PRA Group, Inc.

Good afternoon and welcome to the PRA group conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touch-tone thumb. To withdraw your question, please press star then two. Please note, this event is being recorded. I would now like to turn the call over to Ms. Lauren Parton, Vice President of Global Financial Planning and Analysis for PRA Group. Please go ahead.

Thank you. Good afternoon, everyone, and thank you for joining us. With me today are Kevin Stevenson, President and Chief Executive Officer, and Pete Graham, Executive Vice President and Chief Financial Officer. We will make forward-looking statements during the call, which are based on management's current beliefs, projections, assumptions, and expectations. We assume no obligation to revise or update these statements. We caution listeners that these forward-looking statements are subject to risks, uncertainties, assumptions, and other factors that could cause our actual results to differ materially from our expectations. Please refer to the earnings press release and our SEC filings for a detailed discussion of these factors. The earnings release, the slide presentation that we will use during today's call and our SEC filings can be found on the investor section of our website at www.pragroup.com. Additionally, a replay of this call will be available shortly after its conclusion, and the information needed to listen is in the earnings press release. All comparisons mentioned today will be between Q3 2020 and Q3 2021, unless otherwise noted, and our America's results include Australia. During our call, we will discuss adjusted EBITDA and debt to adjusted EBITDA for the 12 months ended September 30th, 2021 and December 31st, 2020. Please refer to the appendix of the slide presentation on our website used during this call for a reconciliation of these non-GAAP financial measures to the most directly comparable U.S. GAAP financial measures. I'd now like to turn the call over to Kevin Stevenson, our President and Chief Executive Officer.

