Atlanticus Holdings Corp 10-Q

ITEM 1. FINANCIAL STATEMENTS Atlanticus Holdings Corporation and Subsidiaries Condensed Consolidated Balance Sheets (Unaudited) (Dollars in thousands) June 30, December 31, 2026 2025 Assets 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 $ 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 $ 6,466.1 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 $ 3.7 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 Property at cost, net of depreciation 10,867 12,589 Intangible assets, net (Note 2) 25,130 30,268 Operating lease right-of-use assets 13,886 15,104 Prepaid expenses and other assets, net 60,228 66,954 Total assets $ 7,491,770 $ 7,623,088 Liabilities Accounts payable and accrued expenses $ 275,313 $ 284,514 Operating lease liabilities 23,568 25,283 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 Senior notes, net 692,117 698,562 Income tax liability 184,414 152,138 Total liabilities 6,754,294 6,979,258 Commitments and contingencies (Note 10) 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 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 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: 15,170,081 and 14,922,462 shares issued and outstanding at June 30, 2026 and December 31, 2025, respectively — — Paid-in capital 106,177 102,276 Retained earnings 595,702 506,424 Total shareholders’ equity attributable to Atlanticus Holdings Corporation 701,879 608,700 Noncontrolling interests ( 4,403 ) ( 4,870 ) Total equity 697,476 603,830 Total liabilities, shareholders' equity and temporary equity $ 7,491,770 $ 7,623,088 (1) Both the Series A preferred stock and the Series B preferred stock have no par value and are part of the same aggregate 10,000,000 shares authorized. See accompanying notes. 1 Table of Contents Atlanticus Holdings Corporation and Subsidiaries Condensed Consolidated Statements of Income (Unaudited) (Dollars in thousands, except per share data) For the Three Months Ended For the Six Months Ended June 30, June 30, 2026 2025 2026 2025 Revenue and other income: Consumer loans, including past due fees $ 545,086 $ 276,350 $ 1,074,531 $ 524,005 Fees and related income on earning assets 150,878 94,285 261,307 172,626 Other revenue 48,350 23,185 88,010 42,062 Total operating revenue and other income 744,314 393,820 1,423,848 738,693 Other non-operating income 9 343 64 636 Total revenue and other income 744,323 394,163 1,423,912 739,329 Interest expense ( 123,431 ) ( 53,684 ) ( 246,192 ) ( 101,214 ) Provision for credit losses ( 1,038 ) ( 1,382 ) ( 2,638 ) ( 2,450 ) Changes in fair value of loans ( 396,280 ) ( 216,777 ) ( 761,804 ) ( 395,122 ) Net margin 223,574 122,320 413,278 240,543 Operating expenses: Salaries and benefits ( 27,250 ) ( 13,381 ) ( 55,896 ) ( 28,884 ) Card and loan servicing ( 57,863 ) ( 34,085 ) ( 102,781 ) ( 66,237 ) Marketing and solicitation ( 48,130 ) ( 24,949 ) ( 84,603 ) ( 45,283 ) Depreciation and amortization ( 3,592 ) ( 885 ) ( 7,178 ) ( 1,682 ) Other ( 20,732 ) ( 8,874 ) ( 37,965 ) ( 17,443 ) Total operating expenses ( 157,567 ) ( 82,174 ) ( 288,423 ) ( 159,529 ) Income before income taxes 66,007 40,146 124,855 81,014 Income tax expense ( 16,286 ) ( 9,856 ) ( 30,557 ) ( 19,602 ) Net income 49,721 30,290 94,298 61,412 Net (loss) income attributable to noncontrolling interests ( 2 ) 283 ( 404 ) 681 Net income attributable to controlling interests 49,719 30,573 93,894 62,093 Preferred stock and preferred unit dividends and discount accretion ( 2,308 ) ( 2,222 ) ( 4,616 ) ( 5,796 ) Net income attributable to common shareholders $ 47,411 $ 28,351 $ 89,278 $ 56,297 Net income attributable to common shareholders per common share—basic $ 3.13 $ 1.87 $ 5.93 $ 3.72 Net income attributable to common shareholders per common share—diluted $ 2.50 $ 1.51 $ 4.74 $ 3.00 See accompanying notes. 2 Table of Contents Atlanticus Holdings Corporation and Subsidiaries Condensed Consolidated Statements of Shareholders’ Equity and Temporary Equity (Unaudited) For the Six Months Ended June 30, 2026 and June 30, 2025 (Dollars in thousands) Series B Preferred Stock Common Stock Temporary Equity Shares Issued Amount Shares Issued Amount Paid-In Capital Retained Earnings Noncontrolling Interests Total Equity Series A Preferred Stock Class B Preferred Units Balance at January 1, 2026 3,584,131 $ — 14,922,462 $ — $ 102,276 $ 506,424 $ ( 4,870 ) $ 603,830 $ 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 — — 9,308 — 294 — — 294 — — Compensatory stock issuances, net of forfeitures — — 226,652 — — — — — — — Issuance of series B preferred stock, net 515 — — — 12 — — 12 — — Contributions by owners of noncontrolling interests — — — — — — 3 3 — — Stock-based compensation costs — — — — 1,393 — — 1,393 — — Redemption and retirement of common shares — — ( 72,008 ) — ( 3,831 ) — — ( 3,831 ) — — Net income — — — — — 44,175 402 44,577 — — Balance at March 31, 2026 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 ) — — Net income — — — — — 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 $ — 3 Table of Contents Series B Preferred Stock Common Stock Temporary Equity Shares Issued Amount Shares Issued Amount Paid-In Capital Retained Earnings Noncontrolling Interests Total Equity Series A Preferred Stock Class B Preferred Units Balance at January 1, 2025 3,301,179 $ — 14,904,192 $ — $ 98,278 $ 394,628 $ ( 3,543 ) $ 489,363 $ 40,000 $ 50,000 Series A preferred stock dividends ($ 1.50 dividend per share) — — — — — ( 600 ) — ( 600 ) — — Series B preferred stock dividends ($ 0.48 dividend per share) — — — — — ( 1,574 ) — ( 1,574 ) — — Class B preferred units dividends ($ 0.04 dividend per share) — — — — — ( 1,400 ) — ( 1,400 ) — — Stock option exercises and proceeds related thereto — — 11,300 — 335 — — 335 — — Compensatory stock issuances, net of forfeitures — — 9,003 — — — — — — — Issuance of common stock — — 200,000 — 11,588 — — 11,588 — — Issuance of series B preferred stock, net 13,661 — — — 313 — — 313 — — Contributions by owners of noncontrolling interests — — — — — — 78 78 — — Stock-based compensation costs — — — — 870 — — 870 — — Redemption and retirement of preferred shares and preferred units — — — — — — — — — ( 50,000 ) Redemption and retirement of common shares — — ( 27,252 ) — ( 1,246 ) — — ( 1,246 ) — — Net income (loss) — — — — — 31,520 ( 398 ) 31,122 — — Balance at March 31, 2025 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. 4 Table of Contents Atlanticus Holdings Corporation and Subsidiaries Condensed Consolidated Statements of Cash Flows (Unaudited) (Dollars in thousands) For the Six Months Ended June 30, 2026 2025 Operating activities Net income $ 94,298 $ 61,412 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation, amortization and accretion, net 10,146 3,287 Provision for credit losses 2,638 2,450 Deferred income tax expense 30,418 19,418 Income from accretion of discount associated with Loans at amortized cost, net ( 14,228 ) ( 13,409 ) Income from merchant fees associated with Loans at fair value ( 87,612 ) ( 96,123 ) Changes in fair value of loans 761,804 395,122 Change in bank partner fees carried at fair value ( 8,786 ) 2,135 Amortization of debt issuance costs 12,989 8,088 Stock-based compensation costs 4,197 1,818 Changes in assets and liabilities: Decrease in lease liability ( 2,569 ) ( 1,530 ) Increase in uncollected fees on earning assets ( 265,243 ) ( 144,630 ) Increase (decrease) in income tax liability 1,858 ( 659 ) Increase in accounts payable and accrued expenses 17,583 40,603 Other 5,779 ( 13,722 ) Net cash provided by operating activities 563,272 264,260 Investing activities Proceeds from recoveries on charged off receivables 50,385 32,221 Investments in earning assets ( 3,059,089 ) ( 1,549,730 ) Proceeds from earning assets 2,588,578 1,001,912 Purchases and development of property ( 318 ) ( 4,822 ) Net cash used in investing activities ( 420,444 ) ( 520,419 ) Financing activities Noncontrolling interests contributions 63 78 Proceeds from issuance of common stock — 11,589 Proceeds from issuance of Series B preferred stock, net of issuance costs 12 3,470 Preferred stock and preferred unit dividends ( 4,616 ) ( 7,831 ) Proceeds from exercise of stock options 3,578 405 Purchase and retirement of outstanding stock and preferred units ( 3,886 ) ( 53,161 ) Proceeds from issuance of Senior notes, net of issuance costs 4,335 25,282 Proceeds from borrowings 2,067,361 894,686 Repayment of borrowings ( 2,331,902 ) ( 634,760 ) Net cash (used in) provided by financing activities ( 265,055 ) 239,758 Net decrease in cash and cash equivalents and restricted cash and cash equivalents ( 122,227 ) ( 16,401 ) Cash and cash equivalents and restricted cash equivalents at beginning of period 767,407 499,636 Cash and cash equivalents and restricted cash equivalents at end of period $ 645,180 $ 483,235 Cash and cash equivalents, and restricted cash and cash equivalents at end of period Cash and cash equivalents $ 555,215 $ 329,421 Restricted cash and cash equivalents 89,965 153,814 Cash and cash equivalents, and restricted cash and cash equivalents at end of period $ 645,180 $ 483,235 Supplemental cash flow information Cash paid for interest $ 238,891 $ 90,300 Cash paid for income taxes, net of refunds $ ( 1,718 ) $ 843 Decrease in accrued and unpaid preferred stock and preferred unit dividends $ — $ ( 2,035 ) See accompanying notes. 