Company: ATLCL
Filing Date: 2025-11-10
Form Type: 10-Q
Source: 0001437749-25-033947
Chunk: 161

Company: Atlanticus Holdings Corp
Filing Date: 2025-11-10
Form: 10-Q
Item: Item 1
Chunk 161
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 our pre-qualified network of independent automotive dealers and automotive finance companies.
    
   We show an allowance for credit losses for our loans at amortized cost. A considerable amount of judgment is required to assess the ultimate amount of expected losses on loans at amortized cost, and we regularly evaluate and update our methodologies to determine the most appropriate allowance necessary. Our loans at amortized cost consist of smaller-balance, homogeneous loans in our Auto Finance segment. These loans are further divided into pools based on common characteristics such as contract or acquisition channel. For each pool, we determine the necessary allowance for credit losses using reasonable and supportable forecasts that analyze some or all of the following attributes unique to each type of receivable pool: historical loss rates on similar loans; current delinquency and roll-rate trends which  may indicate consumer loss rates in excess or less than those which historical trends might suggest; the effects of changes in the economy on consumers such as inflation or other macroeconomic changes; changes in underwriting criteria; unfunded commitments (to the extent they are unconditional), and estimated recoveries. The aforementioned inputs are calculated using historical trends over the most recent two year period, and adjusted as needed for current trends and reasonable and supportable forecasts. We  may individually evaluate a receivable or pool of receivables for credit losses if circumstances indicate that the receivable or pool of receivables  may be at higher risk for non-performance than other receivables (e.g., if a particular retail or auto-finance partner has indications of nonperformance (such as a bankruptcy) that could impact the underlying pool of receivables we purchased from the partner).
    
   Certain of our loans at amortized cost also contain components of deferred revenue related to loan discounts on the purchase of our auto finance receivables. As of  September 30, 2025 and  December 31, 2024, the weighted average remaining accretion period for the $21.5 million and $19.8 million of deferred revenue reflected in the condensed consolidated balance sheets was 22 and 24 months, respectively.
    
   A roll-forward (in millions) of our allowance for credit losses by class of receivable is as follows:

     For the Three Months Ended September 30,   2025    2024  
   Notes Receivable    Auto Finance    Total    Notes Receivable    Auto Finance    Total  
 Allowance for credit losses: