PRA Group
May 6, 2015

PRA Group Reports First Quarter 2015 Results

NORFOLK, Va., May 6, 2015 (GLOBE NEWSWIRE) -- PRA Group (Nasdaq:PRAA), a global leader in acquiring defaulted receivables, today reported its financial results for the first quarter of 2015.

First Quarter Highlights

"We are very pleased with the strong start to 2015. Our investment levels continue to be high, setting a record of $139 million in core portfolios in the Americas," said Steve Fredrickson, chairman, president and chief executive officer, PRA Group. "PRA Group also produced another record by collecting almost $400 million during the period. This quarter produced the type of results we look to deliver and we will work hard to continue this momentum through the year."

REVENUES

Cash Collection Source ($ in thousands)Q12015Q42014Q32014Q22014Q12014
Americas-Core $ 219,371 $ 185,921 $ 189,027 $ 190,229 $ 187,818
Americas-Insolvency  95,533  103,104  110,544  124,101  120,702
Europe-Core  83,876  84,398  73,172  4,944  4,847
Europe-Insolvency  967  5  --   --   -- 
Total Cash Collections  $ 399,747  $ 373,428  $ 372,743  $ 319,274  $ 313,367
           

EXPENSES AND OPERATING INCOME

PORTFOLIO ACQUISITIONS

 
Portfolio Purchase Source ($ in thousands)Q12015Q42014Q32014Q22014Q12014
Americas-Core  $ 138,498  $ 119,714  $ 118,018  $ 91,904  $ 79,085
Americas-Insolvency  16,437  24,949  38,535  16,187  72,003
Europe-Core (1)  21,579  123,194  734,803  1,121  1,626
Europe-Insolvency  8,510  11,625  --   --   -- 
Total Portfolio Purchasing  $ 185,024  $ 279,482  $ 891,356  $ 109,212  $ 152,714
 
           
(1) Excludes the $27.9 million and $34.7 million investment in the securitized fund in Poland during the three months ended March 31, 2015 and December 31, 2014, respectively.
           

BALANCE SHEET

Conference Call Information

PRA Group 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, visit http://ir.pragroup.com/events.cfm. To listen by phone, call 888-695-7639 in the U.S. or 970-315-0482 outside the U.S. The conference ID is 30685528. A question-and-answer session on the call will be open only to analysts or investors. To listen to a replay of the call until May 13, 2015, call 855-859-2056 in the U.S. or 404-537-3406 outside the U.S. and use conference ID 30685528.                        

About PRA Group

As a global leader in acquiring defaulted receivables, PRA Group (Nasdaq:PRAA) returns capital to global banks and other creditors to help expand financial services for consumers in North America and Europe. PRA Group companies collaborate with customers to help them resolve their debt and provide a broad range of additional revenue and recovery services to business and government clients.

PRA has been recognized as one of Fortune's 100 Fastest-Growing Companies for the past three years and one of Forbes' Best Small Companies in America for eight consecutive years since 2007. For more information, please visit www.pragroup.com.

About Forward Looking Statements

Statements made herein which are not historical in nature, including PRA Group'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's future operations 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. 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's filings with the Securities and Exchange Commission including but not limited to PRA Group's annual reports on Form 10-K, its quarterly reports on Form 10-Q and its current reports on Form 8-K, filed with the Securities and Exchange Commission and available through PRA Group's website, which contain a detailed discussion of PRA Group'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 assumes no obligation to publicly update or revise its forward-looking statements contained herein to reflect any change in PRA Group'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.

 
PRA Group, Inc.
Unaudited Consolidated Income Statements
(in thousands, except per share amounts)
     
     
     
 Three Months Ended March 31,
 20152014
     
Revenues:    
Income recognized on finance receivables, net $ 228,403 $ 177,970
Fee income 13,053 15,608
Other revenue 3,750 344
     
Total revenues 245,206 193,922
     
Operating expenses:    
Compensation and employee services 65,271 51,385
Legal collection fees 13,691 10,833
Legal collection costs 20,854 26,533
Agency fees 8,261 1,450
Outside fees and services 12,797 10,791
Communication 10,418 8,963
Rent and occupancy 3,560 2,338
Depreciation and amortization 4,610 3,947
Other operating expenses 9,578 6,100
     
