8 unchanged sentences
We leverage data, analytics, and innovative technology to unlock access to financial solutions for the millions of Americans who would otherwise be underserved.
−Removed: According to data published by Experian, 40% of Americans had FICO® scores of less than 700.
−Removed: We believe this equates to a population of over 100 million everyday Americans in need of access to credit.
−Removed: These consumers often have financial needs that are not effectively met by larger financial institutions.
By facilitating appropriately priced consumer credit and financial service alternatives with value-added features and benefits curated for the unique needs of these consumers, we endeavor to empower better financial outcomes for Everyday Americans.
12 unchanged sentences
In this Report, "receivables" or "loans" typically refer to receivables we have purchased from our bank partners or from other third parties.
−Removed: On September 11, 2025, the Company closed the acquisition of all outstanding equity interests of Mercury, a leading data- and tech-centric credit card platform utilized by bank partners to provide credit cards to near-prime consumers in the U.S.
+Added: On September 11, 2025, the Company acquired all outstanding equity interests of Mercury, a leading data- and tech-centric credit card platform utilized by bank partners to provide credit cards to near-prime consumers in the U.S.
The acquisition aligns with Atlanticus’ strategic objective to expand its consumer credit offerings and increase scale within its credit card operations.
At the closing, Mercury became a wholly owned subsidiary of Atlanticus.
−Removed: The acquisition of Mercury adds an established top 25 credit card program to the suite of programs that Atlanticus manages on behalf of bank partners.
−Removed: Mercury’s credit card offerings, including Mercury branded and co-branded programs, complements Atlanticus’ general purpose credit card, retail credit, patient financing, and dealer solutions products.
−Removed: Total purchase consideration was approximately $166.5 million in cash.
−Removed: In addition to the purchase consideration, the seller has the opportunity under the purchase agreement to receive earn out payments for up to three years following the closing of the acquisition in an amount equal to 75% of the amount by which the charge-offs of Mercury’s acquired receivables are less than agreed-upon charge-off levels.
−Removed: We have determined the contingent consideration meets the definition of a derivative instrument under ASC 815.
−Removed: We have recorded the derivative at fair value calculated using internally-developed estimates.
−Removed: These estimates on performance of the acquired portfolio include expected credit losses, payment rates, servicing costs, discount rates and yields earned on our general purpose credit card receivables.
−Removed: See Note 7, "Fair Values of Assets and Liabilities" for more information.
−Removed: As a result of the acquisition, the Company added approximately 1.3 million credit card accounts and $3.2 billion in credit card receivables.
−Removed: These receivables have been included with our existing general purpose credit card receivables in our reported results of operations and other discussions below.
+Added: The acquisition of Mercury added an established top 25 credit card program to the suite of programs that Atlanticus manages on behalf of bank partners.
+Added: Mercury’s credit card offerings, including Mercury-branded and co-branded programs, complement Atlanticus’ general purpose credit card, retail credit, patient financing, and dealer solutions products.
Credit as a Service Segment
−Removed: Currently, within our CaaS segment, we apply our technology solutions, in combination with the experiences gained, and infrastructure built from servicing $48 billion in consumer loans over more than 25 years of operating history, to support lenders in offering more inclusive financial services.
+Added: Currently, within our CaaS segment, we apply our technology solutions, in combination with the experiences gained, and infrastructure built from servicing approximately $52 billion in consumer loans over more than 30 years of operating history, to support lenders in offering more inclusive financial services.
These products include private label credit cards using the Fortiva and Curae brand names as well as merchant associated brands.
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None of these companies are publicly-traded and the carrying value of our investment in these companies is not material.
−Removed: One of these companies, Fintiv Inc., has sued Apple, Inc., Walmart, Inc., and PayPal Holdings, Inc.
+Added: One of these companies, Fintiv Inc., has sued Apple, Inc., and Walmart, Inc.
for patent infringement.
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We have made meaningful changes to our practices over the past several years, and because our account management practices are evolutionary and dynamic, it is possible that we may make further changes to these practices, some of which may produce positive, and others of which may produce adverse, effects on our operating results and financial position.
−Removed: Customers at the lower end of the credit score range intrinsically have higher loss rates than do customers at the higher end of the credit score range.
+Added: Customers at the lower end of the credit score range intrinsically have higher loss rates than customers at the higher end of the credit score range.
As a result, the products we support are priced to reflect expected loss rates for our various risk categories.
−Removed: See "Consumer and Debtor Protection Laws and Regulations—CaaS Segment" in Part I, Item 1 of our Annual Report on Form 10-K and "We operate in a heavily regulated industry" in Part II, Item 1A, "Risk Factors" contained in this Report.
+Added: See "Consumer and Debtor Protection Laws and Regulations—CaaS Segment" in Part 1, Item 1 of our Annual Report on Form 10-K and "We operate in a heavily regulated industry" in Part II, Item 1A, "Risk Factors" contained in this Report.
Subject to possible disruptions caused by the uncertain economic environment, we believe that our private label credit and general purpose credit card receivables are generating, and will continue to generate, attractive returns on assets, thereby facilitating debt financing under terms and conditions (including advance rates and pricing) that will support attractive returns on equity, and we continue to pursue growth in this area.
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We offer a number of other products to our network of buy-here, pay-here dealers (including our floor-plan financing offering), but the majority of our activities are represented by our purchases of auto loans at discounts and our servicing of auto loans for a fee.
−Removed: As of September 30, 2025, our CAR operations served over 690 dealers in 33 states and two U.S.
+Added: As of March 31, 2026, our CAR operations served 700 dealers in 34 states and two U.S.
The core operations continue to achieve profitability and generate positive cash flows.
CONSOLIDATED RESULTS OF OPERATIONS
−Removed: For the Three Months Ended September 30,
−Removed: Increases (Decreases)
−Removed: (In Thousands)
−Removed: from 2024 to 2025
−Removed: Total operating revenue and other income
−Removed: Other non-operating income
−Removed: Interest expense
−Removed: Provision for credit losses
−Removed: Changes in fair value of loans at fair value
−Removed: Operating expenses:
−Removed: Salaries and benefits
−Removed: Card and loan servicing
−Removed: Marketing and solicitation
−Removed: Depreciation and amortization
−Removed: Total operating expenses:
−Removed: Net loss attributable to noncontrolling interests
−Removed: Net income attributable to controlling interests
−Removed: Net income attributable to controlling interests to common shareholders
−Removed: For the Nine Months Ended September 30,
+Added: For the Three Months Ended March 31,
Increases (Decreases)
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Total operating expenses:
−Removed: Net loss attributable to noncontrolling interests
+Added: Net (income) loss attributable to noncontrolling interests
Net income attributable to controlling interests
−Removed: Net income attributable to controlling interests to common shareholders
−Removed: Three and Nine Months Ended September 30, 2025 Compared to Three and Nine Months Ended September 30, 2024
+Added: Net income attributable to common shareholders
+Added: Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025
Total operating revenue and other income.
1 unchanged sentence
1) interest income, finance charges and late fees on consumer loans, 2) other fees on credit products including annual and merchant fees and 3) interchange and servicing income on loan portfolios and other customer related fees.
−Removed: Period-over-period results primarily relate to growth in private label credit and general purpose credit card products, the receivables of which increased to $6,600.1 million as of September 30, 2025, from $2,653.8 million as of September 30, 2024.
−Removed: Growth in these receivables includes general purpose credit card receivables associated with our acquisition of Mercury, which added $3,159.9 million in receivables as of September 30, 2025 and contributed $49.9 million to the period ending Total operating revenue and other income.
−Removed: Absent this acquisition, receivables were $3,440.2 million as of September 30, 2025.
−Removed: We experienced growth in total operating revenues for both our general purpose credit card and our private label credit receivables for the three and nine months ended September 30, 2025, when compared to the same period in 2024.
−Removed: These increases were primarily due to quarterly growth in both new credit card and private label customers serviced, the total active accounts of which increased over 775,000 as of September 30, 2025 when compared to September 30, 2024 (excluding those serviced accounts added as part of our acquisition of Mercury) and also due to the recognition of merchant fees associated with new private label receivable acquisitions, which increased $8.7 million and $37.8 million, for the three and nine months ended September 30, 2025, respectively, from the same periods in 2024.
−Removed: For our general purpose credit card receivables, we experienced strong growth in finance and fee income (increasing $73.5 million and $158.8 million for the three and nine months ended September 30, 2025, respectively, compared to the same periods in 2024) resulting from growth in the acquisition of receivables and our acquisition of Mercury.
+Added: Period-over-period results primarily relate to growth in private label credit and general purpose credit card products, the receivables of which increased to $6,724.9 million as of March 31, 2026, from $2,706.3 million as of March 31, 2025.
+Added: Growth in these receivables includes general purpose credit card receivables associated with our acquisition of Mercury, which totaled $3,078.7 million in receivables as of March 31, 2026.
+Added: Excluding the receivables acquired pursuant to this acquisition, receivables were $3,646.2 million as of March 31, 2026.
+Added: We experienced growth in total operating revenues and other income for both our general purpose credit card and our private label credit receivables for the three months ended March 31, 2026, when compared to the same period in 2025.
+Added: These increases were primarily due to quarterly growth in both new credit card and private label customers serviced, the total active accounts of which increased by over 900,000 as of March 31, 2026 when compared to March 31, 2025 (excluding those serviced accounts added as part of our acquisition of Mercury).
+Added: This growth in customers served resulted in an increase in substantially all finance and fee categories from the same period in 2025.
+Added: Our acquisition of Mercury contributed an additional $224.4 million to our quarter-over-quarter growth in Total Operating revenue and other income.
The relative mix of receivable acquisitions can lead to some variation in our corresponding revenue as general purpose credit card receivables typically generate higher gross yields than private label credit receivables do.
−Removed: We are currently experiencing continued period-over-period increases in private label credit and general purpose credit card receivables.
−Removed: Therefore, we expect net period-over-period growth in our total interest income and related fees for these operations throughout 2025.
−Removed: During 2024 and so far in 2025, we experienced higher growth rates for our private label credit receivables than for our general purpose credit card receivables.
−Removed: While the products are designed to provide for similar net returns, private label receivables typically generate lower gross yields and lower gross losses than our general purpose credit card receivables.
−Removed: This growth in private label credit receivables, relative to growth in general purpose credit card receivables offset some of the increased fee and finance pricing requirements discussed above.
−Removed: As our private label credit receivables growth is typically strongest during the second and third quarters of each year, we expect some seasonal contraction in that portfolio in the fourth quarter of 2025.
−Removed: Growth in our general purpose credit card receivables is expected to continue for the remainder of the year and outpace growth in our private label credit receivables as we continue to expand our marketing efforts.
−Removed: Additionally, as part of our acquisition of Mercury, we are currently enacting a number of product, policy and pricing changes on the newly acquired portfolio of general purpose credit card receivables.
−Removed: These changes should result in meaningful additions to our Total operating revenue and other income in 2026 and beyond, although certain of the changes will take several quarters to be fully realized.
