE | JGW V | Multi-tranche and lender credit facility | Tranche B | LIBOR | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Margin added to variable interest rate basis (as a percent) | 5.50% | 5.50% | ||||||
Interest rate (as a percent) | 5.70% | 5.70% | 5.70% | 5.67% | ||||
VIE | JGW VII | Credit facility | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Maximum borrowing capacity | $ 300,000,000 | $ 300,000,000 | $ 300,000,000 | $ 300,000,000 | ||||
Monthly unused fee (as a percent) | 0.50% | 0.50% | ||||||
Variable interest rate payable monthly (as a percent) | 2.75% | 2.75% | 2.75% | 2.75% | ||||
Interest rate (as a percent) | 3.09% | 3.09% | 3.09% | 2.92% | ||||
VIE | Peach One | Credit facility | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Maximum borrowing capacity | $ 35,000,000 | $ 35,000,000 | $ 35,000,000 | $ 35,000,000 | $ 35,000,000 | |||
Monthly unused fee (as a percent) | 0.50% | 0.50% | ||||||
VIE | Peach One | Credit facility | Class A rate | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Margin added to variable interest rate basis (as a percent) | 1.00% | 1.00% | ||||||
Interest rate floor (as a percent) | 4.50% | 4.50% | 4.50% | 4.50% | ||||
Interest rate (as a percent) | 4.50% | 4.50% | 4.50% | 4.50% | ||||
VIE | Peach One | Credit facility | Class B rate | ||||||||
Line of Credit Facility [Line Items] | ||||||||
Margin added to variable interest rate basis (as a percent) | 1.00% | 1.00% | ||||||
Interest rate (as a percent) | 5.50% | 5.50% | 5.50% | 5.50% |
Other Borrowings Under Revolv75
Other Borrowings Under Revolving Credit Facilities and Other Similar Borrowings (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2015 | Oct. 15, 2015 | Dec. 31, 2014 | |
Line of Credit Facility [Line Items] | ||||
Other borrowings under revolving credit facilities and other similar borrowings | $ 126,494,000 | $ 126,494,000 | $ 0 | |
Revolving Credit Facility | ||||
Line of Credit Facility [Line Items] | ||||
Interest rate (as a percent) | 2.61% | 2.61% | ||
Interest expense | $ 500,000 | $ 500,000 | ||
Warehouse Line of Credit | ||||
Line of Credit Facility [Line Items] | ||||
Other borrowings under revolving credit facilities and other similar borrowings | 126,494,000 | 126,494,000 | ||
Warehouse Line of Credit | Credit facility | Line Of Credit Agreement Expiring November 2015 | ||||
Line of Credit Facility [Line Items] | ||||
Other borrowings under revolving credit facilities and other similar borrowings | 23,524,000 | 23,524,000 | ||
Revolving commitment | $ 35,000,000 | $ 35,000,000 | ||
Interest rate (as a percent) | 3.50% | 3.50% | ||
Non-usage fee | 0.25% | |||
Warehouse Line of Credit | Credit facility | Line Of Credit Agreement Expiring December 2015 | ||||
Line of Credit Facility [Line Items] | ||||
Other borrowings under revolving credit facilities and other similar borrowings | $ 41,121,000 | $ 41,121,000 | ||
Revolving commitment | $ 60,000,000 | $ 60,000,000 | ||
Interest rate (as a percent) | 2.50% | 2.50% | ||
Non-usage fee | 0.25% | |||
Warehouse Line of Credit | Credit facility | Line Of Credit Agreement Expiring December 2015 | Subsequent Event | ||||
Line of Credit Facility [Line Items] | ||||
Revolving commitment | $ 50,000,000 | |||
Warehouse Line of Credit | Credit facility | Line Of Credit Agreement Expiring September 2016 | ||||
Line of Credit Facility [Line Items] | ||||
Other borrowings under revolving credit facilities and other similar borrowings | $ 23,717,000 | $ 23,717,000 | ||
Revolving commitment | $ 45,000,000 | $ 45,000,000 | ||
Interest rate (as a percent) | 2.25% | 2.25% | ||
Warehouse Line of Credit | Credit facility | Line Of Credit Agreement Expiring July 2016 | ||||
Line of Credit Facility [Line Items] | ||||
Other borrowings under revolving credit facilities and other similar borrowings | $ 0 | $ 0 | ||
Revolving commitment | $ 20,000,000 | $ 20,000,000 | ||
Interest rate (as a percent) | 2.50% | 2.50% | ||
Warehouse Line of Credit | Credit facility | Line Of Credit Agreement Expiring April 2016 | ||||
Line of Credit Facility [Line Items] | ||||
Other borrowings under revolving credit facilities and other similar borrowings | $ 34,119,000 | $ 34,119,000 | ||
Revolving commitment | $ 50,000,000 | $ 50,000,000 | ||
Interest rate (as a percent) | 2.50% | 2.50% | ||
Non-usage fee | 0.25% | |||
