8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________________

Form 8-K
_____________________

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event Reported): August 8, 2017  

PRA Group, Inc.
(Exact Name of Registrant as Specified in Charter)

Delaware	000-50058	75-3078675
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification Number)

120 Corporate Boulevard, Suite 100, Norfolk, Virginia 23502

(Address of Principal Executive Offices) (Zip Code)

888-772-7326
(Registrant's telephone number, including area code)

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
	[   ]	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
	[   ]	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
	[   ]	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
	[   ]	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2). Emerging growth company [   ]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [   ]

Item 2.02. Results of Operations and Financial Condition.

On August 8, 2017, PRA Group, Inc. (the “Company”) issued a press release announcing its financial results for the second quarter ended June 30, 2017. A copy of the press release is furnished as Exhibit 99.1 to this Form 8-K and is incorporated into this Item 2.02 by reference.

Item 7.01. Regulation FD Disclosure.

The slide presentation being used in connection with the Company’s previously announced August 8, 2017 webcast and conference call to discuss its financial results for the second quarter ended June 30, 2017 is available in the Investor Relations section of the Company’s website at http://ir.pragroup.com/events.cfm.

None of the information furnished in Item 2.02, Item 7.01 or Exhibit 99.1 of this Form 8-K shall be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that Section. Unless expressly set forth by specific reference in such filings, none of the information furnished in this Form 8-K shall be incorporated by reference in any filing under the Securities Act of 1933, as amended, whether made before or after the date hereof and regardless of any general incorporation language in such filings.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

Exhibit 99.1 Press release dated August 8, 2017

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	PRA Group, Inc.
Date: August 8, 2017	By:	/s/ Peter M. Graham
		Peter M. Graham
		Executive Vice President and Chief Financial Officer

EXHIBIT INDEX

Exhibit Number	Description
99.1	Press Release dated August 8, 2017

EX-99.1

EXHIBIT 99.1

PRA Group Reports Second Quarter 2017 Results

NORFOLK, Va., Aug. 08, 2017 (GLOBE NEWSWIRE) -- PRA Group (Nasdaq:PRAA), a global leader in acquiring and collecting nonperforming loans, today reported its financial results for the second quarter of 2017.  The company reported net income of $11.7 million in the second quarter, compared with $36.5 million in the prior year period.  Diluted earnings per share were $0.25 versus $0.79 in the second quarter of 2016.

Second Quarter Business Highlights

• Delivered record quarterly investment in purchased portfolios in Americas Core and Americas Insolvency, outside of a business acquisition.
• Hired almost 900 net new U.S. collectors since June of 2016, including nearly 250 in the second quarter of 2017 alone.
• Plan to open new domestic call centers in order to provide continued, expanded service to customers and sellers. 
• Grew cash collections in all segments on a currency adjusted basis compared with second quarter of 2016 except Americas Insolvency, where cash collections grew sequentially for the first time since the second quarter of 2014. 
• Expanded North American credit facility to $1.2 billion and issued $345 million in convertible senior notes.  Capital available for portfolio purchases of $1.1 billion globally.   

Second Quarter Financial Highlights

• Estimated remaining collections of $5.3 billion consistent with the prior year quarter and an increase of $181 million since the first quarter of 2017. 
• Cash collections of $374.7 million versus $387.2 million in the prior year quarter. 
• Total revenues of $200.3 million versus $228.5 million in the prior year quarter. 
• Income from operations of $48.3 million versus $72.8 million in the prior year quarter.
• Net income of $11.7 million versus $36.5 million in the prior year quarter. 
• Portfolio acquisitions of $295.6 million versus $249.5 million in the prior year quarter.

“We continue to be excited about volumes and the significant level of investment in both Core and Insolvency in the United States.  We are committed to working with customers to resolve their debt and helping sellers optimize the value of their charged-off inventories.  To accommodate larger purchasing volumes, we are preparing to open new call centers in the U.S.,” said Kevin Stevenson, president and chief executive officer.   “During the quarter, we saw growth in currency adjusted cash collection in all segments except for Americas Insolvency, which grew sequentially for the first time in three years.  We are very encouraged by both the industry and internal trends.”

