What changed in this filing

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Item 1. Financial Statements

2022-11-08 compared with 2022-08-09 · 336 added, 282 removed, 1888 unchanged (25% of the section changed)

3 unchanged sentences

(Dollars in thousands)

Unrestricted cash and cash equivalents (including $ 184.5 million and $ 209.5 million associated with variable interest entities at June 30, 2022 and December 31, 2021, respectively)

September 30,

Unrestricted cash and cash equivalents (including $ 186.6 million and $ 209.5 million associated with variable interest entities at September 30, 2022 and December 31, 2021, respectively)

$ 352,908  

$ 409,660  

Restricted cash and cash equivalents (including $ 25.0 million and $ 75.9 million associated with variable interest entities at June 30, 2022 and December 31, 2021, respectively)

Restricted cash and cash equivalents (including $ 15.8 million and $ 75.9 million associated with variable interest entities at September 30, 2022 and December 31, 2021, respectively)

33,783  

1 unchanged sentence

Loans, interest and fees receivable:

Loans, interest and fees receivable, at fair value (including $ 1,461.3 million and $ 925.5 million associated with variable interest entities at June 30, 2022 and December 31, 2021, respectively)

Loans, interest and fees receivable, at fair value (including $ 1,618.2 million and $ 925.5 million associated with variable interest entities at September 30, 2022 and December 31, 2021, respectively)

1,728,091  

23 unchanged sentences

19,959  

Notes payable, net (including $ 1,359.7 million and $ 1,223.4 million associated with variable interest entities at June 30, 2022 and December 31, 2021, respectively)

Notes payable, net (including $ 1,473.0 million and $ 1,223.4 million associated with variable interest entities at September 30, 2022 and December 31, 2021, respectively)

1,544,108  

11 unchanged sentences

Preferred stock, no par value, 10,000,000 shares authorized:

Series A preferred stock, 400,000 shares issued and outstanding at June 30, 2022 (liquidation preference - $ 40.0 million);

Series A preferred stock, 400,000 shares issued and outstanding at September 30, 2022 (liquidation preference - $ 40.0 million);

400,000 shares issued and outstanding at December 31, 2021 (Note 5) (1)

5 unchanged sentences

Shareholders' Equity

Series B preferred stock, no par value, 3,188,533 shares issued and outstanding at June 30, 2022 (liquidation preference - $ 79.7 million);

Series B preferred stock, no par value, 3,193,262 shares issued and outstanding at September 30, 2022 (liquidation preference - $ 79.8 million);

3,188,533 shares issued and outstanding at December 31, 2021 (1)

Common stock, no par value, 150,000,000 shares authorized:

14,561,078 and 14,804,408 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively

14,445,295 and 14,804,408 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively

Paid-in capital

20 unchanged sentences

For the Three Months Ended

For the Six Months Ended

For the Nine Months Ended

September 30,

Consumer loans, including past due fees

15 unchanged sentences

Income tax expense

Net loss attributable to noncontrolling interests

Net loss (income) attributable to noncontrolling interests

Net income attributable to controlling interests

6 unchanged sentences

Consolidated Statements of Shareholders’

Equity (Unaudited)

For the Three and Six Months Ended June 30, 2022 and June 30, 2021

Equity and Temporary Equity (Unaudited)

For the Three and Nine Months Ended September 30, 2022 and September 30, 2021

(Dollars in thousands)

25 unchanged sentences

Balance at June 30, 2022

Accretion of discount associated with issuance of subsidiary equity

Discount associated with repurchase of preferred stock

Preferred dividends

Stock option exercises and proceeds related thereto

Compensatory stock issuances, net of forfeitures

Issuance of series B preferred stock, net

Deferred stock-based compensation costs

Redemption and retirement of shares

Balance at September 30, 2022

Series B Preferred Stock

24 unchanged sentences

Balance at June 30, 2021

Accretion of discount associated with issuance of subsidiary equity

Preferred dividends

Stock option exercises and proceeds related thereto

Compensatory stock issuances, net of forfeitures

Issuance of series B preferred stock, net

Deferred stock-based compensation costs

Redemption and retirement of shares

Balance at September 30, 2021

See accompanying notes.

2 unchanged sentences

(Dollars in thousands)

For the Six Months Ended June 30,

For the Nine Months Ended September 30,

Operating activities

10 unchanged sentences

Lease liability payments

Gain on sale of property

Changes in assets and liabilities:

Increase in uncollected fees on earning assets

(Decrease) increase in income tax liability

Increase (decrease) in accounts payable and accrued expenses

Increase in income tax liability

Increase in accounts payable and accrued expenses

Net cash provided by operating activities

Investing activities

Investments in equity-method investee

Proceeds from equity-method investee

2 unchanged sentences

Proceeds from earning assets

Sale of property

Purchases and development of property, net of disposals

10 unchanged sentences

Effect of exchange rate changes on cash

Net (decrease) increase in cash and cash equivalents and restricted cash

Net decrease in cash and cash equivalents and restricted cash

Cash and cash equivalents and restricted cash at beginning of period

3 unchanged sentences

Net cash income tax payments

Decrease in accrued and unpaid preferred dividends

(Decrease) increase in accrued and unpaid preferred dividends

See accompanying notes.

1 unchanged sentence

Notes to Consolidated Financial Statements

June 30, 2022 and 2021

September 30, 2022 and 2021

Description of Our Business

17 unchanged sentences

We also report within our CaaS segment:

1 ) servicing income;

1 ) servicing income;

and 2 ) gains or losses associated with investments previously made in consumer finance technology platforms.

These include investments in companies engaged in mobile technologies, marketplace lending and other financial technologies.

These investments are carried at lower of cost or market valuation.

None of these companies are publicly-traded and there are no material pending liquidity events.

None of these companies are publicly-traded and the carrying value of our investment in these companies is not material. 

Within our Auto Finance segment, our CAR subsidiary operations principally purchase and/or service loans secured by automobiles from or for, and also provide floor plan financing for, a pre-qualified network of independent automotive dealers and automotive finance companies in the buy-here, pay-here, used car business.

2 unchanged sentences

In March 2020, a national emergency was declared under the National Emergencies Act due to a new strain of coronavirus ("COVID- 19" ).

The COVID- 19 pandemic has negatively impacted global supply chains and business operations as suppliers continue to experience difficulties keeping up with strong demand for factory goods.

The COVID- 19 pandemic has negatively impacted global supply chains and business operations.

In addition, rising inflation in 2021 and 2022 has resulted in increasing costs for many goods and services.

2 unchanged sentences

population and the federal COVID- 19 relief package contributed to increased economic recovery in 2021;

however, fiscal support of business and personal incomes has declined.

however, fiscal support of businesses and individuals has declined.

Russia’s invasion of Ukraine has intensified supply chain disruptions and heightened uncertainty surrounding the near-term outlook for the broader economy.

4 unchanged sentences

as well as our employees.

We continue to monitor the ongoing pandemic and have modified certain business practices including minimizing employee travel and transitioning to a hybrid distributed work model.

These practices have also been adopted by certain of our third party service partners.

We continue to monitor the ongoing pandemic, have modified certain business practices, transitioned to a distributed work model and are offering consumers greater payment flexibility.

These and similar practices have also been adopted by certain of our third party service partners.

Significant Accounting Policies and Consolidated Financial Statement Components

35 unchanged sentences

Prior to January 1, 2022 this category of receivable also included a portion (those which were not part of our Fair Value Receivables) of our private label credit and general purpose credit card receivables within our CaaS segment. Our CaaS segment loans, interest and fees receivable generally are unsecured, while our Auto Finance segment loans, interest and fees receivable generally are secured by the underlying automobiles for which we hold the vehicle title.

We purchased auto loans with outstanding principal of $ 52.8 million, $ 109.3 million, $ 47.8 million and $ 98.3 million for the three and six months ended June 30, 2022 

We purchased auto loans with outstanding principal of $ 56.3  million, $ 165.6  million, $ 47.8 million and $ 146.1 million for the three and nine months ended September 30, 2022 

and 2021, respectively, through our pre-qualified network of independent automotive dealers and automotive finance companies.

16 unchanged sentences

Our private label credit, general purpose credit card and auto finance loans, interest and fees receivable include principal balances and associated fees and interest due from customers which are earned each period a loan is outstanding, net of the unearned portion of merchant fees, annual fees and loan discounts.

As of June 30, 2022 

As of September 30, 2022 

and December 31, 2021, the weighted average remaining accretion period for the $ 16.6  million and $ 29.3 million of deferred revenue reflected in the consolidated balance sheets was 27  months and 15  months, respectively.

Included within deferred revenue, are discounts on purchased auto loans of $ 16.7 million as of June 30, 2022 and merchant fees, annual fees and discounts of $ 20.4 million as of December 31, 2021.

As a result of the COVID- 19 pandemic and subsequent declaration of a national emergency in March 2020 under the National Emergencies Act, certain consumers have been offered the ability to defer their payment without penalty during the national emergency period.

Included within deferred revenue, are discounts on purchased auto loans of $ 16.6  million as of September 30, 2022 and merchant fees and discounts of $ 20.4 million as of December 31, 2021.

As a result of the COVID- 19 pandemic and subsequent declaration of a national emergency in March 2020 under the National Emergencies Act and the associated government policy responses and corresponding inflation, certain consumers have been offered the ability to defer their payment without penalty during the national emergency period.

In March 2020, the federal bank regulatory agencies issued an “Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus”

3 unchanged sentences

Receivables enrolled in these short-term payment deferrals continue to accrue interest and their delinquency status will not change through the deferment period.

Through June 30, 2022 

we continued to actively work with consumers that indicated hardship as a result of COVID- 19;

Through September 30, 2022 

we continued to actively work with consumers that indicated hardship as a result of COVID- 19 and inflation pressure;

however, the number of impacted consumers is a small part of our overall receivable base.

3 unchanged sentences

A roll-forward (in millions) of our allowance for uncollectible loans, interest and fees receivable by class of receivable is as follows:

For the Three Months Ended June 30, 2022

For the Three Months Ended September 30, 2022

Other Unsecured Lending Products  

7 unchanged sentences

$ ( 1.8 )  

For the Six Months Ended June 30, 2022

For the Nine Months Ended September 30, 2022

Other Unsecured Lending Products  

12 unchanged sentences

$ ( 1.8 )  

As of June 30, 2022

As of September 30, 2022

Other Unsecured Lending Products  

11 unchanged sentences

$ 107.4  

For the Three Months Ended June 30, 2021

For the Three Months Ended September 30, 2021

Other Unsecured Lending Products  

14 unchanged sentences

$ ( 19.6 )  

For the Six Months Ended June 30, 2021

For the Nine Months Ended September 30, 2021

Other Unsecured Lending Products  

9 unchanged sentences

( 5.5 )  

( 4.3 )  

Balance at end of period

27 unchanged sentences

All proceeds received, associated with charged-off accounts, are credited to the allowance for uncollectible loans, interest and fees receivable and effectively offset our provision for losses on loans, interest and fees receivable recorded at net realizable value on our consolidated statements of income.

For the three and six months ended June 30, 2022, $ 0.2 million and $ 0.5 million, respectively, of our recoveries noted above related to collections from third -party collectors and $ 0.0 million and $ 0.0 million, respectively, related to sales of charged-off accounts to unrelated third -parties.

For the three and six months ended June 30, 2021, $ 2.7 million and $ 5.1 million, respectively, of our recoveries noted above related to collections from third -party collectors and $ 3.3 million and $ 4.6 million, respectively, related to sales of charged-off accounts to unrelated third -parties.

For the three and nine months ended September 30, 2022, $ 0.4  million and $ 0.9  million, respectively, of our recoveries noted above related to collections from third -party collectors and $ 0.0 million related to sales of charged-off accounts to unrelated third -parties for both periods.

For the three and nine months ended September 30, 2021, $ 1.8  million and $ 6.9 million, respectively, of our recoveries noted above related to collections from third -party collectors and $ 1.1 million and $ 5.7 million, respectively, related to sales of charged-off accounts to unrelated third -parties.

We consider loan delinquencies a key indicator of credit quality because this measure provides the best ongoing estimate of how a particular class of receivable is performing.

An aging of our delinquent loans, interest and fees receivable, gross (in millions) by class of receivable as of June 30, 2022 

and December 31, 2021 

An aging of our delinquent loans, interest and fees receivable, gross (in millions) by class of receivable as of September 

30, 2022  and December 31, 2021 

is as follows:

As of June 30, 2022

As of September 30, 2022

Other Unsecured Lending Products  

44 unchanged sentences

The following table details by class of receivable, the number and amount of modified loans, including TDRs that have been re-aged, as of 

June 30, 2022 and 

September 30, 2022 and 

December 31, 2021 :

June 30, 2022

September 30, 2022

December 31, 2021

38 unchanged sentences

We do not separately reserve or impair these receivables outside of our general reserve process.

