Press Release

Atlanticus Reports Third Quarter 2023 Financial Results

Company Release -
11/8/2023 5:10 PM ET

Third Quarter 2023 Receivables growth of 18.1% over prior year, with over
3.4 million accounts served
(1) , allowing for continued strong results

ATLANTA, Nov. 08, 2023 (GLOBE NEWSWIRE) -- Atlanticus Holdings Corporation (NASDAQ: ATLC) (Atlanticus, the Company, we, our or us), a financial technology company which enables its bank, retail and healthcare partners to offer more inclusive financial services to millions of everyday Americans, today announced its financial results for the third quarter ended September 30, 2023. An accompanying earnings presentation is available in the Investors section of the Company’s website at www.atlanticus.com or by clicking [here].

Financial and Operating Highlights

Third Quarter 2023 Highlights (all comparisons to the Third Quarter 2022)

  • Managed receivables2 increased 12.9% to $2.3 billion
  • Total operating revenue increased 6.1% to $294.9 million.
  • Return on average shareholders’ equity of 20.4%3
  • Purchase volume of $706.5 million.
  • Over 380,000 new accounts served during the quarter, over 3.4 million total accounts serviced1
  • Net income attributable to common shareholders of $18.9 million, or $1.03 per diluted common share

1 ) In our calculation of total accounts serviced, we include all accounts with account activity and accounts that have open lines of credit at the end of the referenced period .
2) Managed receivables is a non-GAAP financial measure and excludes the results of our Auto Finance receivables. See Non-GAAP Financial Measures for important additional information
3 )Return on average shareholders’ equity is calculated using Net Income attributable to common shareholders as the numerator and the average of Total shareholders’ equity as of September 30, 2023 and June 30, 2023 as the denominato r, annualized.

Management Commentary

Jeff Howard, President and Chief Executive Officer at Atlanticus stated, “Our third quarter results once again deliver strong profitability, attractive return on capital, and reasonable growth as we navigate an evolving macro-economic landscape. We have maintained our conservative approach to underwriting that began in mid-2022 and we continue to monitor the consumers we serve as they adjust to a higher cost of living and benefit from higher wage growth. Despite this conservative approach, we are seeing growth across each of our product offerings. While some of our retail credit partners have experienced volume reductions, our year-over-year retail credit purchase activity grew by double digits in the quarter. This growth is attributable to our diverse array of industry segments served and continued product enhancements that allow us to bring greater value to our partners by serving more of their customers. Our general purpose managed receivables also grew year-over-year, despite our tightened underwriting and the run-off of higher delinquency receivables purchased prior to the rapid increase in inflation. Our more conservative underwriting has also led to a meaningful reduction in portfolio delinquency compared to the same period last year.

“While our current rate of growth is predicated on our confidence in achieving attractive returns on our shareholders’ capital in this environment, we remain excited about long term growth potential that exists across our various product lines. Throughout our history, we have seen the greatest opportunities coming out of periods of economic uncertainty. As prime originators tighten, our second-look offering provides even greater value to our retail partners. As capital becomes more restrictive, many newer entrants to the general purpose card space have reduced their offerings. Across our retail credit, general purpose credit card, healthcare payments and auto lines of business, we make up a small percentage of the total addressable market. With these industry dynamics, our ample liquidity, and well-structured balance sheet, we are positioned for long term sustained growth.”

