NORFOLK, Va., Nov. 08, 2017 (GLOBE NEWSWIRE) -- PRA Group (Nasdaq:PRAA), a global leader in acquiring and collecting nonperforming loans, today reported its financial results for the third quarter of 2017. The company reported net income of $15.6 million in the third quarter, compared with $34.3 million in the prior year period. Diluted earnings per share were $0.34 versus $0.74 in the third quarter of 2016.

Third Quarter Business Highlights

• Increased cash collections 3% compared with the third quarter of 2016.
  • Europe Core cash collections increased 7%.
  • Global Insolvency collections increased 2%, U.S. Insolvency collections increased 2% versus the prior year quarter and 14% sequentially.
  • Americas Core cash collections increased 1%.
• Investment in portfolios increased 31% versus the prior year quarter, with a year-to-date total of $734.4 million.
• The total number of collectors remained constant with last quarter since the Company was at capacity in the current call centers. However, the Company has announced two new call centers in Henderson, Nevada and Burlington, North Carolina, as well as expansions at existing sites in Virginia. This will add capacity for almost 1,000 new collectors and will be utilized to service the growth in purchases of nonperforming loans the Company is expecting.

Third Quarter Financial Highlights

• Investment in portfolios of $210.9 million versus $161.3 million in the prior year quarter.
• Estimated remaining collections of $5.4 billion which increased $174 million from the prior year quarter and $100 million sequentially.
• Cash collections of $381.8 million versus $371.7 million in the prior year quarter.
• Net finance receivable revenue of $197.2 million versus $202.6 million in the prior year quarter.
• Income from operations of $54.3 million versus $67.5 million in the prior year quarter.
• Net income of $15.6 million versus $34.3 million in the prior year quarter.

“PRA continues to deliver from an operational perspective in both Europe and the Americas and cash collections increased 3% from the same period last year. In Europe, we have seen additional improvement in cash collections from operational enhancements including investment in the legal channel and improved scoring,” said Kevin Stevenson, president and chief executive officer of PRA Group, Inc. “In the U.S., we will be hosting training classes this month in our two new sites and remain optimistic about portfolio supply. We have been investing to prepare for anticipated growth especially in the U.S. and want to make sure we are in the best position possible to help sellers globally with their nonperforming loans.”

Cash Collections and Revenues

• The following table presents cash collections by quarter and by source on an as reported and currency-adjusted basis:
• Cash collections in the quarter increased 3% versus the prior year quarter. This marks the first quarter in three and a half years that Americas Insolvency cash collections have grown year over year. U.S. call center cash collections increased 7% primarily due to hiring additional collectors and portfolio acquisitions.
• Net finance receivable revenue was lower than the prior year quarter due in large part to the attrition of higher yielding Insolvency portfolios. This was partially offset by significant portfolio investment thus far in the year and yield increases on certain pools.
• The reduction in fee income is primarily the result of the sale of two of three fee based subsidiaries earlier in the year.
Expenses

• Operating expenses decreased from the previous year largely due to decreased legal collection expense and agency fees. The decline in legal collection expense resulted primarily from fewer accounts in the legal channel during the quarter. The decline in agency fees is primarily the result of the sale of PRA Location Services.
• The Company recorded $5.3 million in pre-tax, noncash interest expense and amortization of issuance costs, a $1.0 million gain on interest rate swap agreements, and $1.0 million in amortization of intangible assets.
• The year to date effective tax rate was 39.7% compared with 32.2% for the full year 2016. Changes in the effective tax rate were primarily driven by changes in the proportion of income recognized in the U.S. versus other countries.
Portfolio Acquisitions

• PRA Group invested $210.9 million in new finance receivables in the third quarter.
• The Company has in place forward flow commitments for the purchase of nonperforming loans over the next twelve months with a maximum purchase price of $413.6 million.

About PRA Group
As a global leader in acquiring and collecting nonperforming loans, PRA Group returns capital to banks and other creditors to help expand financial services for consumers in the Americas and Europe. With more than 4,500 employees worldwide, PRA Group companies collaborate with customers to help them resolve their debt. For more information, please visit www.pragroup.com.