+Added: We experienced period-over-period increases in private label credit and general purpose credit card receivables.
+Added: During 2025, we experienced higher growth rates for our private label credit receivables than for our general purpose credit card receivables.
+Added: While the products are designed to provide for similar net returns, private label credit receivables typically generate lower gross yields and lower gross losses than our general purpose credit card receivables.
+Added: As our private label credit receivables growth is typically strongest during the second and third quarters of each year, we expect seasonal contraction in receivable acquisitions for that portfolio in other quarters.
+Added: Growth in our general purpose credit card receivables is expected to continue throughout 2026 and to outpace growth in our private label credit receivables as we continue to expand our marketing efforts.
+Added: We currently expect our private label credit receivable balance to increase modestly in 2026 as volumes of receivables acquisitions, for which we have limited loss exposure due to agreements with retail partners, are expected to slow.
+Added: Additionally, as part of our acquisition of Mercury, we have and continue to enact a number of product, policy and pricing changes on the newly acquired portfolio of general purpose credit card receivables.
+Added: We expect these changes to result in increased yield for this portfolio and result in additions to our Total operating revenue and other income in 2026 and beyond.
+Added: Certain of the product, policy and pricing changes, and their impact on the acquisition of new receivables, will take several quarters to be fully realized.
Future periods’ growth is dependent on the addition of new retail partners to expand the reach of private label credit operations as well as growth within existing partnerships and the level of marketing investment for the general purpose credit card operations.
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Growth in customer related fees was largely due to the use of new marketing channels which increased customer engagement with these products.
−Removed: When coupled with increases in interchange revenues which are largely impacted by growth in our receivables, this resulted in an increase in this category of revenues for the three and nine months ended September 30, 2025, when compared to the same periods in 2024.
+Added: When coupled with increases in interchange revenues, which are largely impacted by growth in our receivables, this resulted in an increase in this category of revenues for the three months ended March 31, 2026, when compared to the same period in 2025.
See Note 2, "Significant Accounting Policies and Condensed Consolidated Financial Statement Components" to our condensed consolidated financial statements for additional information related to this revenue from contracts with customers.
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Interest expense.
−Removed: Variations in interest expense are due to new borrowings and increased costs of capital associated with growth in private label credit and general purpose credit card receivables and CAR operations as evidenced within Note 10, "Notes Payable," to our condensed consolidated financial statements, offset by our debt facilities being repaid commensurate with net liquidations of the underlying credit card, auto finance and installment loan receivables that serve as collateral for the facilities.
−Removed: Outstanding notes payable, net of unamortized debt issuance costs and discounts, associated with our private label credit and general purpose credit card platform increased to $5,297.3 million as of September 30, 2025, from $1,976.8 million as of September 30, 2024.
−Removed: This growth, period over period, included notes payable associated with our Mercury acquisition of $2,813.0 million as of September 30, 2025.
−Removed: Interest expense increased $33.0 million and $61.2 million for the three and nine months ended September 30, 2025, respectively, when compared to the three and nine months ended September 30, 2024.
−Removed: The majority of this increase in interest expense relates to the addition of multiple credit facilities in 2024 and 2025 associated with growth in our card and loan receivables, coupled with the issuances of 9.25% Senior Notes due 2029 (the "2029 Senior Notes") and our recent issuance of $400.0 million aggregate principal amount of 9.750% Senior Notes due 2030 (the "2030 Senior Notes").
−Removed: Recent increases in the effective interest rates on debt have increased our interest expense as we have raised additional capital (or replaced existing facilities) over the last two years.
−Removed: We anticipate additional debt financing over the next few quarters as we continue to grow coupled with higher effective interest rates on new debt compared to rates on maturing debt.
−Removed: As such, and when coupled with the interest expense associated with the acquired Mercury debt facilities, we expect our quarterly interest expense for these operations to increase compared to prior periods.
+Added: Variations in interest expense are due to new borrowings and increased costs of capital associated with growth in private label credit, general purpose credit card receivables, and CAR operations as evidenced within Note 9, "Notes Payable," to our condensed consolidated financial statements, as well as the addition of Mercury and its associated collateralized borrowings.
+Added: This growth was partially offset by our debt facilities being repaid commensurate with net liquidations of the underlying credit card, auto finance and installment loan receivables that serve as collateral for the facilities.
+Added: Outstanding notes payable, net of unamortized debt issuance costs and discounts, associated with our private label credit and general purpose credit card platform (including those associated with the Mercury acquisition) increased to $5,606.7 million as of March 31, 2026, from $2,137.6 million as of March 31, 2025.
+Added: This growth, period-over-period, included notes payable of $2,747.6 million associated with our Mercury acquisition as of March 31, 2026.
+Added: Interest expense increased $75.2 million for the three months ended March 31, 2026, when compared to the three months ended March 31, 2025.
+Added: The majority of this increase in interest expense relates to the addition of multiple credit facilities in 2025 associated with growth in our card and loan receivables, coupled with the issuance of $400.0 million aggregate principal amount of 9.750% Senior Notes due 2030 (the "2030 Senior Notes").
+Added: Increases in the effective interest rates on debt have impacted our interest expense as we have raised additional capital (or replaced existing facilities) over the last two years.
+Added: We anticipate additional debt financing over the next few quarters as we continue to grow our receivables.
+Added: As such, and when coupled with the interest expense associated with the acquired Mercury debt facilities, we expect our quarterly interest expense to increase compared to prior periods throughout 2026.
Provision for credit losses.
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All proceeds received associated with charged-off accounts, are credited to the allowance for credit losses.
−Removed: We have experienced a period-over-period decrease of $3.1 million and $5.3 million in our provision for credit losses (when comparing the three and nine months ended September 30, 2025 to the same periods in 2024) primarily associated with lower receivable balances and decreases in loss estimates associated with our Auto Finance segment's floorplan loans.
+Added: We have experienced a period-over-period increase of $0.5 million in our provision for credit losses (when comparing the three months ended March 31, 2026 to the same period in 2025) as losses remained relatively modest between periods and estimates for our receivables future losses have remained consistent, with no significant changes in receivable balances.
Most risk of loss in our Auto Finance segment is widely diversified with consumer auto loans across the U.S.
1 unchanged sentence
We take several steps to mitigate this risk including holding title to the underlying collateral, ongoing reassessments of collateral value and regular audits at participating dealer locations.
−Removed: Nevertheless, the timing of losses is difficult to predict.
−Removed: Recent stress noted at some dealer locations is incorporated into our loss estimates for floorplan and consumer loans and resulted in increased provisions for credit losses during 2024.
−Removed: With these increased loss rates incorporated in our current allowance for credit losses, we do not expect to see increases in year over year amounts absent significant growth in the associated receivables.
+Added: We do not expect to see significant increases or decreases in year-over-year amounts absent significant growth in the associated receivables.
See Note 2, "Significant Accounting Policies and Condensed Consolidated Financial Statement Components," to our condensed consolidated financial statements for further credit quality statistics and analysis.
Changes in fair value of loans.
−Removed: We experienced losses in our total Changes in fair value of loans of $276.9 million and $672.0 million for the three and nine months ended September 30, 2025, respectively.
−Removed: This compares to losses of $203.7 million and $549.2 million for the three and nine months ended September 30, 2024, respectively.
−Removed: Changes in fair value of loans includes 1) current period principal and finance charge-offs of fair value receivables, 2) the normal accretion of fair value related to finance charges and fees in excess of the contractual amounts billed, which is recognized in revenue during the period, and gains typically recognized in earnings as the fair value of finance charges and fees is greater than the contractual amounts billed during a period, 3) losses on acquisitions of our private label receivables and 4) the impact of changes in the assumptions underlying receivables at the end of the measurement period.
−Removed: The increase in losses in Changes in fair value of loans for the three and nine months ended September 30, 2025 when compared to the three and nine months ended September 30, 2024, were largely due to a decrease in the net positive impacts of Changes in fair value of loans at fair value, included in earnings, which offset charge-offs incurred during the period.
−Removed: These impacts totaled $(45.0) million and $5.1 million for the three and nine months ended September 30, 2025, respectively, compared to $(2.3) million and $101.0 million for the three and nine months ended September 30, 2024, respectively.
−Removed: Results impacting the Changes in fair value of loans at fair value, included in earnings for the three and nine months ended September 30, 2025 and 2024, respectively, are as follows:
−Removed: 1) net gains of $37.8 million and $95.0 million for the three and nine months ended September 30, 2025, respectively, associated with the normal accretion of fair value related to finance charges and fees in excess of the contractual amounts billed, which is recognized in revenue during the period, and gains typically recognized in earnings as the fair value of finance charges and fees is greater than the contractual amounts billed during a period (compared to $20.0 million and $89.8 million of such gains for the three and nine months ended September 30, 2024, respectively), 2) net losses of $48.5 million and $134.2 million for the three and nine months ended September 30, 2025, respectively, on the acquisition of private label credit receivables, which often have below market pricing and for which we often receive merchant fees which ensure we earn adequate returns (compared to $44.1 million and $127.7 million of such losses for the three and nine months ended September 30, 2024, respectively) and 3) net (losses)/gains of $(34.3) million and $44.3 million (compared to $21.8 million and $138.9 million of such increase for the three and nine months ended September 30, 2024, respectively) related to unfavorable changes for the quarter ended September 30, 2025 but favorable changes for the nine months ended September 30, 2025, in fair value assumptions.
−Removed: These unfavorable assumption changes were largely due to a marginal decline in the fair value associated with our retail assets, largely due to significant increases in retail receivables acquired, which tend to have a lower fair value on the date of acquisition than those that have matured past peak charge off periods.
−Removed: This unfavorable change was offset by improvements in the underlying performance in the form of lower delinquencies and higher net returns.
−Removed: The decreased impacts due to favorable changes in fair value assumptions for the three and nine months ended September 30, 2025 relative to the same periods in 2024 were largely a result of product, policy and pricing changes made during 2024 which enhanced the fair value of the portfolio in those periods.
−Removed: Adding to this decline in Changes in fair value of loans were slight increases in principal and finance charge-offs (net of recoveries), which totaled $231.8 million and $677.1 million for the three and nine months ended September 30, 2025, respectively, compared to $201.5 and $650.2 million for the three and nine months ended September 30, 2024, respectively.
+Added: We experienced losses in our total Changes in fair value of loans of $365.5 million for the three months ended March 31, 2026.
+Added: This compares to losses of $178.3 million for the three months ended March 31, 2025.
+Added: Changes in fair value of loans includes 1) current period principal and finance charge-offs of fair value receivables, 2) the normal accretion (or amortization) of fair value related to prior period finance charges and fees less than (or in excess of) the contractual amounts billed, which is recognized in revenue during the period, and offset by gains typically recognized in current period earnings as the fair value of finance charges and fees is greater than the contractual amounts billed during a period, 3) losses on acquisitions of our private label credit receivables, 4) the impact of changes in the fair value assumptions underlying receivables at the end of the measurement period and 5) the impact of changes in the fair value of Contingent consideration on our acquired portfolio of receivables from our acquisition of Mercury.
