Company: ATLCL
Filing Date: 2025-11-10
Form Type: 10-Q
Source: 0001437749-25-033947
Chunk: 67

Company: Atlanticus Holdings Corp
Filing Date: 2025-11-10
Form: 10-Q
Item: Item 8
Chunk 67
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. These unfavorable assumption changes were largely due to a marginal decline in the fair value associated with our retail assets, largely due to significant increases in retail receivables acquired, which tend to have a lower fair value on the date of acquisition than those that have matured past peak charge off periods. This unfavorable change was offset by improvements in the underlying performance in the form of lower delinquencies and higher net returns. The decreased impacts due to favorable changes in fair value assumptions for the three and nine months ended September 30, 2025 relative to the same periods in 2024 were largely a result of product, policy and pricing changes made during 2024 which enhanced the fair value of the portfolio in those periods. Adding to this decline in Changes in fair value of loans were slight increases in principal and finance charge-offs (net of recoveries), which totaled $231.8 million and $677.1 million for the three and nine months ended September 30, 2025, respectively, compared to $201.5 and $650.2 million for the three and nine months ended September 30, 2024, respectively. These charge-offs increased period over period primarily due to increases in our period end managed receivables although the increase was offset due to the improved performance in both our private label credit and general purpose credit card delinquencies rates over the past several quarters as well as changes to our relative mix of receivables that include significant increases in the acquisition of private label credit receivables for which we have limited loss exposure due to agreements with retail partners (see additional discussion related to delinquencies and charge-offs below). 

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For all periods presented, we included asset performance degradation in our forecasts to reflect both changes in assumed asset level economics and the possibility of delinquency rates increasing in the near term (and the corresponding increase in charge-offs and decrease in payments) above the level that current trends would suggest. In recent periods we have removed some of this expected degradation based on observed asset stabilization, implementation of product, policy, and pricing changes and an improved inflation environment. See Note 7 "Fair Values of Assets and Liabilities" to our condensed consolidated financial statements included herein for further discussion of our fair value calculation. We may, however, adjust our forecasts to reflect observed macroeconomic events. Thus, the fair values are subject to potentially high levels of volatility if we experience changes in the quality of our credit card receivables or if there