Operating Line Of Credit | Credit facility | Line Of Credit Agreement Expiring July 2016 | ||||
Line of Credit Facility [Line Items] | ||||
Other borrowings under revolving credit facilities and other similar borrowings | $ 4,013,000 | $ 4,013,000 | ||
Revolving commitment | $ 6,000,000 | $ 6,000,000 | ||
Interest rate (as a percent) | 5.00% | 5.00% | ||
Non-usage fee | 0.50% |
VIE Long-Term Debt (Details)
VIE Long-Term Debt (Details) | Aug. 13, 2015USD ($) | Dec. 31, 2012USD ($) | Dec. 31, 2010USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Dec. 31, 2011USD ($)note | Aug. 12, 2015 | Dec. 31, 2014USD ($) | Nov. 30, 2010USD ($) |
VIE long-term debt | |||||||||||
VIE long-term debt | $ 201,464,000 | $ 201,464,000 | $ 181,558,000 | ||||||||
Professional and consulting | 6,542,000 | $ 4,520,000 | 15,841,000 | $ 13,482,000 | |||||||
VIE long-term debt | |||||||||||
VIE long-term debt | |||||||||||
Interest expense related to borrowings | 4,300,000 | $ 3,700,000 | 12,400,000 | $ 11,200,000 | |||||||
PLMT Permanent Facility | |||||||||||
VIE long-term debt | |||||||||||
VIE long-term debt | 42,443,000 | 42,443,000 | 44,277,000 | ||||||||
Residual Term Facility | |||||||||||
VIE long-term debt | |||||||||||
VIE long-term debt | 131,096,000 | 131,096,000 | 107,043,000 | ||||||||
Long-Term Pre-settlement Facility | |||||||||||
VIE long-term debt | |||||||||||
VIE long-term debt | 7,050,000 | 7,050,000 | 8,884,000 | ||||||||
2012-A Facility | |||||||||||
VIE long-term debt | |||||||||||
VIE long-term debt | 1,072,000 | 1,072,000 | 1,357,000 | ||||||||
LCSS Facility (2010-C) | |||||||||||
VIE long-term debt | |||||||||||
VIE long-term debt | 12,644,000 | 12,644,000 | 12,838,000 | ||||||||
LCSS Facility (2010-D) | |||||||||||
VIE long-term debt | |||||||||||
VIE long-term debt | 7,159,000 | 7,159,000 | $ 7,159,000 | ||||||||
VIE | LCSS II | LCSS, LLC | |||||||||||
VIE long-term debt | |||||||||||
Ownership percentage | 100.00% | ||||||||||
VIE | LCSS III | LCSS II | |||||||||||
VIE long-term debt | |||||||||||
Ownership percentage | 100.00% | ||||||||||
VIE | LCSS, LLC | |||||||||||
VIE long-term debt | |||||||||||
Cash | $ 200,000 | ||||||||||
VIE | PLMT Permanent Facility | |||||||||||
VIE long-term debt | |||||||||||
Face amount of debt | $ 75,000,000 | $ 75,000,000 | |||||||||
VIE | PLMT Permanent Facility | LIBOR | |||||||||||
VIE long-term debt | |||||||||||
Margin added to variable interest rate basis (as a percent) | 1.25% | ||||||||||
VIE | Residual Term Facility | |||||||||||
VIE long-term debt | |||||||||||
Face amount of debt | $ 133,000,000 | ||||||||||
Increase in residual term facility | 25,000,000 | ||||||||||
Professional and consulting | $ 600,000 | ||||||||||
Interest rate (as a percent) | 7.25% | 7.00% | |||||||||
VIE | Long-Term Pre-settlement Facility | |||||||||||
VIE long-term debt | |||||||||||
Face amount of debt | $ 45,100,000 | ||||||||||
Interest rate (as a percent) | 9.25% | 9.25% | |||||||||
Number of fixed rate notes issued | note | 3 | ||||||||||
VIE | 2012-A Facility | |||||||||||
VIE long-term debt | |||||||||||
Interest rate (as a percent) | 9.25% | 9.25% | |||||||||
Proceeds from issuance of notes | $ 2,500,000 | ||||||||||
VIE | LCSS Facility (2010-C) | |||||||||||
VIE long-term debt | |||||||||||
Face amount of debt | $ 12,900,000 | ||||||||||
Interest rate (as a percent) | 10.00% | 10.00% | |||||||||
VIE | LCSS Facility (2010-D) | LCSS III | |||||||||||
VIE long-term debt | |||||||||||
Face amount of debt | $ 7,200,000 | ||||||||||
Interest rate (as a percent) | 10.00% | 10.00% |
VIE Long-Term Debt Issued by 77
VIE Long-Term Debt Issued by Securitization and Permanent Financing Trusts, at Fair Value (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($)transaction | Sep. 30, 2014USD ($)transaction | Dec. 31, 2014USD ($) | |
Term loan payable | |||||
Fair Value | $ 4,074,210 | $ 4,074,210 | $ 4,031,864 | ||
VIE long-term debt issued by securitization and permanent financing trusts, at fair market value | |||||
Term loan payable | |||||
Interest expense related to borrowings | 38,200 | $ 32,900 | $ 104,600 | $ 102,800 | |
VIE | |||||
Term loan payable | |||||
Number of asset securitization transactions completed | transaction | 2 | 2 | |||
Outstanding Principal | 3,860,058 | $ 3,860,058 | 3,716,180 | ||
Fair Value | 4,074,210 | 4,074,210 | 4,031,864 | ||