+Added: The increase in losses in Changes in fair value of loans for the three months ended March 31, 2026 when compared to the three months ended March 31, 2025, was largely due to increases in charge-offs on our underlying receivables.
+Added: Additionally we experienced a slight decrease in the net positive impacts of Changes in fair value of loans at fair value, included in earnings, which offset charge-offs incurred during the period.
+Added: These impacts totaled $40.9 million for the three months ended March 31, 2026, compared to $55.2 million for the three months ended March 31, 2025.
+Added: Results impacting the $40.9 million and $55.2 million in Changes in fair value of loans at fair value, included in earnings for the three months ended March 31, 2026 and 2025, respectively, are as follows:
+Added: 1) net gains of $24.6 million for the three months ended March 31, 2026, associated with the normal (net) accretion of fair value related to finance charges and fees, which is recognized in revenue during the period, and gains typically recognized in earnings as the fair value of certain finance charges and fees is greater than the contractual amounts billed during a period (compared to $31.4 million of such gains for the three months ended March 31, 2025), 2) net losses of $25.8 million for the three months ended March 31, 2026, on the acquisition of private label credit receivables, which often have below market pricing and for which we often receive merchant fees which ensure we earn adequate returns (compared to $37.7 million of such losses for the three months ended March 31, 2025), 3) net gains of $29.1 million for the three months ended March 31, 2026 (compared to $61.5 million of such gains for the three months ended March 31, 2025) related to favorable changes for the quarter ended March 31, 2026 and 2025 in fair value assumptions.
+Added: These favorable assumption changes for the first quarter of 2026 were largely due to improvements in new customers served which were added in the third and fourth quarters of 2025.
+Added: As new accounts served tend to have lower initial fair values until the associated receivables have seasoned through peak charge off periods, the maturation of these accounts, and seasonal declines in new receivables acquisitions in the first quarter of 2026, led to an expected increase in the fair value of the associated receivables.
+Added: Additionally, our Changes in fair value of loans at fair value in the first quarter of 2026 were impacted by $13.0 million in gains related to a reduction in the fair value of Contingent consideration associated with our acquisition of Mercury.
+Added: As we account for the purchase of Mercury as an asset acquisition, this reduction in Contingent consideration resulted in an adjustment to the allocated value (and fair value thereon) of the acquired receivables.
+Added: Offsetting these improvements in Changes in fair value of loans were increases in principal and finance charge-offs (net of recoveries), which totaled $406.4 million for the three months ended March 31, 2026 compared to $233.5 million for the three months ended March 31, 2025.
These charge-offs increased period-over-period primarily due to increases in our period end managed receivables although the increase was offset due to the improved performance in both our private label credit and general purpose credit card delinquencies rates over the past several quarters as well as changes to our relative mix of receivables that include significant increases in the acquisition of private label credit receivables for which we have limited loss exposure due to agreements with retail partners (see additional discussion related to delinquencies and charge-offs below).
1 unchanged sentence
In recent periods we have removed some of this expected degradation based on observed asset stabilization, implementation of product, policy, and pricing changes and an improved inflation environment.
−Removed: See Note 7 "Fair Values of Assets and Liabilities" to our condensed consolidated financial statements included herein for further discussion of our fair value calculation.
+Added: See Note 6 "Fair Values of Assets and Liabilities" to our condensed consolidated financial statements included herein for further discussion of this calculation.
We may, however, adjust our forecasts to reflect observed macroeconomic events.
Thus, the fair values are subject to potentially high levels of volatility if we experience changes in the quality of our credit card receivables or if there are significant changes in market valuation factors (e.g., interest rates and spreads) in the future.
−Removed: Tightened underwriting standards shifted new receivable acquisitions to consumers at the higher end of the FICO bands in which our bank partners participate, presumably resulting in improved overall credit performance of our acquired receivables.
−Removed: When coupled with those existing assets negatively impacted by inflation gradually becoming a smaller percentage of the outstanding portfolio, we expect to see overall improvements in the measured fair value of our portfolios of acquired receivables although growth rates of our portfolios may impact the timing of these improvement.
+Added: When coupled with those existing assets negatively impacted by inflation gradually becoming a smaller percentage of the outstanding portfolio, we expect to see overall improvements in the measured fair value of our portfolios of acquired receivables.
As part of our analysis to determine the fair value of our receivables, we look at several key factors that influence the overall fair value.
−Removed: Additionally, receivables acquired as part of our acquisition of Mercury were initially valued at a lower fair value than our existing portfolio of credit card receivables.
−Removed: We are currently enacting a number of product, policy and pricing changes on the Mercury portfolio of general purpose credit card receivables.
−Removed: Once implemented, we would expect to see continued improvement in the fair value of these receivables.
Qualitative discussion of these factors is as follows:
1 unchanged sentence
As the size and composition of our portfolio fluctuates, or as we experience periods of growth or decline in our acquisition of new receivables, this rate can fluctuate.
−Removed: We have experienced marginal declines in our weighted-average, Gross yield, net of finance charge charge-offs rate used in our fair value calculations of our private label credit receivables as of September 30, 2025, when compared to rates used as of September 30, 2024 largely due to a shift in the overall portfolio mix towards private label credit receivables acquired that tend to have lower effective yields but also for which we have limited loss exposure due to agreements with retail partners.
−Removed: Largely offsetting this decline, our general purpose credit card receivables experienced an increase in this same rate for the noted periods due to the aforementioned product, policy, and pricing changes which partially offset the net $(44.8) million and $5.3 million of net (loss)/gains noted above for the three and nine months ended September 30, 2025, respectively.
−Removed: As these product, policy and pricing changes continue to further positively impact both newly acquired and existing private label credit receivables and general purpose credit card receivables.
+Added: We have experienced marginal declines in our weighted-average, Gross yield, net of finance charge charge-offs rate used in our fair value calculations of our private label credit receivables as of March 31, 2026, when compared to rates used as of March 31, 2025 largely due to increased acquisitions of receivables associated with private label credit receivables acquired that tend to have lower effective yields but also for which we have limited loss exposure due to agreements with retail partners.
+Added: Largely offsetting this decline in yield, our general purpose credit card receivables experienced an increase in this same rate for the noted periods due to changes in the mix of receivables acquired towards higher yielding assets which partially contributed to the net $40.9 million of net gains noted above for the three months ended March 31, 2026.
+Added: This change in mix of acquired receivables will continue to positively impact both newly acquired and existing private label credit receivables and general purpose credit card receivables throughout 2026.
We expect our gross yield, net of finance charge charge-offs rate to increase over time although the pace and timing of purchases for new general purpose credit card receivables, relative to those of private label credit receivables, could result in near term declines in this rate.
1 unchanged sentence
As a result, we would expect this weighted average rate to decrease in those periods (as was noted during the second and third quarter of 2025) absent the offset of our higher yielding general purpose credit card receivables acquired during the same period.
−Removed: While our bank partners have enacted product, policy, and pricing changes on our existing receivables (and all newly acquired receivables), some of these changes will take several quarters to be fully realized.
+Added: While our bank partners have enacted some product, policy, and pricing changes on our portfolio of receivables associated with our acquisition of Mercury, some of these changes have not yet been fully implemented and will take several quarters to be fully realized
Payment Rate – Our total portfolio payment rate has declined marginally over time largely due to the increased relative weight of acquisitions of private label credit receivables to our overall pool of receivables and did not contribute meaningfully to shifts in the fair value of receivables noted above.
−Removed: These receivables tend to include less finance and fee billings that factor into monthly payment amounts (due to associated merchant fee billings that provide us adequate returns on the receivables) and have payment terms that extend over longer periods.
+Added: While the addition of receivables associated with the Mercury acquisition muted this decline in 2026, private label credit receivables tend to include less finance and fee billings that factor into monthly payment amounts (due to associated merchant fee billings that provide us adequate returns on the receivables) and have payment terms that extend over longer periods.
As a result, payment rates on private label credit receivables are naturally lower than those associated with our general purpose credit card receivables.
−Removed: This was particularly influenced by strong growth in the aforementioned private label credit receivables acquired during the second and third quarters of 2024 and 2025 that have limited loss exposure and tend to have longer associated terms and lower effective payment rates.
+Added: This was particularly influenced by strong growth in the aforementioned private label credit receivables acquired during the second and third quarters of 2025 that have limited loss exposure and tend to have longer associated terms and lower effective payment rates.
This decline in payment rates is not evident in our credit card portfolio, which has maintained relatively stable payment rates for all periods in 2025 and 2026.
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Expected Net Principal Credit Loss Rate – Our Expected net principal credit loss rate is chiefly impacted by the relative makeup of receivables within our pools rather than changes in expected performance of those underlying pools.
−Removed: As we have acquired a higher number of receivables associated with our private label credit accounts for which we have limited loss exposure due to agreements with retail partners, particularly in the second and third quarters of 2024 and 2025, our Expected net principal credit loss rate has decreased.
−Removed: Additionally, we have noted reductions in the Expected net principal credit loss rate associated with our general purpose credit card receivables, which have shown continued overall improvements in delinquency rates.
−Removed: With growth in the acquisition of our private label credit receivables, particularly those noted above with limited loss exposure, and growth in better performing general purpose credit card receivables, we expect this weighted average rate to decrease over the next several quarters (when compared to similar periods in prior years) before stabilizing.
−Removed: As changes in expected losses for receivables at the individual pool level did not change meaningfully, the overall impact on our fair value calculation was not meaningful although the positive impact of the improvement noted in delinquencies is included as a component of the net $(45.0) million and $5.1 million of net (loss)/gains noted above for the three and nine months ended September 30, 2025, respectively.
−Removed: Discount Rate – Our weighted average discount rate has remained relatively consistent over the past several quarters (and is expected to continue to remain consistent or go down).
−Removed: Primarily impacting modest changes in our weighted average discount rate are mix shifts in the type of receivables acquired, as different receivable types (general purpose credit card receivables versus private label credit receivables) have different expected return requirements used by third-party market participants.
−Removed: As we have acquired a higher number of receivables associated with our private label credit accounts for which we have limited loss exposure due to agreements with retail partners that reimburse us for credit losses, our weighted average discount rate has decreased marginally as these receivables have appropriately lower return requirements.
+Added: As we have acquired a higher number of receivables associated with our private label credit accounts for which we have limited loss exposure due to agreements with retail partners, particularly in the second and third quarters of 2025, our Expected net principal credit loss rate has decreased.
+Added: Offsetting this, while expected net principal credit loss rates associated with our general purpose credit card receivables have shown continued overall improvements as evidenced by delinquency rates period-over-period, recent strong growth in this portfolio of receivables associated with newer serviced accounts has resulted in an overall increase to our Expected Net Principal Credit Loss Rate as these receivables associated with newer accounts continue to season and make up a larger percentage of the overall receivables portfolio.
+Added: With growth in the acquisition of our general purpose credit receivables with slightly higher loss rates expected to exceed those associated with private label credit, particularly those noted above with limited loss exposure, we expect this weighted average rate to increase marginally over the next several quarters.
+Added: This decline in the Expected Net Principal Credit Loss Rate is included as a component of the net $40.9 million gains in Changes in fair value of loans at fair value noted above.
+Added: Discount Rate – Our weighted average discount rate has remained relatively consistent over the past several quarters.
+Added: Primarily impacting modest changes in our weighted average discount rate are changes in the types and volumes of receivables acquired, as different receivable types (general purpose credit card receivables versus private label credit receivables) have different expected return requirements used by third-party market participants.
+Added: As we have acquired a higher number of receivables associated with our private label credit accounts for which we have limited loss exposure due to agreements with retail partners that reimburse us for credit losses, we would expect our weighted average discount rate to decrease marginally as these receivables have appropriately lower expected return requirements.
+Added: Offsetting this expected decline is continued growth in our general purpose credit receivables which tend to have slightly higher return requirements.
While changes in this mix do impact the weighted average discount rate, they do not have a direct impact on the calculation of fair value for our individual pools.
−Removed: We have assigned a lower discount rate when assessing the fair value of these receivables to reflect the significantly lower risk and return characteristics.
−Removed: As a result, our weighted average discount rate has decreased marginally.
We consider asset specific financing costs associated with our receivables (coupled with our internal cost of equity capital in agreements that require credit enhancements) as the best indicator of return requirements used by third-party market participants.
−Removed: If the Federal Reserve continues to decrease interest rates or we observe a corresponding decrease in return requirements used by third-party market participants, we may further reduce our weighted average discount rate.
+Added: If the Federal Reserve continues to decrease interest rates or we observe a corresponding consistent decrease in return requirements used by third-party market participants, we may further reduce our weighted average discount rate.
Total operating expenses.
−Removed: Total operating expenses variances for the three and nine months ended September 30, 2025, relative to the three and nine months ended September 30, 2024, reflect the following:
−Removed: increases in salaries and benefit costs related to both the growth in the number of employees, including those added as part of our acquisition of Mercury, and inflationary compensation pressure.
−Removed: Subsequent to our acquisition of Mercury, we eliminated certain redundant positions, which resulted in termination costs of approximately $4.3 million for the nine months ended September 30, 2025.
−Removed: We expect some continued increase in salaries and benefits for the remainder of 2025 and into 2026 compared to comparable periods in 2024 and 2025 due to this acquired workforce;
−Removed: increases in card and loan servicing expenses for both the three and nine months ended September 30, 2025, when compared to the same periods in 2024 due to growth in receivables associated with our investments in private label credit and general purpose credit card receivables, which grew to $6,600.1 million outstanding from $2,653.8 million outstanding at September 30, 2025 and September 30, 2024, respectively, and costs associated with the implementation of product, policy, and pricing changes discussed above.
−Removed: As many of the expenses associated with our card and loan servicing efforts are now variable based on the amount of underlying receivables, we would expect this number to continue to grow in 2025 and 2026 commensurate with growth in our receivables.
−Removed: increases in marketing and solicitation costs for both the three and nine months ended September 30, 2025, when compared to the same period in 2024, primarily due to quarterly growth in both new credit card and private label customers serviced, the total accounts of which increased over 2.1 million as of September 30, 2025 when compared to September 30, 2024 (including approximately 1.3 million serviced accounts added as part of the Mercury acquisition).
+Added: Total operating expenses variances for the three months ended March 31, 2026, relative to the three months ended March 31, 2025, reflect the following:
+Added: increases in salaries and benefit costs related to both the growth in the number of employees, including those added as part of our acquisition of Mercury, and increases in related compensation.
+Added: We expect continued increase in salaries and benefits for 2026 compared to comparable periods in 2025 due to this acquired workforce;
+Added: increases in card and loan servicing expenses due to growth in receivables associated with our investments in private label credit and general purpose credit card receivables, which grew to $6,724.9 million outstanding from $2,706.3 million outstanding at March 31, 2026 and March 31, 2025, respectively, and costs associated with the implementation of product, policy, and pricing changes.
+Added: As many of the expenses associated with our card and loan servicing efforts are now variable based on the amount of underlying receivables, we would expect this number to continue to grow in 2026 commensurate with growth in our receivables;
+Added: increases in marketing and solicitation costs, primarily due to quarterly growth in both new credit card and private label customers serviced, the total accounts of which increased over 2.2 million as of March 31, 2026 when compared to March 31, 2025 (including approximately 1.2 million serviced accounts as of March 31, 2026 associated with the Mercury acquisition).
These increases in marketing and solicitation costs are a direct result of the increased costs associated with assisting our bank partners to acquire new consumers.
As we continue to adjust our underwriting standards to reflect changes in fee and finance assumptions on new receivables, continue to expand under our newly acquired Mercury brand and allow for overall increases in the cost to successfully market to consumers, we expect period-over-period marketing costs for 2026 to increase relative to those experienced in 2025, although the frequency and timing of increased marketing efforts could vary and are dependent on macroeconomic factors such as national unemployment rates and federal funds rates; and
−Removed: slight increases in other expenses for both the three and nine months ended September 30, 2025, when compared to the same period in 2024, primarily related to costs associated with occupancy or other third party expenses that are largely fixed in nature.
+Added: increases in other expenses, primarily related to costs associated with occupancy or other third party expenses that are largely fixed in nature.
Some costs including occupancy, legal and travel expenses can be variable based on growth and have grown as we expand our marketing and growth efforts.
−Removed: Increases in this category for the three and nine months ended September 30, 2025, when compared to the same period in 2024 primarily relate to ongoing increased costs associated with accounting and legal expenses as well as certain transaction costs associated with our Mercury acquisition.
−Removed: These increased costs are offset by certain nonrecurring costs in these categories experienced in the first quarter of 2024.
+Added: Increases in this category for the three months ended March 31, 2026, when compared to the same period in 2025 primarily relate to ongoing increased costs associated with accounting and legal expenses as well as certain increased costs associated with our Mercury acquisition.
While we expect some continued increase in these associated costs as we continue to grow our receivable portfolios, we do not anticipate the increase to be meaningful.
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As we have significantly grown our managed receivables levels over the past two years with minimal increase in the fixed portion of our card and loan servicing expenses as well as our salaries and benefits costs, we have realized greater operating efficiency.
−Removed: As many of our expenses associated with our card and loan servicing efforts are now variable based on the amount of underlying receivables, we would expect certain expenses to continue to grow in 2025 and 2026 commensurate with growth in our receivables balances.
These expenses will primarily relate to the variable costs of marketing efforts and card and loan servicing expenses associated with new receivable acquisitions.
−Removed: Unknown ongoing potential impacts related to the aforementioned inflation and other global disruptions could result in more variability in these expenses and could impair our ability to acquire new receivables, resulting in increased costs despite our efforts to manage costs effectively.
+Added: Unknown impacts related to potential inflation and other global disruptions could result in more variability in these expenses and could impair our ability to acquire new receivables, resulting in increased costs despite our efforts to manage costs effectively.
Noncontrolling interests.
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In March 2020, the subsidiary issued an additional 50.0 million Class B preferred units under the same terms.
−Removed: During the year ended December 31, 2024, we redeemed 50.5 million of the Class B preferred units at $1.00 per unit plus accrued but unpaid interest thereon.
In March 2025, we redeemed the remaining 50.0 million of Class B preferred units at $1.00 per unit plus accrued but unpaid interest thereon.
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Income Taxes.
−Removed: We experienced effective tax rates of 24.0% and 24.0% for the three and nine months ended September 30, 2025, respectively, compared to 21.5% and 19.7% for the three and nine months ended September 30, 2024, respectively.
−Removed: Our effective tax rates for the three and nine months ended September 30, 2025, are above the statutory rate principally due to our (1) state and foreign income tax expense, including the effects of law changes enacted in the nine months ended September 30, 2025, in certain states in which we operate, (2) the tax effects of deduction disallowance under Section 162(m) of the Internal Revenue Code of 1986 as amended (the “Code”) with respect to compensation paid to our covered employees, and (3) taxes on global intangible low-taxed income.
−Removed: Offsetting the foregoing items were the tax effects of deductions (1) associated with the exercises of stock options and the vesting of restricted stock at the times when the fair value of our stock exceeded such share-based awards’ grant date values, and (2) of amounts characterized in our condensed consolidated financial statements as dividends on preferred stock (which was outstanding until its redemption in the first quarter of 2025), such amounts which constituted deductible interest expense on debt for tax purposes.
−Removed: Our effective tax rates for the three and nine months ended September 30, 2024, are below the statutory rate principally due to the tax effects of our deduction of (1) amounts characterized in our condensed consolidated financial statements as dividends on preferred stock (which was outstanding at varying amounts in 2024), such amounts which constituted deductible interest expense on debt for tax purposes, and (2) exercises of stock options and the vesting of restricted stock at times when the fair value of our stock exceeded such share-based awards’ grant date values.
−Removed: Offsetting the foregoing items were (1) state and foreign income tax expense including the effects of law changes enacted in certain states in which we operate, (2) the tax effects of deduction disallowance under Section 162(m) of the Code with respect to compensation paid to our covered employees and (3) taxes on global intangible low-taxed income.
−Removed: We report interest expense associated with our income tax liabilities (including accrued liabilities for uncertain tax positions) within our income tax line item on our condensed consolidated statements of income.
−Removed: We likewise report within such line item the reversal of interest expense associated with our accrued liabilities for uncertain tax positions to the extent we resolve such liabilities in a manner favorable to our accruals therefor.
−Removed: Such interest expense was $135 thousand for the nine months ended September 30, 2025, and $140 thousand for the nine months ended September 30, 2024.
+Added: We experienced effective tax rates of 24.4% and 23.6% for the three months ended March 31, 2026, and 2025, respectively.
+Added: These effective tax expense rates were above the statutory rate principally due to (1) state and foreign income tax expense, (2) deduction disallowance under Section 162(m) of the Internal Revenue Code of 1986, as amended, with respect to compensation paid to our covered employees, and (3) taxes on global intangible low-taxed income.
+Added: Offsetting the foregoing items were deductions associated with the vesting of restricted stock at times when the fair value of our stock exceeded such share-based awards’ grant date values.
+Added: Another offsetting item in only the three months ended March 31, 2025, was our deduction of interest expense on a financial instrument classified as debt for tax purposes that was repaid in the three months ended March 31, 2025—such financial instrument which was characterized in our consolidated financial statements as dividend-paying preferred stock.
+Added: We report interest expense associated with our income tax liabilities (including accrued liabilities for uncertain tax positions to the extent such liabilities have not been favorably resolved thereby resulting in interest expense reversals) within our income tax line item on our consolidated statements of income.
+Added: Such interest expense was de minimis in both the three months ended March 31, 2026, and 2025.
Non-GAAP Financial Measures
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If we control through direct ownership or exert a controlling interest in the entity, we consolidate it and reflect its operations as noted above.
−Removed: The following discussion of our managed receivables includes the aforementioned acquisition of Mercury and its portfolio of approximately $3,159.9 million in general purpose credit card receivables.