The Company modified 98,880 and 52,686 accounts in the amount of $ 106.7 million and $ 57.4 million during the twelve month periods ended June 30, 2022  and June 30, 2021 , respectively, that qualified as TDRs.

The Company modified 133,134 and 57,142 accounts in the amount of $ 138.4 million and $ 62.2 million during the twelve month periods ended September 30, 2022  and September 30, 2021 , respectively, that qualified as TDRs.

The following table details by class of receivable, the number of accounts and balance of loans that completed a modification (including those that were classified as TDRs) within the prior twelve months and subsequently defaulted.

Twelve Months Ended

June 30, 2022

June 30, 2021

September 30, 2022

September 30, 2021

Private label credit  

9 unchanged sentences

$ 4,489  

We experienced effective tax rates of 20.4 % and 2.0 %, respectively, for the three and six months ended June 30, 2022, compared to 21.6 % and 18.1 %, respectively, for the three and six months ended June 30, 2021.

Our effective tax rates for the three and six months ended June 30, 2022 are below the statutory rate principally due to ( 1 ) deductions during such periods associated with the exercise of stock options and the vesting of restricted stock at times when the fair value of our stock exceeded such share-based awards’

Our effective tax rate for the three months ended June 30, 2021 

was above  the statutory rate due to state and foreign income tax expense, significantly offset, however, by ( 1 ) our deduction for income tax purposes of amounts characterized in our consolidated financial statements as dividends on a preferred stock issuance, such amounts constituting deductible interest expense on a debt issuance for tax purposes, and ( 2 ) the exclusion from taxable income of benefits received under various government stimulus programs.

These same two items served to offset the effects of state and foreign income tax expense and executive compensation deduction limits experienced in the first quarter of 2021 under Section 162 (m) of the Internal Revenue Code of 1986 on our effective tax rate for the six months ended June 30, 2021. 

Also offsetting such effects and thereby causing our effective tax rate to be below the statutory rate for the six months ended June 30, 2021, were ( 1 ) deductions in the first quarter of 2021 associated with the exercise of stock options and the vesting of restricted stock at stock fair values significantly exceeding such share-based awards’

grant date values;

and ( 2 ) our release of state tax valuation allowances in the first quarter of 2021.

We experienced effective tax rates of 17.6 % and 7.1 %, respectively, for the three and nine months ended September 30, 2022, compared to 18.7 % and 18.3 %, respectively, for the three and nine months ended September 30, 2021.

Our effective tax rates for the three and nine months ended both September 30, 2021 and 2022 are below the statutory rate principally due to ( 1 ) deductions associated with the exercise of stock options and the vesting of restricted stock at times when the fair value of our stock exceeded such share-based awards’

grant date values and ( 2 ) our deduction for income tax purposes of amounts characterized in our consolidated financial statements as dividends on a preferred stock issuance, such amounts constituting deductible interest expense on a debt issuance for tax purposes. Also, certain state tax valuation allowance releases and benefits received under the Coronavirus Aid, Relief, and Economic Security (CARES) Act prior to the third quarter of 2021 contributed to our effective tax rate being lower than the statutory rate for the nine months ended September 30, 2021.

Partially offsetting the favorable rate effects discussed above in all 2021 and 2022 periods are ( 1 ) the adverse rate effects of state and foreign income tax expense and ( 2 ) executive compensation deduction limitations under Section 162 (m) of the Internal Revenue Code of 1986.

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.

We had de minimis interest expense or reversals thereof during the three and six months ended June 30, 2022, and 2021.

We had de minimis interest expense or reversals thereof during the three and nine months ended September 30, 2022, and 2021.

Revenue Recognition and Revenue from Contracts with Customers

20 unchanged sentences

Components (in thousands) of our revenue from contracts with customers is as follows:

For the Three Months Ended June 30, 2022

For the Three Months Ended September 30, 2022

Interchange revenues, net (1)

7 unchanged sentences

( 1 ) Interchange revenue is presented net of customer reward expense.

For the Six Months Ended June 30, 2022

For the Nine Months Ended September 30, 2022

Interchange revenues, net (1)

3 unchanged sentences

Service charges and other customer related fees

11,484  

11,538  

Total revenue from contracts with customers

2 unchanged sentences

( 1 ) Interchange revenue is presented net of customer reward expense.

For the Three Months Ended June 30, 2021

For the Three Months Ended September 30, 2021

Interchange revenues, net (1)

7 unchanged sentences

( 1 ) Interchange revenue is presented net of customer reward expense.

For the Six Months Ended June 30, 2021

For the Nine Months Ended September 30, 2021

Interchange revenues, net (1)

9 unchanged sentences

In periods where we repurchased or redeemed 5.875 % convertible senior notes (“convertible senior notes”), we recorded any discount or premium paid for the repurchase or redemption (including accrued interest) relative to the amortized book value of the notes.

In the three and six months ended June 30, 2021, we repurchased $ 6.4 million and $ 21.1  million, respectively, in face amount of our convertible senior notes for $ 10.2 million and $ 28.9  million in cash (including accrued interest).

The repurchase resulted in a loss of approximately $ 5.4 million and $ 13.3  million (including the convertible senior notes’

In the three and nine months ended September 30, 2021, we repurchased or redeemed $ 12.7  million and $ 33.8  million, respectively, in face amount of our convertible senior notes for $ 25.4 million and $ 54.3 million in cash (including accrued interest).

The repurchase and redemption resulted in an aggregate loss of approximately $ 16.2 million and $ 29.4 million (including the convertible senior notes’

applicable share of deferred costs, which were written off in connection with the repurchase), respectively.

4 unchanged sentences

This generally will result in the recognition of allowances for losses earlier than under current accounting guidance for trade and other receivables, held to maturity debt securities and other instruments.

The FASB has added several technical amendments (ASU 2018 - 19, 2019 - 04, 2019 - 10 and 2019 - 11 ) to clarify technical aspects of the guidance and applicability to specific financial instruments or transactions.

The FASB has added several technical amendments (ASU 2018 - 19, 2019 - 04, 2019 - 10  and 2019 - 11 ) to clarify technical aspects of the guidance and applicability to specific financial instruments or transactions.

In May 2019, the FASB issued ASU 2019 - 05, which allows entities to measure assets in the scope of ASC 326 - 20, except held to maturity securities, using the fair value option when they adopt the new credit impairment standard.

13 unchanged sentences

Based on our preliminary analysis, the London Interbank Offered Rate ("LIBOR") impacts us in limited circumstances primarily related to our existing debt agreements.

Subsequent Events

We evaluate subsequent events that occur after our consolidated balance sheet date but before our consolidated financial statements are issued.

There are two types of subsequent events:

( 1 ) recognized, or those that provide additional evidence with respect to conditions that existed at the date of the balance sheet, including the estimates inherent in the process of preparing financial statements;

and ( 2 ) nonrecognized, or those that provide evidence with respect to conditions that did not exist at the date of the balance sheet but arose subsequent to that date.

We have evaluated subsequent events occurring after June 30, 2022, and based on our evaluation we did not identify any recognized or nonrecognized subsequent events that would have required further adjustments to our consolidated financial statements.

On March 31, 2022, the FASB issued ASU 2022 - 02, Financial Instruments - Credit Losses (Topic 326 ):

Troubled Debt Restructurings and Vintage Disclosures.

The ASU eliminates the accounting guidance for troubled debt restructurings by creditors while adding disclosures for certain loan restructurings by creditors when a borrower is experiencing financial difficulty. 

This guidance requires an entity to determine whether a modification results in a new loan or a continuation of an existing loan. 

Additionally, the ASU requires disclosure of current period gross writeoffs by year of origination for financing receivables. 

The ASU is effective for the Company for fiscal years beginning after December 15, 2022. 

The Company does not believe the adoption of this ASU will have a material impact on its financial results or accompanying disclosures.

Segment Reporting

2 unchanged sentences

CaaS and Auto Finance.

As of both June 30, 2022 

As of both September 30, 2022 

and December 31, 2021, we did not have a material amount of long-lived assets located outside of the U.S.

3 unchanged sentences

Summary operating segment information (in thousands) is as follows:

Three Months Ended June 30, 2022

Three Months Ended September 30, 2022

Consumer loans, including past due fees

29 unchanged sentences

$ ( 891 )  

Six Months Ended June 30, 2022

Nine Months Ended September 30, 2022

Consumer loans, including past due fees

32 unchanged sentences

$ 2,252,331  

Three Months Ended June 30, 2021

Three Months Ended September 30, 2021

Consumer loans, including past due fees

15 unchanged sentences

( 9,192 )  

( 46 )  

Changes in fair value of loans, interest and fees receivable and notes payable associated with structured financings recorded at fair value

10 unchanged sentences

$ ( 664 )  

Six Months Ended June 30, 2021

Nine Months Ended September 30, 2021

Consumer loans, including past due fees

35 unchanged sentences

Equity and Preferred Stock

During the three and nine months ended September 30, 2022, we repurchased and contemporaneously retired 313,893 and 1,674,141 shares of our common stock at an aggregate cost of $ 10,863,000 and $ 88,938,000 , respectively, pursuant to both open market and private purchases and the return of stock by holders of equity incentive awards to pay tax withholding obligations. During the three and nine  months ended September 30, 2021, we repurchased and contemporaneously retired 109,312 and 127,987 shares of our common stock at an aggregate cost of $ 5,193,000 and $ 5,794,000 , respectively, pursuant to both open market and private purchases and the return of stock by holders of equity incentive awards to pay tax withholding obligations.

In June and July 2021, we issued an aggregate of 3,188,533 shares of 7.625 % Series B Cumulative Perpetual Preferred Stock, liquidation preference of $ 25.00 per share (the “Series B Preferred Stock”) for net proceeds of approximately $ 76.5 million after deducting underwriting discounts and commissions, but before deducting expenses and the structuring fee.

We pay cumulative cash dividends on the Series B Preferred Stock, when and as declared by our Board of Directors, in the amount of $ 1.90625 per share each year, which is equivalent to 7.625% of the $ 25.00 liquidation preference per share.

On August 10, 2022, the Company entered into an At Market Issuance Sales Agreement (the “Sales Agreement”) providing for the sale by the Company of up to an aggregate offering price of $ 100,000,000 of our (i) Series B Preferred Stock and (ii) senior notes, from time to time through a sales agent, in connection with the Company’s “at-the-market”

offering program (the “ATM Program”).

Sales pursuant to the Sales Agreement, if any, may be made in transactions that are deemed to be “at-the-market offerings”

as defined in Rule 415 under the Securities Act of 1933, as amended, including sales made directly on or through the NASDAQ Global Select Market.

The sales agent will make all sales using commercially reasonable efforts consistent with its normal trading and sales practices up to the amount specified in, and otherwise in accordance with the terms of, the placement notice.

During the third quarter of 2022, we sold 8,229 shares of our Series B Preferred Stock under our ATM Program for net proceeds of $ 0.2 million.

During the three and nine months ended September 30, 2022, we repurchased and contemporaneously retired 3,500 shares of Series B Preferred Stock at an aggregate cost of $ 70,000 .

For further information regarding the ATM Program, see Note 14  “ATM Program.”

Redeemable Preferred Stock

November 26, 2014, we and certain of our subsidiaries entered into a Loan and Security Agreement with Dove Ventures, LLC, a Nevada limited liability company (“Dove”).

16 unchanged sentences

Hanna, III and members of his immediate family are the beneficiaries of these other two trusts.

During the three and six months ended June 30, 2022, we repurchased and contemporaneously retired 355,036 and 1,360,248 shares of our common stock at an aggregate cost of $ 12,861,000 and $ 78,075,000 , respectively, pursuant to both open market and private purchases and the return of stock by holders of equity incentive awards to pay tax withholding obligations. During the three and six months ended June 30, 2021, we repurchased and contemporaneously retired 8,747 and 18,675 shares of our common stock at an aggregate cost of $ 304,000 and $ 601,000 , respectively, pursuant to both open market and private purchases and the return of stock by holders of equity incentive awards to pay tax withholding obligations.

On November 14, 2019, a wholly-owned subsidiary issued 50.5 million Class B preferred units at a purchase price of $ 1.00 per unit to an unrelated third party.

