PRA GROUP INC

2. Finance Receivables, net:

Finance receivables, net consisted of the following as of June 30, 2024 and December 31, 2023 (amounts in thousands):

Changes in the negative allowance for expected recoveries by portfolio segment for the three and six months ended June 30, 2024 and 2023 were as follows (amounts in thousands):

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

Portfolio acquisitions for the three and six months ended June 30, 2024 and 2023 were as follows (amounts in thousands):

The initial negative allowance recorded on portfolio acquisitions for the three and six months ended June 30, 2024 and 2023 was as follows (amounts in thousands):

(2) Recoveries applied to negative allowance

Recoveries applied to the negative allowance for the three and six months ended June 30, 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

The Company develops its estimates of expected recoveries by applying discounted cash flow methodologies to its estimated remaining collections and recognizes income over the estimated life of the pool at the constant effective interest rate of the pool. For additional information about these methodologies, refer to Note 1 to the Consolidated Financial Statements in the 2023 Form 10-K.

Changes in expected recoveries for the three months ended June 30, 2024 and 2023 were as follows (amounts in thousands):

Changes in expected recoveries for the three months ended June 30, 2024 were $73.3 million, which included $54.3 million in recoveries received in excess of forecast (cash collections overperformance), due mainly to collections performance in the U.S., driven in large part by the Company's cash-generating initiatives, coupled with collections performance in Europe. Changes in expected future recoveries of $19.1 million mainly reflect the Company's assessment of certain pools in the U.S. and Europe, resulting in an increase to the expected cash flows based primarily on overperformance in recent periods. The increase in expected cash flows was driven in large part by forecast increases to the 2013 to 2019 U.S. Core pools, as well as increases to a number of pools in Europe.

Changes in expected recoveries for the three months ended June 30, 2023 were a net positive $21.1 million. This included $25.3 million in recoveries received in excess of forecast (cash collections overperformance) and a $4.2 million negative adjustment to changes in expected future recoveries. The $25.3 million in recoveries received in excess of forecast was largely due to overperformance generated from larger than expected one-time payments in Europe and performance on new vintages in South America.

Changes in expected recoveries for the six months ended June 30, 2024 and 2023 were as follows (amounts in thousands):

Changes in expected recoveries for the six months ended June 30, 2024 were $125.0 million, which included $90.1 million in recoveries received in excess of forecast, due mainly to collections performance in the U.S., driven in large part by the Company's cash-generating initiatives, coupled with collections performance in Brazil and Europe. Changes in expected future recoveries of $34.9 million mainly reflect the Company's assessment of certain pools in the U.S. and Europe, resulting in an increase to the expected cash flows based primarily on overperformance in recent periods. The increase in expected cash flows was driven in large part by forecast increases to the 2013 to 2019 U.S. Core pools, as well as increases to a number of pools in Europe.

Changes in expected recoveries for the six months ended June 30, 2023 were a net negative $15.8 million. This included $29.2 million in recoveries received in excess of forecast (cash collections overperformance), primarily due to strong performance in Europe and South America, and a $45.0 million negative adjustment to changes in expected future recoveries. The changes in expected future recoveries reflect the Company's assessment of certain pools, which resulted in a reduction of expected cash flows due to collections performance in U.S. call centers resulting from weaker economic conditions.