Financial Results   For the
Three Months Ended September 30,
   
($ in thousands, except per
share data)
    2023       2022     % Change
Total operating revenue   $ 294,913     $ 277,874     6.1 %
Other non-operating revenue     (6 )     80     nm  
Total revenue     294,907       277,954     6.1 %
Interest expense     (28,274 )     (21,514 )   31.4 %
Provision for losses on
loans, interest and fees
receivable recorded at
amortized cost
    (538 )     (381 )   nm  
Changes in fair value of
loans, interest and fees
receivable recorded at fair
value
    (177,854 )     (163,624 )   8.7 %
Net margin   $ 88,241     $ 92,435     -4.5 %
Total operating expenses   $ 56,483     $ 53,119     6.3 %
Net income   $ 24,973     $ 32,370     -22.9 %
Net income attributable to
controlling interests
  $ 25,240     $ 32,571     -22.5 %
Preferred dividends and
discount accretion
  $ (6,341 )   $ (6,296 )   nm  
Net income attributable to
common shareholders
  $ 18,899     $ 26,275     -28.1 %
Net income attributable to
common shareholders per
common share—basic
  $ 1.30     $ 1.81     -28.2 %
Net income attributable to
common shareholders per
common share—diluted
  $ 1.03     $ 1.41     -27.0 %

*nm = not meaningful

Managed Receivables

Managed receivables increased 12.9% to $2.3 billion with over $265.1 million in net receivables growth from September 30, 2022, largely driven by growth in the private label credit and general purpose credit card products offered by our bank partners. Total accounts served increased 4.6% to 3.4 million. While some of our merchant partners continue to face year-over-year growth challenges, others are still benefiting from continued consumer spending and a growing economy. Our general purpose credit card portfolio continues to grow in terms of total customers served and therefore we continue to experience growth in total managed receivables. We expect the pace of growth, near-term, to slow however, when compared to earlier periods due to tightened underwriting standards adopted during the second quarter 2022 (and continued in subsequent quarters).

Total Operating Revenue

Total operating revenue consists of: 1) interest income, finance charges and late fees on consumer loans, 2) other fees on credit products including annual and merchant fees and 3) ancillary, interchange and servicing income on loan portfolios. 

During the quarter ended September 30, 2023, total operating revenue increased 6.1% to $294.9 million when compared to the quarter ended September 30, 2022. Fee billings on our fair value receivables increased from $229.7 million for the quarter ended September 30, 2022 to $248.0 million for the quarter ended September 30, 2023.

We continue to experience period-over-period growth in all segments of our business including private label credit and general purpose credit card receivables and to a lesser extent in our Auto Finance receivables. We expect net period-over-period growth in our total interest income and related fees for these operations for the fourth quarter of 2023, albeit at a decreased growth rate to that experienced in 2022. Growth in future periods is dependent on the addition of new retail partners and the expansion of existing relationships to expand the reach of private label credit operations and the level of marketing investment for the general purpose credit card operations.

Interest Expense

Interest expense was $28.3 million for the quarter ended September 30, 2023, compared to $21.5 million for the quarter ended September 30, 2022. The elevated expenses were primarily driven by the planned increases in outstanding debt in proportion to growth in our receivables coupled with increases in the cost of capital.

Outstanding notes payable, net of unamortized debt issuance costs and discounts, associated with our private label credit and general purpose credit card platform increased from $1,473.1 million as of September 30, 2022 to $1,719.7 million as of September 30, 2023. Recent increases in the federal funds rate have started to increase our interest expense as we have raised additional capital (or replaced existing facilities) over the last two years. We anticipate additional debt financing over the next few quarters as we continue to grow, coupled with increased effective interest rates resulting from federal funds rate increases. As such, we expect our quarterly interest expense for these operations to increase compared to prior periods. However, we do not expect our interest expense to increase significantly in the short term (absent raising additional capital) because over 85% of interest rates on our outstanding debt are fixed.  

Changes in Fair Value of Loans, Interest and Fees Receivable Recorded at Fair Value

Changes in fair value of loans, interest and fees receivable recorded at fair value increased to $177.9 million for the quarter ended September 30, 2023, compared to $163.6 million for the quarter ended September 30, 2022. This increase was largely driven by growth in underlying receivables.

We include asset performance degradation in our forecasts to reflect the possibility of delinquency rates increasing in the near term (and the corresponding increase in charge-offs and decrease in payments) above the level that historical and current trends would suggest. As receivables associated with both 1) assets acquired prior to our tightened underwriting standards (mentioned above) and 2) those assets negatively impacted by inflation, gradually become a smaller percentage of the portfolio, we expect to see overall improvements in the measured fair value of our portfolios of acquired receivables.

Total Operating Expenses

Total operating expenses increased 6.3% in the quarter when compared to the same period in 2022.

For the quarter, operating expenses increased, driven by increases in variable servicing costs associated with growth in our receivables as well as growth in both the number of employees and inflationary compensation pressure. Marketing costs, corresponding to growth in our serviced accounts also contributed to increases for the quarter.

We expect continued increases in many of these costs for the remainder of 2023 as we continue to grow the number of consumers served and hire additional talent to meet our anticipated levels of marketing, origination, and receivables.  

Net Income Attributable to Common Shareholders

Net income attributable to common shareholders decreased 28.1% to $18.9 million, or $1.03 per diluted share for the quarter ended September 30, 2023.

Share Repurchases

We repurchased and retired 285,906 shares of our common stock at an aggregate cost of $9.4 million, in the quarter ended September 30, 2023.

We will continue to evaluate the best use of our capital to increase shareholder value over time.

About Atlanticus Holdings Corporation

Empowering Better Financial Outcomes for Everyday Americans

Atlanticus™ technology enables bank, retail, and healthcare partners to offer more inclusive financial services to everyday Americans through the use of proprietary analytics. We apply the experience gained and infrastructure built from servicing over 20 million customers and over $38 billion in consumer loans over more than 25 years of operating history to support lenders that originate a range of consumer loan products. These products include retail and healthcare private label credit and general purpose credit cards marketed through our omnichannel platform, including retail point-of-sale, healthcare point-of-care, direct mail solicitation, internet-based marketing, and partnerships with third parties. Additionally, through our Auto Finance subsidiary, Atlanticus serves the individual needs of automotive dealers and automotive non-prime financial organizations with multiple financing and service programs.

Forward-Looking Statements

This press release contains forward-looking statements that reflect the Company's current views with respect to, among other things, its business, long-term growth plans, operations, financial performance, revenue, amount and pace of growth of managed receivables, total interest income and related fees and charges, debt financing, liquidity, interest expense, operating expense, fair value of receivables, provision for losses on loans, delinquencies on receivables and economic developments. You generally can identify these statements by the use of words such as outlook, potential, continue, may, seek, approximately, predict, believe, expect, plan, intend, estimate or anticipate and similar expressions or the negative versions of these words or comparable words, as well as future or conditional verbs such as will, should, would, likely and could. These statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those included in the forward-looking statements. These risks and uncertainties include those risks described in the Company's filings with the Securities and Exchange Commission and include, but are not limited to, risks related to COVID-19 and its impact on the Company, bank partners, merchant partners, consumers, loan demand, the capital markets, labor availability, supply chains and the economy in general; the Company's ability to retain existing, and attract new, merchant partners and funding sources; changes in market interest rates; increases in loan delinquencies; its ability to operate successfully in a highly regulated industry; the outcome of litigation and regulatory matters; the effect of management changes; cyberattacks and security vulnerabilities in its products and services; and the Company's ability to compete successfully in highly competitive markets. The forward-looking statements speak only as of the date on which they are made, and, except to the extent required by federal securities laws, the Company disclaims any obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. In light of these risks and uncertainties, there is no assurance that the events or results suggested by the forward-looking statements will in fact occur, and you should not place undue reliance on these forward-looking statements.

Contact:
Investor Relations
(770) 828-2000
investors@atlanticus.com


Atlanticus Holdings Corporation and Subsidiaries
Consolidated Balance Sheets (Unaudited)
(Dollars in thousands)
         
  September 30,   December 31,  
   2023    2022   
         
Assets        
Unrestricted cash and cash equivalents (including $162.7 million and $202.2
million associated with variable interest entities at September 30, 2023 and
December 31, 2022, respectively)
$ 355,707     $ 384,984    
Restricted cash and cash equivalents (including $25.6 million and $27.6 million
associated with variable interest entities at September 30, 2023 and December
31, 2022, respectively)
  44,315       48,208    
Loans, interest and fees receivable:        
Loans, interest and fees receivable, at fair value (including $2,031.3 million and
$1,735.9 million associated with variable interest entities at September 30, 2023
and December 31, 2022, respectively)
  2,049,993       1,817,976    
Loans, interest and fees receivable, gross   118,007       105,267    
Allowances for uncollectible loans, interest and fees receivable   (1,831 )     (1,643 )  
Deferred revenue   (18,288 )     (16,190 )  
Net loans, interest and fees receivable   2,147,881       1,905,410    
Property at cost, net of depreciation   12,014       10,013    
Operating lease right-of-use assets   11,344       11,782    
Prepaid expenses and other assets   25,640       27,417    
Total assets $ 2,596,901     $ 2,387,814    
Liabilities        
Accounts payable and accrued expenses $ 48,170     $ 44,332    
Operating lease liabilities   20,363       20,112    
Notes payable, net (including $1,719.7 million and $1,586.0 million associated
with variable interest entities at September 30, 2023 and December 31, 2022,
respectively)
  1,788,098       1,653,306    
Senior notes, net   144,352       144,385    
Income tax liability   81,176       60,689    
Total liabilities   2,082,159       1,922,824    
         
Commitments and contingencies        
         
Preferred stock, no par value, 10,000,000 shares authorized:        
Series A preferred stock, 400,000 shares issued and outstanding at September
30, 2023 (liquidation preference - $40.0 million); 400,000 shares issued and
outstanding at December 31, 2022 (1)
  40,000       40,000    
Class B preferred units issued to noncontrolling interests   100,175       99,950    
         
Shareholders' Equity        
Series B preferred stock, no par value, 3,256,561 shares issued and outstanding at
September 30, 2023 (liquidation preference - $81.4 million); 3,204,640 shares
issued and outstanding at December 31, 2022 (1)
           
Common stock, no par value, 150,000,000 shares authorized: 14,651,321 and
14,453,415 shares issued and outstanding at September 30, 2023 and December
31, 2022, respectively
           
Paid-in capital   95,838       121,996    
Retained earnings   280,956       204,415    
Total shareholders’ equity   376,794       326,411    
Noncontrolling interests   (2,227 )     (1,371 )  
Total equity   374,567       325,040    
Total liabilities, preferred stock and equity $ 2,596,901     $ 2,387,814    
       

(1) Both the Series A preferred stock and the Series B preferred stock have no par value and are part of the same aggregate 10,000,000 shares authorized


Atlanticus Holdings Corporation and Subsidiaries
Consolidated Statements of Income (Unaudited)
(Dollars in thousands, except per share data)
       
  For the Three Months Ended   For the Nine Months Ended
  September 30,   September 30,
   2023    2022    2023    2022
Revenue:              
Consumer loans, including past due fees $ 224,682     $ 218,016     $ 654,425     $ 574,369  
Fees and related income on earning assets   59,853       48,518       167,084       169,055  
Other revenue   10,378       11,340       25,137       34,016  
Total operating revenue, net   294,913       277,874       846,646       777,440  
Other non-operating revenue   (6 )     80       140       380  
Total revenue   294,907       277,954       846,786       777,820  
               
Interest expense   (28,274 )     (21,514 )     (76,723 )     (57,849 )
Provision for losses on loans, interest and fees receivable recorded at amortized cost   (538 )     (381 )     (1,551 )     (710 )
Changes in fair value of loans, interest and fees receivable recorded at fair value   (177,854 )     (163,624 )     (505,505 )     (414,863 )
Net margin   88,241       92,435       263,007       304,398  
               
Operating expenses:              
Salaries and benefits   11,360       10,363       32,593       31,888  
Card and loan servicing   25,864       24,775       74,013       71,447  
Marketing and solicitation   12,599       11,053       37,491       51,857  
Depreciation   647       488       1,908       1,630  
Other   6,013       6,440       19,149       28,086  
Total operating expenses   56,483       53,119       165,154       184,908  
Income before income taxes   31,758       39,316       97,853       119,490  
Income tax expense   (6,785 )     (6,946 )     (22,172 )     (8,568 )
Net income   24,973       32,370       75,681       110,922  
Net loss attributable to noncontrolling interests   267       201       860       684  
Net income attributable to controlling interests   25,240       32,571       76,541       111,606  
Preferred dividends and discount accretion   (6,341 )     (6,296 )     (18,857 )     (18,759 )
Net income attributable to common shareholders $ 18,899     $ 26,275     $ 57,684     $ 92,847  
Net income attributable to common shareholders per common share—basic $ 1.30     $ 1.81     $ 3.99     $ 6.32  
Net income attributable to common shareholders per common share—diluted $ 1.03     $ 1.41     $ 3.14     $ 4.85  
               


Atlanticus Holdings Corporation and Subsidiaries
Consolidated Statements of Shareholders’ Equity and Temporary Equity (Unaudited)
For the Three and Nine Months Ended September 30, 2023
(Dollars in thousands)
                         
  Series B Preferred Stock   Common Stock                 Temporary Equity
  Shares Issued   Amount   Shares Issued   Amount   Paid-In Capital   Retained Earnings   Noncontrolling Interests   Total Equity   Class B Preferred Units   Series A Preferred Stock  
Balance at December 31, 2022 3,204,640     $   14,453,415     $   $ 121,996     $ 204,415   $ (1,371 )   $ 325,040     $ 99,950   $ 40,000  
Accretion of discount associated with issuance of subsidiary equity                   (75 )               (75 )     75      
Discount associated with repurchase of preferred stock                   16                 16            
Preferred dividends                   (6,168 )               (6,168 )          
Stock option exercises and proceeds related thereto         1,258           19                 19            
Compensatory stock issuances, net of forfeitures         146,227                                      
Issuance of series B preferred stock, net 51,327                   1,069                 1,069            
Contributions by owners of noncontrolling interests                             4       4            
Stock-based compensation costs                   931                 931            
Redemption and retirement of preferred shares (1,806 )                 (45 )               (45 )          
Redemption and retirement of common shares         (72,354 )         (1,947 )               (1,947 )          
Net income (loss)                         26,212     (318 )     25,894            
Balance at March 31, 2023 3,254,161     $   14,528,546     $   $ 115,796     $ 230,627   $ (1,685 )   $ 344,738     $ 100,025   $ 40,000  
Accretion of discount associated with issuance of subsidiary equity                   (75 )               (75 )     75      
Preferred dividends                   (6,214 )               (6,214 )          
Stock option exercises and proceeds related thereto         5,160           40                 40            
Compensatory stock issuances, net of forfeitures         (220 )                                    
Issuance of series B preferred stock, net 2,100                   43                 43            
Stock-based compensation costs                   1,031                 1,031            
Redemption and retirement of common shares         (105,447 )         (2,988 )               (2,988 )          
Net income (loss)                         25,089     (275 )     24,814            
Balance at June 30, 2023 3,256,261     $   14,428,039     $   $ 107,633     $ 255,716   $ (1,960 )   $ 361,389     $ 100,100   $ 40,000  
Accretion of discount associated with issuance of subsidiary equity                   (75 )               (75 )     75      
Preferred dividends                   (6,266 )               (6,266 )          
Stock option exercises and proceeds related thereto         510,028           3,031                 3,031            
Compensatory stock issuances, net of forfeitures         (840 )                                    
Issuance of series B preferred stock, net 300                   6                 6            
Stock-based compensation costs                   908                 908            
Redemption and retirement of common shares         (285,906 )         (9,399 )               (9,399 )          
Net income (loss)                         25,240     (267 )     24,973            
Balance at September 30, 2023 3,256,561     $   14,651,321     $   $ 95,838     $ 280,956   $ (2,227 )   $ 374,567     $ 100,175   $ 40,000  

Additional Information

Additional trends and data with respect to our private label credit and general purpose credit card receivables can be found in our latest Form 10-Q filing with the Securities and Exchange Commission under Management's Discussion and Analysis of Financial Condition and Results of Operations.

Calculation of Non-GAAP Financial Measures

This press release presents information about managed receivables, which is a non-GAAP financial measure provided as a supplement to the results provided in accordance with accounting principles generally accepted in the United States of America (GAAP). In addition to financial measures presented in accordance with GAAP, we present managed receivables, total managed yield, combined principal net charge-offs, and fair value to face value ratio, all of which are non-GAAP financial measures. These non-GAAP financial measures aid in the evaluation of the performance of our credit portfolios, including our risk management, servicing and collection activities and our valuation of purchased receivables. The credit performance of our managed receivables provides information concerning the quality of loan originations and the related credit risks inherent with the portfolios. Management relies heavily upon financial data and results prepared on the managed basis in order to manage our business, make planning decisions, evaluate our performance and allocate resources.

These non-GAAP financial measures are presented for supplemental informational purposes only. These non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation from, or as a substitute for, GAAP financial measures. These non-GAAP financial measures may differ from the non-GAAP financial measures used by other companies. A reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures or the calculation of the non-GAAP financial measures are provided below for each of the fiscal periods indicated.

These non-GAAP financial measures include only the performance of those receivables underlying consolidated subsidiaries (for receivables carried at amortized cost basis and fair value) and exclude the performance of receivables held by our former equity method investee. As the receivables underlying our former equity method investee reflect a small and diminishing portion of our overall receivables base, we do not believe their inclusion or exclusion in the overall results is material. Additionally, we calculate average managed receivables based on the quarter-end balances.

The comparison of non-GAAP managed receivables to our GAAP financial statements requires an understanding that managed receivables reflect the face value of loans, interest and fees receivable without any consideration for potential loan losses or other adjustments to reflect fair value.

A reconciliation of Loans, interest and fees receivable, at fair value to Loans, interest and fees
receivable, at face value is as follows:

  At or for the Three Months Ended
    2023     2022     2021  
(in Millions) Sep. 30 (1) Jun. 30 (1) Mar. 31 (1) Dec. 31 (1) Sep. 30 (1) Jun. 30 (1) Mar. 31 (1) Dec. 31 (1)
Loans, interest and fees
receivable, at fair value
$ 2,050.0   $ 1,916.1   $ 1,795.6   $ 1,818.0   $ 1,728.1   $ 1,616.9   $ 1,405.8   $ 1,026.4  
Fair value mark against
receivable (2)
$ 265.2   $ 257.9   $ 260.1   $ 302.1   $ 322.3   $ 293.0   $ 272.9   $ 208.9  
Loans, interest and fees
receivable, at face value
$ 2,315.2   $ 2,174.0   $ 2,055.7   $ 2,120.1   $ 2,050.4   $ 1,909.9   $ 1,678.7   $ 1,235.3  
Fair value to face value ratio
(3)
  88.5 %   88.1 %   87.3 %   85.8 %   84.3 %   84.7 %   83.7 %   83.1 %


(1 ) We elected the fair value option to account for certain loans receivable associated with our private label credit and general purpose credit card platform that were acquired on or after January 1, 2020, and, as discussed in more detail in the Form 10-Q for the quarter ended September 30, 2023, on January 1, 2022, we elected the fair value option under ASU 2016-13 for those private label credit and general purpose credit card receivables that were previously accounted for under the amortized cost method.
(2 ) The fair value mark against receivables reflects the difference between the face value of a receivable and the net present value of the expected cash flows associated with that receivable.
(3 ) The Fair value to face value ratio is calculated using Loans, interest and fees receivable, at fair value as the numerator, and Loans, interest and fees receivable, at face value, as the denominator.


