PRA GROUP INC

2. Finance Receivables, net:

Finance receivables, net consisted of the following as of March 31, 2024 and December 31, 2023 (amounts in thousands):

Changes in the negative allowance for expected recoveries by portfolio segment for the three months ended March 31, 2024 and 2023 were as follows (amounts in thousands):

(1) Initial negative allowance for expected recoveries - portfolio acquisitions

Portfolio acquisitions for the three months ended March 31, 2024 and 2023 were as follows (amounts in thousands):

The initial negative allowance recorded on portfolio acquisitions for the three months ended March 31, 2024 and 2023 was as follows (amounts in thousands):

(2) Recoveries applied to negative allowance

Recoveries applied to the negative allowance for the three months ended March 31, 2024 and 2023 were as follows (amounts in thousands):

(a) Recoveries include cash collections, buybacks and other cash-based adjustments.

(3) Changes in expected recoveries

Changes in expected recoveries for the three months ended March 31, 2024 and 2023 were as follows (amounts in thousands):

In order to estimate future cash collections, the Company considers factors such as historical collections performance and its view of economic conditions and consumer habits in the various geographies in which the Company operates. Based on these considerations, adjustments to estimated remaining collections ("ERC") may incorporate changes in both the amounts and the timing of expected cash collections over the forecast period.

Changes in expected recoveries for the three months ended March 31, 2024 were $51.7 million. This was primarily due to $35.8 million in recoveries received in excess of forecast (cash collections overperformance), due largely to collections performance in the U.S., driven by the impact of the Company's cash-generating initiatives and supplemented by tax refund seasonality, as well as collections performance in Brazil and Europe. The changes in expected future recoveries of $15.8 million reflect the Company's assessment of certain pools in Europe, Brazil and the U.S., resulting in increases to the expected cash flows.

Changes in expected recoveries for the three months ended March 31, 2023 were a net negative $36.9 million. This included $3.8 million in recoveries received in excess of forecast (cash collections overperformance) and a $40.8 million negative adjustment to changes in expected future recoveries. Overperformance decreased by $19.8 million as a result of reduced cash collections primarily in the U.S. due to a slower tax season. The changes in expected future recoveries reflected the Company's assessment of certain pools resulting in a reduction of expected cash flows as a result of slowing collection performance in the U.S. call centers resulting from weak economic conditions.