Company: ATLCL
Filing Date: 2025-05-08
Form Type: 10-Q
Source: 0001437749-25-015559
Chunk: 138

Company: Atlanticus Holdings Corp
Filing Date: 2025-05-08
Form: 10-Q
Item: Item 1
Chunk 138
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 accrued and unpaid interest and fees. All receivables associated with our private label credit and general purpose credit cards are included within this category of receivables.
    
   Under the fair value option, fees such as annual fees are taken into income when billed to the consumer or upon loan acquisition and any cost associated with the loan acquisition are expensed in the period incurred. The Company estimates the fair value of the loans using a discounted cash flow model, which considers various unobservable inputs such as credit losses, payment rates, servicing costs, discount rates and yields earned on credit card receivables. The Company reevaluates the fair value of loans receivable at the close of each measurement period. Changes in the fair value of loans are recorded as a component of "Changes in fair value of loans" in the condensed consolidated statements of income in the period of the fair value changes. Changes in the fair value of loans include the impact of current period charge-offs associated with these receivables.
    
   Further details concerning our loans at fair value are presented within Note 6, "Fair Values of Assets and Liabilities."
    
   Loans at amortized cost, net. Our loans at amortized cost, net, currently consist of receivables associated with our Auto Finance segment’s operations and are presented in the condensed consolidated balance sheets net of the related allowance for credit losses and deferred revenue. We purchased auto loans with outstanding principal of $48.1 million and $61.0 million for the three months ended  March 31, 2025 and 2024, respectively, through 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