The calculation of managed receivables is as follows:

  At or for the Three Months Ended
    2023   2022   2021
(in Millions) Sep. 30
(1)
Jun. 30
(1)
Mar. 31
(1)
Dec. 31
(1)
Sep. 30
(1)
Jun. 30
(1)
Mar. 31
(1)
Dec. 31
Loans, interest
and fees receivable,
gross
$    — $  — $  — $  — $  — $  — $  — $  375.7
Loans, interest
and fees
receivable,
gross from fair
value
reconciliation
above
  2,315.2   2,174.0   2,055.7   2,120.1   2,050.4   1,909.9   1,678.7   1,235.3
Total
managed
receivables
$  2,315.2 $  2,174.0 $  2,055.7 $  2,120.1 $  2,050.4 $  1,909.9 $  1,678.7 $  1,611.0


(1 ) On January 1, 2022, we elected the fair value option under ASU 2016-13 for those private label credit and general purpose credit card receivables that were previously accounted for under the amortized cost method.

A reconciliation of our operating revenues, net of finance and fee charge-offs, to comparable amounts used in our calculation of Total managed yield is as follows:

  At or for the Three Months Ended
    2023     2022     2021  
(in Millions) Sep. 30 Jun. 30 Mar. 31 Dec. 31 Sep. 30 Jun. 30 Mar. 31 Dec. 31
Consumer loans, including
past due fees
$  214.6   $  210.3   $  200.5   $  202.9   $  208.9   $  182.8   $  156.5   $  144.1  
Fees and related income on
earning assets
  59.8     62.9     44.3     48.0     48.5     65.8     54.7     53.8  
Other revenue   10.2     7.6     6.7     8.5     11.1     12.2     10.0     9.7  
Adjustments due to
acceleration of merchant
fee discount amortization
under fair value accounting
  (6.8)     (10.6)     (0.5)     3.4     (7.9)     (12.1)     1.8     (3.4)  
Adjustments due to
acceleration of annual fees
recognition under fair value
accounting
  (3.1)     (9.8)     7.3     7.9     10.0     (6.6)     (1.3)     (4.4)  
Removal of finance charge-
offs
  (47.1)     (54.2)     (61.7)     (58.3)     (45.3)     (41.2)     (32.5)     (28.1)  
Total managed yield $  227.6   $  206.2   $  196.6   $  212.4   $  225.3   $  200.9   $  189.2   $  171.7  

The calculation of Combined principal net charge-offs is as follows:

  At or for the Three Months Ended
    2023     2022     2021  
(in Millions) Sep. 30
(1)
Jun. 30
(1)
Mar. 31
(1)
Dec. 31
(1)
Sep. 30
(1)
Jun. 30
(1)
Mar. 31
(1)
Dec. 31
Net losses on impairment of loans,
interest and fees receivable recorded
at fair value
$  173.5   $  180.0   $  191.9   $  182.3   $  134.4   $  126.5   $  101.3   $  46.7  
Gross charge-offs on non-fair value
accounts
                              38.7  
Finance charge-offs (2)   (47.1)     (54.2)     (61.7)     (58.3)     (45.3)     (41.2)     (32.5)     (28.1)  
Recoveries on non-fair value
accounts
                              (4.1)  
Combined principal net charge-offs $  126.4   $  125.8   $  130.2   $  124.0   $  89.1   $  85.3   $  68.8   $  53.2  


(1 ) On January 1, 2022, we implemented the fair value method under ASU 2016-13 for those private label credit and general purpose credit card receivables that were previously accounted for under the amortized cost method.
(2 ) Finance charge-offs are included as a component of our Provision for losses on loans, interest and fees receivable recorded at amortized cost and Changes in fair value of loans, interest and fees receivable recorded at fair value in the consolidated statements of income.


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Source: Atlanticus Holdings Corp
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