Total operating expenses 149,040 122,340
     
Income from operations 96,166 71,582
     
Other income and (expense):    
Interest income 147 1
Interest expense (14,923) (4,860)
Net foreign exchange gain 6,789 8
     
Income before income taxes 88,179 66,731
     
Provision for income taxes 30,044 25,891
     
Net income $ 58,135 $ 40,840
     
Net income per common share:    
Basic  $ 1.19  $ 0.82
Diluted  $ 1.19  $ 0.81
     
Weighted average number of shares outstanding:    
Basic 48,724 49,929
Diluted 49,052 50,363
     
 
PRA Group, Inc.
Unaudited Consolidated Balance Sheets
(in thousands, except per share amounts)
     
 March 31,December 31,
ASSETS20152014
     
Cash and cash equivalents $ 40,542 $ 39,661
Investments 91,470 89,703
Finance receivables, net 1,954,772 2,001,790
Other receivables, net 16,834 12,959
Net deferred tax asset 5,771 6,126
Property and equipment, net 46,855 48,258
Goodwill 496,653 527,445
Intangible assets, net 10,042 10,933
Other assets 37,674 41,876
     
Total assets $ 2,700,613 $ 2,778,751
     
LIABILITIES AND EQUITY    
     
Liabilities:    
Accounts payable $ 7,838 $ 4,446
Accrued expenses 69,250 89,361
Income taxes payable 22,120 11,020
Other liabilities 6,725 5,962
Net deferred tax liability 265,661 255,587
Interest bearing deposits 32,439 27,704
Borrowings 1,479,262 1,482,456
     
Total liabilities 1,883,295 1,876,536
     
Stockholders' equity:    
Preferred stock, par value $0.01, authorized shares, 2,000, issued and outstanding shares - 0 -- --
Common stock, par value $0.01, 100,000 authorized shares, 48,320 issued and outstanding shares at March 31, 2015, and 49,577 issued and outstanding shares at December 31, 2014 483 496
Additional paid-in capital 31,339 111,659
Retained earnings 964,145 906,010
Accumulated other comprehensive (loss) (178,649) (115,950)
Total stockholders' equity 817,318 902,215
     
Total liabilities and equity $ 2,700,613 $ 2,778,751
     
       
PRA Group, Inc.
FINANCIAL HIGHLIGHTS
 As of and for the
 Three Months Ended March 31,
  2015 2014 Change
EARNINGS (in thousands)      
Income recognized on finance receivables, net  $ 228,403  $ 177,970 28%
Fee income  13,053  15,608 -16%
Other revenue  3,750  344 990%
Total revenues  245,206  193,922 26%
Operating expenses  149,040  122,340 22%
Income from operations  96,166  71,582 34%
Net interest expense  14,776  4,859 204%
Net income  58,135  40,840 42%
       
PERIOD-END BALANCES (in thousands)      
Cash and cash equivalents  $ 40,542  $ 191,819 -79%
Finance receivables, net  1,954,772  1,253,961 56%
Goodwill and intangible assets, net  506,695  118,800 327%
Total assets  2,700,613  1,642,613 64%
Borrowings  1,479,262  450,278 229%
Total liabilities  1,883,295  732,395 157%
Total equity  817,318  910,218 -10%
       
FINANCE RECEIVABLE INCOME (dollars in thousands)      
Cash collections  $ 399,747  $ 313,367 28%
Cash collections on fully amortized pools  17,005  16,516 3%
Principal amortization without allowance (reversals)/charges  169,714  137,350 24%
Allowance (reversal)/charge  1,630  (1,953) -183%
Principal amortization with allowance (reversals)/charges  171,344  135,397 27%
Principal amortization w/ allowance charges as % of cash collections:    
Including fully amortized pools 42.9% 43.2% -1%
Excluding fully amortized pools 44.8% 45.6% -2%
Allowance (reversal)/charge to period-end net finance receivables 0.1% (0.2%) -154%
       