VIE | 2015-2 | |||||
Term loan payable | |||||
Bond proceeds | 158,400 | ||||
Receivables securitized | 2,489 | $ 2,489 | |||
Deal discount rate (as a percent) | 4.18% | ||||
Retained interest % | 5.50% | ||||
VIE | 2015-2 | Aaa | |||||
Term loan payable | |||||
Class allocation (as a percent) | 84.75% | ||||
VIE | 2015-2 | Baa2 | |||||
Term loan payable | |||||
Class allocation (as a percent) | 9.75% | ||||
VIE | 2015-1 | |||||
Term loan payable | |||||
Bond proceeds | $ 214,000 | ||||
Receivables securitized | 3,422 | $ 3,422 | |||
Deal discount rate (as a percent) | 3.64% | ||||
Retained interest % | 5.50% | ||||
VIE | 2015-1 | Aaa | |||||
Term loan payable | |||||
Class allocation (as a percent) | 85.25% | ||||
VIE | 2015-1 | Baa2 | |||||
Term loan payable | |||||
Class allocation (as a percent) | 9.25% | ||||
VIE | 2014-2 | |||||
Term loan payable | |||||
Bond proceeds | $ 227,400 | ||||
Receivables securitized | 3,744 | $ 3,744 | |||
Deal discount rate (as a percent) | 3.95% | ||||
Retained interest % | 5.50% | ||||
VIE | 2014-2 | Aaa | |||||
Term loan payable | |||||
Class allocation (as a percent) | 84.00% | ||||
VIE | 2014-2 | Baa2 | |||||
Term loan payable | |||||
Class allocation (as a percent) | 10.50% | ||||
VIE | 2014-1 | |||||
Term loan payable | |||||
Bond proceeds | $ 233,900 | ||||
Receivables securitized | $ 4,128 | $ 4,128 | |||
Deal discount rate (as a percent) | 4.24% | ||||
Retained interest % | 6.00% | ||||
VIE | 2014-1 | Aaa | |||||
Term loan payable | |||||
Class allocation (as a percent) | 85.25% | ||||
VIE | 2014-1 | Baa2 | |||||
Term loan payable | |||||
Class allocation (as a percent) | 8.75% | ||||
VIE | Securitization trusts | |||||
Term loan payable | |||||
Outstanding Principal | 3,609,467 | $ 3,609,467 | 3,462,225 | ||
Fair Value | 3,828,933 | 3,828,933 | 3,774,902 | ||
VIE | Permanent financing VIEs | |||||
Term loan payable | |||||
Outstanding Principal | 250,591 | 250,591 | 253,955 | ||
Fair Value | $ 245,277 | $ 245,277 | $ 256,962 |
Derivative Financial Instrume78
Derivative Financial Instruments (Details) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015USD ($)swap | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($)swap | Sep. 30, 2014USD ($) | Dec. 31, 2014USD ($) | |
Derivative [Line Items] | |||||
Total gain (loss) on termination of derivative | $ 0 | $ (54,000) | $ (275,000) | $ (628,000) | |
Unrealized gain (loss) | 1,168,000 | 62,000 | |||
Notional | 417,634,000 | 280,903,000 | 417,634,000 | 280,903,000 | $ 467,309,000 |
Fair Market Value | (74,687,000) | (74,687,000) | (75,706,000) | ||
Interest Rate Swaps | Hedge accounting has not been applied | |||||
Derivative [Line Items] | |||||
Terminated notional value | 11,600,000 | 18,700,000 | 46,500,000 | ||
Total gain (loss) on termination of derivative | 0 | 100,000 | 300,000 | 600,000 | |
Unrealized gain (loss) | 0 | 100,000 | 0 | 0 | |
Interest Rate Swaps | Hedge accounting has not been applied | Long-term debt issued by securitization and permanent financing trusts | |||||
Derivative [Line Items] | |||||
Unrealized gain (loss) | $ (1,700,000) | 3,200,000 | $ 1,800,000 | 3,600,000 | |
Number of outstanding derivatives | swap | 8 | 8 | |||
Notional | $ 202,000,000 | $ 202,000,000 | |||
Floating rate basis | 1-month LIBOR | ||||
Interest Rate Swaps | Hedge accounting has not been applied | Long-term debt issued by securitization and permanent financing trusts | Minimum | |||||
Derivative [Line Items] | |||||
Fixed interest rate (as a percent) | 4.50% | 4.50% | |||
Term of contract | 7 years | ||||
Interest Rate Swaps | Hedge accounting has not been applied | Long-term debt issued by securitization and permanent financing trusts | Maximum | |||||
Derivative [Line Items] | |||||
Fixed interest rate (as a percent) | 5.77% | 5.77% | |||
Term of contract | 20 years | ||||
Interest Rate Swaps | Hedge accounting has not been applied | Borrowings under PSS and PLMT | |||||
Derivative [Line Items] | |||||
Unrealized gain (loss) | $ (4,700,000) | $ 1,300,000 | $ 700,000 | $ 3,500,000 | |
Number of outstanding derivatives | swap | 148 | 148 | |||
Notional | $ 215,600,000 | $ 215,600,000 | |||
Floating rate basis | 1-month LIBOR | ||||
Interest Rate Swaps | Hedge accounting has not been applied | Borrowings under PSS and PLMT | Minimum | |||||
Derivative [Line Items] | |||||
