What changed in this filing

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Item 1. Financial Statements

2026-08-06 compared with 2026-05-07 · 260 added, 118 removed, 953 unchanged (28% of the section changed)

3 unchanged sentences

(Dollars in thousands)

Cash and cash equivalents (including $ 234.4 million and $ 209.6 million associated with variable interest entities at March 31, 2026 and December 31, 2025, respectively)

Cash and cash equivalents (including $ 225.8 million and $ 209.6 million associated with variable interest entities at June 30, 2026 and December 31, 2025, respectively)

$ 555,215 $ 621,093

Restricted cash and cash equivalents (including $ 126.2 million and $ 117.6 million associated with variable interest entities at March 31, 2026 and December 31, 2025, respectively)

Restricted cash and cash equivalents (including $ 51.2 million and $ 117.6 million associated with variable interest entities at June 30, 2026 and December 31, 2025, respectively)

89,965 146,314

Loans at fair value (including $ 6,337.6 million and $ 6,522.9 million associated with variable interest entities at March 31, 2026 and December 31, 2025, respectively)

Loans at fair value (including $ 6,466.1 million and $ 6,522.9 million associated with variable interest entities at June 30, 2026 and December 31, 2025, respectively)

6,658,748 6,647,882

Loans at amortized cost, net (including $ 3.8 million and $ 4.1 million of allowance for credit losses at March 31, 2026 and December 31, 2025, respectively;

and $ 19.5 million and $ 20.1 million of deferred revenue at March 31, 2026 and December 31, 2025, respectively)

Loans at amortized cost, net (including $ 3.7 million and $ 4.1 million of allowance for credit losses at June 30, 2026 and December 31, 2025, respectively;

and $ 18.2 million and $ 20.1 million of deferred revenue at June 30, 2026 and December 31, 2025, respectively)

77,731 82,884

12 unchanged sentences

23,568 25,283

Notes payable, net (including $ 5,607.2 million and $ 5,739.1 million associated with variable interest entities at March 31, 2026 and December 31, 2025, respectively)

Notes payable, net (including $ 5,554.0 million and $ 5,739.1 million associated with variable interest entities at June 30, 2026 and December 31, 2025, respectively)

5,578,882 5,818,761

7 unchanged sentences

Preferred stock, no par value, 10,000,000 shares authorized:

Series A preferred stock, 400,000 shares issued and outstanding (liquidation preference - $ 40.0 million) at March 31, 2026 and December 31, 2025 (Note 5) (1)

Series A preferred stock, 400,000 shares issued and outstanding (liquidation preference - $ 40.0 million) at June 30, 2026 and December 31, 2025 (Note 5) (1)

40,000 40,000

Shareholders' Equity

Series B preferred stock, no par value, 3,584,646 shares issued and outstanding at March 31, 2026 (liquidation preference - $ 89.6 million);

Series B preferred stock, no par value, 3,584,646 shares issued and outstanding at June 30, 2026 (liquidation preference - $ 89.6 million);

3,584,131 shares issued and outstanding at December 31, 2025 (liquidation preference - $ 89.6 million) (1)

Common stock, no par value, 150,000,000 shares authorized:

15,086,414 and 14,922,462 shares issued and outstanding at March 31, 2026 and December 31, 2025, respectively

15,170,081 and 14,922,462 shares issued and outstanding at June 30, 2026 and December 31, 2025, respectively

Paid-in capital

15 unchanged sentences

For the Three Months Ended

For the Six Months Ended

Revenue and other income:

25 unchanged sentences

Condensed Consolidated Statements of Shareholders’ Equity and Temporary Equity (Unaudited)

For the Three Months Ended March 31, 2026 and March 31, 2025

For the Six Months Ended June 30, 2026 and June 30, 2025

(Dollars in thousands)

18 unchanged sentences

— — 226,652 — — — — — — —

Issuance of common stock

— — — — — — — — — —

Issuance of series B preferred stock, net

9 unchanged sentences

3,584,646 $ — 15,086,414 $ — $ 100,144 $ 548,291 $ ( 4,465 ) $ 643,970 $ 40,000 $ —

Series A preferred stock dividends ($ 1.50 dividend per share per quarter)

— — — — — ( 600 ) — ( 600 ) — —

Series B preferred stock dividends ($ 0.48 dividend per share per quarter)

— — — — — ( 1,708 ) — ( 1,708 ) — —

Stock option exercises and proceeds related thereto

— — 78,850 — 3,284 — — 3,284 — —

Compensatory stock issuances, net of forfeitures

— — 5,813 — — — — — — —

Contributions by owners of noncontrolling interests

— — — — — — 60 60 — —

Stock-based compensation costs

— — — — 2,804 — — 2,804 — —

Redemption and retirement of common shares

— — ( 996 ) — ( 55 ) — — ( 55 ) — —

— — — — — 49,719 2 49,721 — —

Balance at June 30, 2026

3,584,646 $ — 15,170,081 $ — $ 106,177 $ 595,702 $ ( 4,403 ) $ 697,476 $ 40,000 $ —

Series B Preferred Stock

31 unchanged sentences

— — ( 27,252 ) — ( 1,246 ) — — ( 1,246 ) — —

Net income (loss)

— — — — — 31,520 ( 398 ) 31,122 — —

1 unchanged sentence

3,314,840 $ — 15,097,243 $ — $ 110,138 $ 422,574 $ ( 3,863 ) $ 528,849 $ 40,000 $ —

