Finance receivables measured at fair value

3 Months Ended

Mar. 31, 2026

Finance Receivables Measured At Fair Value

Finance receivables measured at fair value

(2) Finance receivables measured at fair value

Our portfolio of finance receivables consists of small-balance homogeneous contracts comprising a single segment. Our contract purchase guidelines are designed to produce a homogenous portfolio. For key terms such as interest rate, length of contract, monthly payment and amount financed, there is relatively little variation from the average for the portfolio.

We have elected to use the fair value method to value our portfolio of finance receivables acquired. The accounting treatment follows the fair value hierarchy outlined in ASC 820, “Fair Value Measurements”, and the inputs and assumptions are level 3. This is described further in footnote 9.

Our valuation policies and procedures have been developed by our Accounting department in conjunction with our Risk department and with consultation with outside valuation experts. Our policies and procedures have been approved by our Chief Executive and our Board of Directors and include methodologies for valuation, internal reporting, calibration and back testing. Our periodic review of valuations includes an analysis of changes in fair value measurements and documentation of the reasons for such changes. There is little available third-party information such as broker quotes or pricing services available to assist us in our valuation process.

Our level 3, unobservable inputs reflect our own assumptions about the factors that market participants use in pricing similar receivables and are based on the best information available in the circumstances. They include such inputs as estimates for the magnitude and timing of net charge-offs and the rate of amortization of the portfolio of finance receivable. Significant changes in any of those inputs in isolation would have a significant effect on our fair value measurement.

For the quarter ended March 31, 2026, the Company evaluated the appropriate fair value and future earnings rate of existing receivables compared to recently acquired receivables and did not record a mark up or down to the portfolio.

The table below presents a reconciliation of the finance receivables measured at fair value on a recurring basis using significant unobservable inputs:

	Three Months Ended
	March 31,
	2026			2025
	(In thousands)
Balance at beginning of period	$	3,655,855		$	3,313,767
Finance receivables at fair value acquired during period		524,900			449,602
Payments received on finance receivables at fair value		(275,019	)		(252,856	)
Net interest income accretion on fair value receivables		(69,947	)		(64,907	)
Mark to fair value		–			3,500
Balance at end of period	$	3,835,789		$	3,449,106

The table below compares the fair values of these finance receivables to their contractual balances for the periods shown:

	March 31, 2026				December 31, 2025
	Contractual		Fair		Contractual		Fair
	Balance		Value		Balance		Value
	(In thousands)
Finance receivables measured at fair value	$	3,941,948	$	3,835,789	$	3,778,127	$	3,655,855

The following table provides certain qualitative information about our level 3 fair value measurements:

Financial Instrument	Fair Values as of					Weight Avg. Inputs as of
	March 31,		December 31,			March 31,		December 31,
	2026		2025		Unobservable	2026		2025
	(In thousands)
Assets:
Finance receivables measured at fair value	$	3,835,789	$	3,655,855	Discount rate		11.07%		11.07%
					Cumulative net losses		16.21%		16.02%

We report delinquency on a contractual basis. The following table summarizes the delinquency status of these finance receivables measured at fair value as of March 31, 2026, and December 31, 2025:

	March 31,		December 31,
	2026		2025
	(In thousands)
Delinquency Status
Current	$	3,485,649	$	3,220,198
31 - 60 days		217,632		272,421
61 - 90 days		86,227		118,201
91 + days		48,911		56,203
Repo		103,529		111,104
	$	3,941,948	$	3,778,127