Fixed interest rate (as a percent) | 4.80% | 4.80% | |||
Term of contract | 1 month | ||||
Interest Rate Swaps | Hedge accounting has not been applied | Borrowings under PSS and PLMT | Maximum | |||||
Derivative [Line Items] | |||||
Fixed interest rate (as a percent) | 8.70% | 8.70% | |||
Term of contract | 19 years | ||||
Interest Rate Swaps | Hedge accounting has not been applied | 321 Henderson I | 2004-A A-1 | |||||
Derivative [Line Items] | |||||
Notional | $ 27,593,000 | $ 27,593,000 | 32,628,000 | ||
Fair Market Value | (2,824,000) | (2,824,000) | (3,019,000) | ||
Interest Rate Swaps | Hedge accounting has not been applied | 321 Henderson I | 2005-1 A-1 | |||||
Derivative [Line Items] | |||||
Notional | 50,296,000 | 50,296,000 | 58,735,000 | ||
Fair Market Value | (7,099,000) | (7,099,000) | (7,435,000) | ||
Interest Rate Swaps | Hedge accounting has not been applied | 321 Henderson II | 2006-1 A-1 | |||||
Derivative [Line Items] | |||||
Notional | 11,748,000 | 11,748,000 | 15,571,000 | ||
Fair Market Value | (1,292,000) | (1,292,000) | (1,509,000) | ||
Interest Rate Swaps | Hedge accounting has not been applied | 321 Henderson II | 2006-2 A-1 | |||||
Derivative [Line Items] | |||||
Notional | 16,007,000 | 16,007,000 | 18,859,000 | ||
Fair Market Value | (2,550,000) | (2,550,000) | (2,718,000) | ||
Interest Rate Swaps | Hedge accounting has not been applied | 321 Henderson II | 2006-3 A-1 | |||||
Derivative [Line Items] | |||||
Notional | 17,215,000 | 17,215,000 | 21,361,000 | ||
Fair Market Value | (2,252,000) | (2,252,000) | (2,475,000) | ||
Interest Rate Swaps | Hedge accounting has not been applied | 321 Henderson II | 2006-4 A-1 | |||||
Derivative [Line Items] | |||||
Notional | 16,242,000 | 16,242,000 | 19,719,000 | ||
Fair Market Value | (1,768,000) | (1,768,000) | (2,056,000) | ||
Interest Rate Swaps | Hedge accounting has not been applied | 321 Henderson II | 2007-1 A-2 | |||||
Derivative [Line Items] | |||||
Notional | 28,175,000 | 28,175,000 | 32,994,000 | ||
Fair Market Value | (5,478,000) | (5,478,000) | (5,624,000) | ||
Interest Rate Swaps | Hedge accounting has not been applied | 321 Henderson II | 2007-2 A-3 | |||||
Derivative [Line Items] | |||||
Notional | 34,746,000 | 34,746,000 | 37,592,000 | ||
Fair Market Value | (8,801,000) | (8,801,000) | (8,966,000) | ||
Interest Rate Swaps | Hedge accounting has not been applied | PSS | VIE | |||||
Derivative [Line Items] | |||||
Notional | 165,571,000 | 165,571,000 | 176,943,000 | ||
Fair Market Value | (32,841,000) | (32,841,000) | (31,807,000) | ||
Interest Rate Swaps | Hedge accounting has not been applied | PLMT | |||||
Derivative [Line Items] | |||||
Notional | 50,041,000 | 50,041,000 | 52,907,000 | ||
Fair Market Value | $ (9,782,000) | $ (9,782,000) | $ (10,097,000) |
Derivative Financial Instrume79
Derivative Financial Instruments - Home Lending Derivatives (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | |
Derivative [Line Items] | |||
Derivative asset, fair value | $ 7,822 | ||
Derivative asset, notional amount | 309,434 | ||
Derivative liability, fair value | 1,929 | ||
Derivative liability, notional amount | $ 417,634 | $ 467,309 | 280,903 |
Interest Rate Lock Commitments | |||
Derivative [Line Items] | |||
Derivative asset, fair value | 7,822 | ||
Derivative asset, notional amount | 309,434 | ||
Interest Rate Lock Commitments | Minimum | |||
Derivative [Line Items] | |||
Term of contract | 30 days | ||
Interest Rate Lock Commitments | Maximum | |||
Derivative [Line Items] | |||
Term of contract | 90 days | ||
Forward sale commitments and mandatory sale commitments | |||
Derivative [Line Items] | |||
Derivative liability, fair value | 1,929 | ||
Derivative liability, notional amount | $ 280,903 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Income Taxes | ||||
Effective income tax rate (as a percent) | 12.20% | 19.00% | ||
Effective income tax rate for parent (as a percent) | 25.00% | 44.80% | ||
Net income (loss) before income taxes | $ (64,879) | $ 14,865 | $ (102,142) | $ 85,099 |
Impairment charges | 29,860 | $ 0 | $ 29,860 | $ 0 |
The J.G. Wentworth Company, LLC | ||||
Income Taxes | ||||
Effective income tax rate (as a percent) | (1.70%) | 0.90% | ||
Home Lending | ||||
Income Taxes | ||||
