IMGCAP(1)]
Portfolio Recovery Associates Inc., a debt purchaser that buys and collects delinquent credit card portfolios, today reported net income of $10.1 million for the third quarter ended Sept. 30, a 12.2% decrease from net income of $11.5 million during the same period a year ago.
The Norfolk, Va.-based debt buyer's total revenue was unchanged from a year earlier at $68.6 million, according to a company filing with the U.S. Securities and Exchange Commission.
Portfolio Recovery Associates is the sixth-largest debt buyer in the U.S. with more than $206 million in revenue from purchased debt in 2008, according to research conducted by Collections & Credit Risk and CCR Newsline.
"Portfolio Recovery Associates continued to perform solidly in the third quarter of 2009, despite an economy still struggling to recover from recession," Steven D. Fredrickson, chairman, president and CEO, said of the company's earnings. "Not only did the company produce strong results operationally, but we continued to build for the future – further refining our best-in-class platform and taking advantage of our access to capital to make significant portfolio acquisitions."
The company purchased $1.75 billion of face-value debt for $76.7 million during the third quarter. This debt was acquired in 100 portfolios from 12 different sellers. During the same quarter last year, the company purchased $857 million of face-value debt for $52.3 million, and was acquired in 56 portfolios from 19 different sellers.
Cash collections rose 11.3% to $92.4 million in the third quarter, up from $83 million in the year-ago period. The company also reported call center and other collections increased 11%, external legal collections decreased 29%, internal legal collections grew 194%, and purchased bankruptcy collections gained 45% when compared with the year-earlier period.
Portfolio Recovery Associates' overall third-quarter operating performance was strong, highlighted by record cash collections of $92.4 million, year-over-year productivity improvements at all call centers, and portfolio acquisitions totaling $76.7 million even in a tight credit environment, according to Kevin P. Stevenson, chief financial and administrative officer.
"The weak economy did impact our fee-for-service businesses, particularly in the government services area, and contributed to an $8 million net allowance charge," Stevenson said. "However, we remain extremely confident in our strategy of developing Portfolio Recovery Associates' businesses for the long term and look forward to emerging from this recession a stronger competitor than ever."