1 unchanged sentence

The units have both call and put rights and are also subject to various covenants including a minimum book value, which if not satisfied, could allow for the securities to be put back to the subsidiary.

A holder of the Class B Preferred Units may, at its election, require the Company to redeem part or all of such holder’s Class B Preferred Units for cash on October 14, 

In March 2020, the subsidiary issued an additional 50.0 million Class B preferred units under the same terms.

4 unchanged sentences

for more information.

Investment in Equity-Method Investee

2 unchanged sentences

In the following table, we summarize (in thousands) results of operations data for our former equity-method investee:

Three Months Ended June 30,

Six months ended June 30,

Net (loss) income

Net (loss) income attributable to our equity investment investee

Three Months Ended September 30,

Nine months ended September 30,

Net income attributable to our equity investment investee

Fair Values of Assets and Liabilities

8 unchanged sentences

Certain fee billings (such as annual or merchant fees) and expenses of loans and notes are no longer deferred but recognized (when billed or incurred) in income or expense, respectively;

The net present value of cash flows associated with future fee billings on existing receivables are included in fair value. 

Changes in the fair value of loans and notes impact recorded revenues;

1 unchanged sentence

For all of our other receivables, we have not elected the fair value option.

Nevertheless, pursuant to applicable requirements, we include disclosures of the fair value of these other items to the extent practicable within the disclosures below.

Nevertheless, pursuant to applicable requirements, we include disclosures of the fair value of these other receivables to the extent practicable within the disclosures below.

Additionally, we have other liabilities, associated with consolidated legacy credit card securitization trusts, that we are required to carry at fair value in our consolidated financial statements, and they also are addressed within the disclosures below.

8 unchanged sentences

The table below summarizes (in thousands) by fair value hierarchy the 

June 30, 2022 and 

September 30, 2022 and 

December 31, 2021 fair values and carrying amounts of ( 1 ) our assets that are required to be carried at fair value in our consolidated financial statements and ( 2 ) our assets not carried at fair value, but for which fair value disclosures are required:

Assets –

As of June 30, 2022 (1)

As of September 30, 2022 (1)

Quoted Prices in Active Markets for Identical Assets (Level 1)

23 unchanged sentences

For our loans, interest and fees receivable included in the above table, we assess the fair value of these assets based on our estimate of future cash flows net of servicing costs, and to the extent that such cash flow estimates change from period to period, any such changes are considered to be attributable to changes in instrument-specific credit risk.

For Level 3 assets carried at fair value measured on a recurring basis using significant unobservable inputs, the following table presents (in thousands) a reconciliation of the beginning and ending balances for the six months ended June 30, 2022  and 2021 :

Loans, Interest and Fees Receivables, at Fair Value

8 unchanged sentences

( 243,186 )  

Finance charge-offs, included in earnings

Finance and fees, included in earnings

642,181  

234,430  

Finance charge-offs, included in earnings

( 118,990 )  

1,890,558  

Finance and fees, included in earnings

1,137,207  

( 1,731,194 )  

Balance at June 30,

Balance at September 30,

$ 1,728,091  

6 unchanged sentences

Interest income on receivables underlying our asset classes that are carried at fair value in our consolidated financial statements is recorded in Revenue - Consumer loans, including past due fees in our consolidated statements of income.

For Level 3 assets carried at fair value measured on a recurring basis using significant unobservable inputs, the following table presents (in thousands) quantitative information about the valuation techniques and the inputs used in the fair value measurement as of June 30, 2022 

and December 31, 2021. 

3 unchanged sentences

Fair Value Measurement

Fair Value at June 30, 2022 (in thousands)  

Fair Value at September 30, 2022 (in thousands)  

Valuation Technique

33 unchanged sentences

Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the liability.

The table below summarizes (in thousands) by fair value hierarchy the June 30, 2022 

The table below summarizes (in thousands) by fair value hierarchy the September 30, 2022 

and December 31, 2021 

1 unchanged sentence

Liabilities –

As of June 30, 2022

As of September 30, 2022

Quoted Prices in Active Markets for Identical Assets (Level 1)

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for further discussion on our other notes payable.

For our material Level 3 liabilities carried at fair value measured on a recurring basis using significant unobservable inputs, the following table presents (in thousands) a reconciliation of the beginning and ending balances for the six months ended June 30, 2021 ( no amounts were outstanding as of June 30, 2022):

For our material Level 3 liabilities carried at fair value measured on a recurring basis using significant unobservable inputs, the following table presents (in thousands) a reconciliation of the beginning and ending balances for the nine months ended September 30, 2021 ( no amounts were outstanding as of September 30, 2022):

Notes Payable Associated with Structured Financings, at Fair Value

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Net revaluations of notes payable associated with structured financings, at fair value, included in earnings

Balance at June 30,

Balance at September 30,

$ 2,221  

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Other Relevant Data

Other relevant data (in thousands) as of June 30, 2022 and 

Other relevant data (in thousands) as of September 30, 2022 and 

December 31, 2021 concerning certain assets and liabilities we carry at fair value are as follows:

As of June 30, 2022

As of September 30, 2022

Loans, Interest and Fees Receivable at Fair Value  

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We are the primary beneficiary when we have the power to direct activities that most significantly affect the economic performance and have the obligation to absorb the majority of the losses or benefits.

In certain circumstances we guarantee the performance of the underlying debt or agree to contribute additional collateral when necessary.

In all of our VIEs, we continue to service the receivables (in accordance with defined servicing procedures), and as such, have the ability to significantly impact the economic performance of those VIEs. In certain circumstances we guarantee the performance of the underlying debt or agree to contribute additional collateral when necessary.

When collateral is pledged, it is not available for the general use of the Company and can only be used to satisfy the related debt obligation.

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The following table presents a summary of VIEs in which we had continuing involvement or held a variable interest (in millions):

June 30, 2022

September 30, 2022

December 31, 2021

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The components of lease expense associated with our lease liabilities and supplemental cash flow information related to those leases were as follows (dollar amounts in thousands):

For the Three Months Ended June 30,

For the Six Months Ended June 30,

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

Operating lease cost, gross

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$ 5,187  

$ 3,447  

Sublease income

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Net Operating lease cost

Cash paid under operating leases, gross

$ 1,627  

$ 1,311  

Cash paid under operating leases, gross

$ 2,635  

$ 3,845  

$ 7,837  

Weighted average remaining lease term - months

Weighted average discount rate

As of June 30, 2022 , maturities of lease liabilities were as follows (in thousands):

As of September 30, 2022 , maturities of lease liabilities were as follows (in thousands):

Gross Lease Payment

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Net Lease Payment

2022 (excluding the six months ended June 30, 2022)

2022 (excluding the nine months ended September 30, 2022)

$ ( 24 )  

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In addition, we occasionally lease certain equipment under cancelable and non-cancelable leases, which are accounted for as capital leases in our consolidated financial statements.

As of June 30, 2022 , we had no material non-cancelable capital leases with initial or remaining terms of more than one year.

As of September 30, 2022 , we had no material non-cancelable capital leases with initial or remaining terms of more than one year.

Notes Payable

Notes Payable, at Face Value

Other notes payable outstanding as of June 30, 2022 and 

Other notes payable outstanding as of September 30, 2022 and 

December 31, 2021 that are secured by the financial and operating assets of either the borrower, another of our subsidiaries or both, include the following, scheduled (in millions);

except as otherwise noted, the assets of our holding company (Atlanticus Holdings Corporation) are subject to creditor claims under these scheduled facilities:

June 30, 2022

September 30, 2022

December 31, 2021

Revolving credit facilities at a weighted average interest rate equal to 4.6% as of June 30, 2022 (4.3% as of December 31, 2021) secured by the financial and operating assets of CAR and/or certain receivables and restricted cash with a combined aggregate carrying amount of $1,576.9 million as of June 30, 2022 ($1,391.6 million as of December 31, 2021)

Revolving credit facilities at a weighted average interest rate equal to 4.9 % as of September 30, 2022 ( 4.3 % as of December 31, 2021) secured by the financial and operating assets of CAR and/or certain receivables and restricted cash with a combined aggregate carrying amount of $ 1,728.1 million as of September 30, 2022 ($ 1,391.6 million as of December 31, 2021)

Revolving credit facility, not to exceed $ 55.0 million (expiring November 1, 2024 ) (1) (2) (3)

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Revolving credit facility, not to exceed $ 50.0 million (expiring October 30, 2023 ) (2) (3) (4) (5)

Revolving credit facility, not to exceed $ 10.0 million (expiring October 15, 2022 ) (2) (3) (4) (5) (6)

Revolving credit facility, not to exceed $ 20.0 million (expiring July 15, 2023 ) (2) (3) (4) (5)

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Revolving credit facility, not to exceed $ 250.0 million (expiring May 15, 2030 ) (3) (4) (5) (6)

Revolving credit facility, not to exceed $ 100.0 million (expiring August 5, 2024 ) (3) (4) (5) (6)

Revolving credit facility, not to exceed $ 100.0 million (expiring March 15, 2028 ) (3) (4) (5) (6)

Other facilities

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Loans are associated with VIEs.

See Note 8, "Variable Interest Entities" for more information.

Creditors do not have recourse against the general assets of the Company but only to the collateral within the VIEs.

* As of June 30, 2022 , the LIBOR rate was 1.79 % and the prime rate was 4.75 %.

October 2015, we (through a wholly owned subsidiary) entered a revolving credit facility with a (as subsequently amended) $ 50.0 million revolving borrowing limit that can be drawn to the extent of outstanding eligible principal receivables (of which $ 28.1 million was drawn as of June 30, 2022).

* As of September 30, 2022 , the LIBOR rate was 3.14 % and the prime rate was 6.25 %.

This facility is secured by the loans, interest and fees receivable and related restricted cash and accrues interest at an annual rate equal to LIBOR plus 3.0 %.

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The facility is guaranteed by Atlanticus, which is required to maintain certain minimum liquidity levels.

October 2016, we (through a wholly owned subsidiary) entered a revolving credit facility available to the extent of outstanding eligible principal receivables of our CAR subsidiary (of which $ 46.4 million was drawn as of June 30, 2022).

This facility is secured by the financial and operating assets of CAR and accrues interest at an annual rate equal to LIBOR plus a range between 2.4 % and 3.0 % based on certain ratios.

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In periods subsequent to October 2016, we amended the original agreement to either extend the maturity date and/or expand the capacity of this revolving credit facility.

As of June 30, 2022, the borrowing limit was $ 55.0 million and the maturity is November 1, 2024.

As of September 30, 2022, the facility's borrowing limit was $ 55.0 million and the facility matures on 

November 1, 2024.

There were no other material changes to the existing terms or conditions as a result of these amendments and the new maturity date and borrowing limit are reflected in the table above.

In 2018, we (through a wholly owned subsidiary) entered into two separate facilities associated with the above mentioned program to sell up to an aggregate $ 200.0  million of notes which are secured by the receivables and other assets of the trust (of which $ 0.0 million was outstanding as of June 30, 2022) to separate unaffiliated third parties pursuant to facilities that can be drawn upon to the extent of outstanding eligible receivables.

Interest rates on the notes are based on commercial paper rates plus 3.15 % and Secured Overnight Financing Rate ("SOFR") plus a range between 4.5 % and 6.5 %, respectively.

The facilities mature on October 15, 2022 and March 15, 2024, respectively, and are subject to certain affirmative covenants and collateral performance tests, the failure of which could result in required early repayment of all or a portion of the outstanding balance of notes.

As of June 30, 2022, the aggregate borrowing limit was $ 110.0 million.

In December 2017, we (through a wholly owned subsidiary) entered a revolving credit facility with a (as subsequently amended) $ 25.0 million revolving borrowing limit that is available to the extent of outstanding eligible principal receivables (of which $ 11.0 million was drawn as of June 30, 2022).

In 2018, we (through a wholly owned subsidiary) entered into a revolving credit facility to sell up to an aggregate $ 100.0  million of notes that are secured by the receivables and other assets of the trust (of which $ 30.0 million was outstanding as of September 30, 2022) 

that can be drawn upon to the extent of outstanding eligible receivables.

The interest rate on the notes equals the Secured Overnight Financing Rate ("SOFR") plus 3.1 %.

The facility matures on March 15, 2024, and is subject to certain affirmative covenants and collateral performance tests, the failure of which could result in required early repayment of all or a portion of the outstanding balance of notes.

As of September 30, 2022, the aggregate borrowing limit was $ 100.0 million.

This facility is secured by the loans, interest and fees receivable and related restricted cash and accrues interest at an annual rate equal to LIBOR plus 3.5 %.