Impairment charges | $ 29,900 | $ 29,900 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) | Jul. 31, 2015shares | May. 26, 2015USD ($)$ / sharesshares | Sep. 30, 2015USD ($)vote$ / sharesshares | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($)vote$ / sharesshares | Sep. 30, 2014USD ($)shares | Sep. 30, 2015USD ($)vote$ / sharesshares | Dec. 31, 2014$ / sharesshares | May. 02, 2014USD ($) | Nov. 14, 2013$ / sharesshares |
Stockholders' Equity | ||||||||||
Amount reclassified from accumulated other comprehensive income | $ | $ 0 | $ 2,098,000 | $ 2,098,000 | |||||||
The J.G. Wentworth Company, LLC | ||||||||||
Stockholders' Equity | ||||||||||
Common stock exchanged (in shares) | 947,098 | 3,123,517 | ||||||||
PGHI Corp | Tranche C-1 profit interests | ||||||||||
Stockholders' Equity | ||||||||||
Exercise price of warrants issued (in dollars per share) | $ / shares | $ 35.78 | |||||||||
PGHI Corp | Tranche C-1 profit interests | Maximum | ||||||||||
Stockholders' Equity | ||||||||||
Number of shares entitled by warrants (in shares) | 483,217 | |||||||||
PGHI Corp | Tranche C-2 profits interests | ||||||||||
Stockholders' Equity | ||||||||||
Exercise price of warrants issued (in dollars per share) | $ / shares | $ 63.01 | |||||||||
PGHI Corp | Tranche C-2 profits interests | Maximum | ||||||||||
Stockholders' Equity | ||||||||||
Number of shares entitled by warrants (in shares) | 483,217 | |||||||||
Preferred Stock | ||||||||||
Stockholders' Equity | ||||||||||
Preferred stock, authorized shares | 100,000,000 | 100,000,000 | 100,000,000 | 100,000,000 | ||||||
Preferred stock, shares issued | 0 | 0 | 0 | |||||||
Preferred stock, shares outstanding | 0 | 0 | 0 | |||||||
Common Stock - Class A | ||||||||||
Stockholders' Equity | ||||||||||
Common stock, authorized shares | 500,000,000 | 500,000,000 | 500,000,000 | 500,000,000 | 500,000,000 | |||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.00001 | $ 0.00001 | $ 0.00001 | $ 0.00001 | ||||||
Common stock, shares issued | 15,972,555 | 15,972,555 | 15,972,555 | 15,021,147 | ||||||
Common stock, shares outstanding | 15,430,483 | 15,430,483 | 15,430,483 | 14,420,392 | ||||||
Aggregate value of shares repurchased | $ | $ 15,000,000 | |||||||||
Number of votes per share of common stock held | vote | 1 | 1 | 1 | |||||||
Exchange of JGW LLC Common Interests into Class A common stock (in shares) | 947,098 | 3,123,517 | ||||||||
Common Stock - Class A | Home Lending | ||||||||||
Stockholders' Equity | ||||||||||
Shares issued as consideration | 1,572,327 | |||||||||
Common Stock - Class A | Stock Repurchase Program 2014 | ||||||||||
Stockholders' Equity | ||||||||||
Treasury stock, shares, acquired | 1,087,312 | 1,546,017 | ||||||||
Aggregate purchase price of shares repurchased under Stock Repurchase Program | $ | $ 10,500,000 | $ 15,000,000 | ||||||||
Shares repurchase price (in dollars per share) | $ / shares | $ 9.69 | |||||||||
Common Stock - Class A | Private Repurchase | ||||||||||
Stockholders' Equity | ||||||||||
Treasury stock, shares, acquired | 426,332 | |||||||||
Aggregate purchase price of shares repurchased under Stock Repurchase Program | $ | $ 3,900,000 | |||||||||
Shares repurchase price (in dollars per share) | $ / shares | $ 9.24 | |||||||||
Treasury stock, discount on repurchase, percent of common stock closing price | 3.00% | |||||||||
Common Stock - Class B | ||||||||||
Stockholders' Equity | ||||||||||
Common stock, authorized shares | 500,000,000 | 500,000,000 | 500,000,000 | 500,000,000 | 500,000,000 | |||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.00001 | $ 0.00001 | $ 0.00001 | $ 0.00001 | ||||||
Common stock, shares issued | 8,997,232 | 8,997,232 | 8,997,232 | 9,963,750 | ||||||
Common stock, shares outstanding | 8,997,232 | 8,997,232 | 8,997,232 | 9,963,750 | ||||||
Number of votes per share of common stock held | vote | 10 | 10 | 10 | |||||||
Number of shares of Class A common stock whose market value is given as cash on optional exchange of common interests | 1 | 1 | 1 | |||||||
Exchange of JGW LLC Common Interests into Class A common stock (in shares) | (947,098) | |||||||||
Common Stock - Class B | The J.G. Wentworth Company, LLC | ||||||||||
Stockholders' Equity | ||||||||||
Exchange of JGW LLC Common Interests into Class A common stock (in shares) | 947,098 | 3,123,517 | ||||||||
Common Stock - Class C | ||||||||||
Stockholders' Equity | ||||||||||
