Encore Overview – November 2024
Encore Overview
Legal Disclaimers
The statements in this presentation that are not historical facts, including, most importantly, those statements preceded by, or that include, the words "will," "may," "believe," "projects," "expects," "anticipates" or the negation thereof, or similar expressions, constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 (the "Reform Act"). These statements may include, but are not limited to, statements regarding our future operating results (including portfolio purchase volumes, collections and cash generation), supply, portfolio pricing, returns, run rates, tax rates, the consumer credit cycle and the impacts of inflation, interest rates and other macroeconomic
factors. For all "forward-looking statements," the Company claims the protection of the safe harbor for forward-looking statements contained in the Reform Act. Such forward-looking statements involve risks, uncertainties and other factors which may cause actual results, performance or achievements of the Company and its subsidiaries to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These risks, uncertainties and other factors are discussed in the reports filed by the Company with the
|
2 |
Introduction to Encore
|
|
3 |
Who We Are
Encore's primary business is the purchase and collection of
7400
charged-off consumer debt in the
Encore
|
Consumer |
Consumer |
Issuers |
|||
|
sell |
|||||
|
debt is |
debt is |
||||
|
charged- |
|||||
|
issued |
charged off |
||||
|
off debt |
|||||
Consumer Credit Ecosystem
Encore
purchases
and collects
on charged-off
debt
Engages consumers in
collection activities
Consumer-
centric
approach
Proprietary advanced analytics
Operational
expertise
Amount of capital returned to the
portfolio purchases since our inception
|
|
4 |
Encore at a Glance
|
Business overview |
Main trading brands |
- Based in
San Diego, CA , Encore provides debt recovery solutions for consumers across a broad range of assets -
- MCM is a market leader in portfolio purchasing and recovery in
the United States - Cabot is one of the largest credit management services providers in
Europe and theUK
- MCM is a market leader in portfolio purchasing and recovery in
- Publicly traded NASDAQ Global Select company (ticker: ECPG) with a market capitalization of
~$1.1bn - Purchases portfolios of defaulted consumer receivables from credit originators, including banks, credit unions, consumer finance companies and commercial retailers
- Partners with individuals as they repay their debt obligations, helping them towards financial recovery and improving their economic well-being
|
Capital Deployed |
ERC(1) |
|
LTM Deployments thru Q3 2024 |
Q3 2024 180m ERC |
|
Total |
Total |
Parent company (publicly traded)
|
|
|
|
Operating |
Operating predominantly in |
|
in |
the |
|
Collections |
Revenues |
|
LTM Collections thru Q3 2024 |
LTM Revenues thru Q3 2024 |
|
Total |
Total |
21%
79%
|
|
|
|||
|
43% |
||||
|
Other |
28% |
Other |
||
|
1% |
||||
|
|
<1% |
|||
|
|
||||
|
72% |
||||
|
56% |
||||
Source: Company filings. Market data as of
- ERC represents total estimated remaining gross collections including real-estate owned assets.
- Represents servicing revenue and other revenues.
- DP (debt purchasing) represents revenues from owned receivable portfolios.
Other (2) 8%
DP (3)
92%
5
Our Mission, Vision and Values
|
Mission |
Values |
Creating pathways to economic freedom
Vision
We help make credit accessible by partnering with consumers to restore their financial health
We Care
We put people first and engage with honesty, empathy and respect
We Find a
We deliver our best in everything we do, find ways to make a positive difference, and achieve impactful results
We are Inclusive and Collaborative
We embrace our differences and work together to ensure every individual can thrive
|
|
6 |
Our large data sets feed proprietary predictive models to optimize valuation, pricing and account level collection strategies
|
We use channel-specific |
||
|
models to optimize operations, |
||
|
Our core competency in understanding the payment behavior |
strategies and profitability |
|
|
on an account level |
||
|
of distressed consumers is influenced by consumers' |
||
|
perceived willingness and ability to pay |
||
|
Digital |
||
|
Consumer |
Call Center |
|
|
behavior |
||
|
research |
||
|
Portfolio |
Servicing |
Direct Mail |
|
valuation |
||
|
channel |
||
|
Pre-purchase |
||
|
optimization |
||
|
model |
Legal |
|
|
Market data |
|
|
|
and insights |
||
|
No effort |
Continuous feedback between operations, servicing strategies and valuation
|
|
7 |
Our Strategy and Financial Priorities
|
|
8 |
Our Business and Our Strategy
Our Business
- Purchase NPL portfolios at attractive cash returns
- Focus on the consumer and ensure the highest level of compliance
- Meet or exceed collection expectations
- Maintain efficient cost structure
- Minimize cost of funding
Our Strategy
- Market Focus
- Competitive Advantage
- Balance Sheet Strength
|
|
9 |
First Pillar of Our Strategy - Market Focus
Concentrating on our most valuable markets with the highest risk-adjusted returns
- Target market characteristics:
-
- Large, consistent flow of purchasing opportunities
- Strong regulatory framework
- Sophistication and data availability
- Stable, long-term returns
- Thrive on recurring portfolio sales through the credit cycle: Our success does not rely on large macro events
- Currently focusing capital allocation in the
U.S. due to favorable purchasing environment - Constraining Cabot purchases until returns in
U.K. andEurope improve
|
|
10 |
Attachments
Disclaimer
PBM Math: Big Chains Are Paid $23.55 To Fill a Blood Pressure Rx. Small Drugstores? $1.51.
A Look at Government Cyber Insurance Prospects in 2024
Advisor News
- Social cultivation: How to talk with wealthy prospects
- How important is a written financial plan?
- Coalition wants to advise people impacted by policy changes in new administration
- Diagnosing miscommunication in retirement planning
- Election creates an opportunity for advisor/client dialogue
More Advisor NewsAnnuity News
Health/Employee Benefits News
- As Medicare Advantage plans pull out of rural areas, patients stand to lose access to critical care
- Beware of scams during open enrollment for insurance
- Vermonters may be eligible for better health coverage
- Munson Healthcare offers help for Affordable Care Act enrollment
- Doctor’s bills often come with sticker shock for patients – but health insurance could be reinvented to provide costs upfront
More Health/Employee Benefits NewsLife Insurance News