5 Table of Contents Atlanticus Holdings Corporation and Subsidiaries Notes to Condensed Consolidated Financial Statements June 30, 2026 and 2025 1. Description of Our Business Our accompanying condensed consolidated financial statements include the accounts of Atlanticus Holdings Corporation (the "Company") and those entities we control. We are a purpose driven financial technology company. We are primarily focused on facilitating consumer credit through the use of our financial technology and related services. We provide technology and other support services to lenders who offer an array of financial products and services, including private label and general purpose card products, to consumers who may have been declined by other providers of credit. Private label and general purpose card products are originated by The Bank of Missouri, WebBank and First Bank and Trust (collectively, our “bank partners”). Our bank partners originate these accounts through multiple channels, including retail and healthcare point-of-sale locations, direct mail solicitation, digital marketing and partnerships with third parties. In these Notes to Condensed Consolidated Financial Statements, "receivables" or "loans" typically refer to receivables we have purchased from our bank partners or from other third parties. We are principally engaged as a program manager, providing a technology platform and corresponding services to lenders in the U.S. to assist those lenders with offering products to consumers. These lenders pay us a fee and, in most circumstances, the lenders are then obligated to sell us the receivables they generate from these products. We acquire these receivables for the principal amount of the loan. For certain of our receivables, we also receive merchant fees from our retail partners that are used to enhance our returns for those receivables. We compensate our bank partners monthly for the regulatory oversight they provide associated with our acquired receivables, the underlying accounts of which they continue to own and service. This compensation is based on both fixed and variable components dependent on the underlying performance of the acquired receivables (collectively, "Bank partner fees"). As we are obligated to compensate our bank partners for the duration of the underlying account, we recognize the fair value of these Bank partner fees within Card and loan servicing on the accompanying condensed consolidated statements of income on the date we acquire the underlying receivable. 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 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 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. Private label credit products associated with the healthcare space are generally issued under the Curae brand while all other retail partnerships, including those in consumer electronics, furniture, elective medical procedures, and home-improvement use the Fortiva brand or use our retail partners’ brands. General purpose credit cards use the Aspire, Imagine, Mercury and Fortiva brand names. Our flexible technology solutions allow our bank partners to integrate our paperless process and instant decisioning platform with the existing infrastructure of participating retailers, healthcare providers and other service providers. Using our technology and proprietary predictive analytics, lenders can make instant credit decisions utilizing hundreds of inputs from multiple sources and thereby offer credit to consumers overlooked by many providers of financing that focus exclusively on consumers with higher FICO scores. Atlanticus’ decisioning platform is enhanced by artificial intelligence and machine learning, enabling fast, sound decision-making when it matters most. We also report within our CaaS segment: 1 ) servicing income; and 2 ) gains or losses associated with notes receivable and equity investments previously made in consumer technology platforms. These include investments in companies engaged in mobile technologies, marketplace lending and other financial technologies. None of these companies are publicly-traded, and the carrying values of our investments in these companies are not material. Within our Auto Finance segment, our CAR subsidiary operations principally purchase and/or service loans secured by automobiles from or for, and also provide floor plan financing for, a pre-qualified network of independent automotive dealers and automotive finance companies in the buy-here, pay-here, used car business. We purchase auto loans at a discount and with dealer retentions or holdbacks that provide risk protection. Also within our Auto Finance segment, we are providing certain installment lending products in addition to our traditional loans secured by automobiles. 6 Table of Contents On September 11, 2025, the Company acquired all outstanding equity interests of Mercury Financial LLC (“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 closing, Mercury became a wholly owned subsidiary of the Company. The acquisition was accounted for as an asset acquisition under ASC 805, "Business Combinations" as substantially all of the fair value of the assets acquired were concentrated in a group of similar assets. Fair values of assets acquired and liabilities assumed were determined using management estimates and third -party valuations (e.g., replacement cost method). 2. Significant Accounting Policies and Condensed Consolidated Financial Statement Components The following is a summary of significant accounting policies we follow in preparing our condensed consolidated financial statements, as well as a description of significant components of our condensed consolidated financial statements. The condensed consolidated financial statements furnished have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and reflect all normal and recurring adjustments that are, in the opinion of management, necessary for a fair presentation of the results for the periods presented. The preparation of financial statements in accordance with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of our condensed consolidated financial statements, as well as the reported amounts of revenues and expenses during each reporting period. We base these estimates on information available to us as of the date of the financial statements. Actual results could differ materially from these estimates. Certain estimates, such as credit losses, payment rates, servicing costs, discount rates and yields earned on credit card receivables, significantly affect the reported amount (and changes thereon) of our Loans at fair value and certain Accounts payable and accrued expenses (carried at fair value), on our condensed consolidated balance sheets and condensed consolidated statements of income. Consolidation The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. The Company’s policy is to consolidate the financial statements of entities in which it has a controlling financial interest. The Company determines whether it has a controlling financial interest in an entity by evaluating whether the entity is a voting interest entity or variable interest entity ("VIE") and if the accounting guidance requires consolidation. For more information on the Company's VIEs, see Note 7 "Variable Interest Entities". Loans, Interest and Fees Receivable We maintain two categories of Loans on our condensed consolidated balance sheets: those that are carried at fair value (Loans at fair value) and those that are carried at net amortized cost (Loans at amortized cost). For our Loans at fair value (within our CaaS segment), we discontinue the recognition of interest and fees when the receivable becomes contractually 90 or more days past due. For our Loans at amortized cost (within our Auto Finance segment), we continue interest and fee billings until the time of charge-off if there is adequate value associated with the underlying asset serving as collateral for the receivable. Once a loan discontinues accruing interest and fees it is ineligible to return to accrual status. We charge off receivables underlying our Loans at fair value, against our Changes in fair value of loans, when they become contractually more than 180 days past due, or 120 days past due if they are enrolled in an installment loan product. We charge off our Loans at amortized cost receivables, against our Allowance for credit losses, when they become contractually between 120 and 180 days past due. For all of our receivables portfolios, we charge off receivables within 30 days of notification and confirmation of a customer’s bankruptcy or death. However, in some cases of death, we do not charge off receivables if there is a surviving, contractually liable individual or estate large enough to pay the debt in full. Loans at fair value. Loans at fair value represent receivables for which we have elected the fair value option (the "Fair Value Receivables"). 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. All receivables associated with private label credit and general purpose credit cards are included within this category of receivables. 