Common stock, authorized shares | 500,000,000 | 500,000,000 | 500,000,000 | 500,000,000 | 500,000,000 | |||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.00001 | $ 0.00001 | $ 0.00001 | $ 0.00001 | ||||||
Common stock, shares issued | 0 | 0 | 0 | 0 | ||||||
Common stock, shares outstanding | 0 | 0 | 0 | 0 | ||||||
Conversion ratio of common stock | 1 | |||||||||
Number of shares entitled by warrants (in shares) | 4,360,623 | 4,360,623 | 4,360,623 |
Stockholders' Equity - Accumu82
Stockholders' Equity - Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2014 | |
Stockholders' Equity Note [Abstract] | |||
Amount reclassified from accumulated other comprehensive income | $ 0 | $ 2,098 | $ 2,098 |
Non-Controlling Interests (Deta
Non-Controlling Interests (Details) | 9 Months Ended |
Sep. 30, 2015shares | |
Common Stock - Class A | |
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | |
Common interests repurchased as a result of Class A common stock repurchased | 1,513,644 |
Common Stock - Class C | |
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | |
Number of shares entitled by warrants | 4,360,623 |
The J.G. Wentworth Company, LLC | |
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | |
Balance at the beginning of period | 28,744,765 |
Common interests acquired by The J.G. Wentworth Company as a result of the issuance of restricted common stock | 4,310 |
Common interests repurchased as a result of Class A common stock repurchased | (1,513,644) |
Common interests re-issued as a result of the Home Lending Acquisition | 1,572,327 |
Common interests forfeited | (19,420) |
Balance at the end of period | 28,788,338 |
The J.G. Wentworth Company, LLC | Common Stock - Class A | |
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | |
Common interests acquired by The J.G. Wentworth Company as a result of the issuance of restricted common stock | (947,098) |
The J.G. Wentworth Company, LLC | The J.G. Wentworth Company | |
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | |
Balance at the beginning of period | 14,420,392 |
Common interests acquired by The J.G. Wentworth Company as a result of the issuance of restricted common stock | 4,310 |
Common interests repurchased as a result of Class A common stock repurchased | (1,513,644) |
Common interests re-issued as a result of the Home Lending Acquisition | 1,572,327 |
Balance at the end of period | 15,430,483 |
The J.G. Wentworth Company, LLC | The J.G. Wentworth Company | Common Stock - Class A | |
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | |
Common interests acquired by The J.G. Wentworth Company as a result of the issuance of restricted common stock | 947,098 |
The J.G. Wentworth Company, LLC | Non-controlling Interests | |
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | |
Balance at the beginning of period | 14,324,373 |
Common interests forfeited | (19,420) |
Balance at the end of period | 13,357,855 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | Nov. 14, 2013 | Nov. 14, 2013 | Sep. 30, 2015USD ($) | Dec. 31, 2014USD ($) |
Loan Origination Commitments | ||||
Commitments and contingencies | ||||
Commitments to originate loans | $ 309.4 | |||
The J.G. Wentworth Company, LLC | ||||
Commitments and contingencies | ||||
Increase in share of tax basis | $ 207 | |||
Common Stock | ||||
Commitments and contingencies | ||||
Conversion ratio of common stock | 1 | |||
Borrowing Agreement | Counterparty under agreement to purchase LCSS assets | ||||
Commitments and contingencies | ||||
Amount owed by counterparty | $ 10.1 | $ 9.7 | ||
Annual rate of interest for counterparty borrowing (as a percent) | 5.35% | |||
Arrangement | Counterparty under agreement to purchase LCSS assets | ||||
Commitments and contingencies | ||||
Percentage of target IRR above original target IRR paid by counterparty | 3.50% | |||
Tax Receivable Agreement | ||||
Commitments and contingencies | ||||
Income tax, cash savings percentage to be paid to common interestholders | 85.00% | |||
Tax Receivable Agreement | Minimum | The J.G. Wentworth Company, LLC | ||||
Commitments and contingencies | ||||
Common interestholders, ownership percentage | 1.00% |
Share-based Compensation (Detai
Share-based Compensation (Details) - USD ($) $ / shares in Units, $ in Millions | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | Dec. 31, 2014 | |
Shares | |||