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The note is guaranteed by Atlanticus.

In June 2019, we (through a wholly owned subsidiary) entered a revolving credit facility with a $ 15.0 million revolving borrowing limit that is available to the extent of outstanding eligible principal receivables (of which $ 5.5 million was drawn as of June 30, 2022).

In June 2019, we (through a wholly owned subsidiary) entered a revolving credit facility with a (as subsequently amended) $ 20.0 million revolving borrowing limit that is available to the extent of outstanding eligible principal receivables (of which $ 14.9 million was drawn as of September 30, 2022).

This facility is secured by the loans, interest and fees receivable and related restricted cash and accrues interest at an annual rate equal to the prime rate.

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October 2020, we sold $ 250.0 million of ABS secured by certain private label credit receivables.

A portion of the proceeds from the sale were used to paydown our existing term ABS associated with our private label credit receivables, noted above, and the remaining proceeds have been invested in the acquisition of receivables.

A portion of the proceeds from the sale was used to pay down our existing term ABS associated with our private label credit receivables, noted above, and the remaining proceeds were used to fund the acquisition of receivables.

The terms of the ABS allow for a 41 -month revolving structure with an 18 -month amortization period, and the securities mature between August 2025 and October 2025.

The weighted average interest rate on the securities is fixed at 4.1 %.

In January 2021, we (through a wholly owned subsidiary) entered a revolving credit facility with a (as subsequently amended) $ 25.0 million borrowing limit (of which $ 25.0 million was drawn as of June 30, 2022) that is available to the extent of outstanding eligible principal receivables.

In January 2021, we (through a wholly owned subsidiary) entered a revolving credit facility with a (as subsequently amended) $ 25.0 million borrowing limit (of which $ 25.0 million was drawn as of September 30, 2022) that is available to the extent of outstanding eligible principal receivables.

This facility is secured by the loans, interest and fees receivable and related restricted cash and accrues interest at an annual rate equal to the greater of the prime rate or 4 %.

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The weighted average interest rate on the securities is fixed at 4.24 %.

In September 2021, we entered a term facility with a $ 75.0 million limit (of which $ 0 was drawn as of June 30, 2022) that is available to the extent of outstanding eligible principal receivables.

In September 2021, we entered a term facility with a $ 75.0 million limit (of which $ 0 was drawn as of September 30, 2022) that is available to the extent of outstanding eligible principal receivables.

This facility is secured by the loans, interest and fees receivable and related restricted cash and accrues interest at an annual rate equal to LIBOR plus 

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The weighted average interest rate on the securities is fixed at 3.53 %.

In May 2022, we entered a $ 250.0 million ABS agreement (of which $ 150.0 million was outstanding as of June 30, 2022) 

In May 2022, we entered a $ 250.0 million ABS agreement (of which $ 150.0 million was outstanding as of September 30, 2022) 

secured by certain credit card receivables (expiring May 15, 2030).

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The weighted average interest rate on the securities is fixed at 6.33 %. 

As of June 30, 2022, we were in compliance with the covenants underlying our various notes payable and credit facilities.

In August 2022, we entered a  

$ 100.0  million ABS agreement secured by certain credit card receivables (of which $ 10.0 million was outstanding as of September 30, 2022) 

that can be drawn upon to the extent of outstanding eligible receivables.

The interest rate on the notes is based on the Term Secured Overnight Financing Rate ("Term SOFR") plus 1.8 %.

The facility matures on August 5, 2024. 

In September 

2022, we sold $ 100.0 million of ABS secured by certain private label credit receivables.

A portion of the proceeds from the sale was used to pay down other revolving facilities associated with our private label credit receivables, noted above, and the remaining proceeds have been invested in the acquisition of receivables.

The terms of the ABS allow for a 3 -year revolving structure with an 18 -month amortization period.

The weighted average interest rate on the securities is fixed at 7.3 %.

As of September 30, 2022, we were in compliance with the covenants underlying our various notes payable and credit facilities.

Senior Notes, net

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We are amortizing fees associated with the issuance of the senior notes into interest expense over the expected life of the notes.

Amortization of these fees for the three and six months ended June 30, 2022 

Amortization of these fees for the three and nine months ended September 30, 2022 

totaled $ 0.4  million and $ 1.1  million, respectively.

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Under finance products available in the private label credit and general purpose credit card channels, consumers have the ability to borrow up to the maximum credit limit assigned to each individual’s account.

Unfunded commitments under these products aggregated $ 2.2  billion at June 30, 2022.

Unfunded commitments under these products aggregated $ 2.2  billion at September 30, 2022.

We have never experienced a situation in which all borrowers have exercised their entire available lines of credit at any given point in time, nor do we anticipate this will ever occur in the future.

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These loans are secured by the underlying auto inventory and, in certain cases where we have other lending products outstanding with the dealer, are secured by the collateral under those lending arrangements as well, including any outstanding dealer reserves.

As of June 30, 2022, CAR had unfunded outstanding floor-plan financing commitments totaling $ 12.6  million.

As of September 30, 2022, CAR had unfunded outstanding floor-plan financing commitments totaling $ 12.2  million.

Each draw against unused commitments is reviewed for conformity to pre-established guidelines.

Under agreements with third -party originating and other financial institutions, we have pledged security (collateral) related to their issuance of consumer credit and purchases thereunder, of which $ 24.9 million remains pledged as of June 30, 2022 

to support various ongoing contractual obligations.

Under agreements with third -party originating and other financial institutions, we have agreed to indemnify the financial institutions for certain liabilities associated with the services we provide on behalf of the financial institutions—such indemnification obligations generally being limited to instances in which we either (a) have been afforded the opportunity to defend against any potentially indemnifiable claims or (b) have reached agreement with the financial institutions regarding settlement of potentially indemnifiable claims.

As of June 30, 2022, we have assessed the likelihood of any potential payments related to the aforementioned contingencies as remote.

As of September 30, 2022, we have assessed the likelihood of any potential payments related to the aforementioned contingencies as remote.

We would accrue liabilities related to these contingencies in any future period if and in which we assess the likelihood of an estimable payment as probable.

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Eligible events typically include loss of life, job loss, disability, or hospitalization.

As an acquirer of receivables, our potential exposure under this program, if all eligible participants applied for this benefit, was $ 73.3 million as of June 30, 2022.

As an acquirer of receivables, our potential exposure under this program, if all eligible participants applied for this benefit, was $ 69.8 million as of September 30, 2022.

We have never experienced a situation in which all eligible participants have applied for this benefit at any given point in time, nor do we anticipate this will ever occur in the future.

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For the Three Months Ended

For the Six Months Ended

For the Nine Months Ended

September 30,

Net income attributable to controlling interests

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$ 5.43  

Shares related to unvested share-based payment awards included in our basic and diluted share counts were 153,650 and 127,138 for the three and six months ended June 30, 2022 , respectively, compared to 430,413 and 426,050 for the three and six months ended June 30, 2021, respectively

As their effects were anti-dilutive, we excluded stock options to purchase 0.1  million shares and 0.0  shares from our net income attributable to controlling interests per share of common stock calculations for the three and six months ended June 30, 2022, respectively, and we excluded stock options to purchase 0.0 shares and 0.1 million shares from our net income attributable to controlling interests per share of common stock calculations for the three and six months ended June 30, 2021, respectively.

For the three months and six months ended June 30, 2022 

and 2021, we included 4.0 million shares of common stock for each period in our outstanding diluted share counts associated with our Series A Preferred Stock.

See Note 4, "Shareholders' Equity and Preferred Stock", for a further discussion of these convertible securities.

For the three and six months ended June 30, 2021, we included 0.2 million shares of common stock for both periods in the diluted net income attributable to controlling interests per share of common stock calculations associated with our convertible senior notes.

Shares related to unvested share-based payment awards included in our basic and diluted share counts were 146,617 and 133,702 for the three and nine months ended September 30, 2022 , respectively, compared to 278,425 and 376,301 for the three and nine months ended September 

30, 2021, respectively.

30, 2022, respectively, and we excluded stock options to purchase 0.0 shares and 0.1 million shares from our net income attributable to controlling interests per share of common stock calculations for the three and nine months ended September 

30, 2021, respectively.

For the three months and nine months ended September 

30, 2022  and 2021, we included 4.0 million shares of common stock for each period in our outstanding diluted share counts associated with our Series A Preferred Stock.

See Note 5, "Redeemable Preferred Stock", for a further discussion of these convertible securities.

For the three and nine months ended September 

30, 2021, we included 0.0 and 0.1  million shares, respectively, of common stock in the diluted net income attributable to controlling interests per share of common stock calculations associated with our convertible senior notes.

Stock-Based Compensation

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The Fourth Amended 2014 Plan was approved by our shareholders in May 2019.

As of June 30, 2022, 52,842 shares remained available for issuance under the ESPP and 1,997,750 shares remained available for issuance under the Fourth Amended 2014 Plan.

Exercises and vestings under our stock-based compensation plans resulted in no income tax-related charges to paid-in capital during the three months and six months ended June 30, 2022 

As of September 

30, 2022, 51,727 shares remained available for issuance under the ESPP and 2,086,208 shares remained available for issuance under the Fourth Amended 2014 Plan.

Exercises and vestings under our stock-based compensation plans resulted in no income tax-related charges to paid-in capital during the three months and nine  months ended September 

30, 2022  and 2021.

Restricted Stock and Restricted Stock Units

During the six months ended June 30, 2022 

and 2021, we granted 106,315 and 39,084 shares of restricted stock and restricted stock units (net of any forfeitures), respectively, with aggregate grant date fair values of $ 5.0  million and $ 1.1 million, respectively.

We incurred expenses of $ 1.3  million and $ 0.5  million during the six months ended June 30, 2022 

During the nine months ended September 

30, 2022  and 2021, we granted 103,957 and 53,584 shares of restricted stock and restricted stock units (net of any forfeitures), respectively, with aggregate grant date fair values of $ 4.9 million and $ 1.7  million, respectively.

We incurred expenses of $ 1.9  million and $ 0.9  million during the nine months ended September 30, 2022 

and 2021, respectively, related to restricted stock awards.

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Our restricted stock awards typically vest over a range of 12 to 60 months (or other term as specified in the grant which may include the achievement of performance measures) and are amortized to salaries and benefits expense ratably over applicable vesting periods.

As of June 30, 2022, our unamortized deferred compensation costs associated with non-vested restricted stock awards were $ 4.7 million with a weighted-average remaining amortization period of 3.0 years.

As of September 30, 2022, our unamortized deferred compensation costs associated with non-vested restricted stock awards were $ 3.9 million with a weighted-average remaining amortization period of 2.9 years.

No forfeitures have been included in our compensation cost estimates based on historical forfeiture rates.

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The exercise price per share of the options awarded under the Fourth Amended 2014 Plan must be equal to or greater than the market price on the date the option is granted.

The option period may not exceed 10 years from the date of grant. We had expense of $ 0.5 million, $ 1.0 million, $ 0.4  million and $ 0.7  million related to stock option-related compensation costs during the three and six  months ended June 30, 2022 

and 2021, respectively.

The option period may not exceed 10 years from the date of grant. We had expense of $ 0.3  million, $ 1.3  million, $ 0.7  million and $ 1.4  million related to stock option-related compensation costs during the three and nine months ended September 

30, 2022  and 2021, respectively.

When applicable, we recognize stock option-related compensation expense for any awards with graded vesting on a straight-line basis over the vesting period for the entire award.

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Outstanding at December 31, 2021

2,017,969  

$ 6.74  

( 1,003,936 )  

$ 2.81  

Expired/Forfeited

( 1,000 )  

$ 15.30  

Outstanding at June 30, 2022

1,013,033  

$ 10.63  

$ 25,366,627  

Exercisable at June 30, 2022

814,597  

$ 6.23  

$ 23,574,045  

Options issued during the three and six months ended June 30, 

2021  had an aggregate grant-date fair value of $ 90 thousand and $ 0.1 million, respectively.

No options were issued during the three months and six months ended June 30, 2022. 

We had $ 1.4  million and $ 2.4 million of unamortized deferred compensation costs associated with non-vested stock options as of June 30, 2022 

and December 31, 2021, respectively, with a weighted average remaining amortization period of 1.4  years as of June 30, 2022.

Outstanding at September 30, 2022

Exercisable at September 30, 2022

Options issued during the three and nine months ended September 

2021  had an aggregate grant-date fair value of $ 2.1 million and $ 3.2 million, respectively.

No options were issued during the three months and nine months ended September 30, 2022. 