7 Table of Contents Under the fair value option, fees such as annual fees are taken into income when billed to the consumer or upon loan acquisition and any cost associated with the loan acquisition are expensed in the period incurred. The Company estimates the fair value of the loans using a discounted cash flow model, which considers various unobservable inputs such as credit losses, payment rates, servicing costs, discount rates and yields earned on credit card receivables. The Company reevaluates the fair value of loans receivable at the close of each measurement period. Changes in the fair value of loans are recorded as a component of "Changes in fair value of loans" in the condensed consolidated statements of income in the period of the fair value changes. Changes in the fair value of loans include the impact of current period charge-offs associated with these receivables. Further details concerning our loans at fair value are presented within Note 6, "Fair Values of Assets and Liabilities." Loans at amortized cost, net. 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 $ 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. A considerable amount of judgment is required to assess the ultimate amount of expected losses on loans at amortized cost, and we regularly evaluate and update our methodologies to determine the most appropriate allowance necessary. Our loans at amortized cost consist of smaller-balance, homogeneous loans in our Auto Finance segment. These loans are further divided into pools based on common characteristics such as contract or acquisition channel. For each pool, we determine the necessary allowance for credit losses using reasonable and supportable forecasts that analyze some or all of the following attributes unique to each type of receivable pool: historical loss rates on similar loans; current delinquency and roll-rate trends which may indicate consumer loss rates in excess or less than those which historical trends might suggest; the effects of changes in the economy on consumers such as inflation or other macroeconomic changes; changes in underwriting criteria; unfunded commitments (to the extent they are unconditional), and estimated recoveries. The aforementioned inputs are calculated using historical trends over the most recent two year period and adjusted as needed for current trends and reasonable and supportable forecasts. We may individually evaluate a receivable or pool of receivables for credit losses if circumstances indicate that the receivable or pool of receivables may be at higher risk for non-performance than other receivables (e.g., if a particular retail or auto-finance partner has indications of nonperformance (such as a bankruptcy) that could impact the underlying pool of receivables we purchased from the partner). 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 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 June 30, 2026 2025 Notes Receivable Auto Finance Total Notes Receivable Auto Finance Total Allowance for credit losses: Balance at beginning of period $ ( 8.8 ) $ ( 3.8 ) $ ( 12.6 ) $ ( 5.9 ) $ ( 4.8 ) $ ( 10.7 ) Provision for credit losses(1) ( 0.4 ) ( 0.6 ) ( 1.0 ) ( 0.2 ) ( 1.2 ) ( 1.4 ) Charge-offs — 1.3 1.3 — 1.7 1.7 Recoveries — ( 0.6 ) ( 0.6 ) — ( 0.6 ) ( 0.6 ) Balance at end of period $ ( 9.2 ) $ ( 3.7 ) $ ( 12.9 ) $ ( 6.1 ) $ ( 4.9 ) $ ( 11.0 ) For the Six Months Ended June 30, 2026 2025 Notes Receivable Auto Finance Total Notes Receivable Auto Finance Total 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 ) Charge-offs — 3.0 3.0 — 3.5 3.5 Recoveries — ( 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. June 30, December 31, As of 2026 2025 Allowance for credit losses: Balance of Notes Receivable at end of period individually evaluated for impairment $ ( 9.2 ) $ ( 8.0 ) Balance of Auto Finance at end of period individually evaluated for impairment $ ( 0.5 ) $ ( 0.6 ) Balance of Auto Finance at end of period collectively evaluated for impairment $ ( 3.2 ) $ ( 3.5 ) Loans at amortized cost: Loans at amortized cost $ 99.6 $ 107.1 Loans at amortized cost individually evaluated for impairment $ 0.5 $ 1.1 Loans at amortized cost collectively evaluated for impairment $ 99.1 $ 106.0 Recoveries, noted above, consist of amounts received from the efforts of third -party collectors. All proceeds received, associated with charged-off accounts, are credited to the allowance for credit losses. 8 Table of Contents Delinquent loans at amortized cost reflect the principal, fee and interest components of loans we did not collect on or prior to the contractual due date and are considered "past due". Amounts we believe we will not ultimately collect are included as a component in our overall allowance for credit losses. 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 June 30, 2026 and December 31, 2025 is as follows: June 30, December 31, As of 2026 2025 30-59 days past due $ 8.1 $ 9.1 60-89 days past due 2.5 3.2 90 or more days past due 2.3 3.0 Delinquent loans at amortized cost 12.9 15.3 Current loans at amortized cost 86.7 91.8 Total loans at amortized cost $ 99.6 $ 107.1 Balance of loans greater than 90-days delinquent still accruing interest and fees $ 1.8 $ 2.6 Loan Modifications and Restructurings We review our Loans at amortized cost, net, associated with our Auto Finance segment’s operations to determine if any modifications for borrowers experiencing financial difficulty were made that would qualify the receivable as a Financial Difficulty Modification ("FDM"). 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 six months ended June 30, 2026 and 2025, no Loans at amortized cost qualified as a FDM. Intangible Assets and Amortization As part of the acquisition of Mercury, we acquired $ 32.4 million of identifiable finite-lived intangible assets primarily associated with internally developed software. These intangible assets are carried at the fair value at acquisition less accumulated amortization. Amortization is computed on a straight-line basis over the useful lives of the related assets which is estimated to be 5 years from the date of acquisition. Details of our finite-lived intangible assets were as follows (in thousands): June 30, December 31, As of 2026 2025 Intangible assets - gross carrying amount $ 32,430 $ 32,430 Accumulated amortization ( 7,300 ) ( 2,162 ) Net carrying amount $ 25,130 $ 30,268 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): For the Year Ending December 31, Amortization Expense 2026 (Remainder of 2026) $ 4,009 2027 5,760 2028 5,760 2029 5,760 2030 3,841 Total amortization expense 25,130 Income Taxes 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 the six months ended June 30, 2026, and was $ 0.1 million for the six months ended June 30, 2025. 9 Table of Contents Revenue Recognition and Revenue from Contracts with Customers Consumer Loans, Including Past Due Fees Consumer loans, including past due fees reflect interest income, including finance charges, and late fees on loans in accordance with the terms of the related customer agreements. These fees are recognized when assessed based upon the contractual terms of the loans. Discounts received associated with auto loans that are not included as part of our Fair Value Receivables are deferred and amortized over the average life of the related loans using the effective interest method. Finance charges and fees, net of amounts that we consider uncollectible, are included in loans, interest and fees receivable and revenue when the fees are earned based upon the contractual terms of the loans. Retail partner incentives such as fee reductions or rebates are recorded as a reduction to revenue over the period the incentives are earned. Merchant fees paid or received associated with the acquisition of Fair Value Receivables are recognized when the merchant confirms the transaction with us, which fulfills the terms of the associated merchant agreement. Our merchant agreements are defined at the transaction level and do not extend beyond the service already provided (i.e., each transaction is separate). We independently negotiate each agreement with separate counterparties and consider ourselves the principal in each agreement with our bank partners and retail partners. As such, we view the economic substance of our relationship with our retail partners as a service contract. The merchant fee is derived based on the value of the goods purchased from our retail partners and considers factors such as the consumer’s credit risk and the terms of our bank partners' related product offering. Our service comprises a single performance obligation to facilitate the transaction between the retail partner and its consumer and the merchant fee is recognized into income when the retail partner successfully confirms the transaction, as no remaining obligations exist under the contract. Fees and Related Income on Earning Assets Fees and related income on earning assets primarily include fees associated with credit products such as annual fees, cash advance fees, and other fees. These fees are assessed based upon the contractual terms of the loans. We recognize these fees as income when they are billed to the customers’ accounts. Fees and related income on earning assets, net of amounts that we consider uncollectible, are included in loans, interest and fees receivable and revenue when the fees are earned based upon the contractual terms of the loans. Other revenue Other revenue includes revenue from contracts with customers, which includes interchange revenues, servicing income, service charges and other customer related fees. We recognize these fees as income in the period earned. Other non-operating income Other non-operating income includes income (or loss) associated with investments in non-core businesses or other items not directly associated with our ongoing operations. None of these companies are publicly-traded and there are no material pending liquidity events. We will continue to carry the investments on our books at cost minus impairment, if any, plus or minus changes resulting from observable price changes. 