PURCHASES OF FINANCE RECEIVABLES (dollars in thousands)    
Purchase price - Americas core  $ 138,498  $ 79,085 75%
Purchase price - Americas insolvency  16,437  72,003 -77%
Purchase price - Europe core  21,579  1,626 1227%
Purchase price - Europe insolvency  8,510  -- 100%
Purchase price - total  185,024  152,714 21%
Number of portfolios - total 139 104 34%
ESTIMATED REMAINING COLLECTIONS (in thousands)      
Estimated remaining collections - Americas core  $ 2,370,086  $ 1,891,511 25%
Estimated remaining collections - Americas insolvency  577,319  793,855 -27%
Estimated remaining collections - Europe core  1,619,454  19,358 8266%
Estimated remaining collections - Europe insolvency  24,838  -- 100%
Estimated remaining collections - total  4,591,697  2,704,724 70%
Adjusted estimated remaining collections (7)  4,716,230  --  --
       
SHARE DATA (share amounts in thousands)      
Net income per common share - diluted  $ 1.19  $ 0.81 47%
Weighted average number of shares outstanding - diluted  49,052  50,363 -3%
Shares repurchased  1,478  -- 100%
Average price paid per share repurchased (including acquisitions costs)  $ 52.65  $ --  100%
Closing market price  $ 54.32  $ 57.86 -6%
       
RATIOS AND OTHER DATA (dollars in thousands)      
Return on average equity (1) 30.1% 18.2% 65%
Return on revenue (2) 23.7% 21.1% 13%
Return on average assets (3) 8.7% 10.0% -13%
Operating margin (4) 39.2% 36.9% 6%
Operating expense to cash receipts (5) 36.1% 37.2% -3%
Debt to equity (6) 181.0% 49.5% 266%
Number of full-time equivalent collectors 2,395 2,379 1%
Number of full-time equivalent employees 3,847 3,621 6%
Cash receipts (5)  $ 412,800  $ 328,975 25%
Line of credit - unused portion at period end  323,812  435,500 -26%
(1) Calculated as annualized net income divided by average equity for the period
(2) Calculated as net income divided by total revenues
(3) Calculated as annualized net income divided by average assets for the period
(4) Calculated as income from operations divided by total revenues
(5) "Cash receipts" is defined as cash collections plus fee income
(6) For purposes of this ratio, "debt" equals borrowings
(7) Equals total estimated remaining collections on our owned finance receivable portfolios plus the estimated remaining collections on certain of our other investments.
       
           
PRA Group, Inc.
FINANCIAL HIGHLIGHTS
 For the Quarter Ended
 March 31December 31September 30June 30March 31
 20152014201420142014
EARNINGS (in thousands)          
Income recognized on finance receivables, net  $ 228,403  $ 222,660  $ 224,326  $ 182,518  $ 177,970
Fee income  13,053  22,800  12,757  14,510  15,608
Other revenue  3,750  5,271  1,890  315  344
Total revenues  245,206  250,731  238,973  197,343  193,922
Operating expenses  149,040  140,871  150,784  124,906  122,340
Income from operations  96,166  109,860  88,189  72,437  71,582
Net interest expense  14,776  13,493  11,807  5,067  4,859
Net income  58,135  46,991  51,167  37,507  40,840
           
PERIOD-END BALANCES (in thousands)          
Cash and cash equivalents  $ 40,542  $ 39,661  $ 70,300  $ 270,526  $ 191,819
Finance receivables, net  1,954,772  2,001,790  1,913,710  1,219,595  1,253,961
Goodwill and intangible assets, net  506,695  538,378  606,716  118,927  118,800
Total assets  2,700,613  2,778,751  2,757,429  1,695,362  1,642,613
Borrowings  1,479,262  1,482,456  1,425,409  448,785  450,278
Total liabilities  1,883,295  1,876,536  1,797,569  743,106  732,395
Total equity  817,318  902,215  959,860  952,256  910,218
           
