QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
−Removed: We have operations within the United States, Canada and U.K., and we are exposed to market risks in the ordinary course of our business.
+Added: We have operations within the United States, Canada and the U.K., and we are exposed to market risks in the ordinary course of our business.
Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and interest rates.
28 unchanged sentences
To manage this risk, we utilize our proprietary underwriting models to make lending decisions, score, and price loans in a manner that we believe is reflective of the credit risk.
+Added: Our proprietary model score (“ITACS”) analyzes the characteristics of a consumer's attributes that are shown to be predictive of both willingness and ability to repay including, but not limited to:
+Added: basic features of a consumer's credit profile, a consumer's prior repayment performance with other creditors, current credit utilization, and legal and policy changes.
Other credit levers, such as user limits and/or down payment requirements, are used to determine the likelihood of a consumer being able to pay.
To monitor portfolio performance, we utilize a wide range of internal and external metrics to review user and loan populations.
−Removed: Each week, management reviews performance for each consumer segment, typically split by ITACs model score at the time of origination, financial product originated, age of loan, and delinquency status.
−Removed: Internal performance trendlines are measured against external factors such as unemployment, CPI, and consumer sentiment to determine what changes, if any, in risk strategy is warranted.
+Added: Each week, management reviews performance for each consumer segment, typically split by ITACS score at the time of origination, financial product originated, age of loan, and delinquency status.
+Added: Internal performance trendlines are measured against external factors such as unemployment, CPI, and consumer sentiment to determine what changes, if any, in risk strategy are warranted.
As of June 30, 2026 and June 30, 2025, we were exposed to credit risk on $9.6 billion and $7.0 billion, respectively, of loans held within our consolidated balance sheet.
1 unchanged sentence
As of both June 30, 2026 and June 30, 2025, approximately 11% of loan receivables related to consumers residing in the state of California.
−Removed: Approximately 10% of loan receivables related to customers residing in the state of Texas as of June 30, 2025 but did not exceed 10% as of June 30, 2024.
+Added: As of June 30, 2026 and June 30, 2025, approximately 11% and 10% of loan receivables related to consumers residing in the state of Texas, respectively.
No other states or provinces exceeded 10%.
−Removed: In addition, we have credit risk exposure related to certain off-balance sheet loans sold to third parties where we have entered into risk sharing arrangements, retained interests in unconsolidated securitization trusts and our residual interests in structured transactions.
−Removed: As of June 30, 2025 and June 30, 2024, we have sold $8.6 billion and $4.2 billion, respectively, in unpaid principal balance loans which are subject to risk sharing arrangements, of which our maximum exposure to losses was $91.1 million and $81.2 million, respectively.
−Removed: This amount includes our maximum potential loss with respect to risk sharing liabilities of $24.5 million and the fair value of risk sharing assets of $66.6 million, as of June 30, 2025.
−Removed: The fair value of notes receivable and residual trust certificate retained interests in unconsolidated securitization trusts was $75.5 million and $51.7 million as of June 30, 2025 and June 30, 2024, respectively, of which our maximum exposure to losses was $76.9 million and $51.9 million, respectively.
+Added: In addition, we have credit risk exposure in relation to certain off-balance sheet loans sold to third parties where we have entered into risk sharing arrangements, retained interests in unconsolidated securitization trusts and our residual interests in structured transactions.
+Added: As of June 30, 2026 and June 30, 2025, the unpaid principal balance of loans sold subject to risk sharing arrangements was $4.2 billion and $8.6 billion, respectively, of which our maximum exposure to losses was $52.7 million and $91.1 million, respectively.
+Added: The fair value of notes receivable and residual trust certificate retained interests in unconsolidated securitization trusts was $68.4 million and $75.5 million as of June 30, 2026 and June 30, 2025, respectively.
The fair value of residual interests in structured transactions was $5.6 million as of June 30, 2026, of which our maximum exposure to losses was $16.7 million.
4 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.