CASH COLLECTIONS AND REVENUES

• The following table presents cash collections by quarter and by source on an as reported and currency adjusted basis:

Cash Collection Source		2017				2016
($ in thousands)	Q2		Q1		Q4		Q3		Q2
Americas-Core	$	217,020	$	226,906	$	193,360	$	210,524	$	213,741
Americas-Insolvency		53,163		49,813		52,988		60,429		67,745
Europe-Core		99,121		98,081		97,429		96,028		102,972
Europe-Insolvency		5,371		5,030		4,974		4,719		2,744
Total Cash Collections	$	374,675	$	379,830	$	348,751	$	371,700	$	387,202
Cash Collection Source -
Constant Currency Adjusted		2017								2016
($ in thousands)	Q2								Q2
Americas-Core	$	217,020							$	214,982
Americas-Insolvency		53,163								67,697
Europe-Core		99,121								96,886
Europe-Insolvency		5,371								2,571
Total Cash Collections	$	374,675							$	382,136

• Currency adjusted cash collections in the quarter increased in all categories except for Americas Insolvency; however, cash collections in Americas Insolvency increased sequentially for the first time since the second quarter of 2014.    
• Net finance receivable revenue was lower than the prior year quarter due in large part to the reduction in finance receivable balances from the elevated allowance charges recorded in 2016 and normal attrition.  This was partially offset by significant portfolio purchases in the first half of 2017. 
• The change in the fee income is primarily the result of the sale of Government Services in the first quarter of 2017 and a decrease in fee income generated by the Claims Compensation Bureau business which experienced an outsized second quarter in 2016. 
• The Company recorded a gain of $1.3 million from the sale of PRA Location Services during the quarter. 

EXPENSES

• Operating expenses decreased from the previous year largely due to decreased legal collection expenses and agency fees.  The decline in legal collection expense resulted primarily from an increased number of lower balance accounts which are less likely to be pursued legally and improvements to the legal selection methodology in the U.S.  The decline in agency fees is primarily the result of the Company establishing a legal collection process in Italy and shifting accounts from regular collections into legal collections. 
• The Company incurred nonrecurring pre-tax charges of $2.3 million in legal fees not associated with normal operations, $1.0 million in expenses related to PRA Location Services and $0.7 million related to the amended and restated North American credit facility and the convertible senior notes issuance. 
• The Company also recorded $1.8 million in pre-tax, noncash interest expense related to its convertible notes whose effective interest rates are 4.92% and 6.20%. 
• Year-to-date tax expense was 39.9% of income before income taxes compared with 32.2% for full-year 2016, due primarily to changes in the mix of earnings and state tax rates.     

PORTFOLIO ACQUISITIONS

• PRA Group invested $295.6 million in new finance receivables in the second quarter. 

Portfolio Purchase Source		2017				2016
($ in thousands)	Q2		Q1		Q4		Q3		Q2
Americas-Core	$	144,871	$	115,166	$	91,800	$	95,452	$	130,529
Americas-Insolvency		100,040		67,123		20,929		16,760		33,723
Europe-Core		42,876		39,505		80,129		34,240		68,835
Europe-Insolvency		7,860		6,020		6,943		14,803		16,410
Total Portfolio Purchasing	$	295,647	$	227,814	$	199,801	$	161,255	$	249,497

Conference Call Information 
PRA Group will hold a conference call today at 5:00 p.m. ET to discuss results with institutional investors and stock analysts.  To listen to a webcast of the call and view the accompanying slides, visit http://ir.pragroup.com/events.cfm.   To listen by phone, call 888-695-7639 in the U.S. or 970-315-0482 outside the U.S.  The conference ID is 63045731.  To listen to a replay of the call until August 15, 2017, call 855-859-2056 in the U.S. or 404-537-3406 outside the U.S. and use conference ID 63045731.                         

About PRA Group
As a global leader in acquiring and collecting nonperforming loans, PRA Group returns capital to banks and other creditors to help expand financial services for consumers in the Americas and Europe. With more than 4,500 employees worldwide, PRA Group companies collaborate with customers to help them resolve their debt. For more information, please visit www.pragroup.com.

About Forward Looking Statements
Statements made herein which are not historical in nature, including PRA Group’s or its management's intentions, hopes, beliefs, expectations, representations, projections, plans or predictions of the future, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.

The forward-looking statements in this press release are based upon management's current beliefs, estimates, assumptions and expectations of PRA Group’s future operations and financial and economic performance, taking into account currently available information. These statements are not statements of historical fact or guarantees of future performance, and there can be no assurance that anticipated events will transpire or that our expectations will prove to be correct. Forward-looking statements involve risks and uncertainties, some of which are not currently known to PRA Group. Actual events or results may differ materially from those expressed or implied in any such forward-looking statements as a result of various factors, including risk factors and other risks that are described from time to time in PRA Group’s filings with the Securities and Exchange Commission including but not limited to PRA Group’s annual reports on Form 10-K, its quarterly reports on Form 10-Q and its current reports on Form 8-K, which are available through PRA Group's website and contain a detailed discussion of PRA Group's business, including risks and uncertainties that may affect future results.

