Debt buyer Encore Capital Group Inc. on Friday reported gross collections from the portfolio purchasing and recovery business in the second quarter ended June 30 reached $240.6 million, a 23% jump over the $195.1 million in the year-ago period.

Net income for the quarter totaled $16.6 million, a 12% increase from a year ago. But the San Diego-based company also reported that it halted some operations in the quarter, thus altering the company’s net income. Income from continuing operations was $19 million, up more than 28% from the second quarter last year. 

Encore spent $231 million in the quarter to purchase an estimated $6 billion in face value of debt. In the second quarter of 2011, Encore spent $93.7 million to buy an estimated $3 billion in face value of debt.

Revenue from receivable portfolios totaled $138.7 million, a 25% increase over the $111.1 million in the year-ago period. Revenue recognized on receivable portfolios, as a percentage of portfolio collections, excluding the effects of net portfolio allowances, decreased to approximately 57% from 58% in the year-ago period.

"For the quarter, we delivered strong financial results, while making investments designed to provide long-term strategic advantages and further strengthen our industry-leading debt purchasing and recovery platform," said Brandon Black, Encore's president and CEO. "Our deliberate and disciplined approach to portfolio underwriting and management drove record earnings, collections and operating cash flow."

The company in May announced it acquired Propel Financial Services LLC, a tax lien acquisition company, and sold its bankruptcy servicing subsidiary, Ascension Capital Group. Uncertainty over a client’s contract renewal with Ascension led to Encore’s decision to sell the unit,

To facilitate those deals, Encore expanded its credit facility, led by SunTrust Robinson Humphrey, to $555 million, with a $100 million accordion feature, and an increase in the availability of capital under a revised borrowing base calculation. The company also established a $160 million facility, led by Texas Capital Bank, to provide the funding for the Propel acquisition and its capital requirements.

"The acquisition of Propel will capitalize on Encore's expertise in consumer-level analytics and operational capabilities, will leverage the company's deep experience assisting financially stressed consumers and will put Encore in position to build a significant tax lien acquisition business," Black said at the time.

Last week, Encore officials noted progress integrating Propel Financial.

"Our long-term prospects are enhanced by the Propel acquisition and I'm pleased to report that the integration is proceeding smoothly. During the quarter, Propel achieved two important milestones: the funding of its 25,000th transfer and surpassing $250 million dollars in cumulative tax lien transfers."

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