We had $ 1.1  million and $ 2.4 million of unamortized deferred compensation costs associated with non-vested stock options as of September 30, 2022 

and December 31, 2021, respectively, with a weighted average remaining amortization period of 1.2  years as of September 30, 2022.

Upon exercise of outstanding options, the Company issues new shares.

During the third quarter of 2022, we sold 8,229 shares of our Series B Preferred Stock under the ATM Program.

We received $ 0.2 million in net proceeds from sales under the ATM Program.

For further information regarding the ATM Program, see Note 4, “Shareholders’

Equity and Preferred Stock.”

Subsequent Events

We evaluate subsequent events that occur after our consolidated balance sheet date but before our consolidated financial statements are issued.

There are two types of subsequent events:

and ( 2 ) nonrecognized, or those that provide evidence with respect to conditions that did not exist at the date of the balance sheet but arose subsequent to that date.

We have evaluated subsequent events occurring after September 30, 2022, and based on our evaluation we did not identify any recognized or nonrecognized subsequent events that would have required further adjustments to our consolidated financial statements.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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These include investments in companies engaged in mobile technologies, marketplace lending and other financial technologies.

These investments are carried at the lower of cost or market valuation.

None of these companies are publicly-traded and there are no material pending liquidity events.

We will continue to carry these investments on our books at cost minus impairment, if any, plus or minus changes resulting from observable price changes.

None of these companies are publicly-traded and the carrying value of our investment in these companies is not material. One of these companies has sued Apple, Inc., Walmart, Inc., and PayPal Holdings, Inc.

for patent infringement. 

The claimed losses sustained by this patent infringement are substantial and could be measured in the billions of dollars. 

We believe on a diluted basis that we will own over 10% of the company. 

The case against Apple, Inc.

is expected to go to trial in 2023. 

Apple has vigorously contested the claims, and we expect it to continue doing so.

The recurring cash flows we receive within our CaaS segment principally include those associated with (1) private label credit and general purpose credit card receivables, (2) servicing compensation and (3) credit card receivables portfolios that are unencumbered or where we own a portion of the underlying structured financing facility.

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contained in this Report.

Subject to possible disruptions caused by COVID-19, supply chain interruptions, or inflation, we believe that our private label credit and general purpose credit card receivables are generating, and will continue to generate, attractive returns on assets, thereby facilitating debt financing under terms and conditions (including advance rates and pricing) that will support attractive returns on equity, and we continue to pursue growth in this area.

Subject to possible disruptions caused by inflation, rising interest rates, COVID-19 and supply chain interruptions, we believe that our private label credit and general purpose credit card receivables are generating, and will continue to generate, attractive returns on assets, thereby facilitating debt financing under terms and conditions (including advance rates and pricing) that will support attractive returns on equity, and we continue to pursue growth in this area.

Within our Auto Finance segment, our CAR subsidiary operations principally purchase and/or service loans secured by automobiles from or for, and also provide floor-plan financing for, a pre-qualified network of independent automotive dealers and automotive finance companies in the buy-here, pay-here used car business.

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We offer a number of other products to our network of buy-here, pay-here dealers (including our floor-plan financing offering), but the majority of our activities are represented by our purchases of auto loans at discounts and our servicing of auto loans for a fee.

As of June 30, 2022, our CAR operations served more than 590 dealers in 33 states and two U.S.

As of September 30, 2022, our CAR operations served more than 610 dealers in 32 states and two U.S.

The core operations continue to perform well, absent the recent settlement of outstanding litigation (achieving consistent profitability and generating positive cash flows and growth).

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Impact of the COVID-19 Pandemic on Atlanticus and our Markets

In March 2020, a national emergency was declared under the National Emergencies Act due to the COVID-19 pandemic.  The COVID-19 pandemic has negatively impacted global supply chains and business operations as suppliers continue to experience difficulties keeping up with strong demand for factory goods.

In addition, rising inflation in 2021 and 2022 has resulted in increasing costs for many goods and services.

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population and the federal COVID-19 relief package contributed to increased economic recovery in 2021;

however, fiscal support of business and personal incomes has declined.

Russia’s invasion of Ukraine has intensified supply chain disruptions and heightened uncertainty surrounding the near-term outlook for the broader economy.

The impacts of new COVID-19 variants, responses to the COVID-19 pandemic by both consumers and governments, rising energy costs, inflation, rising interest rates, and the unresolved geopolitical tensions relating to Russia’s invasion of Ukraine could significantly affect the economic outlook.

however, fiscal support of businesses and individuals has declined.

Russia’s invasion of Ukraine has intensified supply chain disruptions and heightened uncertainty surrounding the near-term outlook for the global economy.

The impacts of new COVID-19 variants, responses to the COVID-19 pandemic by both consumers and governments, rising energy costs, inflation, rising interest rates, and the unresolved geopolitical tensions related to Russia’s invasion of Ukraine has negatively affected the economic outlook.

As of the date of filing this Quarterly Report on Form 10-Q, the duration and severity of the effects of the COVID-19 pandemic and resulting government stimulus programs remain unknown.

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At the onset of the COVID-19 pandemic, Atlanticus instituted a company-wide distributed work program to promote the safety of all employees and their families.

Once the severity of the pandemic declined, Atlanticus transitioned to a hybrid distributed work model.

Once the severity of the pandemic declined, Atlanticus transitioned to a distributed work model.

Appropriate safety measures continue to be followed to protect employees working on site.

Atlanticus will continue to follow all government mandates and make adjustments to support employees and prioritize employee safety.

Atlanticus will continue to follow all government mandates and make adjustments to support employees and prioritize employee health and safety.

Consumer spending behavior has been significantly impacted by the COVID-19 pandemic, initially due to uncertainties about the extent and duration of the pandemic.

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While we expect these measures to mitigate credit losses, related economic disruptions could result in increased portfolio credit losses in the future.

As the impact of COVID-19 continues to evolve, the Company remains committed to serving our bank partner, merchant partners and consumers, while caring for the safety of our employees and their families.

The potential impact that COVID-19, related economic impacts, and labor shortages and supply chain disruptions could have on our financial condition and results of operations remains highly uncertain.

As the impact of COVID-19 continues to evolve, the Company remains committed to serving our bank partner, merchant partners and consumers, while caring for the health and safety of our employees and their families.

The potential impact that COVID-19, related economic impacts, inflation and labor shortages and supply chain disruptions could have on our financial condition and results of operations remains highly uncertain.

For more information, refer to Part II, Item 1A “Risk Factors”

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COVID-19 has caused severe disruptions in the U.S.

economy, and may have an adverse impact on our performance, results of operations and access to capital.

economy, and may have an adverse impact on our performance, results of operations and access to capital ”

and "–

Our business and operations may be negatively affected by rising prices and interest rates." 

CONSOLIDATED RESULTS OF OPERATIONS

For the Three Months Ended June 30,

For the Three Months Ended September 30,

Increases (Decreases)

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Loss on repurchase and redemption of convertible senior notes

Net loss attributable to noncontrolling interests

Net loss (income) attributable to noncontrolling interests

Net income attributable to controlling interests

Net income attributable to controlling interests to common shareholders

For the Six Months Ended June 30,

For the Nine Months Ended September 30,

Increases (Decreases)

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Loss on repurchase and redemption of convertible senior notes

Net loss attributable to noncontrolling interests

Net loss (income) attributable to noncontrolling interests

Net income attributable to controlling interests

Net income attributable to controlling interests to common shareholders

Three and Six Months Ended June 30, 2022, Compared to Three and Six Months Ended June 30, 2021

Three and Nine Months Ended September 30, 2022, Compared to Three and Nine Months Ended September 30, 2021

Total operating revenue.

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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.

Period-over-period results primarily relate to growth in private label credit and general purpose credit card products, the receivables of which increased from $1,243.9 million as of June 30, 2021 to $1,908.9 million as of June 30, 2022.

We experienced higher growth in our acquisitions of general purpose credit card receivables (which tend to have higher yields and corresponding charge-offs) than in our acquisitions of private label credit receivables. This relative mix of receivable acquisitions led to an increase in our Total managed yield ratio, annualized and our corresponding revenue. While we noted some disruptions in consumer spending behavior due to the COVID-19 pandemic and related economic impacts, including inflation, labor shortages and supply chain disruptions, we are currently experiencing continued period-over-period growth in private label credit and general purpose credit card receivables and to a lesser extent in our CAR receivables—growth which we expect to result in net period-over-period growth in our total interest income and related fees for these operations for 2022.

Period-over-period results primarily relate to growth in private label credit and general purpose credit card products, the receivables of which increased from $1,441.5 million as of September 30, 2021 to $2,049.5 million as of September 30, 2022.

We continue to experience higher growth in our acquisitions of general purpose credit card receivables (which tend to have higher yields and corresponding charge-offs) than in our acquisitions of private label credit receivables. This relative mix of receivable acquisitions led to an increase in our Total managed yield ratio, annualized and our corresponding revenue. While we noted some disruptions in consumer spending behavior due to the COVID-19 pandemic and related economic impacts, including inflation, labor shortages and supply chain disruptions, we are currently experiencing continued period-over-period growth in private label credit and general purpose credit card receivables and to a lesser extent in our CAR receivables—growth that we expect to result in net period-over-period growth in our total interest income and related fees for these operations for the remainder of 2022.

Future periods’

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As discussed elsewhere in this Report we adopted the fair value option under ASU 2016-13, beginning January 1, 2022, for all remaining loans receivable associated with our private label credit and general purpose credit card platform previously measured at amortized cost.

The impact of this adoption, for those accounts that elected the fair value option, resulted in an increase in the recognition of certain fee categories with future changes in the fair value of the 

associated receivables being included as part of our "Changes in fair value of loans, interest and fees receivable and notes payable associated with structured financings recorded at fair value" on our consolidated statements of income.

The impact of this adoption, for those accounts that elected the fair value option, resulted in an increase in the recognition of certain fee categories with future changes in the fair value of the associated receivables being included as part of our "Changes in fair value of loans, interest and fees receivable and notes payable associated with structured financings recorded at fair value" on our consolidated statements of income.

The above discussions on expectations for finance, fee and other income are based on our current expectations.

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to our consolidated financial statements, offset by our debt facilities being repaid commensurate with net liquidations of the underlying credit card, auto finance and installment loan receivables that serve as collateral for the facilities.

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 $911.9 million as of June 30, 2021 to $1,359.7 million as of June 30, 2022.

The majority of this increase in outstanding debt relates to the addition of multiple revolving credit facilities during 2021.

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 $944.5 million as of September 30, 2021 to $1,473.1 million as of September 30, 2022.

The majority of this increase in outstanding debt relates to the addition of multiple revolving credit facilities during 2021 and 2022.

Additionally, the issuance of $150.0 million of senior notes in November 2021 (included on our consolidated balance sheet as "Senior notes, net") will also serve to increase interest expense over prior periods.

Offsetting these increases in interest expense is an overall decrease in the weighted average cost of funds, coupled with the repurchase and redemption of our convertible senior notes.

Recent increases in the federal funds rate have thus far had a minimal impact on our interest expense as over 90% of interest rates on our outstanding debt are fixed. 

We anticipate additional debt financing over the next few quarters as we continue to grow coupled with increased effective interest rates resulting from recent and additional anticipated federal funds rate increases.

As such we expect our quarterly interest expense to be above that experienced in the prior periods for these operations.

As such, we expect our quarterly interest expense for these operations to increase compared to prior periods.

Provision for losses on loans, interest and fees receivable recorded at net realizable value.

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All proceeds received associated with charged-off accounts, are credited to the allowance for uncollectible loans, interest and fees receivable and effectively offset our provision for losses on loans, interest and fees receivable recorded at net realizable value.

We have experienced a period-over-period decrease in this category between the three and six months ended June 30, 2021 and June 30, 2022 primarily reflecting:

1) the effects of our adoption of the fair value option under ASU 2016-13 on January 1, 2022, which has resulted in a significant decline in the outstanding receivables subject to this provision and 2) the overall reduction in delinquencies associated with these receivables in part due to government stimulus programs, which have served to increase payments on outstanding receivables.

We have experienced a period-over-period decrease in this category between the three and nine months ended September 30, 2021 and September 30, 2022 primarily reflecting the effects of our adoption of the fair value option under ASU 2016-13 on January 1, 2022, which has resulted in a significant decline in the outstanding receivables subject to this provision.

See Note 2, “Significant Accounting Policies and Consolidated Financial Statement Components,”

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 The increase in Changes in fair value of loans, interest and fees receivable and notes payable associated with structured financings recorded at fair value was largely driven by growth in the underlying receivables (as noted above), coupled with increased fee billings on those receivables.