Due to such uncertainties and risks, you are cautioned not to place undue reliance on such forward-looking statements, which speak only as of today. Information in this press release may be superseded by recent information or statements, which may be disclosed in later press releases, subsequent filings with the Securities and Exchange Commission or otherwise. Except as required by law, PRA assumes no obligation to publicly update or revise its forward-looking statements contained herein to reflect any change in PRA Group’s expectations with regard thereto or to reflect any change in events, conditions or circumstances on which any such forward-looking statements are based, in whole or in part.

PRA Group, Inc.
Unaudited Consolidated Income Statements
(in thousands, except per share amounts)
				Three Months Ended						Six Months Ended
				June 30,						June 30,
					2017			2016			2017			2016
Revenues:
	Income recognized on finance receivables, net			$	190,843		$	204,008		$	385,378		$	410,515
	Fee income				6,344			22,347			16,202			38,613
	Other revenue				3,145			2,101			5,310			4,210
		Total revenues			200,332			228,456			406,890			453,338
Operating expenses:
	Compensation and employee services				66,771			64,793			135,239			131,558
	Legal collection expenses				31,202			33,897			62,930			64,029
	Agency fees				9,254			11,309			20,054			22,193
	Outside fees and services				18,061			15,876			31,346			31,684
	Communication				7,254			8,423			16,391			18,305
	Rent and occupancy				3,387			4,038			7,170			7,834
	Depreciation and amortization				5,041			6,085			10,256			12,155
	Other operating expenses				11,046			11,279			21,931			21,930
		Total operating expenses			152,016			155,700			305,317			309,688
		Income from operations			48,316			72,756			101,573			143,650
Other income and (expense):
	Gain on sale of subsidiaries				1,322			-			48,167			-
	Interest expense				(22,506	)		(20,569	)		(43,763	)		(40,528	)
	Foreign exchange (loss)/gain				(2,516	)		2,029			(337	)		179
		Income before income taxes			24,616			54,216			105,640			103,301
		Provision for income taxes			10,766			17,348			42,175			33,580
		Net income		$	13,850		$	36,868		$	63,465		$	69,721
			Adjustment for net income attributable to noncontrolling interests		2,177			412			3,625			1,282
		Net income attributable to PRA Group, Inc.		$	11,673		$	36,456		$	59,840		$	68,439
Net income per common share attributable to PRA Group, Inc.:
	Basic			$	0.25		$	0.79		$	1.30		$	1.48
	Diluted			$	0.25		$	0.79		$	1.29		$	1.48
Weighted average number of shares outstanding:
	Basic				45,941			46,333			46,173			46,288
	Diluted				46,060			46,402			46,344			46,387

PRA Group, Inc.
Consolidated Balance Sheets
(in thousands)
						(unaudited)
						June 30,			December 31,
ASSETS							2017			2016
Cash and cash equivalents						$	92,756		$	94,287
Investments							76,438			68,543
Finance receivables, net							2,520,883			2,307,969
Other receivables, net							11,306			11,650
Income taxes receivable							2,865			9,427
Net deferred tax asset							37,299			28,482
Property and equipment, net							36,532			38,744
Goodwill							516,165			499,911
Intangible assets, net							25,878			27,935
Other assets							40,489			33,808
Assets held for sale							-			43,243
					Total assets	$	3,360,611		$	3,163,999
LIABILITIES AND EQUITY
Liabilities:
	Accounts payable					$	3,694		$	2,459
	Accrued expenses						77,869			82,699
	Income taxes payable						19,793			19,631
	Net deferred tax liability						250,821			258,344
	Interest-bearing deposits						92,479			76,113
	Borrowings						1,899,148			1,784,101
	Other liabilities						3,094			10,821
	Liabilities held for sale						-			4,220
					Total liabilities		2,346,898			2,238,388
Redeemable noncontrolling interest							8,860			8,448
Equity:
		Preferred stock, par value $0.01, authorized shares, 2,000,
			issued and outstanding shares, 0				-			-
		Common stock, par value $0.01, authorized shares, 100,000, issued
			and outstanding shares, 45,166 at June 30, 2017; 100,000 authorized
			shares, 46,356 issued and outstanding shares at December 31, 2016				452			464
		Additional paid-in capital					49,928			66,414
		Retained earnings					1,109,207			1,049,367
		Accumulated other comprehensive loss					(204,213	)		(251,944	)
			Total stockholders' equity - PRA Group, Inc.				955,374			864,301
				Noncontrolling interest			49,479			52,862
				Total equity			1,004,853			917,163
					Total liabilities and equity	$	3,360,611		$	3,163,999

Investor Contact:
Darby Schoenfeld
Vice President, Investor Relations
(757) 431-7913
Darby.Schoenfeld@PRAGroup.com

News Media Contact:
Nancy Porter
Vice President, Corporate Marketing
(757) 431-7950
Nancy.Porter@PRAGroup.com