FINANCE RECEIVABLE COLLECTIONS (dollars in thousands)          
Cash collections  $ 399,747  $ 373,428  $ 372,743  $ 319,274  $ 313,367
Cash collections on fully amortized pools  17,005  17,785  17,105  16,943  16,516
Principal amortization without allowance (reversals)/charges  169,714  149,753  150,115  139,055  137,350
Allowance (reversal)/charge  1,630  1,015  (1,698)  (2,299)  (1,953)
Principal amortization with allowance (reversals)/charges  171,344  150,768  148,417  136,756  135,397
Principal amortization w/ allowance charges as % of cash collections:          
Including fully amortized pools 42.9% 40.4% 39.8% 42.8% 43.2%
Excluding fully amortized pools 44.8% 42.4% 41.7% 45.2% 45.6%
Allowance (reversal)/charge to period-end net finance receivables 0.1% 0.1% -0.1% -0.2% -0.2%
           
PURCHASES OF FINANCE RECEIVABLES (dollars in thousands)          
Purchase price - North America core  $ 138,498  $ 119,714  $ 118,018  $ 91,904  $ 79,085
Purchase price - North America insolvency  16,437  24,949  38,535  16,187  72,003
Purchase price - Europe core  21,579  123,194  734,803  1,121  1,626
Purchase price - Europe insolvency  8,510  11,625  --  --  --
Purchase price - total  185,024  279,482  891,356  109,212  152,714
Number of portfolios - total 139 142 125 85 104
ESTIMATED REMAINING COLLECTIONS (in thousands)          
Estimated remaining collections - Americas core  $ 2,370,086  $ 2,229,403  $ 2,089,253  $ 1,948,414  $ 1,891,511
Estimated remaining collections - Americas insolvency  577,319  642,552  697,662  733,176  793,855
Estimated remaining collections - Europe core  1,619,454  1,478,738  1,582,135  20,349  19,358
Estimated remaining collections - Europe insolvency  24,838  15,021  --  --  --
Estimated remaining collections - total  4,591,697  4,365,714  4,369,050  2,701,939  2,704,724
Adjusted estimated remaining collections (7)  4,716,230  4,437,264  --  --  --
           
SHARE DATA-ADJUSTED (7) (share amounts in thousands)          
Net income per common share - diluted  $ 1.19  $ 0.93  $ 1.01  $ 0.74  $ 0.81
Weighted average number of shares outstanding - diluted  49,052  50,444  50,439  50,437  50,363
Shares repurchased  1,478  574  --  --  --
Average price paid per share repurchased (including acquisitions costs)  $ 52.65  $ 57.79  $ --   $ --   $ -- 
Closing market price  $ 54.32  $ 57.93  $ 52.23  $ 59.53  $ 57.86
           
RATIOS AND OTHER DATA (dollars in thousands)          
Return on average equity (1) 30.1% 20.2% 21.1% 16.0% 18.2%
Return on revenue (2) 23.7% 18.7% 21.4% 19.0% 21.1%
Return on average assets (3) 8.7% 6.9% 7.3% 9.0% 10.0%
Operating margin (4) 39.2% 43.8% 36.9% 36.7% 36.9%
Operating expense to cash receipts (5) 36.1% 35.6% 39.1% 37.4% 37.2%
Debt to equity (6) 181.0% 164.3% 148.5% 47.1% 49.5%
Number of collectors 2,395 2,457 2,498 2,258 2,379
Number of full-time equivalent employees 3,847 3,880 3,913 3,567 3,621
Cash receipts (5)  $ 412,800  $ 396,228  $ 385,500  $ 333,784  $ 328,975
Line of credit - unused portion at period end  323,812  352,926  513,800  650,000  435,500
(1) Calculated as annualized net income divided by average equity for the period
(2) Calculated as net income divided by total revenues
(3) Calculated as annualized net income divided by average assets for the period
(4) Calculated as income from operations divided by total revenues
(5) "Cash receipts" is defined as cash collections plus fee income
(6) For purposes of this ratio, "debt" equals borrowings
(7) Equals total estimated remaining collections on our owned finance receivable portfolios plus the estimated remaining collections on certain of our other investments.
           
CONTACT: Investor Contact:

         Darby Schoenfeld

         Director of Investor Relations

         (757) 431-7913

         DCSchoenfeld@PRAGroup.com

         

         News Media Contact:

         Nancy Porter

         Vice President, Corporate Communications

         (757) 431-7950

         NAPorter@PRAGroup.com