10 Table of Contents Revenue from Contracts with Customers The majority of our revenue is earned from financial instruments and is not included within the scope of ASC 606, "Revenue from Contracts with Customers". We have determined that revenue from contracts with customers would primarily consist of merchant fees and interchange revenues in our CaaS segment and servicing revenue and other customer-related fees in both our CaaS segment and our Auto Finance segment. Interchange fees are earned when our customers’ cards are used over established card networks. We earn a portion of the interchange fee the card networks charge merchants for the transaction and these fees are settled daily. Additionally, within interchange revenues are network incentives which are earned when credit card transactions, associated with accounts we service, are processed through interchange networks. Servicing revenue is generated by meeting contractual performance obligations related to the collection of amounts due on receivables, and is settled with the customer net of our fee, which can be settled daily or monthly. Service charges and other customer related fees are earned from customers based on the occurrence of specific services and are paid by customers per the terms of their credit agreement. Merchant fees paid or received associated with the acquisition of Fair Value Receivables are recognized when the merchant confirms the transaction with us, which fulfills the terms of the associated merchant agreement. None of these revenue streams result in an ongoing obligation beyond what has already been rendered. 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 are as follows: For the Three Months Ended June 30, 2026 CaaS Auto Finance Total Interchange revenues, net (1) $ 15,065 $ — $ 15,065 Servicing income 11,110 195 11,305 Service charges and other customer related fees 21,972 8 21,980 Total Other revenue 48,147 203 48,350 Merchant fees (2) 55,362 — 55,362 Total revenue from contracts with customers $ 103,509 $ 203 $ 103,712 For the Six Months Ended June 30, 2026 CaaS Auto Finance Total Interchange revenues, net (1) $ 25,913 $ — $ 25,913 Servicing income 19,601 398 19,999 Service charges and other customer related fees 42,080 18 42,098 Total Other revenue 87,594 416 88,010 Merchant fees (2) 87,612 — 87,612 Total revenue from contracts with customers $ 175,206 $ 416 $ 175,622 For the Three Months Ended June 30, 2025 CaaS Auto Finance Total 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 CaaS Auto Finance Total 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. ( 2 ) Merchant fees are included in Consumer loans, including past due fees on our condensed consolidated statements of income. 11 Table of Contents Recent Accounting Pronouncements In December 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2025 - 11, Interim Reporting (Topic 270 ): Narrow-Scope Improvements . The ASU clarifies existing interim disclosure requirements and establishes a principle requiring entities to disclose events that occur after the end of the most recent annual reporting period that have a material impact on the entity. The new guidance is effective for annual reporting periods beginning after December 15, 2027, and interim periods within those annual reporting periods. Early adoption is permitted. The amendments are applied prospectively. We are currently evaluating the potential impact of adopting this new guidance on our financial statements and disclosures but the new guidance is not expected to have a significant impact to the Company’s consolidated financial statements when adopted. In November 2025, the FASB issued ASU 2025 - 08, Financial Instruments — Credit Losses (Topic 326 ): Purchased Loans . The ASU requires purchased seasoned loans to be accounted for using a gross-up approach, which is intended to enhance comparability in accounting for acquired financial assets. The guidance is effective for public business entities for annual reporting periods beginning after December 15, 2026, including interim periods within those annual reporting periods. Early adoption is permitted. We are currently evaluating the potential impact of adopting this new guidance on our financial statements and disclosures but the new guidance is not expected to have a significant impact to the Company’s consolidated financial statements when adopted. In July 2025, the FASB issued ASU 2025 - 05, "Financial Instruments – Credit Losses (Topic 326 ): Measurement of Credit Losses for Accounts Receivable and Contract Assets", which improves transparency to provide all entities with a practical expedient when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under Topic 606. All entities may elect a practical expedient that assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset. The new guidance is effective for fiscal years beginning after December 15, 2025, and interim reporting periods within those annual periods. We adopted ASU 2025 - 05 for the period ended March 31, 2026, and elected the practical expedient. Adoption of this standard did not have a material effect on our condensed consolidated financial statements. In November 2024, the FASB issued ASU 2024 - 03, "Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures" which requires disaggregated disclosure of income statement expenses for public business entities. The ASU does not change the expense captions an entity presents on the face of the income statement. Instead, it requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. The amendments in this Update are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027 and early adoption of the amendments is permitted. We are currently evaluating the potential impact of adopting this new guidance on our financial statements and disclosures but the new guidance is not expected to have a significant impact to the Company’s consolidated financial statements when adopted. 12 Table of Contents 3. Segment Reporting We operate primarily within one industry consisting of two reportable segments by which we manage our business. Our two reportable segments are: CaaS and Auto Finance. The Company defines operating segments to be components of the Company for which discrete financial information is evaluated regularly by the Company’s Chief Executive Officer (our chief operating decision maker, "CODM") to allocate resources and evaluate financial performance. The CODM uses GAAP Income before income taxes to evaluate segment profitability as it provides the best insight into the segments' overall economic performance. Income before income taxes is used regularly in the forecasting and budgeting process when assessing performance on a quarterly basis and making decisions about capital and personnel allocations. Our CaaS segment includes the operations of three operating segments aggregated into one reportable segment which includes our private label credit, our general purpose credit card receivables and those general purpose credit card receivables acquired as part of our acquisition of Mercury, all of which, through our bank partners, provide financing solutions to consumers. Our Auto Finance reportable segment purchases and/or service loans secured by automobiles and provides other financing options to independent automotive dealers and automotive finance companies. These two reportable segments were determined by management based on the characteristics of the underlying products, management structures and expected returns. We have no material amounts of long lived assets located outside of the U.S. and all revenue is generated within the U.S. We measure the profitability of our reportable segments based on their income after allocation of specific costs and corporate overhead (Income before income taxes); however, our segment results do not reflect any charges for internal capital allocations among our segments. Company revenues, expenses and profitability are aggregated into these segments and presented to the CODM as detailed below. Overhead costs are allocated based on headcounts and other applicable measures to better align costs with the associated revenues. Income taxes are allocated to the individual segments whereby each operating segment determines income tax