Good afternoon, and welcome to the PRA Group's Third Quarter 2022 Conference Call. All participants will be in a listen-only mode. [Operator Instructions] Please note that this event is being recorded. Now I'd like to turn the conference over to Mr. Najim Mostamand, Vice President of Investor Relations for PRA Group. Please go ahead.

All right. Thank you, operator. Good evening, 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 all be found on the Investor Relations section of our website at www.pragroup.com. Additionally a replay of this call will be available shortly after its conclusion and the replay dial-in information is included in the earnings press release. All comparisons mentioned today will be between Q3 2022 and Q3 2021, unless otherwise noted and our Americas results include Australia. During our call, we will discuss adjusted EBITDA and debt to adjusted EBITDA for the 12 months ended September 30 2022 and December 31, 2021. Please refer to today's earnings release and the appendix of the slide presentation used during this call for a reconciliation of these non-GAAP financial measures to the most directly comparable US GAAP financial measures. And with that I'd now like to turn the call over to Kevin Stevenson, our President and Chief Executive Officer.

Thank you, Najim. And thank you everyone for joining us this evening. It's great to be providing another update on the PRA Group, especially as we move further into the next phase of the consumer credit cycle. Companies of all sizes in virtually every sector are preparing for an economic downturn and we are doing the same. We've talked about this many times before, but it's worth reminding everyone, that an economic downturn is where we actually become more important. We've seen this throughout our 26-year history and regardless of whether that downturn was dotcom-driven, mortgage-driven, inflation-driven. And also we are preparing for such an environment with a continued focus on deploying capital profitably, maintaining a strong and conservative balance sheet and remain committed to delivering long-term results. Turning now to Q3, which represented another solid quarter, driven once again by the performance of our European operations. Total cash collections were $412 million globally, a 16% decrease year-over-year, as we're seeing the impact of lower volumes of portfolios offered for sale. And thus lower purchases. We are also experiencing significant impact from foreign currency changes. And on a constant currency adjusted basis that decrease in collections was about 11%. Despite this we beat our internal expectations again this quarter. It's really no surprise that with the dollar continuing to strengthen against other currencies that global companies like PRA Group are focusing more on constant currency results. On a GAAP basis, European cash collections declined 11% year-over-year. The stronger dollar created a headwind of $26 million during the quarter. Excluding the foreign exchange impact however, we had another strong quarter with European cash collections increasing 4%. This is driven by our strong investments in Europe over the past couple of years, especially in Northern Europe. Net income for the quarter was…

Thanks, Kevin. Total revenues were $245 million for the quarter. Total portfolio revenue was $234 million, with portfolio income of $186 million and changes in expected recoveries of $48 million. During the quarter, we collected $28 million in excess of our expected recoveries, which represented consolidated overperformance of 6%, with Americas overperforming by 3% and Europe overperforming by 12%. We continue to observe more normalized collections with sustained overperformance in certain vintages. This has given us the confidence to modestly increase our ERC forecast for those vintages, which drove a positive change in estimate of $20 million. Fee income, in combination with other revenue, were a little higher than normal this quarter, driven by the timing of settlements of purchased claims for a case handled by our CCB subsidiary. This is a solid business for us, but we do experience upticks in revenues in periods when settlements are completed and distributed. Operating expenses were $174 million, a $12 million decrease, driven primarily by decreases in outside fees and services, compensation and employee services, as well as the strengthening of the US dollar against European currencies. Net interest expense for the third quarter was $32 million, an increase of $3 million compared to the third quarter of 2021, primarily reflecting increased interest rates. I talked last quarter about our interest rate hedging program, which is worth repeating in light of the continued rising interest rates we're seeing globally. On a consolidated basis, we're approximately 69% hedged. So we've mitigated roughly two-thirds of the impact of interest rate increases, but we will feel some impact of higher interest costs going forward. The effective tax rate for the quarter was 29% and we still expect the full year rate to be in the low 20% range. The higher rate this quarter was largely…

Thank you, Pete. Q3 was another solid quarter for PRA Group. We produced strong revenue and net income, and we continued to execute on our strategic objectives. Our balance sheet remains strong. We are prepared for meaningful supply and increase in supply. And we remain disciplined in how we allocate capital, which has contributed to our success for more than two decades. And speaking of our long history, we're excited to be celebrating our 20th anniversary as a NASDAQ-listed company this upcoming Monday in New York City. Our leadership team will be participating in the ringing of the closing bell, commemorating the special milestone in our history. Over the past 26 years, we have a proven track record of success, effectively navigating the company through many different economic environments, including the global financial crisis and the COVID-19 pandemic. Since, we went public in 2002. We have grown ERC from $200 million to over $5 billion today while growing revenues from $56 million to over $1 billion last year, which was a record year for us in terms of collections revenue cash efficiency and net income. We look forward to celebrating many more milestones such as these and we believe that our best days are yet still ahead of us. But no matter where we find ourselves in this journey we will continue to deliver on our strategic objectives deploy capital profitably, efficiently collect on our portfolios and deliver incremental value to our shareholders. With that, I thank you all for listening and putting your trust in us to guide PRA Group in this next chapter of evolution. Operator, we're now ready for questions.

Well, again, thank you very much everyone for attending the call today. No questions is a little unusual for us, but we're pleased that our prepared comments, hopefully answered all the questions, and we look forward to speaking to you on the next call. Thank you.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.