Company: ATLCL
Filing Date: 2025-03-10
Form Type: CORRESP
Source: 0001437749-25-006744
Chunk: 2

Company: Atlanticus Holdings Corp
Filing Date: 2025-03-10
Form: CORRESP
Chunk 2
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 Total operating revenue of $351.0 million and $956.8 million, respectively. For the same periods in 2023, we generated Total operating revenue of $294.9 million and $846.6 million, respectively. If we applied the same Fair value to Total managed receivables ratio to both periods (thus isolating the fair value impact related to the increase in revenues), the negative fair value assessment against these revenues would increase.

Confidential Treatment Requested by Atlanticus Holdings Corporation
AHC - 002

Offsetting this negative fair value assessment is an increase in the Fair value to Total managed receivables ratio, which increased at September 30, 2024 when compared to September 30, 2023. This increase was due to the underlying performance of the receivables in the form of improved delinquencies and improved net returns. Additionally, the extension in assumed implementation dates of the CFPB late fee rule allows more time for our product, policy and pricing changes to take effect, further offsetting the negative impact of the rule’s implementation and increasing the overall value of the receivables. The Fair value to Total managed receivables ratio increased from 90.2% as of December 31, 2023 to 94.6% as of September 30, 2024 (as disclosed in the Form 10-Q). Applying this positive change in the fair value ratio of 4.4% (94.6%-90.2%) to our outstanding receivable base as of September 30, 2024 resulted in a positive fair value assessment of $117.6 million for the nine months ended September 30, 2024.

In future filings, we will revise our disclosure to include the following within our discussion of Management’s Discussion and Analysis of Financial Condition and Results of Operations - Changes in fair value of loans.

Changes in fair value of loans.We experienced losses in our total Changes in fair value of loans of $203.7 million and $549.2 million for the three and nine months ended September 30, 2024, respectively. This compares to losses of $177.9 million and $505.5 million for the three and nine months ended September 30, 2023, respectively. Changes in fair value of loans includes 1) current period principal and finance chargeoffs of fair value receivables, 2) the impact of assessing all finance and fee income billed during the period to fair value, 3) losses on acquisitions