expense or benefit as if it filed a separate tax return. Reportable segment information (in thousands) is as follows: Three Months Ended June 30, 2026 CaaS Auto Finance Total Revenue and other income: Consumer loans, including past due fees $ 535,507 $ 9,579 $ 545,086 Fees and related income on earning assets 150,548 330 150,878 Other revenue 48,147 203 48,350 Total operating revenue and other income 734,202 10,112 744,314 Other non-operating income 9 — 9 Total revenue and other income 734,211 10,112 744,323 Interest expense ( 123,082 ) ( 349 ) ( 123,431 ) Provision for credit losses ( 386 ) ( 652 ) ( 1,038 ) Changes in fair value of loans ( 396,280 ) — ( 396,280 ) Net margin 214,463 9,111 223,574 Operating expenses: Salaries and benefits ( 25,978 ) ( 1,272 ) ( 27,250 ) Card and loan servicing ( 54,408 ) ( 3,455 ) ( 57,863 ) Marketing and solicitation ( 48,047 ) ( 83 ) ( 48,130 ) Depreciation and amortization ( 3,573 ) ( 19 ) ( 3,592 ) Other ( 19,477 ) ( 1,255 ) ( 20,732 ) Total operating expenses ( 151,483 ) ( 6,084 ) ( 157,567 ) Income before income taxes $ 62,980 $ 3,027 $ 66,007 Six Months Ended June 30, 2026 CaaS Auto Finance Total Revenue and other income: Consumer loans, including past due fees $ 1,055,409 $ 19,122 $ 1,074,531 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 64 — 64 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 ) Net margin 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 ) Other ( 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 Total assets $ 7,408,285 $ 83,485 $ 7,491,770 13 Table of Contents Three Months Ended June 30, 2025 CaaS Auto Finance Total Revenue and other income: Consumer loans, including past due fees $ 267,204 $ 9,146 $ 276,350 Fees and related income on earning assets 94,262 23 94,285 Other revenue 23,012 173 23,185 Total operating revenue and other income 384,478 9,342 393,820 Other non-operating income 6 337 343 Total revenue and other income 384,484 9,679 394,163 Interest expense ( 53,162 ) ( 522 ) ( 53,684 ) Provision for credit losses ( 189 ) ( 1,193 ) ( 1,382 ) Changes in fair value of loans ( 216,777 ) — ( 216,777 ) Net margin 114,356 7,964 122,320 Operating expenses: Salaries and benefits ( 12,133 ) ( 1,248 ) ( 13,381 ) Card and loan servicing ( 30,764 ) ( 3,321 ) ( 34,085 ) Marketing and solicitation ( 24,912 ) ( 37 ) ( 24,949 ) Depreciation and amortization ( 866 ) ( 19 ) ( 885 ) Other ( 7,685 ) ( 1,189 ) ( 8,874 ) Total operating expenses ( 76,360 ) ( 5,814 ) ( 82,174 ) Income (loss) before income taxes $ 37,996 $ 2,150 $ 40,146 Six Months Ended June 30, 2025 CaaS Auto Finance Total 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 13 623 636 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 ) Net margin 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 ) Other ( 15,219 ) ( 2,224 ) ( 17,443 ) Total operating expenses ( 148,142 ) ( 11,387 ) ( 159,529 ) Income before income taxes $ 76,391 $ 4,623 $ 81,014 Total assets $ 3,555,841 $ 87,334 $ 3,643,175 4. Shareholders’ Equity and Preferred Stock 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 Our preferred stock consists of 7.625 % Series B Cumulative Perpetual Preferred Stock (the "Series B preferred stock"), liquidation preference of $ 25.00 per share. 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 and six months ended June 30, 2026 and 2025. ATM Programs 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"). 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. 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"). 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. 14 Table of Contents 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. 5. Redeemable Preferred Stock 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"). The agreement provided for a senior secured term loan facility in an amount of up to $ 40.0 million at any time outstanding. On December 27, 2019, the Company issued 400,000 shares of its Series A Preferred Stock with an aggregate initial liquidation preference of $ 40.0 million, in exchange for full satisfaction of the $ 40.0 million that the Company owed Dove under the Loan and Security Agreement. Dividends on the preferred stock are 6 % per annum (cumulative, non-compounding) and are payable as declared, and in preference to any dividends on common stock and Series B preferred stock, in cash. The Series A Preferred Stock is perpetual and has no maturity date. The Company may, at its option, redeem the shares of Series A Preferred Stock at a redemption price equal to $ 100 per share, plus any accumulated and unpaid dividends. At the request of holders of a majority of the shares of Series A Preferred Stock, the Company shall offer to redeem all of the Series A Preferred Stock at a redemption price equal to $100 per share, plus any accumulated and unpaid dividends, at the option of the holders thereof. 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 certain adjustment in certain circumstances to prevent dilution. Given the redemption rights contained within the Series A Preferred Stock, we account for the outstanding preferred stock as temporary equity in the condensed consolidated balance sheets. Dividends paid on the Series A Preferred Stock are deducted from Net income attributable to controlling interests to derive Net income attributable to common shareholders. The common stock issuable upon conversion of Series A Preferred Stock is included in our calculation of Net income attributable to common shareholders per share—diluted. See Note 11, "Net Income Attributable to Controlling Interests Per Common Share" for more information. Dove is a limited liability company owned by three trusts. David G. Hanna is the sole shareholder and the President of the corporation that serves as the sole trustee of one of the trusts, and David G. Hanna and members of his immediate family are the beneficiaries of this trust. Frank J. Hanna, III is the sole shareholder and the President of the corporation that serves as the sole trustee of the other two trusts, and Frank J. Hanna, III and members of his immediate family are the beneficiaries of these other two trusts. 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. The units carried a 16 % preferred return to be paid quarterly. In March 2020, the subsidiary issued an additional 50.0 million Class B preferred units under the same terms. The proceeds from the transaction were used for general corporate purposes. 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. 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. 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. See Note 11, "Net Income Attributable to Controlling Interests Per Common Share" for more information. 6. Fair Values of Assets and Liabilities Fair value is defined as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. We update our fair value analysis each quarter, with changes since the prior reporting period reflected as a component of "Changes in fair value of loans" in the condensed consolidated statements of income. Changes in yields, purchase and payment rates, servicing rates, realized and projected credit loss rates and discount rates will lead to changes in the fair value of loans and therefore impact earnings. Further, our retail asset typically has seasonal growth during the summer months, impacting the fair value of assets. Fair value differs from amortized cost accounting in the following ways: • Receivables are recorded at their fair value, not their principal and fee balance or cost basis; • The fair value of the loans takes into consideration net charge-offs for the remaining life of the loans with no separate allowance for credit loss calculation; • Certain fee billings (such as non-refundable annual fees) and expenses of loans are no longer deferred but recognized (when billed or incurred) in income or expense, respectively; • The net present value of cash flows associated with future fee billings on existing receivables are included in fair value; • Changes in the fair value of loans impact net margins; and • Net charge-offs are recognized as they occur rather than through the establishment of an allowance and provision for credit losses for those loans, interest and fees receivable carried at amortized cost. For receivables that are carried at net amortized cost, we include disclosures of the fair value of such receivables to the extent practicable within the disclosures below. Where applicable, we account for our financial assets and liabilities at fair value based upon a three -tiered valuation system. In general, fair values determined by Level 1 inputs use quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access. Fair values determined by Level 2 inputs use inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include quoted prices for similar assets and liabilities in active markets, and inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability. Where inputs used to measure fair value may fall into different levels of the fair value hierarchy, the level in the fair value hierarchy within which the fair value measurement in its entirety has been determined is based on the lowest level input that is significant to the fair value measurement in its entirety. 