NORFOLK, Va., May 9, 2019 /PRNewswire/ -- PRA Group, Inc. (Nasdaq: PRAA), a global leader in acquiring and collecting nonperforming loans, today reported its financial results for the first quarter of 2019. Net income attributable to PRA Group, Inc. was $15.2 million compared to $21.1 million in the first quarter of 2018. Diluted earnings per share were $0.34 compared to $0.47 in the first quarter of 2018.
First Quarter Highlights
- Record global cash collections of $461.2 million, an increase of 8%, or 11% on a currency adjusted basis, compared to the first quarter of 2018. This growth was primarily driven by a 31% increase in U.S. legal cash collections and a 9% increase in U.S. call center and other cash collections.
- Record Estimated Remaining Collections (ERC) of $6.26 billion which increased $114.2 million from the fourth quarter of 2018.
- Total investment for the quarter was $318.8 million, a 90% increase compared to the first quarter of 2018.
- Income recognized on finance receivables of $238.8 million compared to $218.6 million in the first quarter of 2018.
- Acquired the holding company of Resurgent Holdings LLC's Canadian business, which became a wholly owned subsidiary of PRA Group Canada.
"Our investments over the last few years continue to pay off with record cash collections in the first quarter. The largest contributor to the growth was the U.S., particularly from the legal channel. Europe Core cash collections also increased on a currency adjusted basis contributing to global collections of $461 million during the quarter," said Kevin Stevenson, president and chief executive officer. "We also delivered another significant quarter of portfolio investment, building ERC to a record $6.26 billion. We were encouraged by our investment levels in Europe which continues to have healthy levels of supply. We have seen some pricing improvement in select markets, and as a result, our investment was spread across more countries in Europe than in prior quarters."
Cash Collections, Revenues, and Net Allowance Charges
- 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 8% compared to the first quarter of 2018. The increase was primarily due to a 31% increase in U.S. legal collections and a 9% increase in U.S. call center and other cash collections. This was partially offset by a 14% decrease in Global Insolvency cash collections mainly due to muted levels of purchasing during the first three quarters of 2018.
- For the quarter, cash collections on fully amortized pools were $12.1 million and cash collections on nonaccrual pools were $3.7 million.
- Income recognized on finance receivables increased 9% compared to the first quarter of 2018 primarily due to record purchases in Americas Core during 2018 and significant purchases in Europe Core in the fourth quarter of 2018.
- Net allowance charges in the quarter were $6.1 million compared to $0.9 million in the first quarter of 2018.
- Fee income and other revenue in the quarter was $7.0 million, and was generated primarily by our claims processing company, Claims Compensation Bureau. Fee income and other revenue was $5.5 million in the first quarter of 2018.
- Operating expenses in the quarter increased $21.4 million compared to the first quarter of 2018 largely due to increased legal collection costs and fees and an increase in agency fees. The increase in agency fees was primarily due to the shifting of fixed expenses to variable as a result of the sale of the RCB operating platform in Brazil and an increased volumes of servicing activity outside of the U.S.
- A foreign exchange gain in the amount of $6.3 million was recorded during the quarter.
- The effective tax rate for the three months ended March 31, 2019 was 18.6%.
- The Company invested $318.8 million in finance receivables in the first quarter.
- At the end of the first quarter, the Company had in place forward flow commitments of $351.5 million.
Conference Call Information
PRA Group, Inc. will hold a conference call today at 5:00 p.m. ET to discuss results with institutional investors and stock analysts. To listen to a webcast of the call and view the accompanying slides, visit https://ir.pragroup.com/events-and-presentations . To listen by phone, call 877-870-4263 in the U.S. or 412-317-0790 outside the U.S. and ask for the PRA Group conference call. To listen to a replay of the call until May 16, 2019, call 877-344-7529 in the U.S. or 412-317-0088 outside the U.S. and use access code 10128745.
About PRA Group, Inc.
As a global leader in acquiring and collecting nonperforming loans, PRA Group, Inc. returns capital to banks and other creditors to help expand financial services for consumers in the Americas and Europe. With almost 5,400 employees worldwide, PRA Group, Inc. companies collaborate with customers to help them resolve their debt. For more information, please visit www.pragroup.com .
About Forward-Looking Statements
Statements made herein which are not historical in nature, including PRA Group, Inc.'s or its management's intentions, hopes, beliefs, expectations, representations, projections, plans or predictions of the future, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.
The forward-looking statements in this press release are based upon management's current beliefs, estimates, assumptions and expectations of PRA Group, Inc.'s future operations and financial and economic performance, taking into account currently available information. These statements are not statements of historical fact or guarantees of future performance, and there can be no assurance that anticipated events will transpire or that our expectations will prove to be correct. Forward-looking statements involve risks and uncertainties, some of which are not currently known to PRA Group, Inc. Actual events or results may differ materially from those expressed or implied in any such forward-looking statements as a result of various factors, including risk factors and other risks that are described from time to time in PRA Group, Inc.'s filings with the Securities and Exchange Commission including but not limited to PRA Group, Inc.'s annual reports on Form 10-K, its quarterly reports on Form 10-Q and its current reports on Form 8-K, which are available through PRA Group, Inc.'s website and contain a detailed discussion of PRA Group, Inc.'s business, including risks and uncertainties that may affect future results.
Due to such uncertainties and risks, you are cautioned not to place undue reliance on such forward-looking statements, which speak only as of today. Information in this press release may be superseded by recent information or statements, which may be disclosed in later press releases, subsequent filings with the Securities and Exchange Commission or otherwise. Except as required by law, PRA Group, Inc. assumes no obligation to publicly update or revise its forward-looking statements contained herein to reflect any change in PRA Group, Inc.'s expectations with regard thereto or to reflect any change in events, conditions or circumstances on which any such forward-looking statements are based, in whole or in part.
Darby Schoenfeld, CPA
Vice President, Investor Relations
News Media Contact:
Vice President, Communications and Public Policy
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SOURCE PRA Group