GWGH - Earnings call transcript Q2 2020

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Dan Callahan

Thank you. Good afternoon, everybody. My name is Dan Callahan, Director of Communication at GWG Holdings. Welcome to our Second Quarter of 2020 Earnings Webcast.

As a note, we're all remote here.

as pandemic. of us been country with this through bear the the rest has So

webcast me Evans, the Chief Officer. On with Executive President Holland, Officer, and our and Tim our Financial today Chief are Murray

yours, our if through registration we we to questions think don't Following take give you be few of a gotten the or today, email get have there'll we happy as present process. we'll to of remarks more result submitted a will end We've questions, a be us, and we'll information, one can anything slide if get answer. of contact the you you questions us, you the at an today, presentation, call but

are today, with and results the the risks we projected result of as made on uncertainties. update Any webcast information, statements obligation forward-looking future and today, as Some assumptions this make based along on to no events. made subject to or webcast statements of are certain statements any that on financial include new forward-looking them

XX-K webcast factors list and our release from different XX-Q be actual cause to results be sample that at most could website The recorded through available and materially Our statements our recent in Relations gwgh.com in reports. tab. our be can and is found earnings Investor being forward-looking risks on and will of the

over it Chief and President I'll Executive Holland. our that, to Murray? Murray with turn So Officer,

Murray Holland

quarter happened is events and going the our cover a everybody item XXXX events and of much to subsequent Dan, release the And we're welcome very at a quarter. our that the transpired quarter during corporate broadcast. of the end in I to thank number of second that conference. you second of items number that this first Today, have

of products questions we'll second operations you after to BEN and and have that. are individual launch and financial COVID-XX update, about then going take some quarter, of from going to for the give we're investors; liquidity -- metrics the We talk results answers

Rico quarter investment we first over GWG a our events the with approximately of Special borrowers transactions a portfolio performance agreement during to over GWG a to regulatory And all. approval the for Board a substantial we consent to security of for Committee made filed requested the a $X with and of then, in the we more that L BEN's with Texas billion The in assume equity have was and We hires completed the with of maturities, XXXX. Bond XXXX. BEN. trust of second company. are for continued an of the BEN $XX.X part our with is, We Puerto capital XXXX $X trust agreement into for Bond United [ph]. some under billion Directors banking million of life which raising regions number the we've L debt, to that States we increase in number strong into again same that L-bond go capital future department. our exchange States same offering bellwether credit made Russell to of included two were So entered was company capital success the We've in the of financial We significant And $XX.X small-cap our for corporate a which recorded debt, through enable in U.S. product of with out western GWG the the charters Beneficient. begin offering stocks, amendment. as contributions BEN the And sales you a the shareholders by second and our of approved the solicitation authorities Certificate raising SEC United consider million in Index, of documents the common effective for the for of SEC lastly, quarter make release Incorporation, Florida, organization. had liquid of closed approval We for sales enabled in quarter. a and preliminary prerequisite key we the shareholder for under great the growth We necessary the bellwether part preferred our amend that during entered reflecting and

These BEN, explained to path individuals the second investment our for core institutions. for the BEN publicly years and quick June, launched our alternative have last products we access late it's their as cost-effective liquidity high to investors in and investments. solutions has been worth quarter, small strategy over GWG. simple, forward, two net that mid-size In provide for So platform investments liquidity is

exceed being near first to BEN later of the the assets part quarter. expect closed We third the by

Journal, so As Business ThinkAdvisor, Dallas the and part CNBC had The radio, a reviewing and quoted on of StreetInsider, everybody. CEO COVID, number as Chairman, I changes Heppner, and Street Bloomberg with Wall Deal, result the in think it's Journal. in worth a the of he launch, Brad live was stories in BEN's of significant We've and was operations these

the Our this remain strong during life and BEN period. investments insurance portfolio

We've our and the capital life material no portfolios. most As on of of have have non-correlated, L policy many dividends companies, of we realization the most market are in sales strong timeframe. our the our continue Bond on most COVID-XX country, The the March-April on or benefits since We anticipate amount from life of sales our policies safety is the significantly the current the and no have insurance homes. security worth of under face meet have in while and we conditions you other impact market the pandemic so the insurance the relatively net employees portfolio know, receive alternative distress in our has portfolios turmoil of and values. high their pandemic. around significant lowered the from effect rebounded had the portfolio a Like health and individuals operating employees, their many focused created in and insurance obligations, asset and receive interest income raise to and value to cases

assets XX, $X.X June of $X.X of now, had total total $X.X liabilities stockholders' to Financial And over billion, total consolidated our of Evans, just Officer. to billion, $XXX little of million. billion, interest we like and I'd As non-controlling hand Chief Tim? equity equity over Tim and of over a it

Tim Evans

Thank you, Murray.

