v3.26.1
Fair Value of Financial Instruments
 6 Months Ended
Jun. 30, 2026
Fair Value Disclosures [Abstract]  
Fair Value of Financial Instruments Fair Value of Financial Instruments
Financial Instruments at Fair Value
The table below compares the fair value of loans receivable and asset-backed notes to their contractual balances for the periods shown:
June 30, 2026December 31, 2025
(in thousands)Unpaid Principal BalanceFair ValueUnpaid Principal BalanceFair Value
Assets
Loans Receivable at Fair Value$2,648,522 $2,736,750 $2,779,608 $2,874,092 
Liabilities
Asset-backed notes$139,811 $137,778 $268,291 $263,799 

The Company calculates the fair value of the asset-backed notes using independent pricing services and broker price indications, which are based on quoted prices for identical or similar notes, which are Level 2 input measures.

The Company primarily uses a discounted cash flow model to estimate the fair value of Level 3 instruments based on the present value of estimated future cash flows. This model uses inputs that are inherently judgmental and reflect management’s best estimates of the assumptions a market participant would use to calculate fair value. The following tables present quantitative information about the significant unobservable inputs used for the Company’s Level 3 fair value measurements for Loans Receivable at Fair Value. The personal loans receivable balance at fair value as of June 30, 2026, consists of $2,465.0 million of unsecured personal loans receivable and $271.7 million of secured personal loans receivable.
June 30, 2026December 31, 2025
Personal Loans Receivable
MinimumMaximum
Weighted Average (2)
MinimumMaximum
Weighted Average (2)
Remaining cumulative charge-offs (1)
10.13%92.90%12.22%10.10%50.58%12.28%
Remaining cumulative prepayments (1)
3.74%38.08%23.67%0.00%38.29%24.90%
Average life (years)0.391.301.040.281.641.06
Discount rate6.30%6.30%6.30%6.26%6.26%6.26%
(1) Figure disclosed as a percentage of outstanding principal balance.
(2) Unobservable inputs were weighted by outstanding principal balance, which are grouped by risk (type of customer, original loan maturity terms).

Fair value adjustments related to financial instruments where the fair value option has been elected are recorded through earnings for the six months ended June 30, 2026 and 2025. Certain unobservable inputs may (in isolation) have either a directionally consistent or opposite impact on the fair value of the financial instrument for a given change in that input. When multiple inputs are used within the valuation techniques for loans, a change in one input in a certain direction may be offset by an opposite change from another input.

For personal loans receivable, the Company developed an internal model to estimate the fair value of loans receivable held for investment. To generate future expected cash flows, the model combines receivable characteristics with assumptions about borrower behavior based on the Company’s historical loan performance. These cash flows are then discounted using a required rate of return that management estimates would be used by a market participant.

The Company had derivative instruments in connection with its bank partnership program with Pathward, N.A. ("Pathward") related to excess interest proceeds it expected to receive on loans retained by Pathward. Based on the agreement underlying the bank partnership program, for all loans originated and retained by Pathward, Pathward received a fixed interest rate. Under an amendment dated September 26, 2025 to the program agreement, the Company purchases 100% of Pathward originated loans and has purchased all loans previously owned by Pathward. As a result, the derivative instrument as of December 31, 2025 was $(1.2) million; there was no outstanding derivative balance as of June 30, 2026.
For the derivative, the Company used a base set of cash flows derived from historical data and management assumptions. From this base set of cash flows, funds that were projected to be released to the Company according to the contractual terms outlined in the waterfall agreement were calculated on an aggregate basis then discounted at a rate that was representative of equity yield.

The table below presents a reconciliation of Loans Receivable at Fair Value on a recurring basis using significant unobservable inputs:
Three Months Ended June 30,Six Months Ended June 30,
(in thousands)2026202520262025
Balance – beginning of period$2,771,836 $2,770,486 $2,874,092 $2,778,523 
Principal disbursements687,548 658,955 1,310,532 1,318,353 
Principal and interest payments from members
(618,465)(582,313)(1,234,805)(1,163,920)
Gross charge-offs(98,581)(100,745)(206,813)(198,942)
Net increase (decrease) in fair value(5,588)9,087 (6,256)21,456 
Balance – end of period$2,736,750 $2,755,470 $2,736,750 $2,755,470 
Financial Instruments Disclosed But Not Carried at Fair Value

The following table presents the carrying value and estimated fair values of financial assets and liabilities disclosed but not carried at fair value and the level within the fair value hierarchy:
June 30, 2026
Carrying valueEstimated fair valueEstimated fair value
(in thousands)Level 1Level 2Level 3
Assets
Cash and cash equivalents$139,590 $139,590 $139,590 $— $— 
Restricted cash72,839 72,839 72,839 — — 
Liabilities
Accounts payable5,882 5,882 5,882 — — 
Secured financing (Note 8)308,620 308,321 — 308,321 — 
Asset-backed borrowings at amortized cost (Note 8)
2,083,494 2,076,972 — 1,950,738 126,234 
Corporate financing (Note 8)135,000 134,053 — 134,053 — 

December 31, 2025
Carrying valueEstimated fair valueEstimated fair value
(in thousands)Level 1Level 2Level 3
Assets
Cash and cash equivalents$105,525 $105,525 $105,525 $— $— 
Restricted cash93,409 93,409 93,409 — — 
Liabilities
Accounts payable6,273 6,273 6,273 — — 
Secured financing (Note 8)204,833 205,152 — 205,152 — 
Asset-backed borrowings at amortized cost (Note 8)2,181,902 2,184,392 1,961,525 222,867 
Corporate financing (Note 8)165,000 165,836 — 165,836 — 

The Company uses the following methods and assumptions to estimate fair value:

•Cash, cash equivalents, restricted cash and accounts payable ‑ The carrying values of certain of the Company’s financial instruments, including cash and cash equivalents, restricted cash and accounts payable, approximate Level 1 fair values of these financial instruments due to their short-term nature.
•Secured financing and corporate financing ‑ The fair values of the Secured financing and Corporate financing facilities have been calculated using discount rates equivalent to the weighted-average market yield of comparable debt securities, which is a Level 2 input measure.
•Asset-backed borrowings at amortized cost ‑ The fair values of the asset-backed borrowings at amortized cost include both securitizations carried at amortized cost and secured borrowings. We obtain indicative pricing on comparable debt securities for securitizations carried at amortized cost, which is a Level 2 input measure. Fair values of secured borrowings included in the asset-backed borrowings at amortized cost have been calculated by discounting the contractual cash flows at the interest rate the Company estimates such arrangement would bear if executed in the current market, which is a Level 3 input measure.
There were no transfers in or out of Level 3 assets and liabilities for the three and six months ended June 30, 2026 and 2025.