Series A preferred stock dividends ($ 1.50 dividend per share)

— — — — — ( 600 ) — ( 600 ) — —

Series B preferred stock dividends ($ 0.48 dividend per share)

— — — — — ( 1,622 ) — ( 1,622 ) — —

Stock option exercises and proceeds related thereto

— — 4,558 — 70 — — 70 — —

Compensatory stock issuances, net of forfeitures

— — 65,411 — — — — — — —

Issuance of common stock

— — — — 1 — — 1 — —

Issuance of series B preferred stock, net

142,603 — — — 3,157 — — 3,157 — —

Stock-based compensation costs

— — — — 948 — — 948 — —

Redemption and retirement of common shares

— — ( 41,381 ) — ( 1,915 ) — — ( 1,915 ) — —

Net income (loss)

— — — — — 30,573 ( 283 ) 30,290 — —

Balance at June 30, 2025

3,457,443 $ — 15,125,831 $ — $ 112,399 $ 450,925 $ ( 4,146 ) $ 559,178 $ 40,000 $ —

See accompanying notes.

2 unchanged sentences

(Dollars in thousands)

For the Three Months Ended March 31,

For the Six Months Ended June 30,

Operating activities

12 unchanged sentences

Increase in uncollected fees on earning assets

Increase in income tax liability

(Decrease) increase in accounts payable and accrued expenses

Increase (decrease) in income tax liability

Increase in accounts payable and accrued expenses

Net cash provided by operating activities

15 unchanged sentences

Repayment of borrowings

Net cash used in financing activities

Net increase (decrease) in cash and cash equivalents and restricted cash and cash equivalents

Net cash (used in) provided by financing activities

Net decrease in cash and cash equivalents and restricted cash and cash equivalents

Cash and cash equivalents and restricted cash equivalents at beginning of period

11 unchanged sentences

Notes to Condensed Consolidated Financial Statements

March 31, 2026 and 2025

June 30, 2026 and 2025

Description of Our Business

15 unchanged sentences

We service the underlying receivables on behalf of our bank partners by providing and/or managing the ongoing customer service activities in the form of processing payments, providing regular notices of statement activity, and resolving customer complaints, billing disputes, and fraud claims.

Our bank partners continue to own the underlying consumer accounts that they originate and provide regulatory oversight in the form of reviewing, approving the development of consumer finance programs and approving all related marketing materials, establishing the policies and procedures that govern the operation of the consumer finance programs, reviewing and approving customer complaint correspondence, performing ongoing compliance monitoring and testing and audits of the consumer finance programs, and providing settlement services between us and our retail partners.

Our bank partners continue to own the underlying consumer accounts that they originate and provide regulatory oversight in the form of reviewing and approving the development of consumer finance programs and approving all related marketing materials, establishing the policies and procedures that govern the operation of the consumer finance programs, reviewing and approving customer complaint correspondence, performing ongoing compliance monitoring and testing and audits of the consumer finance programs, and providing settlement services between us and our retail partners.

From time to time, we also purchase receivables portfolios from third parties other than our bank partners.

These products and services are reported through two reportable segments, Credit as a Service ("CaaS") and Auto Finance.

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.

Within our CaaS segment, we apply our technology solutions, in combination with the experiences gained, and infrastructure built from servicing over $53 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.

40 unchanged sentences

Loans at fair value represent receivables for which we have elected the fair value option (the "Fair Value Receivables").

The Fair Value Receivables are held by entities that qualify as VIEs, and are consolidated onto our condensed consolidated balance sheets, some portfolios of which are unencumbered and some of which are still encumbered under structured or other financing facilities.

The Fair Value Receivables are primarily held by entities that qualify as VIEs, and are consolidated onto our condensed consolidated balance sheets, some portfolios of which are unencumbered and some of which are still encumbered under structured or other financing facilities.

Loans and finance receivables include accrued and unpaid interest and fees.

8 unchanged sentences

Our loans at amortized cost, net, currently consist of receivables associated with our Auto Finance segment’s operations and are presented in the condensed consolidated balance sheets net of the related allowance for credit losses and deferred revenue.

We purchased auto loans with outstanding principal of $ 50.7 million and $ 48.1 million for the three months ended March 31, 2026 and 2025, respectively, through our prequalified network of independent automotive dealers and automotive finance companies.

We purchased auto loans with outstanding principal of $ 44.4 million, $ 95.2 million, $ 48.2 million and $ 96.3 million for the three and six months ended June 30, 2026 and 2025, respectively, through our prequalified network of independent automotive dealers and automotive finance companies.

We show an allowance for credit losses for our loans at amortized cost.

7 unchanged sentences

Certain of our loans at amortized cost also contain components of deferred revenue related to loan discounts on the purchase of our auto finance receivables.

As of March 31, 2026 and December 31, 2025, the weighted average remaining accretion period for the $ 19.5 million and $ 20.1 million of deferred revenue reflected in the condensed consolidated balance sheets was 21 and 23 months, respectively.

As of June 30, 2026 and December 31, 2025, the weighted average remaining accretion period for the $ 18.2 million and $ 20.1 million of deferred revenue reflected in the condensed consolidated balance sheets was 21 and 23 months, respectively.