on through few to Looking our walking forward a to going XXXX review. this We're results QX financial topics afternoon. take

financial XXXX will review. be QX First, the metrics

of go and portfolio. Then Next, a and our we'll to look BEN portfolio take collateral insurance a balance liquidity. the the we'll at life both, sheet review

with start I'll First, the review. metrics

bottom through back, the a other forfeited was income, that gross compared million of BEN had to $XX to slide, there million. income deemed from of compensation [ph] areas. million second forfeiture that What of one other difference? GAAP the on a BEN that revenue of few can equity-based recognized QX is in of made see vested by the XXXX. The look So was of left this that biggest XXXX, some million that we we different XXXX, down we Director. see bottom income $XX.X that breaks in a as BEN recognized we that the If result $XX.X for revenue under When $XX.X quarter just in former down related increase here in we QX into up

other increases nice large to that here. we one few had also a addition item, In

BEN; that had in in no to from revenue. to income, insurance our interest attributable of We of function and million million million fact our policies, that's $X.X purchasing lower life of life income trust to You about but so insurance $X.X can total, did contributed the $XX so BEN, and investment million see simply additional more a other policies have income we're gain investment to interest longer quarter-over-quarter. $XX.X going our that BEN about we increased million; on natural see difference net higher through revenues of that in $X primarily continue that's service in than of we're

compared year $XX.X On million the expenses side, expenses of $XX.X ago. have did quarter, to this a we million

can in we sold one obviously that can higher is to. more the QX of the see bottom Bond. we fact L that number increase the to On right, interest that relates interest contributor higher That what And the see expenses XXXX. have you relates breakdown in the

going we in was provision also, There to to the through relatively outbound these have times; L can increased strong higher sales reflected you BEN so, for to for made continue particularly and Bond and at As that period. interest. those $X.X leads as loss be COVID the million Murray sales that's a expenses mentioned, the was see at just naturally bottom, loan

year. see those employee staff, a lot as so expenses we million; last about expenses, that on mentioned, lot We employee of A on also a And affect would of well, of compensations. also reflecting taking had compensation consolidating entire we're numbers. have our expect also and are we we would compared $X.X have to we as obviously, legal not as Murray this higher higher the -- compensation of QX million as employee to year, BEN, July that BEN's in going higher $X

we did of lot in this items July a of As QX, year. in going in on have Murray mentioned, and culminated items that

had the as a former want that's though, loss our I coming name the have other benefit, one of expenses Epigenetics, $X the that from increased over over from did not In will which just at is national FOXO. as equity that's increase our our XXXX. been in the legal we loss prior that here the take look We million benefit The also line the that we In the loss quarter compared quarter million. I XXXX, method of tax $X.X investment FOXO. year, same BEN, now this nothing have to compared loss just BEN. investment, subsidiary from maturities the this investment. of in time. from lower above; what's make sense quarter $X.X tax that those quarter same of equity million arriving compared for equity That would our portfolio $X.X and is QX So for income $X.X under in to million Life expenses million gain QX have expenses the income to method to a to related of the note

income So a or million year a income. loss, The compared as for income a have loss year, loss million of common we attributable to net we was in improvement million so $XX shareholders compared that net see loss; last to net quarter, was $X.X to great see to so $XX.X which total, ago, there. a net the

for $X.XX And per so, share, improved the per share loss as so, share, share to on XXXX. per $X.XX earnings our opposed loss improvement per of also QX our earnings $X.XX at

of billion that We the sheet $X.X balance here left we've our at total look at as liquidity. now a let's assets. on and take see looked Murray So that, our metrics, can mentioned,

the slightly can on to each You Equity equity assets bit of here is quarter. we're total billion, non-controlling as chopped of grow continue you that see a here our bottom when $X.X include the at all and just left interests well. off

On and fees positive benefits very that liquidity trend our cash, see receivable. would liquidity include side, cash the and we there, restricted a increased

to again L So, through continuing nice our impact liquidity of assisting Bond sales XX, XXXX. see there the June our

here, asset redirecting at can capital see business bullet as the do the can life raised we to that we're BEN. redirecting being through we're business, GWG's is higher-yielding we Now, historical which alternative has right from the policy purchases, been bottom that on away the

a BEN slide. next the portfolio take let's at look here that on So,

BEN's assets. we see here So collateral

added we So new just this as reminder, last quarter. something a is

assets $XXX to minute on the since here, the uses rate can effective least we So it's alternative receivable those has those loans; and that still fee XX% BEN's on to to billion on new. BEN loans, it's the going loss purchase annual fee a The relatively approximately loan hold earn at ExAlt loans, want allowance, loans assets administration plan loans that a used to is this see X.X% to a an well. off approximately after on plan. to of ExAlt it's cash through were take focus business interest it's those repay again, as and of by as

yield, our XX%, on over life be BEN we're to hold about we portfolio yielding is going at So, loans receivable. where expecting X.XX% that it's XX%

the XXX the over yields. Murray prior so different investments; And to collateral loans market to XXX diversification excited receivable looking we'll talk mentioned, which about right the are a to see here, continue now to to by as over And be asset in out so, for those we've add that that loans that collateral see the here what and and it's ExAlt prior of off is we're it's future, expected BEN investments. quarters similar originations, funds those act product can seen we we owned itself, yields portfolio the those collateral that see the with portfolio. is very in the plan, on additional those in have loans When behind disclosures on it's that as this earn going receivable. BEN's different our When