Outstanding at the beginning of the period (in shares) | 1,376,932 | ||
Granted (in shares) | 256,000 | ||
Forfeited (in shares) | (109,317) | ||
Expired | (6,857) | ||
Outstanding at the end of the period (in shares) | 1,516,758 | 1,376,932 | |
Outstanding, vested and expected to vest (in shares) | 1,462,246 | ||
Vested (in shares) | 252,714 | ||
Weighted-Average Exercise Price | |||
Outstanding at the beginning of the period (in dollars per share) | $ 11.44 | ||
Granted (in dollars per share) | 9.98 | ||
Forfeited (in dollars per share) | 11.01 | ||
Expired (in dollars per share) | 13.34 | ||
Outstanding at the end of the period (in dollars per share) | 11.22 | $ 11.44 | |
Outstanding, vested and expected to vest (in dollars per share) | 11.23 | ||
Vested (in dollars per share) | $ 11.47 | ||
Weighted-Average Remaining Contractual Term | |||
Weighted Average Remaining Contractual Term Outstanding (in years) | 8 years 10 months 1 day | 9 years 5 months 10 days | |
Weighted average remaining contractual term outstanding, vested and expected to vest (in years) | 8 years 10 months 1 day | ||
Weighted average remaining contractual term, granted (in years) | 8 years 8 months 11 days | ||
Aggregate Intrinsic Value | |||
Aggregate intrinsic value outstanding at the beginning of the period | $ 0.1 | ||
Aggregate intrinsic value outstanding at the end of the period | 0 | $ 0.1 | |
Outstanding, vested and expected to vest | 0 | ||
Granted | 0 | ||
Additional disclosure | |||
Total unrecognized compensation expense | $ 5.9 | ||
Weighted average period for recognizing unrecognized compensation expense | 3 years 10 months 24 days | ||
Common Stock - Class A | |||
Share-based compensation | |||
Number of awards available for grant (in shares) | 1,200,000 | ||
Stock options | |||
Assumptions used in the Black-Scholes valuation model for options granted | |||
Weighted average fair value of grant (in dollars per share) | $ 4.80 | ||
Risk-free interest rate (as a percent) | 1.63% | ||
Expected volatility (as a percent) | 47.10% | ||
Expected life of options in years | 6 years 6 months | ||
Expected dividend yield | 0.00% | ||
Share based compensation | $ 1 | $ 0.4 | |
Stock options | Common Stock - Class A | |||
Share-based compensation | |||
Award expiration period (in years) | 10 years | ||
Award vesting period (in years) | 5 years | ||
Performance-based restricted stock units | |||
Assumptions used in the Black-Scholes valuation model for options granted | |||
Share based compensation | $ (0.1) | 0.2 | |
Additional disclosure | |||
Weighted average period for recognizing unrecognized compensation expense | 1 year 11 months 11 days | ||
Awards granted, Converted, forfeited, and outstanding | |||
Outstanding as of December 31, 2014 (in shares) | 130,250 | ||
Granted (in shares) | 127,500 | 87,750 | |
Awards vested (in shares) | 0 | ||
Forfeited (in shares) | (43,000) | ||
Outstanding as of March 31, 2015 (in shares) | 214,750 | 130,250 | |
Vested as of March 31, 2015 (in shares) | 119,228 | ||
Weighted-Average Grant-Date Fair Value | |||
Outstanding as of December 31, 2014 (in dollars per share) | $ 10.60 | ||
Granted (in dollars per share) | 9.98 | ||
Awards vested (in dollars per share) | 0 | ||
Forfeited (in dollars per share) | 10.20 | ||
Outstanding, vested and expected to vest as of March 31, 2015 (in dollars per share) | 10.31 | $ 10.60 | |
Vested as of March 31, 2015 (in dollars per share) | $ 9.98 | ||
Additional disclosure | |||
Aggregate grant date fair value of awards granted | $ 1.3 | ||
Share-based compensation expense expected to recognize | $ 1.5 | ||
Performance-based restricted stock units | Minimum | |||
Additional disclosure | |||
Number of share in to which award will vest | 0 | ||
Performance-based restricted stock units | Maximum | |||
Additional disclosure | |||
Number of share in to which award will vest | 1.5 | ||
Restricted Common Interests | |||
Assumptions used in the Black-Scholes valuation model for options granted | |||
Share based compensation | $ 0.4 | $ 1 | |
Additional disclosure | |||
Weighted average period for recognizing unrecognized compensation expense | 2 years 7 months 6 days | ||
Awards granted, Converted, forfeited, and outstanding | |||
Outstanding as of December 31, 2014 (in shares) | 157,112 | ||
Awards vested (in shares) | (57,944) | ||