15 Table of Contents Valuations and Techniques for Assets 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 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) Level 1 Level 2 Level 3 Carrying Amount of Assets Loans at amortized cost, net for which it is practicable to estimate fair value and which are carried at net amortized cost $ — $ — $ 91,190 $ 77,731 Loans at fair value $ — $ — $ 6,658,748 $ 6,658,748 ( 1 ) For cash, deposits and investments in equity securities, the carrying amount is a reasonable estimate of fair value. Assets – As of December 31, 2025 (1) Level 1 Level 2 Level 3 Carrying Amount of Assets Loans at amortized cost, net for which it is practicable to estimate fair value and which are carried at net amortized cost $ — $ — $ 97,539 $ 82,884 Loans at fair value $ — $ — $ 6,647,882 $ 6,647,882 ( 1 ) For cash, deposits and investments in equity securities, the carrying amount is a reasonable estimate of fair value. For those asset classes above that are carried at fair value in our condensed consolidated financial statements, gains and losses associated with fair value changes are detailed on our condensed consolidated statements of income as a component of Changes in fair value of loans. Variations in the three month U.S. Treasury bill rate over the measurement period are used to determine the portion of change in fair value considered to be attributable to changes in instrument-specific credit risk. These variations are applied to the period end discount rate we use to determine fair value. 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 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. 16 Table of Contents 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 six months ended June 30, 2026 and 2025: Loans at Fair Value 2026 2025 Balance at January 1, $ 6,647,882 $ 2,630,274 Changes in fair value of loans at fair value, included in earnings $ 77,908 $ 50,134 Changes in fair value due to current period principal charge-offs, net of recoveries (1) ( 593,588 ) ( 307,029 ) Changes in fair value due to current period finance and fee charge-offs (1) ( 246,124 ) ( 138,227 ) Total Changes in fair value of loans (2) ( 761,804 ) ( 395,122 ) Change in Contingent consideration and other purchase price adjustments (3) ( 18,500 ) — Purchases 3,063,869 1,562,566 Finance and fees, added to the account balance 1,190,224 594,944 Settlements ( 3,462,923 ) ( 1,387,938 ) Balance at June 30,(4) $ 6,658,748 $ 3,004,724 Aggregate unpaid gross balance of loans carried at fair value $ 6,891,217 $ 3,046,477 Change in unrealized losses for the period included in earnings (or changes in net assets) for assets held at the end of the period $ 77,908 $ 50,134 ( 1 ) Reflects the current period charge-offs (net of recoveries) of loans at fair value. ( 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 and other purchase price adjustments. See below for more information. ( 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. Loans at Fair Value. The fair value of Loans at fair value is based on the present value of future cash flows using a valuation model of expected cash flows and the estimated cost to service and collect those cash flows. We estimate the present value of these future cash flows using internally-developed estimates of assumptions third -party market participants would use in determining fair value, including estimates of credit losses, payment rates, servicing costs, discount rates and yields earned on private label credit and general purpose credit card receivables. We forecast the cash flows underlying our fair value assessment based on the individual offer type (in the case of general purpose credit cards) or by specific offers at our retail partners (for private label credit). While overall product return requirements among the offer types may be similar, the individual product offerings necessary to achieve those returns is often unique to each offer and retailer based on several factors, including acceptance rates of the offers by consumers and underlying consumer performance data which varies by offer type. Our fair value models include market degradation to reflect the possibility of delinquency rates increasing in the near term (and the corresponding increase in charge-offs and decrease in payments) above the level that current trends would suggest. The fair value of loans we acquire associated with our retail partners are typically lower than the aggregate unpaid gross balance of the underlying loans due to loan originations by our bank partners that contain below market interest rates or fees charged to consumers. Under agreements with our bank partners, we are required to purchase these receivables for amounts that may be in excess of fair value. In these instances, a fair value assessment that is less than the purchase price of the receivable can occur on the date we initially acquire the receivable, resulting in a loss on acquisition of the receivable. This negative fair value assessment is included in Changes in fair value of loans on our condensed consolidated statements of income. In cases where we acquire receivables below market rates, we charge merchant fees to our retail partners to facilitate the transaction and ensure we earn adequate returns. These merchant fees are based on the value of the goods purchased from our retail partners, the consumer’s credit risk and the terms of our bank partners' related product offering. These fees are recognized upon completion of our services, which coincides with the funding of the loan by our bank partners, in Consumer loans, including past due fees on our condensed consolidated statements of income. These merchant fees often offset the negative impact of the initial acquisition of the underlying receivable. As such, it is not always necessary for us to collect the aggregate unpaid gross balance of the underlying receivable to achieve desired returns. 17 Table of Contents Valuations and Techniques for Liabilities 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 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 Level 1 Level 2 Level 3 Carrying Amount of Liabilities Bank partner fees $ — $ — $ 19,882 $ 19,882 Contingent consideration $ — $ — $ 22,000 $ 22,000 Liabilities not carried at fair value Revolving credit facilities $ — $ — $ 5,814,679 $ 5,573,683 Amortizing debt facilities $ — $ — $ 5,199 $ 5,199 Senior notes, net $ 311,285 $ — $ 393,322 $ 692,117 Liabilities – As of December 31, 2025 Level 1 Level 2 Level 3 Carrying Amount of Liabilities Bank partner fees $ — $ — $ 28,668 $ 28,668 Contingent consideration $ — $ — $ 40,000 $ 40,000 Liabilities not carried at fair value Revolving credit facilities $ — $ — $ 5,972,582 $ 5,813,474 Amortizing debt facilities $ — $ — $ 5,287 $ 5,287 Senior notes, net $ 317,364 $ — $ 392,000 $ 698,562 Bank partner fees. Bank partner fees carried at fair value in accordance with ASC 815, reflect the estimated fair value of future compensation we owe our bank partners associated with the regulatory oversight and other services they provide on our acquired receivables, the underlying accounts of which they continue to own and service. This compensation is based on both a fixed and variable component, dependent on the underlying performance of the acquired receivables. We estimate the present value of this compensation using internally-developed estimates of payment rates and discount rates. We recognize the fair value of these Bank partner fees within Card and loan servicing on the accompanying condensed consolidated statements of income on the date we acquire the underlying receivable with the corresponding liability recorded within Accounts payable and accrued expenses on the accompanying condensed consolidated balance sheets. Contingent consideration. As part of our acquisition of Mercury, 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 over a limited period of time. We have determined the contingent consideration meets the definition of a derivative instrument not designated as a hedge under ASC 815. We have recorded the derivative at fair value within Accounts payable and accrued expenses on the accompanying condensed consolidated balance sheets, calculated using internally-developed estimates in a Monte Carlo simulation. For each simulation path, the contingent consideration payments are calculated based on the contractual terms, and then discounted at the term-matched risk free rate plus a credit spread. The value of the contingent consideration is calculated as the average present value over all simulated paths. Key assumptions used in the projection included the expected charge off rates and estimated volatility of these charge off rates. In accordance with asset acquisition accounting, we recognize changes in the fair value of this contingent consideration within Changes in fair value of loans on the condensed consolidated statements of income because we mark our loans to fair value. We record the changes in the corresponding liability within Accounts payable and accrued expenses on the accompanying condensed consolidated balance sheets. For our credit and debt facilities where market prices are not available, we assess the fair value of these liabilities based on our estimate of future cash flows generated from their underlying credit card receivables collateral, net of servicing compensation required under the note facilities. We have evaluated the fair value of our third party debt by analyzing repayment terms and credit spreads included in our recent financing arrangements to those of our existing facilities. See Note 9, "Notes Payable," for further discussion on our other notes payable. 