Company: AFRM
Filing Date: 2025-11-06
Form Type: 10-Q
Source: 0001628280-25-050295
Chunk: 122

Company: Affirm Holdings, Inc.
Filing Date: 2025-11-06
Form: 10-Q
Item: Part I, Item 2
Chunk 122
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 accrued interest for such loans and fees. In certain instances, our originating bank partners may originate loans with zero or below market interest rates that we are required to purchase. In these instances, we may be required to purchase the loan for a price in excess of the fair market value of such loans, which results in a loss. These losses are recognized as loss on loan purchase commitment in our interim condensed consolidated statements of operations and comprehensive income (loss). These costs are incurred on a per loan basis.

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Loss on loan purchase commitment increased by $17.3 million, or 32%, for the three months ended September 30, 2025, compared to the same period in 2024, primarily due to an increase in total volume of loans purchased. During the three months ended September 30, 2025, we purchased $8.7 billion of loans from our originating bank partners, compared to $6.4 billion in the same period in 2024, representing an increase of 36%. Of the total loans purchased, 0% APR installment loans represented $1.3 billion during the three months ended September 30, 2025, and $0.8 billion for the same period in 2024, an increase of $0.5 billion.

Provision for credit losses

Provision for credit losses generally represents the amount of expense required to maintain the allowance for credit losses within our interim condensed consolidated balance sheet, which represents management’s estimate of future losses on loans and other receivables. In the event that our loans and receivables outperform our expectation and/or we reduce our expectation of credit losses in future periods, we may release reserves and thereby reduce the allowance for credit losses, yielding income in the provision for credit losses. The provision is determined based on our estimate of expected future losses on loans originated during the period and held for investment on our balance sheet, changes in our estimate of future losses on loans outstanding as of the end of the period and the net charge-offs incurred in the period.

Provision for credit losses increased by $2.9 million, or 2%, for the three months ended September 30, 2025, compared to the same period in 2024, primarily driven by an increase in the provision expense for loans held for investment which increased by $1.6 million, or 1%.  Higher provision for credit losses for loans held for investment resulted from a $1.1 billion or 19% increase in the average balance of loans held for investment