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 acquisition of portfolios from National Capital Management LLC announced in December. Domestic receivables purchased during the quarter were acquired in 94 portfolios from 15 different sellers.