18 Table of Contents 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 six months ended June 30, 2026 and June 30, 2025: Fair Value at Fair Value at December 31, 2025 Changes in fair value of liabilities, included in earnings June 30, 2026 Bank partner fees $ 28,668 $ ( 8,786 ) $ 19,882 Contingent consideration $ 40,000 $ ( 18,000 ) $ 22,000 Fair Value at Fair Value at December 31, 2024 Changes in fair value of liabilities, included in earnings June 30, 2025 Bank partner fees 13,644 2,135 15,779 The following key unobservable assumptions were used in the fair value measurement of our liabilities carried at fair value: June 30, 2026 December 31, 2025 Range Weighted Average Range Weighted Average Bank partner fees Customer Payment Rate 5.4% -10.3% 8.3 % 5.7 % - 10.1 % 8.4 % Discount Rate 8.5 % - 12.5 % 9.8 % 8.5 % - 12.5 % 9.7 % Contingent consideration Charge-off rate 19.7 %- 27.0 % 21.9 % 16.2 %- 24.0 % 19.8 % Charge-off volatility 15.0 % 15.0 % 15.0 % 15.0 % Other Relevant Data 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 June 30, 2026 As of December 31, 2025 Aggregate unpaid gross balance of loans carried at fair value $ 6,891,217 $ 6,940,489 Aggregate unpaid principal balance included within loans at fair value $ 6,404,420 $ 6,472,891 Aggregate fair value of loans at fair value $ 6,658,748 $ 6,647,882 Aggregate fair value of loans at fair value that are 90 days or more past due (which also coincides with finance charge and fee non-accrual policies) $ 55,453 $ 57,624 Unpaid principal balance of loans at fair value and are 90 days or more past due (which also coincides with finance charge and fee non-accrual policies) over the fair value of such loans, interest and fees receivable $ 290,506 $ 330,032 7. Variable Interest Entities The following table presents a summary of VIEs in which we had continuing involvement and held a variable interest (in millions): As of June 30, 2026 December 31, 2025 Cash and cash equivalents $ 225.8 $ 209.6 Restricted cash and cash equivalents 51.2 117.6 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 19 Table of Contents 8. Leases We have operating leases primarily associated with our corporate offices, ancillary office locations associated with our recent acquisition of Mercury and regional service centers. Additionally, we have operating leases for certain equipment. Our leases have remaining lease terms of 1 to 10 years, some of which include options, at our discretion, to extend the leases for additional periods generally on one -year revolving periods. Other leases allow for us to terminate the lease based on appropriate notification periods. For certain of our leased offices, we sublease a portion of the unoccupied space. 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 June 30, For the Six Months Ended June 30, 2026 2025 2026 2025 Operating lease cost, gross $ 1,222 $ 804 $ 2,342 $ 1,586 Sublease income ( 42 ) ( 25 ) ( 50 ) ( 49 ) Net Operating lease cost $ 1,180 $ 779 $ 2,292 $ 1,537 Cash paid under operating leases, gross $ 1,293 $ 768 $ 2,569 $ 1,530 Weighted average remaining lease term - months 91 105 Weighted average discount rate 6.9 % 7.1 % As of June 30, 2026 , scheduled payments of lease liabilities were as follows (in thousands): Gross Lease Payment Payments received from Sublease Net Lease Payment 2026 (Remainder of 2026) $ 2,539 $ ( 51 ) $ 2,488 2027 4,373 ( 43 ) 4,330 2028 3,757 — 3,757 2029 3,592 — 3,592 2030 3,577 — 3,577 Thereafter 13,187 — 13,187 Total lease payments 31,025 ( 94 ) 30,931 Less imputed interest ( 7,457 ) Operating lease liabilities $ 23,568 20 Table of Contents 9. Notes Payable Notes Payable, at Face Value 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 June 30, 2026 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 Interest rate (6) Amortization period (months) (7) Committed capacity Revolving credit facility (1) (2) December 2028 SOFR plus 2.25 %- 2.60 % — $ 65.0 $ 20.1 $ 24.9 Revolving credit facility (2) (3) January 2028 SOFR plus 3.00% — 50.0 — — Revolving credit facility (2) (3) October 2026 Term SOFR plus 3.60% — 75.0 39.3 74.6 Revolving credit facility (2) (3) April 2028 Term SOFR plus 2.85% — 40.0 11.6 12.2 Revolving credit facility (2) (3) March 2028 Prime Rate 12 75.0 50.0 51.1 Revolving credit facility (2) (3) (4) May 2030 Fixed 6.33% 18 325.0 325.0 325.0 Revolving credit facility (2) (3) (4) August 2027 Term SOFR plus 1.80 %- 6.85 % 12 158.3 47.5 31.7 Revolving credit facility (2) (3) August 2027 Term SOFR plus 3.50% — 25.0 — — Revolving credit facility, repaid in June 2026 (3) (4) September 2029 Fixed 9.51% 18 — — 300.0 Revolving credit facility (3) (4) November 2029 Fixed 8.86% 18 250.0 250.0 250.0 Revolving credit facility (3) (4) July 2030 Fixed 7.78% 18 100.0 100.0 100.0 Revolving credit facility (3) (4) September 2029 Fixed 6.60% 18 200.0 200.0 200.0 Revolving credit facility (3) (4) August 2028 Commercial paper rate (3.89%) plus 2.00% 18 200.0 — 100.0 Revolving credit facility (3) (4) December 2030 Fixed 6.76% 18 350.0 350.0 350.0 Revolving credit facility (3) (4) January 2031 Fixed 6.74% 18 125.0 125.0 125.0 Revolving credit facility (3) (4) February 2030 Fixed 5.82% 18 200.0 200.0 200.0 Revolving credit facility (3) (4) (5) April 2029 Term SOFR plus 2.40 %- 7.80 % 12 361.9 307.6 361.9 Revolving credit facility (3) (4) (5) July 2029 Commercial paper rate (3.88% as of December 31, 2025) plus 2.25 % OR Term SOFR plus 8.15 % based on class of notes 18 379.1 194.4 223.0 Revolving credit facility, repaid in May 2026 (3) (4) (5) July 2029 Fixed 7.46% 18 — — 700.0 Revolving credit facility (3) (4) (5) April 2029 Commercial paper rate (3.88% as of December 31, 2025) plus 2.15 % OR Term SOFR plus 8.50 % dependent on class of notes 18 374.0 194.4 313.0 Revolving credit facility, repaid in April 2026 (3) (4) (5) June 2027 Term SOFR plus 2.00 %- 7.50 % 12 — — 500.0 Revolving credit facility (3) (4) May 2031 Fixed 7.02% 18 300.0 300.0 300.0 Revolving credit facility (3) (4) October 2031 Fixed 6.90% 18 500.0 500.0 500.0 Revolving credit facility (3) (4) December 2031 Fixed 6.00% 18 750.0 750.0 750.0 Revolving credit facility (3) (4) October 2033 Fixed 5.59% 18 100.0 100.0 — Revolving credit facility (3) (4) February 2032 Fixed 6.16% 18 365.0 365.0 — Revolving credit facility (3) (4) April 2029 Term SOFR plus 2.1 %- 6.50 % 12 500.0 500.0 — Revolving credit facility (3) (4) June 2032 Fixed 5.61% 18 400.0 400.0 — Revolving credit facility (3) (4) January 2032 Fixed 6.83% 18 275.0 275.0 — Revolving credit facility July 2028 Term SOFR plus 3.00% — 50.0 — 50.0 Revolving credit facility (2) (3) May 2027 Term SOFR plus 3.75% 8 100.0 — — Revolving credit facility (2) (3) April 2029 Term SOFR plus 2.50% 18 125.0 — — Other facilities Other debt 5.2 5.3 Total notes payable before unamortized debt issuance costs and discounts 5,610.1 5,847.7 Unamortized debt issuance costs and discounts ( 31.2 ) ( 28.9 ) Total notes payable outstanding, net $ 5,578.9 $ 5,818.8 ( 1 ) Loan is subject to certain affirmative covenants, including a coverage ratio, a leverage ratio and a collateral performance test, the failure of which could result in required early repayment of all or a portion of the outstanding balance by our CAR Auto Finance operations. ( 2 ) These notes reflect modifications to either extend the maturity date, increase the loan amount or both, and are treated as accounting modifications. ( 3 ) Loans are associated with VIEs. See Note 7, "Variable Interest Entities" for more information. ( 4 ) Creditors do not have recourse against the general assets of the Company but only to the collateral within the VIEs. ( 5 ) Notes payable assumed as part of acquisition of Mercury. ( 6 ) For fixed rate debt instruments, interest rate is shown as a weighted average. Rates shown do not include the impact of the amortization of debt issuance costs or debt discounts. ( 7 ) Amortization period (months) reflects the scheduled paydown period prior to the stated Maturity date. 21 Table of Contents 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. Revolving loans are also subject to some or all of the following affirmative covenants (among others): 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 June 30, 2026, we were in compliance with the covenants underlying our various notes payable and credit facilities. Senior Notes, net 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. The 2026 Senior Notes are effectively subordinated to all of the Company’s existing and future secured indebtedness, to the extent of the value of the assets securing such indebtedness, and the 2026 Senior Notes are structurally subordinated to all existing and future indebtedness and other liabilities (including trade payables) of the Company’s subsidiaries (excluding any amounts owed by such subsidiaries to the Company). The 2026 Senior Notes bear interest at the rate of 6.125 % per annum. Interest on the 2026 Senior Notes is payable quarterly in arrears on February 1, May 1, August 1 and November 1 of each year. The 2026 Senior Notes will mature on November 30, 2026. 