Fee billings on our fair value receivables increased from $129.1 million for the six months ended June 30, 2021 to $412.4 million for the six months ended June 30, 2022. 

Fee billings on our fair value receivables increased from $234.4 million for the nine months ended September 30, 2021 to $642.2 million for the nine months ended September 30, 2022. 

For both periods presented, we included expected market 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. 

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and notes payable associated with structured financings recorded at fair value was a reduction in the discount rate applied to the net cash flows associated with these investments.

The applied discount rate represents estimates third-party market participants could use in determining fair value. The reduction in this discount rate for the period ended June 30, 2022 reflects the asset level returns we believe would be required by market participants.

See Note 6 "Fair Values of Assets and Liabilities" included herein for further discussion of assumptions underlying this calculation.

The applied discount rate represents estimates third-party market participants could use in determining fair value. The reduction in this discount rate during the second quarter of 2022 reflected the asset level returns we believe would be required by market participants.

See Note 7 "Fair Values of Assets and Liabilities" included herein for further discussion of assumptions underlying this calculation.

For credit card receivables for which we use fair value accounting (including those for which we elected the fair value option on January 1, 2022), we expect our change in fair value of credit card receivables recorded at fair value to increase throughout 2022 commensurate with growth in these receivables.

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Total operating expense.

Total operating expense variances for the three and six months ended June 30, 2022, relative to the three and six months ended June 30, 2021, reflect the following:

increases in salaries reflecting growth in both the number of employees and increases in related benefit costs.

Recent nationwide increases in labor costs have correspondingly resulted in increased compensation costs associated with retaining and recruiting employees. We expect some continued increase in this cost for the remainder of 2022 when compared to 2021 as we expect our receivables to continue to grow and as a result we expect to modestly increase our number of employees;

increases in card and loan servicing expenses due to growth in receivables associated with our investments in private label credit and general purpose credit card receivables, which grew from $1,243.9 million outstanding to $1,908.9 million outstanding at June 30, 2021 and June 30, 2022, respectively.

Total operating expense variances for the three and nine months ended September 30, 2022, relative to the three and nine months ended September 30, 2021, reflect the following:

increases in salaries and benefit costs related to both the growth in the number of employees and inflationary compensation pressure. We expect some continued increase in this cost for the remainder of 2022 compared to 2021 as we expect our receivables to continue to grow and as a result we expect to modestly increase our number of employees;

increases in card and loan servicing expenses due to growth in receivables associated with our investments in private label credit and general purpose credit card receivables, which grew from $1,441.5 million outstanding to $2,049.5 million outstanding at September 30, 2021 and September 30, 2022, respectively.

As many of the expenses associated with our card and loan servicing efforts are now variable based on the amount of underlying receivables, we would expect this number to continue to grow throughout the remainder of 2022.

Offsetting a portion of this increase are significant reductions in our servicing costs per account, resulting from the realization of greater economies of scale as our receivables have grown.

increases in marketing and solicitation costs primarily due to increased origination and brand marketing support;

we expect these efforts to result in slight increases in marketing and solicitation costs during the remainder of 2022 although the frequency and timing of marketing efforts could result in reductions in quarter-over-quarter marketing costs;

increases in marketing and solicitation costs primarily due to increased origination and brand marketing support for the nine months ended September 30, 2022 when compared to the nine months ended September 30, 2021;

we experienced a decrease in marketing and solicitation costs for the three months ended September 30, 2022 when compared to the three months ended September 30, 2021.

This recent decline in marketing and solicitation costs is a direct result of tightened underwriting standards adopted during the second and third quarters of 2022. 

We expect these tightened underwriting standards to result in decreases in marketing and solicitation costs during the remainder of 2022 (and to reduce our growth rate in general purpose credit card receivables) although the frequency and timing of marketing efforts varies;

other expenses primarily relate to costs associated with occupancy or other third party expenses that are largely fixed in nature.

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Loss on repurchase and redemption of convertible senior notes. 

In the three and six months ended June 30, 2021, we repurchased $6.4 and $21.1 million, respectively, in face amount of our convertible senior notes for $10.2 million and $28.9 million, respectively, in cash (including accrued interest). The repurchase resulted in a loss of approximately $5.4 million and $13.3 million, respectively (including the convertible senior notes’

applicable share of deferred costs, which were written off in connection with the repurchase).

All remaining convertible senior notes were retired in 2021.

In the three and nine months ended September 30, 2021, we repurchased or redeemed $12.7 million and $33.8 million, respectively, in face amount of our convertible senior notes for $25.4 million and $54.3 million in cash (including accrued interest).

The repurchase and redemption resulted in an aggregate loss of approximately $16.2 million and $29.4 million (including the convertible senior notes’

applicable share of deferred costs, which were written off in connection with the repurchase), respectively.

Upon acquisition, the notes were retired. 

Noncontrolling interests.

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In November 2019, a wholly-owned subsidiary issued 50.5 million Class B preferred units at a purchase price of $1.00 per unit to an unrelated third party.

The units carry a 16% preferred return to be paid quarterly, with up to 6 percentage points of the preferred return to be paid through the issuance of additional units or cash, at our election.

The units carry a 16% preferred return paid quarterly, with up to 6 percentage points of the preferred return to be paid through the issuance of additional units or cash, at our election.

In March 2020, the subsidiary issued an additional 50.0 million Class B preferred units under the same terms.

The proceeds from the transaction are being used for general corporate purposes.

The proceeds from the transaction were used for general corporate purposes.

We have included the issuance of these Class B preferred units as temporary noncontrolling interests on the consolidated balance sheets and the associated dividends are included as a reduction of our net income attributable to common shareholders on the consolidated statements of income.

Income Taxes.

We experienced effective tax rates of 20.4% and 2.0%, respectively, for the three and six months ended June 30, 2022, compared to 21.6% and 18.1%, respectively, for the three and six months ended June 30, 2021.

Our effective tax rates for the three and six months ended June 30, 2022 are below the statutory rate principally due to (1) deductions during such periods associated with the exercise of stock options and the vesting of restricted stock at times when the fair value of our stock exceeded such share-based awards’

Our effective tax rate for the three months ended June 30, 2021 was above  the statutory rate due to state and foreign income tax expense, significantly offset, however, by (1) our deduction for income tax purposes of amounts characterized in our consolidated financial statements as dividends on a preferred stock issuance, such amounts constituting deductible interest expense on a debt issuance for tax purposes, and (2) the exclusion from taxable income of benefits received under various government stimulus programs.

These same two items served to offset the effects of state and foreign income tax expense and executive compensation deduction limits experienced in the first quarter of 2021 under Section 162(m) of the Internal Revenue Code of 1986 on our effective tax rate for the six months ended June 30, 2021. 

Also offsetting such effects and thereby causing our effective tax rate to be below the statutory rate for the six months ended June 30, 2021, were (1) deductions in the first quarter of 2021 associated with the exercise of stock options and the vesting of restricted stock at stock fair values significantly exceeding such share-based awards’

grant date values;

and (2) our release of state tax valuation allowances in the first quarter of 2021.

We experienced effective tax rates of 17.6% and 7.1%, respectively, for the three and nine months ended September 30, 2022, compared to 18.7% and 18.3%, respectively, for the three and nine months ended September 30, 2021.

Our effective tax rates for the three and nine months ended both September 30, 2021 and 2022 are below the statutory rate principally due to (1) deductions associated with the exercise of stock options and the vesting of restricted stock at times when the fair value of our stock exceeded such share-based awards’

grant date values and (2) our deduction for income tax purposes of amounts characterized in our consolidated financial statements as dividends on a preferred stock issuance, such amounts constituting deductible interest expense on a debt issuance for tax purposes. Also, certain state tax valuation allowance releases and benefits received under the Coronavirus Aid, Relief, and Economic Security (CARES) Act prior to the third quarter of 2021 contributed to our effective tax rate being lower than the statutory rate for the nine months ended September 30, 2021.

Partially offsetting the favorable rate effects discussed above in all 2021 and 2022 periods are (1) the adverse rate effects of state and foreign income tax expense and (2) executive compensation deduction limitations under Section 162(m) of the Internal Revenue Code of 1986.

We had de minimis interest expense or reversals thereof during the three and six months ended June 30, 2022, and 2021.

Our CaaS segment includes our activities relating to our servicing of and our investments in the private label credit and general purpose credit card operations, our various credit card receivables portfolios, as well as other product testing and investments that generally utilize much of the same infrastructure.

We had de minimis interest expense or reversals thereof during the three and nine months ended September 30, 2022, and 2021.

Our CaaS segment includes our activities related to our servicing of and our investments in the private label credit and general purpose credit card operations, our various credit card receivables portfolios, as well as other product testing and investments that generally utilize much of the same infrastructure.

The types of revenues we earn from our investments in receivables portfolios and services primarily include fees and finance charges, merchant fees or annual fees associated with the private label credit and general purpose credit card receivables.

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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.

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 adjustment for potential loan losses to reflect fair value.

Below are (i) the reconciliation of Loans, interest and fees receivable, at fair value to Loans, interest and fees receivable, at face value and (ii) the calculation of managed receivables:

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As discussed above, our managed receivables data differ in certain aspects from our GAAP data. First, managed receivables data are based on billings and actual charge-offs as they occur without regard to any changes in our allowance for uncollectible loans, interest and fees receivable (in periods where applicable). Second, for managed receivables data, we amortize certain fees (such as annual and merchant fees) and expenses (such as marketing expenses) associated with our Fair Value Receivables over the expected life of the corresponding receivable and recognize other costs, such as claims made under credit deferral programs, when paid. Under fair value accounting, these fees are recognized when billed or upon receivable acquisition and marketing expenses are recognized when incurred. Third, managed receivables data excludes the impacts of equity in income of equity method investees.

As of January 1, 2022, we changed the name of combined net charge-offs to combined principal net charge-offs and the combined net charge-off ratio, annualized to combined principal net charge-off ratio, annualized. 

As of January 1, 2022, we changed the names of combined net charge-offs to combined principal net charge-offs and the combined net charge-off ratio, annualized to combined principal net charge-off ratio, annualized. 

These changes reflect that we now subtract finance charge-offs in the calculation of combined principal net charge-offs and the related ratio. 

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Total managed yield

These changes reflect that we now subtract finance charge-offs in the calculation of combined principal net charge-offs and the related ratio. 

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Managed receivables levels.

 We have continued to experience overall period-over-period quarterly receivables growth with over $665.0 million in net receivables growth associated with the private label credit and general purpose credit card products offered by our bank partners from June 30, 2021 to June 

The addition of large private label credit retail partners and ongoing purchases of receivables arising in accounts issued by our bank partners to customers of our existing retail partners helped grow our private label credit receivables by $135.0 million in the twelve months ended June 30, 2022.

Our general purpose credit card receivables grew by $529.9 million, net during the twelve months ended June 30, 2022.

 We have continued to experience overall period-over-period quarterly receivables growth with over $608.0 million in net receivables growth associated with the private label credit and general purpose credit card products offered by our bank partners from September 30, 2021 to September 

The addition of large private label credit retail partners and ongoing purchases of receivables arising in accounts issued by our bank partners to customers of our existing retail partners helped grow our private label credit receivables by $122.8 million in the twelve months ended September 30, 2022.

Our general purpose credit card receivables grew by $485.2 million, net during the twelve months ended September 30, 2022.

We have noted recent recoveries in consumer spending behavior that have helped to increase the overall combined managed receivables levels, and we currently expect this trend to continue into 2022, although we expect the pace of growth to slow when compared to earlier periods (further unknown impacts of COVID-19, related government stimulus and relief measures and related economic consequences may impact our ability to acquire new receivables or the impact they may have on consumers' ability to make payments on outstanding loans and fees receivable). Growth in future periods largely is dependent on the addition of new retail partners to the private label credit origination platform, the timing and size of solicitations within the general purpose credit card platform by our bank partner, as well as purchase activity of consumers.

Further, the loss of existing retail partner relationships could adversely affect new loan acquisition levels. Our top five retail partnerships accounted for over 65% of the above-referenced Retail period-end managed receivables outstanding as of June 30, 2022. 

Similarly, the loss of existing retail partner relationships could adversely affect new loan acquisition levels. Our top five retail partnerships accounted for over 70% of the above-referenced Retail period-end managed receivables outstanding as of September 30, 2022. 

Delinquencies.

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We measure the success of these efforts by reviewing delinquency rates.

These rates exclude receivables that have been charged off.

