PRA Group Inc. Files Q3 2024 10-Q

TL;DR

PRA Group's Q3 10-Q is in. Check financials for latest performance.

AI Summary

PRA Group Inc. filed its 10-Q for the period ending September 30, 2024. The filing covers the third quarter and the first nine months of the year. Specific financial details such as revenue, net income, and balance sheet figures for these periods are detailed within the report.

Why It Matters

This filing provides investors with the latest financial performance and position of PRA Group Inc., crucial for understanding the company's health and future prospects.

Risk Assessment

Risk Level: medium — 10-Q filings are standard financial reports, but the specific content can reveal significant financial health indicators.

Key Numbers

• 20240930 — Reporting Period End Date (Indicates the end of the fiscal quarter and nine-month period covered by the report.)
• 20241108 — Filing Date (The date the 10-Q was officially submitted to the SEC.)

Key Players & Entities

• PRA GROUP INC (company) — Filer of the 10-Q
• 20240930 (date) — End of the reporting period
• 20241108 (date) — Date of filing
• NORFOLK (location) — Company's business and mailing address city
• VA (location) — Company's business and mailing address state

FAQ

Key Financial Figures

• $0.01 — ange on which registered Common Stock, $0.01 par value per share PRAA NASDAQ Global

Filing Documents

• praa-20240930.htm (10-Q) — 2444KB
• q32024exhibit311.htm (EX-31.1) — 11KB
• q32024exhibit312.htm (EX-31.2) — 10KB
• q32024exhibit321.htm (EX-32.1) — 11KB
• praa-20240930_g1.jpg (GRAPHIC) — 80KB
• 0001185348-24-000052.txt ( ) — 9246KB
• praa-20240930.xsd (EX-101.SCH) — 42KB
• praa-20240930_cal.xml (EX-101.CAL) — 71KB
• praa-20240930_def.xml (EX-101.DEF) — 248KB
• praa-20240930_lab.xml (EX-101.LAB) — 552KB
• praa-20240930_pre.xml (EX-101.PRE) — 426KB
• praa-20240930_htm.xml (XML) — 1475KB

Financial Information

Part I. Financial Information

Financial Statements (Unaudited)

Item 1. Financial Statements (Unaudited) 3 Consolidated Balance Sheets 3 Consolidated Income Statements 4 Consolidated Statements of Comprehensive Income 5 Consolidated Statements of Changes in Equity 6 Consolidated Statements of Cash Flows 8

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 9 1. Organization and Business 9 2. Finance Receivables, net 9 3. Investments 12 4. Goodwill 13 5. Borrowings 13 6. Derivatives 15 7. Fair Value 16 8. Accumulated Other Comprehensive Loss 18 9. Earnings per Share 18 10. Income Taxes 19 11. Commitments and Contingencies 19 12. Recently Issued Accounting Standards 20 13. Subsequent Events 21

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 22

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 42

Controls and Procedures

Item 4. Controls and Procedures 43

Other Information

Part II. Other Information

Legal Proceedings

Item 1. Legal Proceedings 44

Risk Factors

Item 1A. Risk Factors 44

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 44

Defaults Upon Senior Securities

Item 3. Defaults Upon Senior Securities 44

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 44

Other Information

Item 5. Other Information 44

Exhibits

Item 6. Exhibits 44 Signatures 46 2

Financial Information

Part I. Financial Information

Financial Statements (Unaudited)

Item 1. Financial Statements (Unaudited) PRA Group, Inc. Consolidated Balance Sheets September 30, 2024 and December 31, 2023 (Amounts in thousands) (unaudited) September 30, 2024 December 31, 2023 Assets Cash and cash equivalents $ 141,135 $ 112,528 Investments 61,322 72,404 Finance receivables, net 4,064,467 3,656,598 Income taxes receivable 33,368 27,713 Deferred tax assets, net 88,260 74,694 Right-of-use assets 40,831 45,877 Property and equipment, net 31,835 36,450 Goodwill 423,011 431,564 Other assets 51,841 67,526 Total assets $ 4,936,070 $ 4,525,354 Liabilities and Equity Liabilities: Accounts payable $ 8,176 $ 6,325 Accrued expenses 108,926 131,893 Income taxes payable 27,501 17,912 Deferred tax liabilities, net 19,881 17,051 Lease liabilities 45,222 50,300 Interest-bearing deposits 128,594 115,589 Borrowings 3,296,172 2,914,270 Other liabilities 19,806 32,638 Total liabilities 3,654,278 3,285,978 Equity: Preferred stock, $ 0.01 par value, 2,000 shares authorized, no shares issued and outstanding — — Common stock, $ 0.01 par value; 100,000 shares authorized, 39,426 shares issued and outstanding as of September 30, 2024; 100,000 shares authorized, 39,247 shares issued and outstanding as of December 31, 2023 394 392 Additional paid-in capital 15,415 7,071 Retained earnings 1,541,693 1,489,548 Accumulated other comprehensive loss ( 338,620 ) ( 329,899 ) Total stockholders' equity - PRA Group, Inc. 1,218,882 1,167,112 Noncontrolling interests 62,910 72,264 Total equity 1,281,792 1,239,376 Total liabilities and equity $ 4,936,070 $ 4,525,354 The accompanying notes are an integral part of these Consolidated Financial Statements. 3 PRA Group, Inc. Consolidated Income Statements For the Three and Nine Months Ended September 30, 2024 and 2023 (Amounts in thousands, except per share amounts) (unaudited) Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Revenues: Portfolio i

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 1. Organization and Business: Nature of operations : As used herein, the terms "PRA Group," the "Company," or similar terms refer to PRA Group, Inc. and its subsidiaries. PRA Group, Inc., a Delaware corporation, is a global financial and business services company with operations in the Americas, Europe and Australia. The Company's primary business is the purchase, collection and management of portfolios of nonperforming loans. The Company also provides fee-based services on class action claims recoveries in the United States ("U.S."). Basis of presentation : The Consolidated Financial Statements of the Company are prepared in accordance with U.S. generally accepted accounting principles ("GAAP"). The accompanying interim financial statements have been prepared in accordance with the instructions for Quarterly Reports on Form 10-Q, and therefore, do not include all information and Notes to the Consolidated Financial Statements necessary for a complete presentation of financial position, results of operations, comprehensive income/(loss) and cash flows in conformity with GAAP. In the opinion of management, all adjustments, consisting of normal and recurring items, necessary for the fair presentation of the Company's Consolidated Balance Sheets as of September 30, 2024, its Consolidated Income Statements and Statements of Comprehensive Income for the three and nine months ended September 30, 2024 and 2023, and its Consolidated Statements of Changes in Equity and Statements of Cash Flows for the nine months ended September 30, 2024 and 2023, have been included. The Consolidated Financial Statements include the accounts of PRA Group and other entities in which the Company has a controlling interest. All significant intercompany accounts and transactions have been eliminated. These unaudited Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and notes thereto i

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements Changes in the negative allowance for expected recoveries by portfolio segment for the three and nine months ended September 30, 2024 and 2023 were as follows (amounts in thousands): Three Months Ended September 30, 2024 2023 Core Insolvency Total Core Insolvency Total Balance at beginning of period $ 3,450,721 $ 369,465 $ 3,820,186 $ 3,086,405 $ 338,143 $ 3,424,548 Initial negative allowance for expected recoveries - portfolio acquisitions (1) 335,120 14,858 349,978 248,181 63,002 311,183 Recoveries applied to negative allowance (2) ( 222,960 ) ( 40,429 ) ( 263,389 ) ( 189,710 ) ( 41,709 ) ( 231,419 ) Changes in expected recoveries (3) 55,992 4,622 60,614 15,894 6,262 22,156 Foreign currency translation adjustment $ 87,496 $ 9,582 $ 97,078 $ ( 58,878 ) $ ( 6,786 ) $ ( 65,664 ) Balance at end of period $ 3,706,369 $ 358,098 $ 4,064,467 $ 3,101,892 $ 358,912 $ 3,460,804 Nine Months Ended September 30, 2024 2023 Core Insolvency Total Core Insolvency Total Balance at beginning of period $ 3,295,214 $ 361,384 $ 3,656,598 $ 2,936,207 $ 358,801 $ 3,295,008 Initial negative allowance for expected recoveries - portfolio acquisitions (1) 880,529 94,635 975,164 763,776 105,391 869,167 Recoveries applied to negative allowance (2) ( 664,423 ) ( 119,906 ) ( 784,329 ) ( 574,993 ) ( 120,392 ) ( 695,385 ) Changes in expected recoveries (3) 171,303 14,305 185,608 ( 7,436 ) 13,816 6,380 Foreign currency translation adjustment $ 23,746 $ 7,680 $ 31,426 $ ( 15,662 ) $ 1,296 $ ( 14,366 ) Balance at end of period $ 3,706,369 $ 358,098 $ 4,064,467 $ 3,101,892 $ 358,912 $ 3,460,804 (1) Initial negative allowance for expected recoveries - portfolio acquisitions Portfolio acquisitions for the three and nine months ended September 30, 2024 and 2023 were as follows (amounts in thousands): Three Months Ended September 30, 2024 2023 Core Insolvency Total Core Insolvency Total Face value $ 3,739,494 $ 75,859 $ 3,815,35

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements The initial negative allowance recorded on portfolio acquisitions for the three and nine months ended September 30, 2024 and 2023 was as follows (amounts in thousands): Three Months Ended September 30, 2024 2023 Core Insolvency Total Core Insolvency Total Allowance for credit losses at acquisition $ ( 3,071,252 ) $ ( 53,164 ) $ ( 3,124,416 ) $ ( 1,535,136 ) $ ( 295,524 ) $ ( 1,830,660 ) Writeoffs, net 3,071,252 53,164 3,124,416 1,535,136 295,524 1,830,660 Expected recoveries 335,120 14,858 349,978 248,181 63,002 311,183 Initial negative allowance for expected recoveries $ 335,120 $ 14,858 $ 349,978 $ 248,181 $ 63,002 $ 311,183 Nine Months Ended September 30, 2024 2023 Core Insolvency Total Core Insolvency Total Allowance for credit losses at acquisition $ ( 6,088,303 ) $ ( 330,392 ) $ ( 6,418,695 ) $ ( 4,353,724 ) $ ( 435,101 ) $ ( 4,788,825 ) Writeoffs, net 6,088,303 330,392 6,418,695 4,353,724 435,101 4,788,825 Expected recoveries 880,529 94,635 975,164 763,776 105,391 869,167 Initial negative allowance for expected recoveries $ 880,529 $ 94,635 $ 975,164 $ 763,776 $ 105,391 $ 869,167 (2) Recoveries applied to negative allowance Recoveries applied to the negative allowance for the three and nine months ended September 30, 2024 and 2023 were as follows (amounts in thousands): Three Months Ended September 30, 2024 2023 Core Insolvency Total Core Insolvency Total Recoveries (a) $ 426,574 $ 52,937 $ 479,511 $ 369,385 $ 51,994 $ 421,379 Less - amounts reclassified to portfolio income 203,614 12,508 216,122 179,675 10,285 189,960 Recoveries applied to negative allowance $ 222,960 $ 40,429 $ 263,389 $ 189,710 $ 41,709 $ 231,419 Nine Months Ended September 30, 2024 2023 Core Insolvency Total Core Insolvency Total Recoveries (a) $ 1,256,546 $ 155,251 $ 1,411,797 $ 1,106,799 $ 151,078 $ 1,257,877 Less - amounts reclassified to portfolio income 592,123 35,345 627,468 531,806 30,686 562,492 Recove

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements Changes in expected recoveries for the three months ended September 30, 2024 and 2023 were as follows (amounts in thousands): Three Months Ended September 30, 2024 2023 Core Insolvency Total Core Insolvency Total Recoveries received in excess of forecast $ 29,133 $ 5,025 $ 34,158 $ 11,660 $ 6,430 $ 18,090 Changes in expected future recoveries 26,859 ( 403 ) 26,456 4,234 ( 168 ) 4,066 Changes in expected recoveries $ 55,992 $ 4,622 $ 60,614 $ 15,894 $ 6,262 $ 22,156 Changes in expected recoveries for the three months ended September 30, 2024 were $ 60.6 million, which included $ 34.2 million in recoveries received in excess of forecast (cash collections overperformance), due primarily to collections performance in the U.S. and Europe. Changes in expected future recoveries of $ 26.5 million mainly reflect the Company's assessment of the 2013 to 2020 U.S. Core pools and a number of pools in Europe, which resulted in increases to the expected cash flows considering that recent performance of those pools is expected to continue. Changes in expected recoveries for the three months ended September 30, 2023 were a net positive $ 22.2 million. This included $ 18.1 million in recoveries received in excess of forecast (cash collections overperformance) and a $ 4.1 million positive adjustment to changes in expected future recoveries. The $ 18.1 million in recoveries received in excess of forecast reflected overperformance in Europe and the Americas. Changes in expected recoveries for the nine months ended September 30, 2024 and 2023 were as follows (amounts in thousands): Nine Months Ended September 30, 2024 2023 Core Insolvency Total Core Insolvency Total Recoveries received in excess of forecast $ 109,881 $ 14,375 $ 124,256 $ 33,483 $ 13,793 $ 47,276 Changes in expected future recoveries 61,422 ( 70 ) 61,352 ( 40,919 ) 23 ( 40,896 ) Changes in expected recoveries $ 171,303 $ 14,305 $ 185,608 $ ( 7,436 ) $ 13,816 $

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements Government securities: As of September 30, 2024, the Company's available-for-sale debt securities consisted of Swedish treasury securities maturing within one year. As of September 30, 2024 and December 31, 2023, the amortized cost and fair value of these investments were as follows (amounts in thousands): September 30, 2024 Amortized Cost Gross Unrealized Gains Aggregate Fair Value Available-for-sale Government securities $ 50,293 $ 312 $ 50,605 December 31, 2023 Amortized Cost Gross Unrealized Gains Aggregate Fair Value Available-for-sale Government securities $ 59,404 $ 66 $ 59,470 Equity Method Investment The Company ha s an 11.7 % interest in RC B Investimentos S.A. ("RCB"), a servicing platform for nonperforming loans in Brazil, accounted for under the equity method . 4. Goodwill: The Company performs an annual review of goodwill as of October 1 of each year, or more frequently if indicators of impairment exist, with the most recent annual review performed as of October 1, 2023 . The Company performed a quarterly assessment by evaluating whether any triggering events had occurred as of September 30, 2024 , which included c

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View this 10-Q filing on SEC EDGAR