Debt buyer Portfolio Recovery Associates (PRA), based in Norfolk, Va., reported Wednesday that profit reached $35.8 million in the fourth quarter ended Dec. 31, up 35% from the year-ago period. Cash collections totaled $229.2 million in the quarter, up 27% from the fourth quarter of 2011.
For the full year 2012, net income totaled $126.6 million, compared with $100.8 million in 2011, an increase of 26%. Diluted earnings per share increased from $5.85 in 2011 to $7.39 in 2012. Revenues increased from $458.9 million in 2011 to $592.8 million in 2012.
"PRA again reported record operating results in the fourth quarter and for full year 2012, continuing a trend of strong year-over-year growth," said Steve Fredrickson, PRA's chairman, president and CEO. "In 2012, we received a record eight million payments on our debt portfolios. This includes growth in the number of recurring payment plans from customers to eliminate their debt, which provides a low-cost, recurring revenue stream."
The company expanded its use of legal action to collect debt last year. Legal collections in the fourth quarter grew 49% to $65.5 million. Operating expenses rose 31% in the quarter to $94.3 million, in part because of increased legal costs and fees, the company reported.
PRA's debt portfolio purchases more than doubled in the fourth quarter to $199.1 million from $88.9 million a year earlier. Domestic purchasing volume in the quarter was $196.5 million, and was comprised of $111.0 million in bankruptcy portfolio purchases and $85.5 million in core portfolio purchases.
Bankruptcy portfolio investment purchases included the