−Removed: As we acquired the receivables on September 11, 2025, the financial impact of the acquisition on the quarter was limited to fees, billings and expenses subsequent to that date, however the receivables acquired are included in the denominator of the ratios calculated below.
+Added: The following discussion of our managed receivables includes the aforementioned acquisition of Mercury and its portfolio of approximately $3,078.7 million (as of March 31, 2026) in general purpose credit card receivables.
+Added: As we acquired the receivables on September 11, 2025, the financial impact of the acquisition on the quarter was limited to fees, billings and expenses subsequent to that date, however the receivables acquired are included in the denominator of the ratios calculated below for all periods subsequent to acquisition.
Below is the reconciliation of Loans at fair value to Total managed receivables:
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First, managed receivables data include the undiscounted contractual amounts due on the underlying consumer receivable plus fee billings (including fees and finance charges), less actual charge-offs.
−Removed: Managed receivables data are also based on actual charge-offs as they occur and without regard to any merchant fees , changes in fair value of loans or changes in our allowances for credit losses (in periods where applicable).
−Removed: Second, for managed receivables data, we amortize certain fees (such as annual and merchant fees) and expenses (such as marketing expenses) associated with our Fair Value Receivables over the expected life of the corresponding receivable and recognize other costs, such as claims made under credit deferral programs, when paid.
+Added: Second, managed receivables data is also based on actual charge-offs as they occur and without regard to any merchant fees or changes in fair value of loans.
+Added: Third, for managed receivables data, we amortize certain fees (such as annual and merchant fees) and expenses (such as marketing expenses) associated with our Fair Value Receivables over the expected life of the corresponding receivable and recognize other costs, such as claims made under credit deferral programs, when paid.
Under fair value accounting, these fees are recognized when billed or in the case of merchant fees, are recognized when the merchant confirms the transaction with us, which fulfills the terms of the associated merchant and marketing expenses are recognized when incurred.
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The following table presents additional trends and data with respect to our private label credit and general purpose credit card receivables (dollars in thousands):
−Removed: Results of our legacy credit card receivables portfolios are excluded:
Private Label Credit - At or for the Three Months Ended
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Managed receivables levels.
−Removed: We continue to experience overall period-over-period quarterly receivables growth with over $3,451.5 million in net receivables growth associated with the private label credit and general purpose credit card products offered by our bank partners between September 30, 2025 and September 30, 2024.
−Removed: The increased purchases of receivables arising in accounts issued by our bank partners to customers of our existing retail partners helped grow our private label credit receivables by $520.0 million in the twelve months ended September 30, 2025 primarily related to seasonal expansion with one of our retail partners.
−Removed: The seasonal expansion with this retail partner tends to peak in the second and third quarters and declines in the fourth quarter of each year.
−Removed: Our general purpose credit card receivables grew by $3,426.4 million during the twelve months ended September 30, 2025.
−Removed: This increase included receivables added as part of the Mercury acquisition which totaled $3,159.9 million as of September 30, 2025.
+Added: Managed receivables declined from December 31, 2025 due to seasonal paydowns associated with seasonally strong payment patterns associated with tax refunds for many consumers.
+Added: We continue to experience overall period-over-period quarterly receivables growth with over $4,018.6 million in net receivables growth associated with the private label credit and general purpose credit card products offered by our bank partners between March 31, 2026 and March 31, 2025.
+Added: The increased purchases of receivables arising in accounts issued by our bank partners to customers of our existing retail partners helped grow our private label credit receivables by $533.8 million in the twelve months ended March 31, 2026 primarily related to seasonal expansion with one of our retail partners.
+Added: The seasonal expansion with this retail partner tends to peak in the second and third quarters of each year.
+Added: Our general purpose credit card receivables grew by $3,484.8 million during the twelve months ended March 31, 2026.
+Added: This increase included receivables added as part of the Mercury acquisition which totaled $3,078.7 million as of March 31, 2026.
Some of our larger merchant partners have expanded their relationships with us and our bank partner, which resulted in an increased flow of acquired receivables.
−Removed: We currently expect continued period-over-period quarterly receivables growth in our general purpose credit card and private label credit receivables.
+Added: While we currently expect continued period-over-period quarterly growth in our general purpose credit card receivables, we expect purchases associated with the above mentioned retail partner to moderate, resulting in modest increases in expected period-over-period retail receivables.
Growth in future periods receivables is dependent on the addition of new retail partners to the private label credit origination platform, the timing and size of solicitations within the general purpose credit card platform by our bank partners, as well as purchase activity of consumers.
Similarly, the loss of existing retail partner relationships could adversely affect new loan acquisition levels.
−Removed: Our top five retail partnerships accounted for over 85% of our private label receivables outstanding as of September 30, 2025.
+Added: Our top five retail partnerships accounted for 83.6% of our private label credit receivables outstanding as of March 31, 2026.
The volume of receivables purchased each period varies based on a number of factors, including seasonal consumer purchase patterns and growth (or contraction) within merchant retail locations.
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These rates exclude receivables that have been charged off.
−Removed: Increases in delinquencies in the first and second quarters of 2024 in our private label credit receivables were largely due to a mix shift in receivables acquired to certain receivables that have higher observed delinquencies but correspondingly higher yields.
−Removed: Late in the second quarter of 2024 and early in the third quarter of 2024, we additionally acquired receivables that have higher observed delinquencies, but for which we have limited loss exposure due to agreements with retail partners.
+Added: We have acquired certain receivables that have higher observed delinquencies, but for which we have limited loss exposure due to agreements with retail partners.
As a result of these limited loss exposures, these receivables are not included in our delinquency rates for private label credit receivables.
−Removed: Delinquency rates for our general purpose credit card receivables were higher in the first quarter of 2024 due to both a reduction in the growth of our managed receivables and accounts that were enrolled in short-term payment deferrals, due to hardship claims resulting from COVID-19.
−Removed: Receivables enrolled in these short-term payment deferrals continued to accrue interest and their delinquency status did not change through their respective deferment periods.
−Removed: The remainder of these accounts were removed from hardship status with the end of the COVID-19 national and public health emergencies in May 2023.
−Removed: While these accounts resulted in higher than normal reported delinquency rates for the first quarter of 2024 (and correspondingly higher charge-offs in the first and second quarters of 2024), the charge-offs did not result in a further economic impact to us as the majority of these accounts were already considered in our changes in fair value in prior periods.
−Removed: As these accounts were largely charged off by the end of the first quarter of 2024, we saw some modest improvement in our second quarter 2024 delinquencies offset by slower net receivables growth during this period.
−Removed: Delinquency rates in the third and fourth quarter of 2024 remained largely consistent with those noted in the same period of prior year.
−Removed: For the first and second quarters of 2025 we have observed lower overall delinquency rates in both our general purpose credit card receivables and our private label credit receivables.
−Removed: Receivables added as part of the Mercury acquisition in the third quarter of 2025 have lower overall delinquency rates (and correspondingly lower yields) than those of our existing portfolios.
−Removed: The addition of these receivables resulted in a lower combined delinquency rate as of September 30, 2025.
−Removed: Increased acquisitions of private label credit receivables with limited loss exposures, the noted improvements in general purpose credit card receivables and our receivables added as part of the Mercury transaction will continue to result in lower overall delinquency and charge-off rates in the fourth quarter of 2025 and early 2026 when compared to corresponding rates in the fourth quarter of 2024 and first quarter of 2025.
+Added: For 2025 we observed lower overall delinquency rates in both our general purpose credit card receivables and our private label credit receivables.
+Added: Receivables added as part of the Mercury acquisition in the third quarter of 2025 have lower overall delinquency rates (and lower associated yields) than those of our existing portfolios.
+Added: The addition of these receivables resulted in a lower combined delinquency rate as of December 31, 2025 and the first quarter of 2026.
As we continue to acquire newer private label credit and general purpose credit card receivables, we expect our delinquency rates to marginally increase when compared to the same periods in prior years due to a planned shift in our general purpose and private label credit receivables originated as our bank partners continue to expand product offerings to a broader range of consumers.
−Removed: This expected increase in delinquencies will be offset somewhat by using more restrictive product, policy, and pricing changes which we believe will result in a more profitable asset overall.
−Removed: Additionally, as the receivables added from the Mercury acquisition tend to have lower delinquency and charge off rates than our existing portfolios of receivables, we expect the increase in delinquency rates noted above to be muted.
+Added: This expected increase in delinquencies will be accompanied by higher yielding assets, which we believe will result in a more profitable asset overall.
+Added: Additionally, as the receivables added from the Mercury acquisition tend to have lower delinquency and charge off rates than our existing portfolios of receivables and when coupled with expected growth in our general purpose credit card receivables, we expect the increase in delinquency rates noted above to be muted.
We also expect continued seasonal payment patterns on these receivables that impact our delinquencies in line with prior periods.
−Removed: For example, delinquency rates historically are lower in the second quarter of each year due to the benefits of seasonally strong payment patterns associated with tax refunds for many consumers.
−Removed: Offsetting this expected increase in delinquencies is continued growth in the portfolio which will mute delinquency metrics.
−Removed: Our beliefs for future delinquency rates are predicated on the assumption that the slowing rate of inflation will continue and our recent tightened underwriting standards will prove effective at reducing account delinquencies.
+Added: For example, delinquency rates historically are lower in the second quarter of each year due to the benefits of seasonally strong payment patterns associated with tax refunds for many consumers, a trend which continued in the first quarter of 2026.
+Added: Our beliefs for future delinquency rates are predicated on the assumption that the slowing rate of inflation will continue and prove effective at reducing account delinquencies.
Total managed yield ratio, annualized.
−Removed: As discussed above, growth in higher yielding assets has resulted in higher charge-off and delinquency rates in some periods.
−Removed: General purpose credit card receivables tend to have higher total yields than private label credit receivables (and corresponding higher charge-off rates).
+Added: As discussed above, growth in higher yielding assets has resulted in higher charge-off and delinquency rates in some periods and within some product categories.
+Added: General purpose credit card receivables tend to have higher total yields than private label credit receivables (and higher associated charge-off rates).
As a result, in periods where we have slower rates of growth of general purpose credit card receivables, as was noted in 2025 (relative to growth in private label credit receivables), we expect to have slightly lower total managed yield ratios.
−Removed: Additionally, receivables added as part of the Mercury acquisition tend to have lower yields (and correspondingly lower delinquency and charge off rates).
−Removed: The addition of these receivables contributed to the decline in our Total managed yield ratio, annualized for the third quarter of 2025 and will serve to offset some of our expected growth in Total managed yield ratios until planned product, policy, and pricing changes for this new portfolio have taken effect.
−Removed: We currently expect increases in the rates of acquisition of our general purpose credit card receivables relative to private label credit receivables and correspondingly higher period-over-period operating revenue and other income for the remainder of 2025 (and a correspondingly higher Total managed yield ratio) although the timing of these acquisitions and impact of the Mercury acquisition could result in some fluctuations of our Total managed yield ratio, annualized when comparing quarterly rates in 2025 and 2026 to corresponding quarterly periods in 2024 and 2025.
−Removed: Our managed yield ratios, however, may be marginally lower due to an expected seasonal shift in our mix of acquired private label receivables to higher FICO receivables that have lower gross yields (and correspondingly lower charge-off expectations) in the third quarter of each year.
+Added: Additionally, receivables added as part of the Mercury acquisition tend to have lower yields (and lower associated delinquency and charge off rates).
+Added: The addition of these receivables contributed to the decline in our Total managed yield ratio, annualized, since the third quarter of 2025 and will serve to offset some of our expected growth in Total managed yield ratios going forward.
+Added: As previously discussed, these receivables are expected to have lower overall yields (thus negatively impacting our Total managed yield ratio), but also lower principal and finance charge-offs resulting in a similarly profitable asset.
+Added: We experienced in the first of quarter of 2026, and expect to continue to experience for the remainder of 2026, increases in the rates of acquisition of our general purpose credit card receivables relative to private label credit receivables and higher associated period-over-period operating revenue and other income for 2026 although the timing of these acquisitions and impact of the Mercury acquisition could result in some fluctuations of our Total managed yield ratio, annualized when comparing quarterly rates in 2026 to corresponding quarterly periods in 2025.
Combined principal net charge-off ratio, annualized.
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Growth within our general purpose credit card receivables (as a percent of outstanding receivables) has resulted in increases in our charge-offs over time.
−Removed: The increase in the combined principal net charge-off ratio, annualized in the first two quarters of 2024 is a reflection of increased delinquencies noted as consumer behavior reverted to historical norms (similar to those experienced in periods prior to COVID-19) and decreases in the acquisition of new general purpose credit card receivables.
−Removed: Additionally, inflation, particularly as it relates to higher gas prices, negatively impacted some consumers' ability to make payments on outstanding loans and fees receivable.
We noted improvements in this rate in the fourth quarter of 2024 and in the first and second quarters of 2025 as delinquencies continued to improve, consumer payment behavior improved and we experienced strong growth in our receivables base.
The significant improvement noted in the third quarter of 2025 was largely due to the addition of receivables associated with the Mercury acquisition which have lower delinquencies and principal charge-offs than our existing portfolios of receivables.
−Removed: Despite expected marginal increases in delinquency rates as discussed above, we expect our overall combined principal net charge-off ratios to continue to decrease for the remainder of 2025, when compared to the comparable prior period.
−Removed: These charge-off rates are expected to return to historically normalized levels, adjusted for the mix shift discussed above, and will benefit from planned growth in the underlying receivables which we expect will further reduce our combined principal net charge-off ratio.
+Added: This improvement continued in the fourth quarter of 2025 and in the first quarter of 2026.
+Added: We expect to see continued year-over-year improvements in our Combined principal net charge-off ratio, annualized for 2026, assisted by higher expected growth in the third and fourth quarters of 2026 in our general purpose credit cards which will improve ratios in those periods as the receivables associated with these newer consumers will not have seasoned through peak charge off periods.
+Added: We expect our recent overall combined principal net charge-off ratios to continue to marginally improve 2026.
+Added: These charge-off rates are expected to return to historically normalized levels, adjusted for the change in mix of acquired receivables discussed above, and will benefit from planned growth in the underlying receivables which we expect will further reduce our combined principal net charge-off ratio.
Our charge-off ratio has also been impacted due to (and will continue to be impacted by):
−Removed: 1) higher expected charge-off rates on the private label credit and general purpose credit card receivables corresponding with higher yields on these receivables, (2) continued testing of receivables with higher risk profiles, leading to periodic increases in combined principal net charge-offs, (3) the aforementioned tightened underwriting standards that slowed the pace of growth in our receivables base, and (4) negative impacts on some consumers' ability to make payments on outstanding loans and fees receivable as a result of inflation pressures.
−Removed: While charge-offs associated with previously mentioned accounts enrolled in short-term payment deferrals had a negative impact on our Combined principal net charge-off ratio, annualized through the second quarter of 2024, they did not have a material impact on our condensed consolidated statements of income as the majority of these accounts were already considered in our changes in fair value.
+Added: (1) higher expected charge-off rates on certain private label credit and general purpose credit card receivables associated with higher yields on these receivables, (2) continued testing of receivables with higher risk profiles, leading to periodic increases in combined principal net charge-offs, and (3) negative impacts on some consumers' ability to make payments on outstanding loans and fees receivable as a result of inflation pressures.
Further impacting our charge-off rates are the timing and size of solicitations that serve to minimize charge-off rates in periods of high receivable acquisitions but also exacerbate charge-off rates in periods of lower receivable acquisitions.
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Historically, we obtained lower cost financing with fixed interest rates, resulting in lower interest expense ratios.
−Removed: Increases in the federal funds borrowing rate in 2022 and 2023 have led to an increase in interest rates for newly-originated debt and for that portion of debt which does not have fixed rates.
−Removed: As such, we have seen our Interest expense ratio, annualized increase throughout 2024 and into 2025 and we expect the Interest expense ratio to increase when compared to prior quarters for the remainder of 2025 as we replace existing financing arrangements with new ones at a higher cost of capital.
+Added: Increases in the federal funds borrowing rates have led to an increase in interest rates for newly-originated debt and for that portion of debt which does not have fixed rates.
+Added: As such, we have seen our Interest expense ratio, annualized increase in all periods presented and we expect the Interest expense ratio to marginally increase, relative to corresponding periods in prior periods, as we replace existing financing arrangements with new ones at a higher cost of capital.
The addition of debt assumed as part of the Mercury acquisition will also contribute to our Interest expense ratio although the cost of this debt is largely in-line with our existing facilities and, as such, should not result in a meaningful impact to the Interest expense ratio, annualized.
1 unchanged sentence
Our Net interest margin ratio, annualized represents the difference between our Total managed yield ratio, annualized, our Combined principal net charge-off ratio, annualized and our Interest expense ratio, annualized.
−Removed: Recent declines in this ratio, when compared to corresponding prior periods, relate primarily to recent increases in our principal net charge-offs as noted above.
−Removed: This trend reversed in 2025 as we realized improvements in delinquencies and subsequent charge-offs.
−Removed: We currently expect continued marginal improvements in our Combined principal net charge-off ratio, annualized, relative to corresponding periods in 2024 which should continue to result in an improved net interest margin ratio.
−Removed: Changes in the mix shift of acquired receivables, noted above, will also lead to increases in the Net interest margin, annualized as the higher yielding receivables become a larger component of our total portfolio.
−Removed: As noted above, the lower yielding but also lower delinquent accounts associated with the Mercury acquisition should offset some of the improvements noted in our Net interest margin ratio, annualized until such time that product, policy and pricing changes associated with this portfolio have taken effect.
+Added: Declines in this ratio in 2024 reversed in 2025 as we realized improvements in delinquencies and subsequent charge-offs, noted above.
+Added: We currently expect minimal improvements for 2026 in our Combined principal net charge-off ratio, annualized, relative to corresponding periods in 2025 which should continue to result in a consistent net interest margin ratio year-over-year.
+Added: Changes in the mix of acquired receivables, noted above, will lead to improvements in the Net interest margin, annualized as the higher yielding receivables become a larger component of our total portfolio, however the lower yielding but also lower delinquent accounts associated with the Mercury acquisition will continue to offset some of the expected improvement until such time that product, policy and pricing changes associated with this portfolio have taken effect.
The average annual percentage rate ("APR") charged to customers varies by receivable type, credit history and other factors.
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We have experienced minor fluctuations in our average APR based on the relative product mix of receivables purchased during a period.
−Removed: For those receivables that did not contain fixed APRs we have seen some increases in rates charged, as the underlying rates are tied to the federal funds borrowing rate which increased in 2022 and 2023.
−Removed: Our average APRs for general purpose credit card receivables remained largely consistent throughout 2024 with some increases noted as new product, policy, and pricing changes were implemented which raised the APRs associated with new receivable acquisitions.
+Added: Our average APRs for general purpose credit card receivables remained largely consistent throughout 2025 with some modest increases noted resulting from the aforementioned mix shift in yield characteristics of acquired receivables.
We expect some continued improvements in our general purpose credit card receivable average APRs as newly acquired receivables with higher APRs become a larger part of our overall portfolio of receivables.
−Removed: Our average APRs for private label credit fell throughout 2024 and in 2025 due to a shift in the overall portfolio mix towards private label credit receivables acquired that tend to have lower effective yields but also for which we have limited loss exposure due to agreements with retail partners.
−Removed: This trend continued in the second quarter of 2025 with increased acquisitions of these receivables.
−Removed: We expect this declining trend to continue into the third quarter of 2025, however, the timing and relative mix of receivables acquired could cause some minor fluctuations.
+Added: Our average APRs for private label credit fell in 2025 due to a change in the overall portfolio mix towards private label credit receivables acquired that tend to have lower effective yields but also for which we have limited loss exposure due to agreements with retail partners.
+Added: As the relative pace of acquisition for some lower effective yield assets has moderated, we have noted some improvement in our retail overall effective yields.
+Added: We expect this declining trend in Average APR to abate in 2026 with planned higher growth rates in our general purpose credit card receivables, however, the timing and relative mix of receivables acquired could cause some minor fluctuations.
We do not acquire or service receivables that have an APR above 36.0%.
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This growth in Private Label Credit Receivables purchased primarily relates to growth in purchases associated with our largest retail partner.
−Removed: For most periods presented in 2024, our private label credit receivable purchases experienced overall growth, when compared to the same periods in 2023, largely based on the addition of new private label credit retail partners as well as growth within existing retail partnerships, as previously discussed.
We may experience periodic declines in these acquisitions due to:
the loss of one or more retail partners; seasonal purchase activity by consumers; labor shortages and supply chain disruptions; or the timing of new customer originations by our issuing bank partners.
−Removed: We currently expect private label credit receivable acquisitions in the fourth quarter of 2025 and first quarter of 2026 to be consistent with those in the same period of 2024 and 2025, although the timing of the receivable acquisitions may vary based on seasonal spending patterns by consumers and our retail partners overall sales cycles.
+Added: Private label credit receivable acquisitions in the first quarter of 2026 were similar to those in the same period of 2025.
+Added: As discussed above, we expect some retail partner programs to moderate in the second and third quarters of 2026 which will result in slower receivable acquisitions during those periods, when compared to the same periods in 2025.
Our general purpose credit card receivable acquisitions tend to have more volatility based on the issuance of new credit card accounts by our issuing bank partners.
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Stress noted at some dealer locations resulted in higher than anticipated credit losses associated with floorplan loans during 2024.
−Removed: When coupled with increased delinquencies associated with the underlying consumers loans, we have experienced period over period declines in our managed receivables for the third and fourth quarter of 2024 and the first and second quarters of 2025.
−Removed: For the third quarter of 2025, we experienced a period over period increase in managed receivables as our receivables portfolio continues to recover from the floorplan loan losses experienced in 2024.
−Removed: We expect modest growth in the level of our managed receivables for the remainder of 2025 and into 2026 as CAR continues to rebuild its receivables base, expands within its current geographic footprint and continues plans for service area expansion.
+Added: When coupled with increased delinquencies associated with the underlying consumers loans, we have experienced period-over-period declines in our managed receivables for the first and second quarters of 2025.
+Added: For the third and fourth quarters of 2025, we continued to grow the portfolio as we continued to recover from the above noted floorplan loan losses experienced in 2024.
+Added: We noted typical seasonal declines in managed receivables in the first quarter of 2026 resulting from expected increases in payment rates associated with tax refunds for many consumers.
+Added: We expect modest growth in the level of our managed receivables for 2026 as CAR continues to rebuild its receivables base, expands within its current geographic footprint and continues plans for service area expansion.
Although we continue to expand our CAR operations, the Auto Finance segment faces strong competition from other specialty finance lenders, as well as the indirect effects on us of our buy-here, pay-here dealership partners’ competition with other franchise dealerships for consumers interested in purchasing automobiles.
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Combined principal net charge-off ratios in the above table reflect the lower delinquency rates we have recently experienced.
−Removed: Increases in our Combined principal net charge-off ratios throughout 2023 are indicative of our charge off levels returning to historically normalized levels (i.e., those periods prior to COVID-19 and the related government stimulus programs).
−Removed: While we anticipate our charge-offs to be incurred ratably across our portfolio of dealers, specific dealer-related losses are difficult to predict and can negatively influence our combined principal net charge-off ratio as was evidenced throughout 2024.
+Added: While we anticipate our charge-offs to be incurred ratably across our portfolio of dealers, specific dealer-related losses are difficult to predict and can negatively influence our combined principal net charge-off ratio as was evidenced in 2024.
We continually re-assess our dealers and will take appropriate action if we believe a particular dealer’s risk characteristics adversely change.
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Accordingly, we will continue to focus on (i) obtaining the funding necessary to meet capital needs required by the growth of our receivables, (ii) adding new retail partners to our platform to continue growth of the private label credit receivables, (iii) growing general purpose credit card receivables, (iv) effectively managing costs, and (v) repurchasing outstanding shares of our common and preferred stock.
−Removed: We believe our unrestricted cash, future cash provided by operating activities, availability under our debt facilities, and access to the capital markets will provide adequate resources to fund our operating and financing needs.
+Added: We believe our cash, future cash provided by operating activities, availability under our debt facilities, and access to the capital markets will provide adequate resources to fund our operating and financing needs.
All of our CaaS segment’s structured financing facilities are expected to amortize down with collections on the receivables within their underlying trusts and should not represent significant refunding or refinancing risks to our condensed consolidated balance sheets.
−Removed: Facilities that could represent near-term and longer-term refunding or refinancing needs as of September 30, 2025 are those associated with the following notes payable in the amounts indicated (in millions):
+Added: Facilities that could represent near-term and longer-term refunding or refinancing needs as of March 31, 2026 are those associated with the following notes payable and senior notes in the amounts indicated (in millions):
Revolving credit facility (expiring July 20, 2026) that is secured by certain receivables and restricted cash
+Added: 2026 Senior notes
Total short term refinancing needs (within 12 months)
−Removed: Revolving credit facility (expiring December 1, 2026) that is secured by certain assets
Revolving credit facility (expiring March 31, 2028) that is secured by certain receivables and restricted cash
Revolving credit facility (expiring April 7, 2028) that is secured by certain receivables and restricted cash
+Added: Revolving credit facility (expiring December 1, 2028) that is secured by certain assets
+Added: 2029 Senior notes
+Added: 2030 Senior notes
Total long term refinancing needs (in excess of 12 months)
−Removed: Total refinancing needs
Based on the state of the debt capital markets, the performance of our assets that serve as security for the above facilities, and our relationships with lenders, we view imminent refunding or refinancing risks with respect to the above facilities as moderate in the current environment.
−Removed: We believe that the quality of our new receivables should allow us to raise more capital through increasing the size of our facilities with our existing lenders and attracting new lending relationships, albeit at increased costs due to the aforementioned recent interest rate increases.
+Added: We believe that the quality of our new receivables should allow us to raise more capital through increasing the size of our facilities with our existing lenders and attracting new lending relationships.
Further details concerning the above debt facilities and other debt facilities we use to fund the acquisition of receivables are provided in Note 9, "Notes Payable," to our condensed consolidated financial statements included herein.
−Removed: In November 2021, we issued $150.0 million aggregate principal amount of 6.125% Senior Notes due 2026 (the "2026 Senior Notes").
+Added: In November 2021, we issued $150.0 million aggregate principal amount of 2026 Senior Notes.
The 2026 Senior Notes are general unsecured obligations of the Company and rank equally in right of payment with all of the Company’s existing and future senior unsecured and unsubordinated indebtedness, and will rank senior in right of payment to the Company’s future subordinated indebtedness, if any.
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The 2026 Senior Notes will mature on November 30, 2026.
−Removed: We are amortizing fees associated with the issuance of the 2026 Senior Notes into interest expense over the expected life of such notes.
−Removed: Amortization of these fees for the three and nine months ended September 30, 2025 and 2024 totaled $0.4 million, $1.1 million, $0.4 million and $1.1 million, respectively.
−Removed: We repurchased $0.0 and $0.4 million of the outstanding principal amount of these 2026 Senior Notes in the three and nine months ended September 30, 2024, respectively.
−Removed: There have been no repurchases in 2025.
+Added: We repurchased $8.1 million of the outstanding principal amount of these 2026 Senior Notes in the three months ended March 31, 2026.
+Added: There were no repurchases for the same period in 2025.
In January and February 2024, we issued an aggregate of $57.2 million aggregate principal amount of 2029 Senior Notes.
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The 2029 Senior Notes will mature on January 31, 2029.
−Removed: We are amortizing fees associated with the issuance of the 2029 Senior Notes into interest expense over the expected life of such notes.
−Removed: Amortization of these fees for the three and nine months ended September 30, 2025 and 2024 totaled $0.4 million, $1.1 million, $0.3 million and $0.5 million, respectively.
−Removed: In August 2025, we issued an aggregate of $400.0 million aggregate principal amount of 9.750% Senior Notes due 2030 (the "2030 Senior Notes").
+Added: In August 2025, we issued $400.0 million principal amount of 9.750% Senior Notes due 2030 (the "2030 Senior Notes").
The 2030 Senior Notes bear interest at the rate of 9.75% per annum.
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The 2030 Senior Notes will mature on September 1, 2030.
−Removed: We are amortizing fees associated with the issuance of the 2030 Senior Notes into interest expense over the expected life of such notes.
−Removed: Amortization of these fees for the three and nine months ended September 30, 2025 totaled $0.1 million and $0.1 million, respectively.
In June and July 2021, we issued an aggregate of 3,188,533 shares of 7.625% Series B Cumulative Perpetual Preferred Stock, liquidation preference of $25.00 per share (the "Series B preferred stock"), for net proceeds of approximately $76.5 million after deducting underwriting discounts and commissions, but before deducting expenses and the structuring fee.
We pay cumulative cash dividends on the Series B preferred stock, when and as declared by our Board of Directors, in the amount of $1.90625 per share each year, which is equivalent to 7.625% of the $25.00 liquidation preference per share.
−Removed: On August 10, 2022, the Company entered into an At Market Issuance Sales Agreement (the "Preferred Stock Sales Agreement") providing for the sale by the Company of up to an aggregate offering price of $100.0 million of our (i) Series B preferred stock and (ii) 2026 Senior Notes, from time to time through a sales agent, in connection with the Company's "at-the-market" offering program (the "Preferred Stock ATM Program").
−Removed: On August 26, 2024, we amended and restated the Preferred Stock Sales Agreement to remove our 2026 Senior Notes and to include our 2029 Senior Notes under the Preferred Stock ATM Program.
−Removed: Further, on December 29, 2023, the Company entered into an At-The-Market Sales Agreement (the "Common Stock Sales Agreement") providing for the sale by the Company of its common stock, no par value per share (the "common stock"), up to an aggregate offering price of $50.0 million, from time to time to or through a sales agent, in connection with the Company’s Common Stock "at-the-market" offering program (the "Common Stock ATM Program").
−Removed: Sales pursuant to both the Preferred Stock Sales Agreement and Common Stock Sales Agreement, if any, may be made in transactions that are deemed to be "at-the-market offerings" as defined in Rule 415 under the Securities Act of 1933, as amended, including sales made directly on or through the NASDAQ Global Select Market.
+Added: On August 10, 2022, we entered into an At Market Issuance Sales Agreement (the "Preferred Stock Sales Agreement") providing for the sale by the Company of up to an aggregate offering price of $100.0 million of our (i) Series B preferred stock and (ii) 6.125% Senior Notes due 2026 (the "2026 Senior Notes") from time to time through a sales agent, in connection with the Company's Series B preferred stock and 2026 Senior Notes "at-the-market" offering program (the "Preferred Stock ATM Program").
+Added: On August 26, 2024, we amended and restated the Preferred Stock Sales Agreement to remove our 2026 Senior Notes and to include our 9.25% Senior Notes due 2029 (the "2029 Senior Notes") in the Preferred Stock ATM Program.
+Added: On December 29, 2023, the Company entered into an At-The-Market Sales Agreement (the "Common Stock Sales Agreement") providing for the sale by the Company of its common stock, no par value per share, up to an aggregate offering price of $50.0 million, from time to time to or through a sales agent, in connection with the Company’s common stock ATM Program ("Common Stock ATM Program").
+Added: Sales pursuant to both the Preferred Stock Sales Agreement and Common Stock Sales Agreement, if any, may be made in transactions that are deemed to be "at-the-market offerings" as defined in Rule 415 under the Securities Act of 1933, as amended (the "Securities Act"), including sales made directly on or through the NASDAQ Global Select Market.
The sales agents will make all sales using commercially reasonable efforts consistent with their normal trading and sales practices up to the amount specified in, and otherwise in accordance with the terms of, the placement notices.
−Removed: During the three and nine months ended September 30, 2025 and 2024, we sold 106,319 shares, 262,583 shares, 0 shares and 44,143 shares, respectively, of our Series B preferred stock under our Preferred Stock ATM Program for net proceeds of $2.3 million, $5.8 million, $0 and $1.1 million, respectively.
−Removed: During the three and nine months ended September 30, 2025 and 2024, no 2026 Senior Notes were sold under the Company's Preferred Stock ATM Program.
−Removed: During the three and nine months ended September 30, 2025 and 2024, we sold $5.6 million, $31.4 million, $13.5 and $13.5, respectively, principal amount of our 2029 Senior Notes under our Preferred Stock ATM Program for net proceeds of $5.5 million, $30.8 million, $13.4 and $13.4, respectively.
−Removed: During the three and nine months ended September 30, 2025 and 2024, we sold 0 common shares, 200,000 common shares, 0 common shares and 0 common shares, respectively, under the Company’s Common Stock ATM Program for net proceeds of $0, $11.6 million, $0 and $0, respectively.
−Removed: On November 14, 2019, a wholly-owned subsidiary issued 50.5 million Class B preferred units at a purchase price of $1.00 per unit to an unrelated third party.
−Removed: The units carried a 16% preferred return to be paid quarterly.
−Removed: In March 2020, the subsidiary issued an additional 50.0 million Class B preferred units under the same terms.
−Removed: The proceeds from the transaction were used for general corporate purposes.
−Removed: During the year ended December 31, 2024, we redeemed 50.5 million of the Class B preferred units at $1.00 per unit plus accrued but unpaid interest thereon.
−Removed: In March 2025, we redeemed the remaining 50.0 million of Class B preferred units at $1.00 per unit plus accrued but unpaid interest thereon.
−Removed: In periods where present, we have included the issuance of these Class B preferred units as temporary noncontrolling interest on the condensed consolidated balance sheets.
−Removed: Dividends paid on the Class B preferred units were deducted from Net income attributable to controlling interests to derive Net income attributable to common shareholders.
−Removed: See Note 12, "Net Income Attributable to Controlling Interests Per Common Share" for more information.
+Added: During the three months ended March 31, 2026 and 2025, we sold 515 shares and 13,661 shares, respectively, of our Series B preferred stock under our Preferred Stock ATM Program for net proceeds of $0.0 million and $0.3 million, respectively.
+Added: During the three months ended March 31, 2026 and 2025, no 2026 Senior Notes were sold under the Company's Preferred Stock ATM Program.
+Added: During the three months ended March 31, 2026 and 2025, we sold $0.5 million and $17.7 million, respectively, principal amount of our 2029 Senior Notes under our Preferred Stock ATM Program for net proceeds of $0.5 million and $17.4 million, respectively.
+Added: During the three months ended March 31, 2026 and 2025, we sold 0 common shares and 200,000 common shares, respectively, under the Company’s Common Stock ATM Program for net proceeds of $0.0 million and $11.6 million, respectively.
On November 26, 2014, we and certain of our subsidiaries entered into a Loan and Security Agreement with Dove Ventures, LLC, a Nevada limited liability company ("Dove").
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Upon the election by the holders of a majority of the shares of Series A preferred stock, each share of the Series A preferred stock is convertible into the number of shares of the Company’s common stock as is determined by dividing (i) the sum of (a) $100 and (b) any accumulated and unpaid dividends on such share by (ii) an initial conversion price equal to $10 per share, subject to adjustment in certain circumstances to prevent dilution.
−Removed: At September 30, 2025, we had $425.0 million in unrestricted cash held by our various business subsidiaries.
+Added: At March 31, 2026, we had $651.1 million in cash held by our various business subsidiaries.
Because the characteristics of our assets and liabilities change, liquidity management is a dynamic process for us, driven by the pricing and maturity of our assets and liabilities.
We historically have financed our business through cash flows from operations, asset-backed structured financings and the issuance of debt and equity.
−Removed: Details concerning our cash flows for the nine months ended September 30, 2025 and 2024 are as follows:
−Removed: During the nine months ended September 30, 2025, we generated $371.7 million of cash flows from operations compared to our generation of $346.8 million of cash flows from operations during the nine months ended September 30, 2024.
+Added: Details concerning our cash flows for the three months ended March 31, 2026 and 2025 are as follows:
+Added: During the three months ended March 31, 2026, we generated $286.3 million of cash flows from operations compared to our generation of $131.6 million of cash flows from operations during the three months ended March 31, 2025.
While payment rates for our consumers stayed consistent period-over-period, we experienced an increase in cash provided by operating activities principally related to finance and fee collections associated with growing private label credit and general purpose credit card receivables and increased recoveries on charged-off receivables.
−Removed: Most of this change was due to growth in the underlying receivables (and collections thereon) along with the implementation of product, policy and pricing changes, which effectively increased the minimum payment amounts required by consumers.
−Removed: Offsetting a portion of this increase in cash provided by operations were one-time expenses associated with our acquisition of Mercury (and related severance costs) which totaled $6.8 million for the three and nine months ended September 30, 2025.
−Removed: During the nine months ended September 30, 2025, we used $1,027.3 million of cash from our investing activities, compared to the use of $571.0 million of cash from investing activities during the nine months ended September 30, 2024.
−Removed: This increase in cash used is primarily due to marginal increases in the level of net investments in private label credit and general purpose credit card receivables relative to the same period in 2024.
−Removed: For the nine months ended September 30, 2025, we purchased $2,678.8 million in private label and general purpose credit card receivables compared to $2,002.0 million for the nine months ended September 30, 2024.
−Removed: Adding to this use of cash was the acquisition of Mercury which used net, $72.9 million ($166.5 million cash purchase price less $93.6 million of cash acquired as part of the acquisition).
−Removed: Slightly offsetting this increase in cash used in operations were increased recoveries associated with the sale of charged off receivables due to increases in the contractual purchase rates we receive from third parties.
+Added: Most of this change was due to growth in the underlying receivables (and collections thereon) along with higher yielding receivables effectively increasing the minimum payment amounts required by consumers.
+Added: During the three months ended March 31, 2026, we used $51.2 million of cash in our investing activities, compared to the use of $114.9 million of cash from investing activities during the three months ended March 31, 2025.
+Added: This decrease in cash used is primarily due to marginal decreases in the level of net investments in private label credit and general purpose credit card receivables relative to the same period in 2025.
+Added: For the three months ended March 31, 2026, we purchased $1,363.7 million in private label and general purpose credit card receivables compared to $620.9 million for the three months ended March 31, 2025.
+Added: Offsetting these purchases were collections of $1,291.5 million and $496.2 million for the three months ended March 31, 2026 and 2025, respectively.
As we continue to grow our receivables base, we would expect for purchases of new receivables to outpace payments thereon throughout 2026.
−Removed: During the nine months ended September 30, 2025, we generated $681.9 million of cash from financing activities, compared to our generating $225.3 million of cash from financing activities during the nine months ended September 30, 2024.
−Removed: The increase in cash provided by financing activities is primarily due to the issuance $400.0 million aggregate principal amount of 9.750% Senior Notes due 2030 as well as an increase in net borrowings (proceeds from borrowings less repayment of borrowings) of $161.3 million.
−Removed: Additionally, we received proceeds from the issuance of 200,000 shares of common stock for net proceeds of $11.6 million in the first nine months of 2025.
−Removed: This increase was offset by the redemption of the remaining 50.0 million of Class B preferred units at $1.00 per unit plus accrued but unpaid interest thereon during the nine months ended September 30, 2025 coupled with the sale of $130.8 million of 2029 Senior Notes during the nine months ended September 30, 2024 compared to sales of $31.4 million for the nine months ended September 30, 2025.
+Added: During the three months ended March 31, 2026, we used $198.5 million of cash in financing activities, compared to our use of $54.9 million of cash from financing activities during the three months ended March 31, 2025.
+Added: The increase in cash used in financing activities is primarily due to repayments of borrowings in excess of new borrowings (proceeds from borrowings less repayment of borrowings) of $193.2 million.
+Added: Offsetting this increase in use of cash were redemptions of the remaining 50.0 million of Class B preferred units at $1.00 per unit plus accrued but unpaid interest thereon in March 2025.
In both periods, the data reflect borrowings associated with private label credit and general purpose credit card receivables offset by net repayments of amortizing debt facilities as payments are made on the underlying receivables that serve as collateral.
18 unchanged sentences
There have been no material changes to the information on critical accounting estimates described in our Annual Report on Form 10‑K for the year ended December 31, 2025.
−Removed: On a quarterly basis, we review our significant accounting policies and the related assumptions, in particular, those mentioned below, with the audit committee of the Board of Directors.
+Added: On a quarterly basis, we review our significant accounting policies and the related assumptions with the audit committee of the Board of Directors.
RELATED PARTY TRANSACTIONS
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HBR reimburses us for the full cost of the employees, based on the amount of time devoted to HBR.
−Removed: In the nine months ended September 30, 2025 and 2024, we received $0.6 million and $0.6 million, respectively, of reimbursed costs from HBR associated with these leased employees.
+Added: In the three months ended March 31, 2026 and 2025, we received $0.2 million and $0.2 million, respectively, of reimbursed costs from HBR associated with these leased employees.
On November 26, 2014, we and certain of our subsidiaries entered into a Loan and Security Agreement with Dove.
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Although it is not possible to identify all factors, we continue to face many risks and uncertainties.
−Removed: Among the factors that could cause actual future results to differ materially from our expectations are the risks and uncertainties described under "Risk Factors" set forth in Part I, Item 1A, and the risk factors and other cautionary statements in other documents we file with the SEC, including the following:
−Removed: general economic and business conditions, including conditions affecting interest rates, tariffs, consumer income, creditworthiness, consumer confidence, spending and savings levels, employment levels, our revenue, and our defaults and charge-offs;
+Added: Among the factors that could cause actual future results to differ materially from our expectations are the risks and uncertainties described under "Risk Factors" set forth in Part II, Item 1A, and the risk factors and other cautionary statements in other documents we file with the SEC, including the following:
+Added: general economic and business conditions, including conditions affecting interest rates, trade policies (tariffs and other trade measures), consumer income, creditworthiness, consumer confidence, spending and savings levels, employment levels, our revenue, and our defaults and charge-offs;
an increase or decrease in credit losses, or increased delinquencies, including increases due to a worsening of general economic conditions in the credit environment;
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the availability of adequate financing to support growth;
−Removed: the extent to which federal, state, local and foreign governmental regulation of our various business lines and the products we service for others limits or prohibits the operation of our businesses;
+Added: the extent to which federal, state, local and foreign governmental laws and regulations, or interpretations thereof, applicable to our various business lines and the products we service for others limit or prohibit the operation of our businesses;
current and future litigation and regulatory proceedings against us;
1 unchanged sentence
competition from various sources providing similar financial products, or other alternative sources of credit, to consumers;
−Removed: the adequacy of our allowances for credit losses and estimates of loan losses used within our risk management and analyses;
+Added: the adequacy of our allowance for credit losses and estimates of loan losses used within our risk management and analyses;
the possible impairment of assets;
1 unchanged sentence
our relationship with (i) the merchants that participate in private label credit operations and (ii) the banks that issue credit cards and provide certain other credit products utilizing our technology platform and related services;
−Removed: our business, financial condition and results of operations may be adversely affected by merchants’ increasing focus on the fees charged by credit and debit card networks and by legislation and regulation impacting such fees;
+Added: merchants’ increasing focus on the fees charged by credit and debit card networks and by legislation and regulation impacting such fees;
any decline in the use of cards as a payment mechanism or other adverse developments with respect to the credit card industry in general;
1 unchanged sentence
theft and employee errors;
−Removed: integration risk associated with our recent acquisition of Mercury.
+Added: integration risk associated with our recent acquisition of Mercury Financial LLC (“Mercury”).
Most of these factors are beyond our ability to predict or control.
2 unchanged sentences
We expressly disclaim any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
−Removed: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
−Removed: As a "smaller reporting company," as defined by Item 10 of Regulation S-K, we are not required to provide this information.
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.