Company: ATLCL
Filing Date: 2025-05-08
Form Type: 10-Q
Source: 0001437749-25-015559
Chunk: 141

Company: Atlanticus Holdings Corp
Filing Date: 2025-05-08
Form: 10-Q
Item: Item 1
Chunk 141
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  $3.2  $3.7 

   Loan Modifications and Restructurings

    We review our Loans at amortized cost, net, associated with our Auto Finance segment’s operations to determine if any modifications for borrowers experiencing financial difficulty were made that would qualify the receivable as a Financial Difficulty Modification ("FDM"). This could include a restructuring of the loan terms to alleviate the burden of the borrower's near-term cash requirements, such as a modification of terms to reduce or defer cash payments to help the borrower attempt to improve its financial condition. For the three months ended  March 31, 2025 and 2024, no Loans at amortized cost qualified as a FDM.

   Income Taxes
    
   We experienced effective tax rates of 23.6% and 21.1% for the three months ended  March 31, 2025, and 2024, respectively. These effective tax expense rates were above the statutory rate principally due to (1) state and foreign income tax expense, (2) interest accrued on uncertain tax positions, (3) taxes on global intangible low-taxed income, and (4) deduction disallowance under Section 162(m) of the Internal Revenue Code of 1986, as amended, with respect to compensation paid to our covered employees. Offsetting the foregoing items were deductions associated with the vesting of restricted stock at times when the fair value of our stock exceeded such share-based awards’ grant date values. Another offsetting item of a greater magnitude in the three months ended  March 31, 2024, versus the three months ended  March 31, 2025, was our deduction of income tax expense on debt for tax purposes that was repaid in the three months ended  March 31, 2025, such financial instrument which was characterized in our consolidated financial statements as dividend-paying preferred stock.
    
   We report interest expense associated with our income tax liabilities (including accrued liabilities for uncertain tax positions) within our income tax line item on our consolidated statements of income. We likewise report within such line item the reversal of interest expense associated with our accrued liabilities for uncertain tax positions to the extent we resolve such liabilities in a manner favorable to our accruals therefor. Such interest expense was de minimis in both the three months ended  March 31, 2025, and 2024.

       9

   Revenue Recognition and Revenue from Contracts with Customers
    
   Consumer Loans