As we continue to acquire newer private label credit and general purpose credit card receivables, we expect our delinquency rates to increase when compared to the same periods in prior years.

Our delinquency rates have continued to be somewhat lower than what we ultimately expect for our new private label credit and general purpose credit card receivables given the continued growth and age of the related accounts as well as government stimulus efforts. The aforementioned positive impacts related to government stimulus programs served to increase consumer payment rates beyond expectations.

The impact due to growth in the receivable base can be seen in periods of large growth in the charts above which result in lower delinquency rates.

We have started to experience increased delinquency rates, in line with historical norms as the effects of government stimulus wanes and market inflation negatively impacts our customer base. We expect this increase in delinquencies to continue throughout the remainder of 2022 and then return to levels similar to those experienced in periods prior to COVID-19 and the related government stimulus programs.

Our historical delinquency rates have been somewhat lower than what we ultimately expect for our new private label credit and general purpose credit card receivables given the continued growth and age of the related accounts as well as government stimulus efforts, and previously (prior to 2020), a robust economic landscape that resulted in receivables outperforming internal expectations.

Beginning in 2020, the aforementioned positive impacts related to government stimulus programs served to increase consumer payment rates beyond expectations.

The impact due to growth in the receivable base can be seen in periods of large growth in the charts above, resulting in lower delinquency rates.

We have experienced increased delinquency rates in conjunction with slower receivables growth and rising inflation and its negative impact on consumers. We expect this increase in delinquencies to continue throughout the remainder of 2022 and then return to levels similar to those experienced in periods prior to COVID-19 and the related government stimulus programs.

This expected decline in delinquencies in 2023 is predicated on the assumption that recent government efforts to curb inflation will be successful and our recent tightened underwriting standards, implemented during the second and third quarters of 2022, will prove effective at reducing account delinquencies. 

Additionally, in accordance with prescribed guidance discussed elsewhere in this Report, certain consumers negatively impacted by COVID-19 have been provided short-term payment deferrals and fee waivers.

Receivables enrolled in these short-term payment deferrals continue to accrue interest and their delinquency status will not change through the deferment period.

We continue to actively work with consumers that indicate hardship as a result of COVID-19; however, the number of impacted consumers is a small part of our overall receivable base.

In order to establish appropriate reserves for this population we considered various factors such as subsequent payment behavior and additional requests by the consumer for further deferrals or hardship claims.

In 2020 and early 2021, nearly all of these customers were considered current and thus the receivables underlying their accounts were not considered delinquent. The exclusion of these accounts resulted in lower delinquency rates for those periods than we would have otherwise expected.

We continue to actively work with consumers that indicate hardship as a result of COVID-19; however, the number of impacted consumers is a small part of our overall receivable base. In 2020 and early 2021, nearly all of these customers were considered current and thus the receivables underlying their accounts were not considered delinquent. The exclusion of these accounts resulted in lower delinquency rates for those periods than we would have otherwise expected.

Given this, and absent the potential impacts COVID-19 and related economic impacts may have on our ability to acquire new receivables or the impact they may have on consumers' ability to make payments on outstanding loans and fees receivable and the corresponding impact on our delinquency rates, we expect to continue to see seasonal payment patterns on these receivables that impact our delinquencies in line with prior periods (albeit at higher levels when compared to those prior periods).

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Additionally, lower delinquencies (and thus associated fee billings) noted during 2020 and 2021, in addition to reductions in the prime rate that corresponds to lower yields charged on credit card receivables, contributed to an overall lower total managed yield ratio.

Recent growth in our general purpose credit card receivables in excess of the growth experienced in our private label credit receivables, along with expected increased delinquency rates associated with those receivables, has resulted in an increase in our total managed yield ratio. We currently expect continued higher growth rates for our general purpose credit card receivables when compared to growth rates for our private label credit receivables and, as such, expect to see managed yield ratios similar to those experienced in the first quarter of 2022 and fourth quarter of 2021. 

Combined principal net charge-off ratio, annualized.

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When the principal of an outstanding loan is charged off, the related finance charges and fees are simultaneously charged off, resulting in a reduction to our Total managed yield.

Growth within our general purpose credit card receivables (as a percent of outstanding receivables) has resulted in increases in our charge-off rates over time.

Improvements in our delinquency rates throughout 2020 and continuing in the first three quarters of 2021 as a result of the increases in customer payments noted above resulted in lower charge-offs than we would have otherwise expected.

The recent increase in the combined principal net charge-off ratio, net is a reflection of the increased delinquencies noted in the latter part of 2021 and first quarter of 2022, as we continue to see receivables return to historically normalized levels. 

As delinquency rates continue to return to historically normalized levels (i.e., those periods prior to COVID-19 and the related government stimulus programs), we expect combined principal net charge-off rates for the remainder of 2022 to continue to increase, when compared to comparable prior periods since the onset of COVID-19.

This expectation is based on the following:

(1) higher expected charge off rates on the private label credit and general purpose credit card receivables corresponding with higher yields on these receivables, (2) continued testing of receivables with higher risk profiles, which could lead to periodic increases in combined principal net charge-offs, (3) recent vintages reaching peak charge-off periods, (4) our receivables growth during 2021, (5) a slower pace of growth in receivable loan balances expected for the remainder of 2022 and (6) negative impacts on some consumers' ability to make payments on outstanding loans and fees receivable as a result of COVID-19 and the related economic impacts.

Growth within our general purpose credit card receivables (as a percent of outstanding receivables) has resulted in increases in our charge-offs over time.

Improvements in our delinquency rates throughout 2020 and continuing for the first three quarters of 2021 as a result of the increases in customer payments noted above resulted in lower charge-offs than we would have otherwise expected.

The recent increase in the combined principal net charge-off ratio, annualized is a reflection of the increased delinquencies noted in the latter part of 2021 and in 2022 as consumer behavior reverted to more historical norms and inflation, particularly as it relates to higher gas prices, negatively impacted some consumers' ability to make payments on outstanding loans and fees receivable. 

As delinquency rates continue to be elevated relative to historically normalized levels (i.e., those periods prior to COVID-19 and the related government stimulus programs), we expect combined principal net charge-off rates for the remainder of 2022 to continue to increase, when compared to comparable prior periods since the onset of COVID-19.

These increased charge-off rates are expected to continue through the second quarter of 2023 before returning to historically normalized levels. 

This expectation is predicated on the assumption that recent actions by the federal government to reduce inflation will be successful. 

Our charge-off ratio has also been impacted due to (and will continue to be impacted by):

1) higher expected charge-off rates on the private label credit and general purpose credit card receivables corresponding with higher yields on these receivables, (2) continued testing of receivables with higher risk profiles, which leads to periodic increases in combined principal net charge offs, (3) recent vintages reaching peak charge-off periods, (4) our receivables growth during 2021 and early 2022, (5) the aforementioned tightened underwriting standards implemented during the second and third quarters of 2022 that will slow the pace of growth in our receivables base, and (6) negative impacts on some consumers' ability to make payments on outstanding loans and fees receivable as a result of COVID-19 and the related economic impacts.

Further impacting our charge-off rates are the timing and size of solicitations that serve to minimize charge-off rates in periods of high receivable acquisitions but also exacerbate charge-off rates in periods of lower receivable acquisitions.

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Recent impacts to this ratio primarily relate to the timing and size of outstanding debt. 

In general, we have obtained lower cost financing with fixed interest rates which has led to lower interest expense ratios when compared to corresponding prior periods.

In general, we have obtained lower cost financing with fixed interest rates, resulting in lower interest expense ratios when compared to corresponding prior periods.

Recent increases in the federal funds borrowing rate has led to an increase in spreads for newly-originated debt. 

As such, upon the completion of future capital raises, we expect the interest expense ratio to increase when compared to prior quarters.

As such, we expect the interest expense ratio to increase when compared to prior quarters as we replace existing financing arrangements with new ones.

Net interest margin ratio, annualized.

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Given recent increases in delinquency rates, we expect this ratio to continue to fall relative to corresponding prior periods for the remainder of 2022.

The average annual percentage rate (“APR”) charged to customers varies by receivable type, credit history and other factors.

The APR for receivables originated through our private label credit platform range from 0% to 36.0%.

For general purpose credit card receivables, APR ranges from 19.99% to 36.0%.

We have experienced minor fluctuations in our average APR based on the relative product mix of receivables purchased during a period.

The average annual percentage rate (“APR”) charged to customers varies by receivable type, credit history and other factors.

The APRs for receivables originated through our private label credit platform range from 0% to 36.0%.

For general purpose credit card receivables, APRs range from 19.99% to 36.0%.

We have experienced minor fluctuations in our average APR based on the relative product mix of receivables purchased during a period.

We currently expect our average APRs in 2022 to remain consistent with average APRs over the past several quarters;

however, the timing and relative mix of receivables acquired could cause some minor fluctuations. None of the programs we service have APRs in excess of 36.0%.

however, the timing and relative mix of receivables acquired could cause some minor fluctuations. None of the programs we service have APRs above 36.0%.

Receivables purchased during period.

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Auto Finance Segment

CAR, our auto finance platform acquired in April 2005, principally purchase and/or service loans secured by automobiles from or for, and also provide floor-plan financing for, a pre-qualified network of independent automotive dealers and automotive finance companies in the buy-here, pay-here used car business. We have expanded these operations to also include certain installment lending products in addition to our traditional loans secured by automobiles both in the U.S.

Collectively, as of June 30, 2022, we served more than 590 dealers through our Auto Finance segment in 33 states and two U.S.

CAR, our auto finance platform acquired in April 2005, principally purchases and/or services loans secured by automobiles from or for, and also provides floor-plan financing for, a pre-qualified network of independent automotive dealers and automotive finance companies in the buy-here, pay-here used car business. We have expanded these operations to also include certain installment lending products in addition to our traditional loans secured by automobiles both in the U.S.

Collectively, as of September 30, 2022, we served more than 610 dealers through our Auto Finance segment in 32 states and two U.S.

Non-GAAP Financial Measures

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Total managed yield

These changes reflect that we now subtract finance charge-offs in the calculation of combined principal net charge-offs and the related ratio. 

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Managed receivables.

 Absent the potential impacts COVID-19 and related economic impacts may have on our ability to acquire new receivables or the impact they may have on consumers' ability to make payments on outstanding loans and fees receivable, we expect modest growth in the level of our managed receivables for 2022 when compared to the same periods in prior years as CAR expands within its current geographic footprint and continues plans for service area expansion.

 Absent the potential impacts COVID-19 and related economic impacts may have on our ability to acquire new receivables or the impact they may have on consumers' ability to make payments on outstanding loans and fees receivable, we expect modest growth in the level of our managed receivables for 2023 when compared to the same periods in prior years as CAR expands within its current geographic footprint and continues plans for service area expansion.

Although we are expanding our CAR operations, the Auto Finance segment faces strong competition from other specialty finance lenders, as well as the indirect effects on us of our buy-here, pay-here dealership partners’

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Included in the fourth quarter of 2020 was an unplanned bulk purchase of receivables that increased our period over period growth and kept receivables levels higher in the first quarter of 2021.

While we continually evaluate bulk purchases of receivables, the timing and size of the purchases are difficult to predict. 

While we continually evaluate bulk purchases of receivables and have experienced good growth in our receivables base throughout 2022 resulting from several bulk purchases, the timing and size of the purchases are difficult to predict. 

Delinquencies.

 Current delinquency levels are consistent with our expectations for levels in the near term with some improvement noted in the first quarter of 2021 and in 2020 periods due to stronger than anticipated customer payment behavior.

Delinquency rates also tend to fluctuate based on seasonal trends and historically are lower in the first quarter of each year as seen above due to the benefits of strong payment patterns associated with year-end tax refunds for most consumers.

As discussed elsewhere in this Report, 2020 and 2021 delinquency rates benefitted from government stimulus programs that resulted in customer payments in excess of historical experience.

We are not concerned with modest fluctuations in delinquency rates and do not believe they will have a significantly positive or adverse impact on our results of operations;

 As discussed elsewhere in this Report, 2020 and 2021 delinquency rates benefitted from government stimulus programs that resulted in customer payments in excess of historical experience.

While we have experienced recent increases in our delinquency rates, we do not believe they will have a significantly positive or adverse impact on our results of operations;

even at slightly elevated rates, we earn significant yields on CAR’s receivables and have significant dealer reserves (i.e., retainages or holdbacks on the amount of funding CAR provides to its dealer customers) to protect against meaningful credit losses. Delinquency rates also tend to fluctuate based on seasonal trends and historically are lower in the first quarter of each year as seen above due to the benefits of strong payment patterns associated with year-end tax refunds for most consumers.