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 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. In January and February 2024, we issued an aggregate of $ 57.2 million aggregate principal amount of 2029 Senior Notes. In July 2024, we issued an additional $ 60.0 million aggregate principal amount of the 2029 Senior Notes. The 2029 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. The 2029 Senior Notes are effectively subordinated to all of the Company’s existing and future secured indebtedness, to the extent of the value of the assets securing such indebtedness, and the 2029 Senior Notes are structurally subordinated to all existing and future indebtedness and other liabilities (including trade payables) of the Company’s subsidiaries (excluding any amounts owed by such subsidiaries to the Company). The 2029 Senior Notes bear interest at the rate of 9.25 % per annum. Interest on the 2029 Senior Notes is payable quarterly in arrears on January 15, April 15, July 15 and October 15 of each year. The 2029 Senior Notes will mature on January 31, 2029. 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 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"). The 2030 Senior Notes bear interest at the rate of 9.75 % per annum. Interest on the 2030 Senior Notes is payable semi-annually in arrears on March 1 and September 1 of each year. The 2030 Senior Notes will mature on September 1, 2030. 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 - 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. 22 Table of Contents 10. Commitments and Contingencies General 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 $ 7.7 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. Moreover, there would be a concurrent increase in assets should there be any exercise of these lines of credit. Additionally, our CAR operations provide floor-plan financing for a pre-qualified network of independent automotive dealers and automotive finance companies in the buy-here, pay-here used car business. The floor plan financing allows dealers and finance companies to borrow up to the maximum pre-approved credit limit allowed in order to finance ongoing inventory needs. 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 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 $ 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 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. Under the account terms, consumers have the option of enrolling with our issuing bank partners in a credit protection program, which would make the minimum payments owed on their accounts for a period of up to six months upon the occurrence of an eligible event. 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 $ 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. We include our estimate of future claims under this program within our fair value analysis of the associated receivables. Concentrations We acquire all of our fair value receivables under agreements with three third -party originating institutions. 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 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 2026 2025 2026 2025 1 $ 291.3 $ 390.2 $ 412.7 $ 536.6 2 $ 49.8 $ 43.7 $ 87.6 $ 76.5 3 $ 28.6 $ 19.7 $ 59.0 $ 38.7 4 $ 20.0 $ 17.6 $ 41.8 $ 35.2 5 $ 14.0 $ 15.8 $ 29.4 $ 34.5 23 Table of Contents Our general purpose credit card and private label credit receivables base is spread across individual consumers in the U.S. As of June 30, 2026 , only one state (Texas) had receivables concentration in excess of 10% of our total pool of receivables. Litigation We are subject to various legal proceedings that are incidental to the conduct of our business. There are currently no pending legal proceedings that are expected to be material to us. 11. Net Income Attributable to Controlling Interests Per Common Share We compute net income attributable to controlling interests per common share by dividing net income attributable to controlling interests by the weighted average number of shares of common stock (including participating securities) outstanding during the period, as discussed below. Diluted computations applicable in financial reporting periods in which we report income use the treasury stock method to reflect the potential dilution to the basic income per share of common stock computations that could occur if securities or other contracts to issue common stock were exercised, were converted into common stock or were to result in the issuance of common stock that would share in our results of operations. In performing our net income attributable to controlling interests per share of common stock computations, we apply accounting rules that require us to include all unvested stock awards that contain non-forfeitable rights to dividends or dividend equivalents, whether paid or unpaid, in the number of shares outstanding in our basic and diluted calculations. Common stock and certain unvested share-based payment awards earn dividends equally, and we have included all outstanding restricted stock awards in our basic and diluted calculations for current and prior periods. The following table sets forth the computations of net income attributable to controlling interests per share of common stock (in thousands, except per share data): For the Three Months Ended For the Six Months Ended June 30, June 30, 2026 2025 2026 2025 Numerator: Net income attributable to controlling interests $ 49,719 $ 30,573 $ 93,894 $ 62,093 Preferred stock and preferred unit dividends and discount accretion ( 2,308 ) ( 2,222 ) ( 4,616 ) ( 5,796 ) Net income attributable to common shareholders—basic 47,411 28,351 89,278 56,297 Effect of dilutive preferred stock dividends and discount accretion 600 600 1,200 1,200 Net income attributable to common shareholders—diluted $ 48,011 $ 28,951 $ 90,478 $ 57,497 Denominator: Basic (including unvested share-based payment awards) (1) 15,155 15,124 15,065 15,120 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) 19,169 19,187 19,086 19,186 Net income attributable to common shareholders per share—basic $ 3.13 $ 1.87 $ 5.93 $ 3.72 Net income attributable to common shareholders per share—diluted $ 2.50 $ 1.51 $ 4.74 $ 3.00 ( 1 ) 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. 24 Table of Contents 12. Stock-Based Compensation We currently have two stock-based compensation plans, the Second Amended and Restated Employee Stock Purchase Plan (the "ESPP") and the Fourth Amended and Restated 2014 Equity Incentive Plan (the "Fourth Amended 2014 Plan"). Our ESPP provides that we may issue up to 500,000 shares of our common stock under the plan. Our Fourth Amended 2014 Plan provides that we may grant equity awards representing up to 5,750,000 options on or shares of our common stock to members of our Board of Directors, employees, consultants and advisors. The Fourth Amended 2014 Plan was approved by our shareholders in May 2019. 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 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 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. The table below includes additional information about outstanding restricted stock and restricted stock units: Number of Shares Weighted Average Grant Date Fair Value Outstanding at December 31, 2025 403,721 $ 39.79 Issued 237,847 $ 54.12 Vested ( 79,137 ) $ 34.98 Forfeited ( 5,382 ) $ 48.43 Outstanding at June 30, 2026 557,049 $ 46.51 Stock Options The exercise price per share of the options awarded under the Fourth Amended 2014 Plan must be equal to or greater than the market price on the date the option is granted. The option period may not exceed 10 years from the date of grant. There has been no expense related to stock option-related compensation costs in 2026 and 2025. When applicable, we recognize stock option-related compensation expense for any awards with graded vesting on a straight-line basis over the vesting period for the entire award. The table below includes additional information about outstanding options: Number of Shares Weighted Average Exercise Price Weighted Average of Remaining Contractual Life (in years) Aggregate Intrinsic Value Outstanding at December 31, 2025 98,850 $ 39.61 Issued — $ — Exercised ( 88,158 ) $ 40.59 Expired/Forfeited ( 10,692 ) $ 31.54 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. 25 Table of Contents 13. Subsequent Events We evaluate subsequent events that occur after our consolidated balance sheet date but before our consolidated financial statements are issued. There are two types of subsequent events: ( 1 ) recognized, or those that provide additional evidence with respect to conditions that existed at the date of the balance sheet, including the estimates inherent in the process of preparing financial statements; 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 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.