Thank you, Lauren. I'd like to begin the call this evening, once again, sending our thoughts out to those who have been impacted by COVID. After almost two years of the pandemic, we are still faced with challenges that impact our daily lives. It's my hope we can all move together and help each other during these very difficult, very difficult times. Now moving on to the third quarter review. In Q3, we collected $488 million globally. This was driven by strong European cash collections, which increased almost $30 million compared to the third quarter of 2020. This brings year-to-date global cash collections to almost $1.6 billion, which is 4% ahead of our record 2020 year. Net income attributable to PRA Group for the quarter was $34 million. Quarterly portfolio purchases were almost $400 million, one of our largest Q3s on record. Our investments in the quarter reflect the power of our geographic diversification as we invested broadly across our platform in Europe and the Americas. Importantly, looking beyond our funded purchases, we also have built a significant pipeline for the future. At quarter end, looking out generally 12 months or less, our future forward flow commitments total $874 million. Finally, during the quarter, we repurchased $74 million of our common stock. This was part of the $150 million plan that was approved in Q3. The $74 million deployment equated to 1.8 million shares at an average price of around $41 a share. As you may have seen in our press release dated November 1st, our board has approved the topping off of our share repurchase program by adding an additional $80 million. So in summary, over the past two quarters, we approved $230 million of buybacks, and of course, $74 million of that was deployed in Q3. This quarter's strong performance from both an operational and investment perspective is directly related the strategic objectives that I highlighted at the end of last quarter's call. Operationally, our focus on modernizing collections has contributed significantly to our ability to service our NPL portfolios. Our U.S. digital platform continues to drive collections that exceed the combination of our two largest call centers. In Europe, digital collections, although smaller in scale, have grown almost 40% from the third quarter of 2020. We're, of course, very excited about this growth and continue to make enhancements to ensure that our customers are being served via the channel that they prefer. Domestic productivity is still very high, with dollars collected per hour paid performing consistent with historically high levels attained in the third quarter of 2020. Many of the metrics we track continue to either maintain their strong performance or improve. Focusing on modernized collections has driven improvements in our cash efficiency ratio, and we continue to push in order to drive that metric even higher. We hired additional talent in our U.S. operations workforce focused on workforce planning and analytics. We've been working towards shifting a higher percentage of our U.S. legal placements from external law firms to internal staff, which should increase this channel's margin over time. We continue to invest in data and analytics in support of our strategic objectives. Our focus on utilizing advanced analytics and AI enables us to leverage our robust internal data assets, which are then further augmented with external predictive data. The team is building, deploying, and improving our suite of predictive scores that we apply throughout the business to benefit our underwriting, our offers, and our customer contact strategies. This is a continuous improvement cycle for PRA as the team is constantly monitoring and improving upon the data and analytical methods we use in our business strategies. In Europe, we're also benefiting from technology investments that have been driving our cash efficiency ratios higher. These projects include standing up digital platforms in nearly all of our markets, implementing standardized cloud-based dialers and general cloud-based infrastructure, and beginning robotic process automation and integration into supporting systems. Our efficiency efforts, coupled with robust cash collections, has driven our cash efficiency ratio to 65.8% year-to-date. We continue to make strides aimed at fostering a high-performing workforce, specifically we've been deploying initiatives focusing on diversity and inclusion. And we are very proud of our recognition as a three-plus corporation by 50-50 women on boards, probably three or more women on our board of directors. We also have a dedicated leader of diversity and inclusion, and the importance of diversity and inclusion filters down throughout the entire organization. This was demonstrated during Q3 when we launched our first Global Inclusion Week. across Europe and the U.S., and we saw meaningful employee engagement in the program. For more information on our ESG efforts, please visit our website and view our ESG tear sheet. Further, to benefit our employees, we've taken several steps to promote and educate on the COVID-19 vaccine. We've held several on-site vaccination clinics for both our employees and their friends and family. Then to make it easier, we provided unvaccinated employees with paid time off to go get the vaccine, and then as an incentive, provided two additional PTO days or paid time off days after they were vaccinated. And finally, we created a lottery for the vaccinated employees, and it includes three awards of significant cash prizes, 10 awards of one week of PTO, again, paid time off, And lastly, for the site with the highest vaccination rate, they will have a CEO-hosted lunch for the entire site. So we're having a good time with the lottery and getting a lot of people vaccinated. From the investment perspective, our strong volume for the third quarter was the result of our efforts to accomplish another of our strategic objectives, expand products and market share. We leveraged our ability to invest broadly across our platform, allowing us to deploy nearly $400 million in portfolio purchases, an increase of over $200 million from the third quarter of 2020. This achievement clearly demonstrates the power of operating a geographically diverse enterprise. Combine that with our strong balance sheet and access to funding, and we believe we're in a good position from both a capital and operational perspective to shift capital widely across markets where it can be best deployed. In the Americas, we invested $172 million. We continue to see similar marketed volumes to the first half of the year domestically, as well as the same trends last quarter. Consumer spending in the U.S. is increasing, and consumer credit outstanding is now growing. And we saw short-term delinquency rates tick up for some of the large consumer lending clients. Our view from last quarter remains the same. we are moving through what we expect to be a trough in supply in the US. And we believe the volumes will build in 2022. But importantly, because of our expansion to South America in 2015, we augmented our purchasing volumes in the Americas with some larger portfolio purchases there. As we indicated earlier in the year, the pipeline in Europe has been very healthy. Combine that with our diversified footprint and strong balance sheet, we invested $220 million for the quarter. In fact, volumes in Europe have been so good that the first nine months of 2021 has exceeded the first nine months of any other year since we expanded into Europe. You may also notice that we had a sizable increase in our maximum committed forward flow volumes, which now sits at $874 million. This amount generally represents 12 months or less in terms of maximum commitment amount. This includes $323 million in the Americas and Australia, $551 million in Europe. Part of the increase is due to a large forward flow that we secured in Europe. This flow spans multiple years. But you're just seeing the next 11 months. of the maximum contractual commitment given certain provisions in that forward flow. The full contract amount will be higher than what's reported since it extends well beyond 11 months. I'd now like to turn things over to Pete to go through our financial results. Pete?