Company: ATLCL
Filing Date: 2025-04-09
Form Type: CORRESP
Source: 0001437749-25-011567
Chunk: 7

Company: Atlanticus Holdings Corp
Filing Date: 2025-04-09
Form: CORRESP
Chunk 7
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HC3 - 005

The objective of segment reporting, as prescribed in ASC 280, is to provide information about an entity’s different types of business activities and economic environments to help users understand the entity’s performance, assess its prospects for future cash flows, and make more informed judgments about the entity as a whole. Under ASC 280, two or more operating segments can be aggregated into a single reportable segment if:

| 1. | Aggregation is consistent with the objective and basic principles of ASC 280; |

| 2. | The segments have similar economic characteristics; and |

| 3. | If the segments are similar in all of the following areas: |

| ● | Nature of products and services; |

| ● | Nature of productions process; |

| ● | Type or class of customer for the products and services; |

| ● | The methods used to distribute the products or provide services; and |

| ● | The nature of the regulatory environment. |

Below we apply the requirements referenced above to our General Purpose Credit Card and Private Label Credit segments.

The forms of consumer lending noted in the General Purpose Credit Card and Private Label Credit segments involve many different types of offers to consumers. Our General Purpose Credit Card receivables tend to have higher yields coupled with higher charge-offs, whereas our Private Label Credit receivables tend to have lower effective yields, but correspondingly lower charge-offs. Even within these two segments there is significant variability in the products offered, with a wide range in fee structures, each tailored to consumers based on risk profiles. Regardless of the specific fee structure, each of these products is designed to provide a similar IRR on invested capital when viewed at the segment level.

When comparing economic characteristics for each segment, we first considered IRR, which management uses to assess product performance and guide future product pricing. Second, we reviewed the cost to service these assets to consider the similarities in cost structures. Third, we compared the segment margins to consider the actual periodic returns on investments in the measured periods. These results, along with the additional similarities noted below, guided our determination that the two segments were closely aligned in both design, historical performance and targeted future performance.

| ● | As demonstrated by the following graph, targeted (and actual) IRR for each segment is designed to fall within a similar range with actual performance moving in tandem; |

[*****]

Omitted and provided under separate cover to the Staff pursuant to Rule 83

Confidential Treatment Requested by Atlanticus Holdings Corporation

AHC3 -