A roll-forward (in millions) of our allowance for credit losses by class of receivable is as follows:

For the Three Months Ended March 31,

For the Three Months Ended June 30,

Notes Receivable

9 unchanged sentences

$ ( 9.2 ) $ ( 3.7 ) $ ( 12.9 ) $ ( 6.1 ) $ ( 4.9 ) $ ( 11.0 )

( 1 ) For the three months ended March 31, 2026, we recorded a provision for credit losses associated with our notes receivable from consumer technology platforms that are included in Prepaid expenses and other assets on our condensed consolidated balance sheets.

For the Six Months Ended June 30,

Notes Receivable

Allowance for credit losses:

Balance at beginning of period

$ ( 8.0 ) $ ( 4.1 ) $ ( 12.1 ) $ ( 5.9 ) $ ( 4.9 ) $ ( 10.8 )

Provision for credit losses(1)

( 1.2 ) ( 1.4 ) ( 2.6 ) ( 0.2 ) ( 2.3 ) ( 2.5 )

— 3.0 3.0 — 3.5 3.5

— ( 1.2 ) ( 1.2 ) — ( 1.2 ) ( 1.2 )

Balance at end of period

$ ( 9.2 ) $ ( 3.7 ) $ ( 12.9 ) $ ( 6.1 ) $ ( 4.9 ) $ ( 11.0 )

( 1 ) For the three and six months ended June 30, 2026, we recorded a provision for credit losses associated with our notes receivable from consumer technology platforms that are included in Prepaid expenses and other assets on our condensed consolidated balance sheets.

Allowance for credit losses:

Balance of Notes Receivable at end of period individually evaluated for impairment

15 unchanged sentences

We consider loan delinquencies a key indicator of credit quality because this measure provides the best ongoing estimate of how a particular class of receivables is performing.

An aging of our delinquent loans at amortized cost (in millions) as of March 31, 2026 and December 31, 2025 is as follows:

An aging of our delinquent loans at amortized cost (in millions) as of June 30, 2026 and December 31, 2025 is as follows:

30-59 days past due

9 unchanged sentences

This could include a restructuring of the loan terms to alleviate the burden of the borrower's near-term cash requirements, such as a modification of terms to reduce or defer cash payments to help the borrower attempt to improve its financial condition.

For the three months ended March 31, 2026 and 2025, no Loans at amortized cost qualified as a FDM.

For the six months ended June 30, 2026 and 2025, no Loans at amortized cost qualified as a FDM.

Intangible Assets and Amortization

9 unchanged sentences

$ 25,130 $ 30,268

Amortization expense related to these finite-lived intangible assets was $ 2.6 million and $ 0 for the three months ended March 31, 2026 and 2025, respectively, and is included within depreciation and amortization in the condensed consolidated statements of income.

Amortization expense related to these finite-lived intangible assets was $ 2.6 million and $ 5.1 million for the three and six months ended June 30, 2026, respectively, and is included within depreciation and amortization in the condensed consolidated statements of income.

There was no amortization expense related to finite-lived intangible assets for the three and six months ended June 30, 2025.

Aggregate amortization expense of our intangible assets for the next five years is as follows (in thousands):

3 unchanged sentences

Total amortization expense

We experienced effective tax rates of 24.4 % and 23.6 % for the three months ended March 31, 2026, and 2025, respectively.

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.

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.

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.

We experienced effective tax rates of 24.7 % and 24.6 % for the three and six months ended June 30, 2026, respectively compared to 24.4 % and 24.0 % for the three and six months ended June 30, 2025.

These effective tax rates were above the statutory rate principally due to ( 1 ) state and foreign income tax expense, ( 2 ) the tax effects of 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.

Offsetting the foregoing items are the tax effects of our deductions associated with the 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.

Another offsetting item in only the six months ended June 30, 2025, was our deduction of interest expense on a financial instrument classified as debt for tax purposes that was repaid in the six months ended June 30, 2025—such financial instrument which was characterized in our consolidated financial statements as dividend-paying preferred stock.

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.

Such interest expense was de minimis in both the three months ended March 31, 2026, and 2025.

Such interest expense was de minimis in the six months ended June 30, 2026, and was $ 0.1 million for the six months ended June 30, 2025.

Revenue Recognition and Revenue from Contracts with Customers

34 unchanged sentences

Revenue from these contracts with customers is included in Consumer loans, including past due fees and Other revenue on our condensed consolidated statements of income.

Components (in thousands) of our revenue from contracts with customers is as follows:

For the Three Months Ended March 31, 2026

Components (in thousands) of our revenue from contracts with customers are as follows:

For the Three Months Ended June 30, 2026

Interchange revenues, net (1)

10 unchanged sentences

$ 103,509 $ 203 $ 103,712

For the Three Months Ended March 31, 2025

For the Six Months Ended June 30, 2026

Interchange revenues, net (1)

10 unchanged sentences

$ 175,206 $ 416 $ 175,622

For the Three Months Ended June 30, 2025

Interchange revenues, net (1)

$ 5,973 $ — $ 5,973

Servicing income

5,436 165 5,601

Service charges and other customer related fees

11,603 8 11,611

Total Other revenue

23,012 173 23,185

Merchant fees (2)

62,546 — 62,546

Total revenue from contracts with customers

$ 85,558 $ 173 $ 85,731

For the Six Months Ended June 30, 2025

Interchange revenues, net (1)

$ 10,679 $ — $ 10,679

Servicing income

9,410 335 9,745

Service charges and other customer related fees

21,621 17 21,638

Total Other revenue

41,710 352 42,062

Merchant fees (2)

96,123 — 96,123

Total revenue from contracts with customers

$ 137,833 $ 352 $ 138,185

( 1 ) Interchange revenue is presented net of customer reward expense and includes network incentives for credit card transactions processed through interchange networks.