Forfeited (in shares) | (19,420) | ||
Outstanding as of March 31, 2015 (in shares) | 79,748 | 157,112 | |
Vested as of March 31, 2015 (in shares) | 79,302 | ||
Weighted-Average Grant-Date Fair Value | |||
Outstanding as of December 31, 2014 (in dollars per share) | $ 9.86 | ||
Granted (in dollars per share) | 8.99 | ||
Forfeited (in dollars per share) | 2.60 | ||
Outstanding, vested and expected to vest as of March 31, 2015 (in dollars per share) | 12.29 | $ 9.86 | |
Vested as of March 31, 2015 (in dollars per share) | $ 12.28 | ||
Additional disclosure | |||
Share-based compensation expense expected to recognize | $ 0.9 |
Earnings Per Share (Details)
Earnings Per Share (Details) | 9 Months Ended | ||
Sep. 30, 2015shares | Sep. 30, 2014shares | Nov. 14, 2013shares | |
PGHI Corp | Class C Profits Interests | Common Stock - Class A | |||
Earnings per share | |||
Number of shares entitled by warrants (in shares) | 966,434 | ||
The J.G. Wentworth Company, LLC | Common Stock - Class A | |||
Earnings per share | |||
Conversion ratio of common stock | 1 | ||
Stock options | Common Stock - Class A | |||
Earnings per share | |||
Antidilutive shares excluded from computation of diluted earnings per share | 1,461,407 | 602,596 | |
Performance-based restricted stock units | Common Stock - Class A | |||
Earnings per share | |||
Antidilutive shares excluded from computation of diluted earnings per share | 183,069 | 72,352 | |
Common interest and vested restricted common interests | |||
Earnings per share | |||
Antidilutive shares excluded from computation of diluted earnings per share | 13,745,165 | 16,318,829 | |
Unvested restricted common interests | |||
Earnings per share | |||
Antidilutive shares excluded from computation of diluted earnings per share | 124,341 | 707,028 |
Earnings Per Share (Details 2)
Earnings Per Share (Details 2) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Numerator: | ||||
Numerator for basic EPS- Net (loss) income attributable to holders of The J.G. Wentworth Company Class A common stock | $ (26,697) | $ 4,092 | $ (40,338) | $ 19,382 |
Common Stock - Class A | ||||
Numerator: | ||||
Numerator for basic EPS- Net (loss) income attributable to holders of The J.G. Wentworth Company Class A common stock | (26,697) | 4,092 | (40,338) | 19,382 |
Numerator for diluted EPS- Net (loss) income attributable to holders of The J.G. Wentworth Company Class A common stock | $ (26,697) | $ 4,092 | $ (40,338) | $ 19,382 |
Denominator: | ||||
Denominator for basic EPS - Weighted average shares | 14,918,415 | 13,095,194 | 14,437,117 | 12,438,143 |
Effect of dilutive securities: | ||||
Restricted common stock and performance-based restricted stock units | 0 | 3,801 | 0 | 2,184 |
Dilutive potential common shares (in shares) | 0 | 3,801 | 0 | 2,184 |
Denominator for diluted EPS - Adjusted weighted average shares | 14,918,415 | 13,098,995 | 14,437,117 | 12,440,327 |
Basic income per share computation: | ||||
Basic (loss) income per share of Class A common stock (in dollars per share) | $ (1.79) | $ 0.31 | $ (2.79) | $ 1.56 |
Diluted income per share computation: | ||||
Diluted (loss) income per share of Class A common stock (in dollars per share) | $ (1.79) | $ 0.31 | $ (2.79) | $ 1.56 |
Business Segments - Operating D
Business Segments - Operating Data by Reportable Segment (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($)segment | Sep. 30, 2014USD ($) | Dec. 31, 2014USD ($) | |
Segment Reporting [Abstract] | |||||
Number of reportable segments | segment | 2 | ||||
Segment Reporting Information [Line Items] | |||||
Total revenues | $ 63,522 | $ 107,024 | $ 211,717 | $ 367,102 | |
Net (loss) income before income taxes | (64,879) | 14,865 | (102,142) | 85,099 | |
Total assets | 5,379,166 | 4,971,572 | 5,379,166 | 4,971,572 | $ 5,182,709 |
Operating Segments | Structured Settlement and Annuity Purchasing | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | 51,775 | 107,024 | 199,970 | 367,102 | |
Net (loss) income before income taxes | (66,829) | 14,865 | (104,092) | 85,099 | |
Total assets | 5,128,902 | 4,971,572 | 5,128,902 | 4,971,572 | |
Operating Segments | Home Lending | |||||
Segment Reporting Information [Line Items] | |||||
Total revenues | 11,747 | 0 | 11,747 | 0 | |
Net (loss) income before income taxes | 1,950 | 0 | 1,950 | 0 | |
Total assets | $ 250,264 | $ 0 | $ 250,264 | $ 0 |