Company: ATLCL
Filing Date: 2025-11-10
Form Type: 10-Q
Source: 0001437749-25-033947
Chunk: 71

Company: Atlanticus Holdings Corp
Filing Date: 2025-11-10
Form: 10-Q
Item: Item 8
Chunk 71
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 the significantly lower risk and return characteristics. As a result, our weighted average discount rate has decreased marginally. We consider asset specific financing costs associated with our receivables (coupled with our internal cost of equity capital in agreements that require credit enhancements) as the best indicator of return requirements used by third-party market participants. If the Federal Reserve continues to decrease interest rates or we observe a corresponding decrease in return requirements used by third-party market participants, we may further reduce our weighted average discount rate.

Total operating expenses. Total operating expenses variances for the three and nine months ended September 30, 2025, relative to the three and nine months ended September 30, 2024, reflect the following:

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     increases in salaries and benefit costs related to both the growth in the number of employees, including those added as part of our acquisition of Mercury, and inflationary compensation pressure. Subsequent to our acquisition of Mercury, we eliminated certain redundant positions, which resulted in termination costs of approximately $4.3 million for the nine months ended September 30, 2025. We expect some continued increase in salaries and benefits for the remainder of 2025 and into 2026 compared to comparable periods in 2024 and 2025 due to this acquired workforce;

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     increases in card and loan servicing expenses for both the three and nine months ended September 30, 2025, when compared to the same periods in 2024 due to growth in receivables associated with our investments in private label credit and general purpose credit card receivables, which grew to $6,600.1 million outstanding from $2,653.8 million outstanding at September 30, 2025 and September 30, 2024, respectively, and costs associated with the implementation of product, policy, and pricing changes discussed above. As many of the expenses associated with our card and loan servicing efforts are now variable based on the amount of underlying receivables, we would expect this number to continue to grow in 2025 and 2026 commensurate with growth in our receivables. 

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     increases in marketing and solicitation costs for both the three and nine months ended September 30, 2025, when compared to the same period in 2024, primarily due to quarterly growth in both new credit card and private label customers serviced, the total accounts of which increased over 2.1 million as of September 30,