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Imperial Holdings, Inc. (NYSE: IFT) (“Imperial”), a specialty finance company providing liquidity solutions with a focus on individual life insurance policies and purchasing structured settlement payments, today announced financial results for its third quarter and nine months ended September 30, 2011.
Imperial reported a total loss of $1.8 million for the third quarter of 2011, compared to third quarter 2010 total income of $20.0 million. In the life finance segment, total income decreased by $22.3 million during the third quarter to a total loss of $5.5 million, compared to total income of $16.8 million for the same period in 2010. The decrease was primarily driven by a non-cash, unrealized change in fair value expense of $14.1 million in its investment in life settlements during the third quarter of 2011 compared to a $3.5 million non-cash unrealized change in fair value gain during the same period in 2010, resulting from a lower estimated fair value of these Level 3 assets due to a change in the discount rate in the Company’s fair value model. The decrease was also due in part to agency fee income, interest income and origination income declining in total by $4.5 million to $5.0 million during the third quarter of 2011 compared to $9.5 million during the third quarter of 2010. In the Structured Settlements segment, total income increased $137,000 during the third quarter of 2011 to $3.4 million from $3.2 million for the same period in 2010.
Total expenses were $18.6 million for the three months ended September 30, 2011 compared to total expenses of $26.8 million incurred during the three months ended September 30, 2010, a decrease of $8.2 million. Loss before income taxes for the three months ended September 30, 2011 was approximately $20.4 million compared to a loss before income taxes of $6.8 million for the three months ended September 30, 2010, an increase of $13.6 million.