42 unchanged sentences

Reportable segment information (in thousands) is as follows:

Three Months Ended March 31, 2026

Three Months Ended June 30, 2026

Revenue and other income:

31 unchanged sentences

$ 62,980 $ 3,027 $ 66,007

Six Months Ended June 30, 2026

Revenue and other income:

Consumer loans, including past due fees

$ 1,055,409 $ 19,122 $ 1,074,531

Three Months Ended March 31, 2025

Fees and related income on earning assets

260,637 670 261,307

Other revenue

87,594 416 88,010

Total operating revenue and other income

1,403,640 20,208 1,423,848

Other non-operating income

Total revenue and other income

1,403,704 20,208 1,423,912

Interest expense

( 245,475 ) ( 717 ) ( 246,192 )

Provision for credit losses

( 1,196 ) ( 1,442 ) ( 2,638 )

Changes in fair value of loans

( 761,804 ) — ( 761,804 )

395,229 18,049 413,278

Operating expenses:

Salaries and benefits

( 53,440 ) ( 2,456 ) ( 55,896 )

Card and loan servicing

( 95,905 ) ( 6,876 ) ( 102,781 )

Marketing and solicitation

( 84,504 ) ( 99 ) ( 84,603 )

Depreciation and amortization

( 7,141 ) ( 37 ) ( 7,178 )

( 35,597 ) ( 2,368 ) ( 37,965 )

Total operating expenses

( 276,587 ) ( 11,836 ) ( 288,423 )

Income before income taxes

$ 118,642 $ 6,213 $ 124,855

$ 7,408,285 $ 83,485 $ 7,491,770

Three Months Ended June 30, 2025

Revenue and other income:

29 unchanged sentences

( 76,360 ) ( 5,814 ) ( 82,174 )

Income (loss) before income taxes

$ 37,996 $ 2,150 $ 40,146

Six Months Ended June 30, 2025

Revenue and other income:

Consumer loans, including past due fees

$ 505,707 $ 18,298 $ 524,005

Fees and related income on earning assets

172,585 41 172,626

Other revenue

41,710 352 42,062

Total operating revenue and other income

720,002 18,691 738,693

Other non-operating income

Total revenue and other income

720,015 19,314 739,329

Interest expense

( 100,146 ) ( 1,068 ) ( 101,214 )

Provision for credit losses

( 214 ) ( 2,236 ) ( 2,450 )

Changes in fair value of loans

( 395,122 ) — ( 395,122 )

224,533 16,010 240,543

Operating expenses:

Salaries and benefits

( 26,419 ) ( 2,465 ) ( 28,884 )

Card and loan servicing

( 59,621 ) ( 6,616 ) ( 66,237 )

Marketing and solicitation

( 45,239 ) ( 44 ) ( 45,283 )

Depreciation and amortization

( 1,644 ) ( 38 ) ( 1,682 )

( 15,219 ) ( 2,224 ) ( 17,443 )

Total operating expenses

( 148,142 ) ( 11,387 ) ( 159,529 )

Income before income taxes

2 unchanged sentences

Shareholders’ Equity and Preferred Stock

During the three months ended March 31, 2026 and 2025, we repurchased and contemporaneously retired 72,008 and 27,252 shares of our common stock at an aggregate cost of $ 3.8 million, and $ 1.2 million, respectively, pursuant to both open market and private purchases and the return of stock by holders of equity incentive awards to pay tax withholding obligations.

During the three and six months ended June 30, 2026 and 2025, we repurchased and contemporaneously retired 996 shares, 73,004 shares, 41,381 shares and 68,633 shares of our common stock at an aggregate cost of $ 0.1 million, $ 3.8 million, $ 1.9 million and $ 3.2 million, respectively, pursuant to both open market and private purchases and the return of stock by holders of equity incentive awards to pay tax withholding obligations.

Preferred Stock

1 unchanged sentence

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.

No shares of Series B Preferred Stock were repurchased in the three months ended March 31, 2026 and 2025.

No shares of Series B Preferred Stock were repurchased in the three and six months ended June 30, 2026 and 2025.

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").

3 unchanged sentences

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.

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.

During the three months ended March 31, 2026 and 2025, no 2026 Senior Notes were sold under the Company's Preferred Stock ATM Program.

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.

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.

During the three and six months ended June 30, 2026 and 2025, we sold 0 shares, 515 shares, 142,603 shares and 156,264 shares, respectively, of our Series B preferred stock under our Preferred Stock ATM Program for net proceeds of $ 0.0 million, $ 0.0 million, $ 3.2 million and $ 3.5 million, respectively.

During the three and six months ended June 30, 2026 and 2025, we sold $ 3.9 million, $ 4.4 million, $ 8.1 million and $ 25.8 million, respectively, principal amount of our 2029 Senior Notes under our Preferred Stock ATM Program for net proceeds of $ 3.8 million, $ 4.3 million, $ 7.9 million and $ 25.3 million, respectively.

During the six months ended June 30, 2025, we sold 200,000 common shares under the Company’s Common Stock ATM Program for net proceeds of $ 11.6 million.

No shares were sold under the Company’s Common Stock ATM Program for the three and six months ended June 30, 2026 or for the three months ended June 30, 2025.

Redeemable Preferred Stock

46 unchanged sentences

Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.

The table below summarizes (in thousands) by fair value hierarchy the March 31, 2026 and December 31, 2025 fair values and carrying amounts of ( 1 ) our assets that are carried at fair value in our condensed consolidated financial statements and ( 2 ) our assets not carried at fair value, but for which fair value disclosures are required:

Assets – As of March 31, 2026 (1)

Quoted Prices in Active Markets for Identical Assets (Level 1)

Significant Other Observable Inputs (Level 2)

Significant Unobservable Inputs (Level 3)

The table below summarizes (in thousands) by fair value hierarchy the June 30, 2026 and December 31, 2025 fair values and carrying amounts of ( 1 ) our assets that are carried at fair value in our condensed consolidated financial statements and ( 2 ) our assets not carried at fair value, but for which fair value disclosures are required:

Assets – As of June 30, 2026 (1)

Carrying Amount of Assets

5 unchanged sentences

Assets – As of December 31, 2025 (1)

Quoted Prices in Active Markets for Identical Assets (Level 1)

Significant Other Observable Inputs (Level 2)

Significant Unobservable Inputs (Level 3)

Carrying Amount of Assets

9 unchanged sentences

For our loans included in the above table, we assess the fair value of these assets based on our estimate of future cash flows net of servicing costs.

For the three months ended March 31, 2026 and 2025, we estimate the portion of fair value changes considered to be attributable to changes in instrument-specific credit risk to be $ 12.1 million and $ 9.3 million, respectively.

For Level 3 assets carried at fair value measured on a recurring basis using significant unobservable inputs, the following table presents (in thousands) a reconciliation of the beginning and ending balances for the three months ended March 31, 2026 and 2025:

For the six months ended June 30, 2026 and 2025, we estimate the portion of fair value changes considered to be attributable to changes in instrument-specific credit risk to be $ 14.0 million and $ 7.5 million, respectively.

Loans at Fair Value

9 unchanged sentences

( 761,804 ) ( 395,122 )

Change in Contingent consideration (3)

Change in Contingent consideration and other purchase price adjustments (3)

3,063,869 1,562,566

2 unchanged sentences

( 3,462,923 ) ( 1,387,938 )

Balance at March 31,(4)

Balance at June 30,(4)

$ 6,658,748 $ 3,004,724

5 unchanged sentences

( 2 ) Total Changes in fair value of loans is included in our condensed consolidated statements of income.

( 3 ) Reflects changes to the fair value associated with Contingent consideration.

( 3 ) Reflects changes to the fair value associated with Contingent consideration and other purchase price adjustments.

See below for more information.

( 4 ) As of March 31, 2026 and March 31, 2025, the aggregate unpaid principal balance included within loans at fair value was $ 6,272 million and $ 2,462 million, respectively.

( 4 ) As of June 30, 2026 and June 30, 2025, the aggregate unpaid principal balance included within loans at fair value was $ 6,404 million and $ 2,788 million, respectively.

The unrealized gains and losses for assets within the Level 3 category presented in the tables above include changes in fair value that are attributable to both observable and unobservable inputs.

16 unchanged sentences

Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the liability.

The table below summarizes (in thousands) by fair value hierarchy the March 31, 2026 and December 31, 2025 fair values and carrying amounts of our liabilities not carried at fair value, but for which fair value disclosures are required:

Liabilities – As of March 31, 2026

Quoted Prices in Active Markets for Identical Assets (Level 1)

Significant Other Observable Inputs (Level 2)

Significant Unobservable Inputs (Level 3)

The table below summarizes (in thousands) by fair value hierarchy the June 30, 2026 and December 31, 2025 fair values and carrying amounts of both our liabilities carried at fair value and our liabilities not carried at fair value, but for which fair value disclosures are required:

Liabilities – As of June 30, 2026

Carrying Amount of Liabilities

11 unchanged sentences

Liabilities – As of December 31, 2025

Quoted Prices in Active Markets for Identical Assets (Level 1)

Significant Other Observable Inputs (Level 2)

Significant Unobservable Inputs (Level 3)

Carrying Amount of Liabilities

1 unchanged sentence

$ — $ — $ 28,668 $ 28,668

Loan purchase commitment

Contingent consideration

$ — $ — $ 40,000 $ 40,000

25 unchanged sentences

9, "Notes Payable," for further discussion on our other notes payable.

For Level 3 liabilities carried at fair value measured on a recurring basis using significant unobservable inputs, the following table presents (in thousands) a reconciliation of the beginning and ending balances for the three months ended March 31, 2026 and March 31, 2025:

Fair Value at

2 unchanged sentences

Changes in fair value of liabilities, included in earnings

March 31, 2026

June 30, 2026

Bank partner fees

6 unchanged sentences

Changes in fair value of liabilities, included in earnings

March 31, 2025

June 30, 2025

Bank partner fees

1 unchanged sentence

The following key unobservable assumptions were used in the fair value measurement of our liabilities carried at fair value:

March 31, 2026

June 30, 2026

December 31, 2025

14 unchanged sentences

Other Relevant Data

Other relevant data (in thousands) as of March 31, 2026 and December 31, 2025 concerning certain assets we carry at fair value are as follows:

Other relevant data (in thousands) as of June 30, 2026 and December 31, 2025 concerning certain assets we carry at fair value are as follows:

Loans at Fair Value Pledged as Collateral under Structured Financings

As of March 31, 2026

As of June 30, 2026

As of December 31, 2025

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The following table presents a summary of VIEs in which we had continuing involvement and held a variable interest (in millions):

March 31, 2026

June 30, 2026

December 31, 2025

Cash and cash equivalents

$ 225.8 $ 209.6

Restricted cash and cash equivalents

Loans at fair value

6,466.1 6,522.9

Total Assets held by VIEs

$ 6,743.1 $ 6,850.1

Notes Payable, net held by VIEs

$ 5,554.0 $ 5,739.1

We have operating leases primarily associated with our corporate offices, ancillary office locations associated with our recent acquisition of Mercury and regional service centers.

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The components of lease expense associated with our lease liabilities and supplemental cash flow information related to those leases were as follows (dollar amounts in thousands):

For the Three Months Ended March 31,

For the Three Months Ended June 30,

For the Six Months Ended June 30,

Operating lease cost, gross

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Sublease income

( 42 ) ( 25 ) ( 50 ) ( 49 )

Net Operating lease cost

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Weighted average discount rate

As of March 31, 2026 , scheduled payments of lease liabilities were as follows (in thousands):

As of June 30, 2026 , scheduled payments of lease liabilities were as follows (in thousands):

Gross Lease Payment

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Notes Payable, at Face Value

Other notes payable outstanding as of March 31, 2026 and December 31, 2025 that are secured by the financial and operating assets of either the borrower, another of our subsidiaries or both, include the following, scheduled (in millions); except as otherwise noted, the assets of our holding company (Atlanticus Holdings Corporation) are subject to creditor claims under these scheduled facilities:

Other notes payable outstanding as of June 30, 2026 and December 31, 2025 that are secured by the financial and operating assets of either the borrower, another of our subsidiaries or both, include the following, scheduled (in millions); except as otherwise noted, the assets of our holding company (Atlanticus Holdings Corporation) are subject to creditor claims under these scheduled facilities:

Outstanding as of

March 31, 2026

June 30, 2026

December 31, 2025

Revolving credit facilities at a weighted average interest rate equal to 7.0 % as of March 31, 2026 ( 7.1 % as of December 31, 2025) secured by the financial and operating assets of CAR and/or certain receivables and restricted cash with a combined aggregate carrying amount of $ 7,169.6 million as of March 31, 2026 ($ 7,340.6 million as of December 31, 2025)

Revolving credit facilities at a weighted average interest rate equal to 6.7 % as of June 30, 2026 ( 7.1 % as of December 31, 2025) secured by the financial and operating assets of CAR and/or certain receivables and restricted cash with a combined aggregate carrying amount of $ 7,205.2 million as of June 30, 2026 ($ 7,340.6 million as of December 31, 2025)

Maturity date

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Term SOFR plus 3.50%

Revolving credit facility (3) (4)

Revolving credit facility, repaid in June 2026 (3) (4)

September 2029

18 300.0 300.0 300.0

Revolving credit facility (3) (4)

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Revolving credit facility (3) (4)

September 2027

Commercial paper rate (3.89%) plus 2.00%

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18 379.1 194.4 223.0

Revolving credit facility (3) (4) (5)

18 700.0 700.0 700.0

Revolving credit facility, repaid in May 2026 (3) (4) (5)

Revolving credit facility (3) (4) (5)

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18 374.0 194.4 313.0

Revolving credit facility (3) (4) (5)

Revolving credit facility, repaid in April 2026 (3) (4) (5)

Term SOFR plus 2.00 %- 7.50 %

12 500.0 500.0 500.0

Revolving credit facility (3) (4)

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Revolving credit facility (3) (4)

September 2031

18 500.0 500.0 500.0

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Revolving credit facility (3) (4)

18 400.0 400.0 —

Revolving credit facility (3) (4)

18 275.0 275.0 —

Revolving credit facility

Term SOFR plus 3.00%

— 50.0 — 50.0

Revolving credit facility (2) (3)

Term SOFR plus 3.75%

Revolving credit facility (2) (3)

Term SOFR plus 2.50%

Other facilities

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Amortization period (months) reflects the scheduled paydown period prior to the stated Maturity date.

As of March 31, 2026 , the Prime Rate was 6.75 %, the Term Secured Overnight Financing Rate ("Term SOFR") was 3.66 % and the Secured Overnight Financing Rate ("SOFR") was 3.68 %.

As of June 30, 2026 , the Prime Rate was 6.75 %, the Term Secured Overnight Financing Rate ("Term SOFR") was 3.65 % and the Secured Overnight Financing Rate ("SOFR") was 3.68 %.

Revolving loans in the table above may be drawn upon to the extent of outstanding eligible receivables.

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coverage ratios, leverage ratios, liquidity, eligibility, payment, delinquency, charge off or collateral performance tests, the failure of which could result in required early repayment of all or a portion of the outstanding balance.

As of March 31, 2026, we were in compliance with the covenants underlying our various notes payable and credit facilities.

As of June 30, 2026, we were in compliance with the covenants underlying our various notes payable and credit facilities.

Senior Notes, net

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We are amortizing fees associated with the issuance of the 2026 Senior Notes into interest expense over the expected life of such notes.

Amortization of these fees for the three months ended March 31, 2026 and 2025 totaled $ 0.4 million and $ 0.4 million, respectively.

We repurchased $ 8.1 million of the outstanding principal amount of these 2026 Senior Notes in the three months ended March 31, 2026.

Amortization of these fees for the three and six months ended June 30, 2026 and 2025 totaled $ 0.4 million, $ 0.7 million, $ 0.3 million and $ 0.7 million, respectively.

We repurchased $ 5.5 million and $ 13.6 million of the outstanding principal amount of these 2026 Senior Notes in the three and six months ended June 30, 2026.

There were no repurchases for the same period in 2025.

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We are amortizing fees associated with the issuance of the 2029 Senior Notes into interest expense over the expected life of such notes.

Amortization of these fees for the three months ended March 31, 2026 and 2025 totaled $ 0.4 million and $ 0.3 million, respectively.

Amortization of these fees for the three and six months ended June 30, 2026 and 2025 totaled $ 0.4 million, $ 0.7 million, $ 0.3 million, and $ 0.7 million, respectively.

In August 2025, we issued $ 400.0 million principal amount of 9.750 % Senior Notes due 2030 (the "2030 Senior Notes").

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We are amortizing fees associated with the issuance of the 2030 Senior Notes into interest expense over the expected life of such notes.

Amortization of these fees for the three months ended March 31, 2026 totaled $ 0.2 million.

Amortization of these fees for the three - and six months ended June 30, 2026 totaled $ 0.2 million and $ 0.5 million.

The 2026 Senior Notes, 2029 Senior Notes and 2030 Senior Notes are collectively included on our condensed consolidated balance sheet as "Senior Notes, net." See Note 4 "Shareholders' Equity and Preferred Stock" for more information.

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Under finance products available in the private label credit and general purpose credit card channels, consumers have the ability to borrow up to the maximum credit limit assigned to each individual’s account.

Unfunded commitments under these products aggregated $ 7.3 billion at March 31, 2026.

Unfunded commitments under these products aggregated $ 7.7 billion at June 30, 2026.

We have never experienced a situation in which all borrowers have exercised their entire available lines of credit at any given point in time, nor do we anticipate this will ever occur in the future.

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These loans are secured by the underlying auto inventory and, in certain cases where we have other lending products outstanding with the dealer, are secured by the collateral under those lending arrangements as well, including any outstanding dealer reserves.

As of March 31, 2026, CAR had unfunded outstanding floor-plan financing commitments totaling $ 9.3 million.

As of June 30, 2026, CAR had unfunded outstanding floor-plan financing commitments totaling $ 8.3 million.

Each draw against unused commitments is reviewed for conformity to pre-established guidelines and is not unconditional.

Under agreements with third -party originating and other financial institutions, we have pledged security (collateral) related to their issuance of consumer credit and purchases thereunder, of which $ 29.8 million remains pledged as of March 31, 2026 to support various ongoing contractual obligations.

Under agreements with third -party originating and other financial institutions, we have pledged security (collateral) related to their issuance of consumer credit and purchases thereunder, of which $ 41.8 million remains pledged as of June 30, 2026 to support various ongoing contractual obligations.

Under agreements with third -party originating and other financial institutions, we have agreed to indemnify the financial institutions for certain liabilities associated with the services we provide on behalf of the financial institutions—such indemnification obligations generally being limited to instances in which we either (a) have been afforded the opportunity to defend against any potentially indemnifiable claims or (b) have reached agreement with the financial institutions regarding settlement of potentially indemnifiable claims.

As of March 31, 2026, we have assessed the likelihood of any potential payments related to the aforementioned contingencies as remote.

As of June 30, 2026, we have assessed the likelihood of any potential payments related to the aforementioned contingencies as remote.

We would accrue liabilities related to these contingencies in any future period when we assess the likelihood of an estimable payment as probable.

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Eligible events typically include loss of life, job loss, disability, or hospitalization.

As an acquirer of receivables, our potential exposure under this program, if all eligible participants applied for this benefit, was $ 210.8 million as of March 31, 2026.

As an acquirer of receivables, our potential exposure under this program, if all eligible participants applied for this benefit, was $ 241.1 million as of June 30, 2026.

We have never experienced a situation in which all eligible participants have applied for this benefit at any given point in time, nor do we anticipate this will ever occur in the future.

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We acquire all of our fair value receivables under agreements with three third -party originating institutions.

Our top five retail partnerships accounted for over 83 % of our private label receivables outstanding as of March 31, 2026.

Our top five retail partnerships accounted for over 85 % of our private label receivables outstanding as of June 30, 2026.

The volume of receivables purchased each period varies based on a number of factors, including seasonal consumer purchase patterns, growth (or contraction) within retail locations and consumer application volumes that retail partners may direct to our bank partners versus competitors that offer similar financing products.

During the three months ended March 31, 2026 and 2025, we had receivable purchases from our top five retail partners of the following (in millions):

Gross Purchases for the Three Months Ended March 31,

During the three and six months ended June 30, 2026 and 2025, we had receivable purchases from our top five retail partners of the following (in millions):

For the Three Months Ended June 30,

For the Six Months Ended June 30,

Largest Retail Partners

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Our general purpose credit card and private label credit receivables base is spread across individual consumers in the U.S.

As of March 31, 2026 , only one state (Texas) had receivables concentration in excess of 10% of our total pool of receivables.

As of June 30, 2026 , only one state (Texas) had receivables concentration in excess of 10% of our total pool of receivables.

We are subject to various legal proceedings that are incidental to the conduct of our business.

