Company: ATLCL
Filing Date: 2025-03-10
Form Type: CORRESP
Source: 0001437749-25-006744
Chunk: 3

Company: Atlanticus Holdings Corp
Filing Date: 2025-03-10
Form: CORRESP
Chunk 3
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 of our private label receivables and 4) the impact of changes in the assumptions underlying receivables at the end of the measurement period. The increase in losses for both the three and nine month periods were largely due to increases in principal and finance chargeoffs (net of recoveries), which totaled $201.4 million and $650.2 million for the three and nine months ended September 30, 2024, respectively, compared to $173.5 million and $545.4 million for the three and nine months ended September 30, 2023, respectively. These chargeoffs increased period over period primarily due to overall increases in our acquisition of receivables and not due to specific changes in the underlying performance of the receivables. Offsetting this increase in chargeoffs, was an increase in the Changes in fair value of loans at fair value, included in earnings, which increased to $101.0 million for the nine months ended September 30, 2024 compared to $39.9 million for the nine months ended September 30, 2023 primarily resulting from improvements in the fair value assessment for receivables. Results impacting the $101.0 million of Changes in fair value of loans at fair value, included in earnings for the nine months ended September 30, 2024 are as follows: 1) net gains of $106.0 million associated with fair value assessments on increases in finance and fee billings (net of subsequent payments) in excess of the billed amounts, 2) net losses of $122.6 million on the acquisition of receivables, primarily related to private label credit receivables which have below market pricing and 3) improvements in the underlying performance of our fair value receivables in the form of improved delinquencies and improved net returns as well as the extension in assumed implementation dates of recent CFPB rules limiting late fees charged to consumers. This extension 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. These improvements in underlying performance and assumptions resulted in an increase in the fair value of consumer receivables of approximately $117.6 million.

For the three months ended September 30, 2024, Changes in fair value of loans at fair value, included in earnings reduced to a loss of $2.3 million from a loss of $4.3 million for the three months ended September 30