8 unchanged sentences
Because our investment policy is to invest in conservative liquid investments and because our business strategy does not rely on generating material returns from our investment portfolio, we do not expect our market risk exposure on marketable debt securities to be significant.
−Removed: Continued volatility in interest rates and inflation, which may persist longer than previously expected, may adversely impact our customers’ spending levels, and ability and willingness to pay outstanding amounts owed to us.
+Added: Continued volatility in interest rates and inflation, which may persist longer than previously expected, may adversely impact our consumers’ spending levels, and ability and willingness to pay outstanding amounts owed to us.
Higher interest rates may lead to higher payment obligations on our future credit products but also for consumers’ other financial commitments, including their mortgages, credit cards, and other types of loans.
12 unchanged sentences
Some of these contracts are designated as cash flow hedges for accounting purposes.
−Removed: For those contracts designated as cash
−Removed: flow hedges, the effective portion of the gain or loss on the derivatives is recorded in other comprehensive income (loss) and is reclassified into funding costs in the same period the hedged transaction affects earnings.
+Added: For those contracts designated as cash flow hedges, the effective portion of the gain or loss on the derivatives is recorded in other comprehensive income (loss) and is reclassified into funding costs in the same period the hedged transaction affects earnings.
Factoring in the interest rate risk management program and the repricing of investment securities, as of June 30, 2024, we estimate that a hypothetical instantaneous 100 basis point upward parallel shock to interest rates would have a less than $50.0 million adverse impact on our cash flows associated with our market risk sensitive instruments over the next 12 months.
7 unchanged sentences
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 customer segment, typically split by ITACs model score, financial product originated, age of loan, and delinquency status.
+Added: Each week, management reviews performance for each consumer segment, typically split by ITACs model score, financial product originated, age of loan, and delinquency status.
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.
1 unchanged sentence
Loan receivables are diversified geographically.
−Removed: As of June 30, 2023 and June 30, 2022, approximately 11% and 12%, respectively, of loan receivables related to customers residing in the state of California, respectively.
+Added: As of both June 30, 2024 and June 30, 2023, approximately 11% of loan receivables related to consumers residing in the state of California.
No other states or provinces exceeded 10%.
+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 and through our retained interests in unconsolidated securitization trusts.
+Added: As of June 30, 2024 and June 30, 2023, we have sold $4.2 billion and $0.4 billion, respectively, unpaid principal balance of loans which are subject to risk
+Added: sharing arrangements, of which our maximum exposure to losses was $81.2 million and $8.2 million, respectively.
+Added: This amount includes our maximum potential loss with respect to risk sharing liabilities of $47.3 million and the fair value of risk sharing assets of $33.9 million, as of June 30, 2024.
+Added: The fair value of notes receivable and residual trust certificate retained interests in unconsolidated securitization trusts was $51.7 million and $18.9 million as of June 30, 2024 and June 30, 2023, respectively.
We are also exposed to credit risk in the event of nonperformance by the financial institutions holding our cash and the issuers of our cash equivalents and available for sale securities.
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.