Total managed yield ratio, annualized.

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Further, we expect our total managed yield ratio to remain in line with current experience, with moderate fluctuations based on relative growth or declines in average managed receivables for a given quarter.

These variations would be based on the relative mix of receivables in our various product offerings.

These variations depend on the relative mix of receivables in our various product offerings.

Additionally, our product offerings in the U.S.

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We charge off auto finance receivables when they are between 120 and 180 days past due, unless the collateral is repossessed and sold before that point, in which case we will record a charge off when the proceeds are received.

Combined principal net charge-off ratios in the above table reflect the lower delinquency rates we have recently experienced.

In addition, used car prices are near historic levels, further improving recovery and lowering charge-offs. 

While we anticipate our charge-offs to be incurred ratably across our portfolio of dealers, specific dealer-related losses are difficult to predict and can negatively influence our combined principal net charge-off ratio.

Combined principal net charge-off ratios in the above table reflect the lower delinquency rates we have recently experienced. While we anticipate our charge offs to be incurred ratably across our portfolio of dealers, specific dealer-related losses are difficult to predict and can negatively influence our combined principal net charge-off ratio.

We continually re-assess our dealers and will take appropriate action if we believe a particular dealer’s risk characteristics adversely change.

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plus 3) servicing, other income and other activities collectively included in our other operating income category on our consolidated statements of income;

minus 4) finance charge and fee losses from consumers unwilling or unable to pay their receivables balances, as well as from bankrupt and deceased consumers. The denominator used represents our average managed receivables.

minus 4) finance charge and fee losses from consumers unwilling or unable to pay their receivables balances, as well as from bankrupt and deceased consumers. The denominator is our average managed receivables.

Combined principal net charge-off ratio, annualized .

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Interest expense ratio, annualized .

Represents an annualized fraction, the numerator of which is the annualized interest expense associated with the CaaS segment (See Note 3, "Segment Reporting" to our consolidated financial statements) as the numerator and the denominator of which is average managed receivables.

Represents an annualized fraction, the numerator of which is the annualized interest expense associated with the CaaS segment (See Note 3, "Segment Reporting" to our consolidated financial statements) and the denominator of which is average managed receivables.

Net interest margin ratio, annualized .

Represents an annualized fraction, using the Total managed yield ratio, annualized less the Combined principal net charge-off ratio, annualized less the Interest expense ratio, annualized.

Represents the Total managed yield ratio, annualized less the Combined principal net charge-off ratio, annualized less the Interest expense ratio, annualized.

LIQUIDITY, FUNDING AND CAPITAL RESOURCES

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We believe that our actions taken to date, future cash provided by operating activities, availability under our debt facilities, and access to the capital markets will provide adequate resources to fund our operating and financing needs.

Our primary focus is expanding the reach of our financial technology so that we grow our private label credit and general purpose credit card receivables and generate revenues from these investments that will allow us to maintain consistent profitability.

Our primary focus is expanding the reach of our financial technology in order to grow our private label credit and general purpose credit card receivables and generate revenues from these investments that will allow us to maintain consistent profitability.

Increases in new and existing retail partnerships and the expansion of our investments in general purpose credit card finance products have resulted in year-over-year growth of total managed receivables levels, and we expect growth to continue in the coming quarters.

Accordingly, we will continue to focus on (i) obtaining the funding necessary to meet capital needs required by the growth of our receivables, (ii) adding new retail partners to our platform to continue growth of the private label credit receivables, (iii) continuing growth in general purpose credit card receivables and (iv) effectively managing costs.

Accordingly, we will continue to focus on (i) obtaining the funding necessary to meet capital needs required by the growth of our receivables, (ii) adding new retail partners to our platform to continue growth of the private label credit receivables, (iii) growing general purpose credit card receivables and (iv) effectively managing costs.

All of our CaaS segment’s structured financing facilities are expected to amortize down with collections on the receivables within their underlying trusts and should not represent significant refunding or refinancing risks to our consolidated balance sheets.

Facilities that could represent near-term significant refunding or refinancing needs (within the next 24 months) as of June 30, 2022 are those associated with the following notes payable in the amounts indicated (in millions):

Revolving credit facility (expiring July 15, 2023) that is secured by certain receivables and restricted cash

Facilities that could represent near-term significant refunding or refinancing needs (within the next 24 months) as of September 30, 2022 are those associated with the following notes payable in the amounts indicated (in millions):

Revolving credit facility (expiring April 21, 2023) that is secured by certain receivables and restricted cash

Revolving credit facility (expiring October 30, 2023) that is secured by certain receivables and restricted cash

Revolving credit facility (expiring July 15, 2023) that is secured by certain receivables and restricted cash

Revolving credit facility (expiring March 15, 2024) that is secured by certain receivables and restricted cash

Revolving credit facility (expiring August 5, 2024) that is secured by certain receivables and restricted cash

Unsecured term debt (expiring August 26, 2024)

Based on the state of the debt capital markets, the performance of our assets that serve as security for the above facilities, and our relationships with lenders, we view imminent refunding or refinancing risks with respect to the above facilities as low in the current environment, and we believe that the quality of our new receivables should allow us to raise more capital through increasing the size of our facilities with our existing lenders and attracting new lending relationships. Further details concerning the above debt facilities and other debt facilities we use to fund the acquisition of receivables are provided in Note 10, “Notes Payable,” to our consolidated financial statements included herein.

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Interest on the senior notes is payable quarterly in arrears on February 1, May 1, August 1 and November 1 of each year.

The senior notes will mature on November 30, 2026.

The senior notes mature on November 30, 2026.

In June and July 2021, we issued an aggregate of 3,188,533 shares of 7.625% Series B Cumulative Perpetual Preferred Stock, liquidation preference of $25.00 per share (the “Series B Preferred Stock”) for net proceeds of approximately $76.5 million after deducting underwriting discounts and commissions, but before deducting expenses and the structuring fee.

We pay cumulative cash dividends on the Series B Preferred Stock, when and as declared by our Board of Directors, in the amount of $1.90625 per share each year, which is equivalent to 7.625% of the $25.00 liquidation preference per share.

On August 10, 2022, the Company entered into an At Market Issuance Sales Agreement (the “Sales Agreement”) providing for the sale by the Company of up to an aggregate offering price of $100,000,000 of our (i) Series B Preferred Stock and (ii) senior notes, from time to time through a sales agent, in connection with the Company’s “at-the-market”

offering program (the “ATM Program”).

During the third quarter of 2022, we sold 8,229 shares of our Series B Preferred Stock under the ATM Program.

We received $0.2 million in net proceeds from sales under the ATM Program.

We repurchased $22.1 million in face amount of our convertible senior notes during the year ended December 31, 2021 for $30.4 million in cash (including accrued interest).

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On November 14, 2019, a wholly-owned subsidiary issued 50.5 million Class B preferred units at a purchase price of $1.00 per unit to an unrelated third party.

The units carry a 16% preferred return to be paid quarterly, with up to 6 percentage points of the preferred return to be paid through the issuance of additional units or cash, at our election.

The units carry a 16% preferred return paid quarterly, with up to 6 percentage points of the preferred return to be paid through the issuance of additional units or cash, at our election.

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In any event, the majority of our revolving credit facilities mature prior to the expected phase out of LIBOR.

Recently, we replaced LIBOR with Secured Overnight Financing Rate ("SOFR") for one of our facilities. We will work with our lenders to use suitable alternative reference rates for our financial instruments.

Recently, we replaced LIBOR with the Secured Overnight Financing Rate ("SOFR") for certain of our facilities. We will work with our lenders to use suitable alternative reference rates for our financial instruments.

We will continue to monitor, assess and plan for the phase out of LIBOR;

however, we currently do not expect the impact to be material to the Company.

At June 30, 2022, we had $316.3 million in unrestricted cash held by our various business subsidiaries.

Because the characteristics of our assets and liabilities change, liquidity management has been a dynamic process for us, driven by the pricing and maturity of our assets and liabilities.

however, we currently do not expect the phase out of LIBOR to be material to the Company.

At September 30, 2022, we had $352.9 million in unrestricted cash held by our various business subsidiaries.

Because the characteristics of our assets and liabilities change, liquidity management is a dynamic process for us, driven by the pricing and maturity of our assets and liabilities.

We historically have financed our business through cash flows from operations, asset-backed structured financings and the issuance of debt and equity.

Details concerning our cash flows for the three months ended June 30, 2022 and 2021 are as follows:

During the six months ended June 30, 2022, we generated $152.6 million of cash flows from operations compared to our generating $124.5 million of cash flows from operations during the six months ended June 30, 2021.

The increase in cash provided by operating activities was principally related to an increase in finance and fee collections associated with growing private label credit and general purpose credit card receivables and increased recoveries on charged-off receivables.

Offsetting these collections were increased year-over-year payments made to pay federal and state taxes.

Details concerning our cash flows for the three months ended September 30, 2022 and 2021 are as follows:

During the nine months ended September 30, 2022, we generated $245.6 million of cash flows from operations compared to our generating $139.4 million of cash flows from operations during the nine months ended September 30, 2021.

Collections on receivables have generally benefited from increased consumer payments as a result of government stimulus payments. As the impact of these stimulus payments declines, we expect consumer payments to return to historical levels. 

During the six months ended June 30, 2022, we used $354.1 million of cash in our investing activities, compared to use of $159.8 million of cash in investing activities during the six months ended June 30, 2021. This increase in cash used is primarily due to significant increases in the level of net investments in the private label credit and general purpose credit card receivables relative to the same period in 2021. While we continue to see increases in consumer spending behavior, the impacts COVID-19 and related economic impacts may have on our ability to acquire new receivables or the impact they may have on consumers' ability to make payments on outstanding loans and fees receivable are unknown. 

During the six months ended June 30, 2022, we generated $61.2 million of cash in financing activities, compared to our generating $110.1 million of cash in financing activities during the six months ended June 30, 2021.

During the nine months ended September 30, 2022, we used $524.4 million of cash in our investing activities, compared to use of $293.9 million of cash in investing activities during the nine months ended September 30, 2021. This increase in cash used is primarily due to significant increases in the level of net investments in the private label credit and general purpose credit card receivables relative to the same period in 2021. While we continue to see increases in consumer spending behavior, the impacts COVID-19 and related economic impacts may have on our ability to acquire new receivables or the impact they may have on consumers' ability to make payments on outstanding loans and fees receivable are unknown. 

During the nine months ended September 30, 2022, we generated $158.9 million of cash in financing activities, compared to our generating $110.3 million of cash in financing activities during the nine months ended September 30, 2021.

In both periods, the data reflect borrowings associated with private label credit and general purpose credit card receivables offset by net repayments of amortizing debt facilities as payments are made on the underlying receivables that serve as collateral.

Additionally, we purchased and retired $78.1 million of our common stock pursuant to both open market and private purchases and the return of stock by holders of equity incentive awards to pay tax withholding obligations.  

Additionally, we purchased and retired $89.0 million of our common stock during the nine months ended September 30, 2022 pursuant to both open market and private purchases and the return of stock by holders of equity incentive awards to pay tax withholding obligations.  

Beyond our immediate financing efforts discussed throughout this Report, we will continue to evaluate debt and equity issuances as a means to fund our investment opportunities.

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Any proceeds raised under these efforts or additional liquidity available to us could be used to fund (1) additional investments in private label credit and general purpose credit card finance receivables as well as the acquisition of credit card receivables portfolios and (2) further repurchases or redemptions of preferred and common stock.

Pursuant to a share repurchase plan authorized by our Board of Directors on March 15, 2022, we are authorized to repurchase up to 5,000,000 shares of our common stock through June 30, 2024. 

Pursuant to share repurchase plans authorized by our Board of Directors, we are authorized to repurchase up to 5,000,000 shares of our common stock and 500,000 shares of our Series B Preferred Stock through June 30, 2024. 

CONTRACTUAL OBLIGATIONS, COMMITMENTS AND OFF-BALANCE-SHEET ARRANGEMENTS

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HBR reimburses us for the full cost of the employees, based on the amount of time devoted to HBR.

In the six months ended June 30, 2022 and 2021, we received $197,623 and $191,788, respectively, of reimbursed costs from HBR associated with these leased employees.

In the nine months ended September 30, 2022 and 2021, we received $293,471 and $286,048, respectively, of reimbursed costs from HBR associated with these leased employees.

On November 26, 2014, we and certain of our subsidiaries entered into a Loan and Security Agreement with Dove.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements