Last week, Encore Capital Group, a leading consumer debt purchasing and recovery company, announced consolidated financial results for the first quarter ended March 31, 2012.
Some highlights for the quarter:
- Encore deployed more than $130 million on portfolio purchases in the first quarter and is positioned to invest over $200 million in the second quarter
- Gross collections were $231.0 million, a 21% increase over the $191.1 million in the same period of the prior year
- Revenue from receivable portfolios, net was $126.4 million, a 20% increase over the $105.3 million in the same period of the prior year
- Excluding a one-time, non-cash impairment charge, operating expenses were $95.9 million, a 16% increase over the $82.5 million in the same period of the prior year
One additional item stood out from their announcement.
Encore announced the expansion of its existing 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. In addition, the company established a new $160 million facility, led by Texas Capital Bank.
The above signifies that the debt collection industry has achieved significant recognition as a good investment vehicle. The major companies not only purchase very large quantities of charged off credit card debt directly from major banks, but they are financed by lending syndicates headed by these major banks.
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