So in about done continuing on new insurance That because next we're not it's portfolio, future originations this those come season. we're on product, the the we've about slide historically well; performing we'll very at see launched excited future. well, here the as quarters, on now to originations looking over about to that we're excited yields we're has portfolio, adding that the our to this said, see what the BEN is also see time, portfolio. is hoping policies so new life as That

maybe billion XX. of this benefits portfolio $XXX consistent well. over the billion, policy are insurance So we $X in approximately face total of and of benefits, age portfolio those is that have as amount, $X.XX in million paying And

of QX million we a quarter for maturities. QX. very in we If was this So back XXXX, last that so look strong quarter, had million; was of $XX.X just total here $XX.X

like our how look we are covering benefits is to at thing our premiums. other The always

continues portfolio's a the here to is slide. support it basis, and month can itself, XXX% versus improve this What portfolio benefits it's on So in you far at XX each And you bottom QX us really tells the we XXXX, on premiums. over what quarter can the of premiums. as this see see that far to consistently, is that see as the exceeding benefits trailing it's that coverage the continued here premiums

So the we're very performance. happy with

again, insured over age by policy just breakdown in So the can the we've talked portfolio but the amount of policies, and we see benefits face X,XXX about billion of $X.XX here. the the

$XXX but and the in the benefits and benefits we million over, older. XX the XX just over over, mentioned million see $XXX we or earlier, and As in in XX the over of XX% this of

So, we creditworthy very favorable we portfolio, have and counterparties. continue the a to see on seasoning to continue and

As of holdings of the majority we you that and the breakdown quality have [indiscernible]. can see the our that of counterparties for here,

section. questions. I think that's some of going Dan, the And end So my we're to take

Dan Callahan

Thanks, submit received during Tim. questions. to number a We of people We allowed good questions registration.

trends. I'm Holland, interesting author might potential you as which debt GWG book is Nation potential the of important of in the first about presidency? perspective a the entire Our is from about Murray a Red" the as question look CEO, an "A the government Biden presidency, asks crisis, affecting, how our would gives market, macroeconomic advisor who and that at him on Murray, Biden well the an I note assuming Holdings.

Murray Holland

trends about is to with view debt. are. factors those that affecting trajectory I all particularly issue an don't But and which etcetera, are most market for are more -- government the that respect interest is to presidency. rates presidency respect with growth, debt the the that significantly, private equity, where is government we the other our the macroeconomic concerned it trends, trend bothers one I'm the GDP me and the outside thing is the significant

that So, significant I don't economics private industry. either candidate to make the difference would view the equity of a

Dan Callahan

Murray. Thanks,

Our next another who more information question can we mentioned do the give it have people? is the for trust we from charters. on status briefly, any We asks advisor

Murray Holland

Sure.

both here state on worked Texas still BEN them, the remain Texas. the XXXX, of the of of regulators quarter second about they're the We and trust but hands optimistic long in significantly again, the hours During the of and charters. regulators in the trust

Dan Callahan

Thanks, Murray.

and from sales, how projections the question advisor renewals, affected it's about forward. our pandemic, We who going another and have an asks

Murray Holland

future comments timeframe, and the earlier, in my rebound a March-April very Bonds. briefly we but we've during in a this like that saw everybody, and the decline addressed L positive had we're sales We significant since of about

Dan Callahan

is, about challenging them? liquidity individuals. reach try final this high if BEN of The is net individuals our about worth launched question BEN And product? liquidity type high reaching to And question to came worth the going more and ability that how net product access with the it's in has and

Murray Holland

good has to individuals to the is, net a that's it's reach high for not liquidity and product. Well, three multi-channel developed worth we to anticipate going and diverse difficult BEN Each source to strategies delivery be do this in from they of deal question, solutions. three channels, their of flow have originations channels answer they clients. and of initiate are pioneering mix design BEN's of liquidity origination, their

which the investors, dealers, broker professional is RIAs, as online service directly a small the channel, through institutional platform The general was to secure a other the investors, channel worth is individuals firms. originations Since firms, the of of liquidity ago, national a this first calls the channel and this dedicated model BEN work where just as preferred that is and providers. anticipated. final formal next and the regional offices, built partners, BEN Then, coverage channel the The is advisory and mid-sized These direct banks, these is bond interest growing has the liquidity with that offering and seen what few is preferred product and high entities investors BEN such to family portal. portal, provider wealth first investor channel provider and supports enterprise national private BEN's the in pipeline net the is for sponsor service of include management channel, and strategic providers. liquidity as to AI that BEN's weeks operates solutions deliver BEN significant launch

Dan Callahan

to you end With to our is And didn't offline. we're question you your if the it that that, get stuff. Q&A. exciting again, Very get of happy answered,

going have rest want hope taking exciting and to very forward. can have to you We second time everybody a great prospects the about of hear all our us. quarter, for You day. I you Thank call the thank we much. email or

GWG (GWGHQ) 17 Aug 202020 Q2 Earnings call transcript