PRA GROUP INC

2. Finance Receivables, net:

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

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

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

Changes in expected recoveries for the three months ended September 30, 2024 were $60.6 million, which included $34.2 million in recoveries received in excess of forecast (cash collections overperformance), due primarily to collections performance in the U.S. and Europe. Changes in expected future recoveries of $26.5 million mainly reflect the Company's assessment of the 2013 to 2020 U.S. Core pools and a number of pools in Europe, which resulted in increases to the expected cash flows considering that recent performance of those pools is expected to continue.

Changes in expected recoveries for the three months ended September 30, 2023 were a net positive $22.2 million. This included $18.1 million in recoveries received in excess of forecast (cash collections overperformance) and a $4.1 million positive adjustment to changes in expected future recoveries. The $18.1 million in recoveries received in excess of forecast reflected overperformance in Europe and the Americas.

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

Changes in expected recoveries for the nine months ended September 30, 2024 were $185.6 million, which included $124.3 million in recoveries received in excess of forecast, due primarily to collections performance in the U.S. and Europe. Changes in expected future recoveries of $61.4 million mainly reflect the Company's assessment of the 2013 to 2020 U.S. Core pools and a number of pools in Europe, which resulted in increases to the expected cash flows considering that recent performance of those pools is expected to continue.

Changes in expected recoveries for the nine months ended September 30, 2023 were a net positive $6.4 million. This included $47.3 million in recoveries received in excess of forecast (cash collections overperformance), primarily due to continued strong performance in Europe and South America, and a $40.9 million negative adjustment to changes in expected future recoveries. The changes in expected future recoveries reflected the Company's assessment of certain pools, which resulted in a reduction of expected cash flows due largely to collections performance in the U.S.