7 unchanged sentences

For the Three Months Ended

For the Six Months Ended

Net income attributable to controlling interests

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Effect of dilutive preferred stock dividends and discount accretion

600 600 1,200 1,200

Net income attributable to common shareholders—diluted

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Effect of dilutive stock compensation arrangements and exchange of preferred stock

4,014 4,063 4,021 4,066

Diluted (including unvested share-based payment awards) (1)

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$ 2.50 $ 1.51 $ 4.74 $ 3.00

Shares related to unvested share-based payment awards included in our basic and diluted share counts were 445,456 and 352,266 for the three months ended March 31, 2026 and 2025, respectively.

There were no anti-dilutive stock options for excluded from our net income attributable to controlling interests per share of common stock calculations for the three months ended March 31, 2026 and 2025.

For the three months ended March 31, 2026 and 2025, we included 4.0 million shares of common stock for each period in our outstanding diluted share counts associated with our Series A Preferred Stock.

Shares related to unvested share-based payment awards included in our basic and diluted share counts were 558,680 and 502,381 for the three and six months ended June 30, 2026, respectively compared to the 371,800 and 362,087 shares for the three and six months ended June 30, 2025.

There were no anti-dilutive stock options excluded from our net income attributable to controlling interests per share of common stock calculations for the three and six months ended June 30, 2026 and 2025.

For the three and six months ended June 30, 2026 and 2025, we included 4.0 million shares of common stock for each period in our outstanding diluted share counts associated with our Series A Preferred Stock.

See Note 5, "Redeemable Preferred Stock," for a further discussion of these convertible securities.

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The Fourth Amended 2014 Plan was approved by our shareholders in May 2019.

As of March 31, 2026, 34,128 shares remained available for issuance under the ESPP and 1,667,247 shares remained available for issuance under the Fourth Amended 2014 Plan.

Exercises and vesting under our stock-based compensation plans resulted in no income tax-related charges to paid-in capital during the three months ended March 31, 2026 and 2025.

As of June 30, 2026, 32,918 shares remained available for issuance under the ESPP and 1,661,591 shares remained available for issuance under the Fourth Amended 2014 Plan.

Exercises and vesting under our stock-based compensation plans resulted in no income tax-related charges to paid-in capital during the three and six months ended June 30, 2026 and 2025.

Restricted Stock and Restricted Stock Units

During the three months ended March 31, 2026 and 2025, we had granted (net of forfeitures) of 226,652 and 9,003 shares of restricted stock and restricted stock units, respectively, with aggregate grant date fair values $ 12.2 million and $ 0.4 million, respectively.

We incurred expenses of $ 1.4 million and $ 0.9 million during the three months ended March 31, 2026 and 2025, respectively, related to restricted stock awards.

During the three and six months ended June 30, 2026 and 2025, we granted (net of forfeitures) of 5,813 , 232,465 , 65,411 and 74,414 shares of restricted stock and restricted stock units, respectively, with aggregate grant date fair values of $ 0.4 million, $ 12.6 million, $ 3.4 million and $ 3.8 million, respectively.

We incurred expenses of $ 2.8 million, $ 4.2 million, $ 0.9 million and $ 1.8 million during the three and six months ended June 30, 2026 and 2025, respectively, related to restricted stock awards.

When we grant restricted stock and restricted stock units, we defer the grant date value of the restricted stock and restricted stock unit and amortize that value (net of the value of anticipated forfeitures) as compensation expense with an offsetting entry to the paid-in capital component of our condensed consolidated shareholders’ equity.

Our restricted stock awards typically vest over a range of 12 to 60 months (or other term as specified in the grant which may include the achievement of performance measures) and are amortized to salaries and benefits expense ratably over applicable vesting periods.

As of March 31, 2026, our unamortized deferred compensation costs associated with non-vested restricted stock awards were $ 7.4 million with a weighted-average remaining amortization period of 2.7 years.

As of June 30, 2026, our unamortized deferred compensation costs associated with non-vested restricted stock awards were $ 17.4 million with a weighted-average remaining amortization period of 2.7 years.

No forfeitures have been included in our compensation cost estimates based on historical forfeiture rates.

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( 5,382 ) $ 48.43

Outstanding at March 31, 2026

Outstanding at June 30, 2026

557,049 $ 46.51

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( 10,692 ) $ 31.54

Outstanding at March 31, 2026

78,850 $ 41.66 0.3 $ 852,369

Exercisable at March 31, 2026

78,850 $ 41.66 0.3 $ 852,369

No options were issued during the three months ended March 31, 2026 and 2025.

We had no unamortized deferred compensation costs associated with non-vested stock options at both March 31, 2026 and December 31, 2025.

Outstanding at June 30, 2026

Exercisable at June 30, 2026

No options were issued during the three and six months ended June 30, 2026 and 2025.

We had no unamortized deferred compensation costs associated with non-vested stock options at both June 30, 2026 and December 31, 2025.

Upon exercise of outstanding options, the Company issues new shares.

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and ( 2 ) nonrecognized, or those that provide evidence with respect to conditions that did not exist at the date of the balance sheet but arose subsequent to that date.

We have evaluated subsequent events occurring after December 31, 2025 , and based on our evaluation we did not identify any recognized or nonrecognized subsequent events that would have required further adjustments to our consolidated financial statements.

We have evaluated subsequent events occurring after June 30, 2026 , and based on our evaluation we did not identify any recognized or nonrecognized subsequent events that would have required further adjustments to our consolidated financial statements.

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.

What changed 10-Q

Item 1. Financial Statements