Encore Capital Acquires Collection Call Center and $2.9 billion Card Portfolio From CompuCredit

SAN DIEGO - Encore Capital Group, Inc. (Nasdaq: ECPG), a leading accounts receivable management firm, today announced an acquisition of assets from Jefferson Capital, a subsidiary of CompuCredit Corporation (Nasdaq: CCRT).

Encore Capital Group has acquired the following assets for a total purchase price of $142.8 million in cash:

• A portfolio of charged-off consumer credit card debt with a face value of approximately $2.9 billion

• An agreement to purchase an additional $3.25 billion in face value of fresh, credit card charge-offs from Jefferson Capital over the next five years at a fixed price

• A new collection site in St. Cloud, Minnesota with approximately 120 employees, most of whom are collection staff

As part of the transaction, Encore has extended its existing agreement to sell Chapter 13 bankruptcies to Jefferson Capital for an additional two years and agreed to provide Jefferson Capital with a prescribed number of accounts on a monthly basis for its balance transfer program.

"We are very pleased to complete this agreement, which we believe will provide value to both parties and furthers each company's strategic goals," said Carl C. Gregory, III, Vice Chairman and CEO of Encore Capital Group. "This transaction represents a strategic shift in our approach to acquiring portfolios of receivables to deal with the market as we expect it to exist for the foreseeable future, and we believe it will help us to more effectively generate profitable growth in the current operating environment as well as in future years. Through this transaction, we have established a unique long-term partnership with a high quality company that we believe creates a significant competitive advantage and will yield excellent results for both Encore and Jefferson Capital for many years."

"The immediate acquisition largely satisfies our purchasing goals for 2005 and will allow us to be highly selective in our purchasing for the remainder of the year," said Brandon Black, President and COO of Encore Capital Group. "The five-year commitment will also provide the Company with a consistent flow of fresh charge-offs. This enables us to lock-in a meaningful portion of our future purchases on terms we consider attractive, and we can now focus on utilizing our sophisticated consumer level analytics to maximize collections. Importantly, as a part of this transaction, we are very pleased to add an experienced, seasoned group of collectors to our staff, and we expect their efforts will have a positive impact on the Company."

The initial $2.9 billion portfolio is comprised of receivables across the spectrum from active-paying accounts to accounts that are bankrupt and deceased. A large percentage of the accounts were originated by issuers from whom Encore has purchased portfolios in the past, and on which the Company has had good collection success. The anticipated collection multiple assigned to this new portfolio will be consistent with the multiples assigned to the Company's purchases over the past two quarters.

To facilitate this transaction, Encore Capital Group entered into a new three-year, $150 million revolving credit facility with JPMorgan Chase Bank, N.A. that includes an accordion feature for another $50 million that will not be exercised initially. The terms of this credit facility are substantially the same as the $75 million facility it replaces.

Additionally, Encore Capital Group also announced that it invested $21.0 million in May to purchase another portfolio of credit card receivables from a separate issuer.

Financial Impact
Given the Company's efforts to create unique purchasing opportunities such as the acquisition announced today, purchases of new portfolios of receivables have been limited through the first five months of the year. As a result of the limited purchasing volume during this period, and the timing of the acquisition of the initial $2.9 billion portfolio being relatively late in the quarter, the Company expects earnings per share for the second quarter to be between $0.26 and $0.30.

The new portfolio purchases are expected to produce strong growth in collections, revenue and earnings per share in the second half of 2005. The Company believes that the strong second half will result in full year 2005 earnings per share ranging between $1.25 and $1.33 based upon the Company's current collection, purchasing and expense assumptions, and the finalization of purchase price allocation for this transaction.

Although it remains the Company's general policy not to provide earnings per share estimates, given the size, nature and timing of the transaction announced today, the Company believed it appropriate to offer the foregoing guidance.