Company: ATLCL
Filing Date: 2025-11-10
Form Type: 10-Q
Source: 0001437749-25-033947
Chunk: 235

Company: Atlanticus Holdings Corp
Filing Date: 2025-11-10
Form: 10-Q
Item: Item 1
Chunk 235
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4 delinquencies offset by slower net receivables growth during this period. Delinquency rates in the third and fourth quarter of 2024 remained largely consistent with those noted in the same period of prior year. For the first and second quarters of 2025 we have observed lower overall delinquency rates in both our general purpose credit card receivables and our private label credit receivables. Receivables added as part of the Mercury acquisition in the third quarter of 2025 have lower overall delinquency rates (and correspondingly lower yields) than those of our existing portfolios. The addition of these receivables resulted in a lower combined delinquency rate as of September 30, 2025. Increased acquisitions of private label credit receivables with limited loss exposures, the noted improvements in general purpose credit card receivables and our receivables added as part of the Mercury transaction will continue to result in lower overall delinquency and charge-off rates in the fourth quarter of 2025 and early 2026 when compared to corresponding rates in the fourth quarter of 2024 and first quarter of 2025. 

As we continue to acquire newer private label credit and general purpose credit card receivables, we expect our delinquency rates to marginally increase when compared to the same periods in prior years due to a planned shift in our general purpose and private label credit receivables originated as our bank partners continue to expand product offerings to a broader range of consumers. This expected increase in delinquencies will be offset somewhat by using more restrictive product, policy, and pricing changes which we believe will result in a more profitable asset overall. Additionally, as the receivables added from the Mercury acquisition tend to have lower delinquency and charge off rates than our existing portfolios of receivables, we expect the increase in delinquency rates noted above to be muted. We also expect continued seasonal payment patterns on these receivables that impact our delinquencies in line with prior periods. For example, delinquency rates historically are lower in the second quarter of each year due to the benefits of seasonally strong payment patterns associated with tax refunds for many consumers. Offsetting this expected increase in delinquencies is continued growth in the portfolio which will mute delinquency metrics. Our beliefs for future delinquency rates are predicated on the assumption that the slowing rate of inflation will continue and our recent tightened underwriting standards will prove effective at reducing account delinqu