What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2024-03-04 compared with 2023-03-15 · 100 added, 126 removed, 121 unchanged (65% of the section changed)

This Report contains information that we obtained from industry and general publications and research, surveys and studies conducted by third parties. This information involves many assumptions and limitations, and you are cautioned not to give undue weight to any of this data. We have obtained this information from sources that we believe are reliable. However, we have not independently verified market or industry data from third party sources.

This Report contains information that we obtained from industry and general publications and research, surveys and studies conducted by third parties.

This information involves many assumptions and limitations, and you are cautioned not to give undue weight to any of this data.

We have obtained this information from sources that we believe are reliable.

However, we have not independently verified market or industry data from third party sources.

A general discussion of our business follows.

1 unchanged sentence

Information contained on or available through our website is not incorporated by reference in this Report.

Atlanticus is a financial technology company powering more inclusive financial solutions for everyday Americans.

We leverage data, analytics, and innovative technology to unlock access to financial solutions for the millions of Americans who would otherwise be underserved. We are principally engaged in providing products and services to lenders in the U.S.

and, in most cases, we invest in the receivables originated by lenders who utilize our technology platform and other related services.

In the private label credit channel, we partner with retailers and service providers in various industries across the U.S.

Atlanticus is a financial technology company powering more inclusive financial solutions for everyday Americans.

We leverage data, analytics, and innovative technology to unlock access to financial solutions for the millions of Americans who would otherwise be underserved.

We are principally engaged in providing products and services to lenders in the U.S.

and, in most cases, we invest in the receivables originated by lenders who utilize our technology platform and other related services.

In the private label credit channel, we partner with retailers, health care providers and service providers in various industries across the U.S.

to allow them to provide credit to their customers for the purchase of a variety of goods and services including consumer electronics, furniture, elective medical procedures, healthcare, and home-improvements.

From time to time, we also purchase receivables portfolios from third parties.

Subject to the availability of capital at attractive terms and pricing, we plan to continue to evaluate and pursue a variety of activities, including: (1) investments in additional financial assets associated with private label credit and general purpose credit card activities as well as the acquisition of interests in receivables portfolios; (2) investments in other assets or businesses that are not necessarily financial services assets or businesses and (3) the repurchase or retirement of debt and equity securities.  In this Report, “receivables”

or “loans”

typically refer to receivables we have purchased from our bank partners or from third parties. The types of revenues we earn from our investments in receivables portfolios and services primarily include fees and finance charges, and merchant fees or annual fees associated with the private label credit and general purpose credit card receivables. 

Subject to the availability of capital at attractive terms and pricing, we plan to continue to evaluate and pursue a variety of activities, including:

(1) investments in additional financial assets associated with private label credit and general purpose credit card activities as well as the acquisition of interests in receivables portfolios;

(2) investments in other assets or businesses that are not necessarily financial services assets or businesses and (3) the repurchase or retirement of debt and equity securities.

In this Report, "receivables" or "loans" typically refer to receivables we have purchased from our bank partners or from third parties.

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

Market Overview

According to data published by Experian, 40% of Americans had FICO®

scores of less than 700.

According to data published by Experian, 40% of Americans had FICO® scores of less than 700.

We believe this equates to a population of over 100 million everyday Americans in need of access to credit.

3 unchanged sentences

We are a Georgia corporation formed in 2009, as successor to an entity that commenced operations in 1996.

Atlanticus is a financial technology company powering more inclusive financial solutions for everyday Americans.

We leverage data, analytics, and innovative technology to unlock access to financial solutions for the millions of Americans who would otherwise be underserved. 

Credit as a Service Segment 

Currently, within our Credit as a Service ("CaaS") segment, we apply our technology solutions, in combination with the experiences gained, and infrastructure built from servicing over $30 billion in consumer loans over more than 25 years of operating history, to support lenders in offering more inclusive financial services.

Atlanticus is a financial technology company powering more inclusive financial solutions for everyday Americans.

We leverage data, analytics, and innovative technology to unlock access to financial solutions for the millions of Americans who would otherwise be underserved.

Credit as a Service Segment

Currently, within our Credit as a Service ("CaaS") segment, we apply our technology solutions, in combination with the experiences gained, and infrastructure built from servicing over $39 billion in consumer loans over more than 25 years of operating history, to support lenders in offering more inclusive financial services.

These products include private label credit and general purpose credit cards originated by lenders through multiple channels, including retail and healthcare, direct mail solicitation, digital marketing and partnerships with third parties.

The services of our bank partners are often extended to consumers who may not have access to financing options with larger financial institutions.

We specialize in supporting this “second-look”

credit service.

Our flexible technology solutions allow our bank partners to integrate our paperless process and instant decisioning platform with the existing infrastructure of participating retailers and service providers.

The services of our bank partners are often extended to consumers who may not have access to financing options with larger financial institutions.

Our flexible technology solutions allow our bank partners to integrate our paperless process and instant decisioning platform with the existing infrastructure of participating retailers, healthcare providers and other service providers.

Using our technology and proprietary predictive analytics, lenders can make instant credit decisions utilizing hundreds of inputs from multiple sources and thereby offer credit to consumers overlooked by many providers of financing who focus exclusively on consumers with higher FICO scores.

Atlanticus’

underwriting process is enhanced by AI and machine learning, enabling lenders to make fast, sound decision-making when it matters most.

Atlanticus’ underwriting process is enhanced by large language models and machine learning, enabling lenders to make fast, sound decision-making when it matters most.

Using our infrastructure and technology, we also provide loan servicing, including risk management and customer service outsourcing, for third parties.

1 unchanged sentence

Additionally, we report within our CaaS segment:

1) servicing income;

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

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 cost.

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

One of these companies, Fintiv Inc., has sued Apple, Inc., Walmart, Inc., and PayPal Holdings, Inc.

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

One of these companies, Fintiv Inc., has sued Apple, Inc., Walmart, Inc., and PayPal Holdings, Inc.

for patent infringement.

has approximately 150 patents related to secure money transfer on computer and mobile devices.

The transaction volume in these areas has increased dramatically over the last five years. 

If Fintiv Inc.

2 unchanged sentences

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 June 2023.

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

In light of the uncertainty around these lawsuits, 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. 

In light of the uncertainty around these lawsuits, 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.

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.

Our credit and other operations are heavily regulated, potentially causing us to change how we conduct our operations either in response to regulation or in keeping with our goal of leading the industry in adherence to consumer-friendly practices.

For information regarding our concentration with certain retail partners, See Note 11, "Commitments and Contingencies–Concentrations," to our consolidated financial statements included herein.

Our credit and other operations are heavily regulated, which may cause us to change how we conduct our operations either in response to regulation or in keeping with our goal of leading the industry in adherence to consumer-friendly practices.

We have made meaningful changes to our practices over the past several years, and because our account management practices are evolutionary and dynamic, it is possible that we may make further changes to these practices, some of which may produce positive, and others of which may produce adverse, effects on our operating results and financial position.

1 unchanged sentence

As a result, the products we support are priced to reflect expected loss rates for our various risk categories.

See “Consumer and Debtor Protection Laws and Regulations—CaaS Segment”

and Item 1A, “Risk Factors.”

Subject to the possible negative effects from inflation, supply chain disruptions, higher interest rates and other factors impacting consumer confidence, 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.

See "Consumer and Debtor Protection Laws and Regulations—CaaS Segment" in Part I, Item 1A, "Risk Factors."

Subject to possible disruptions caused by inflation, rising interest rates, 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.

Auto Finance Segment

The operations of our Auto Finance segment are conducted through our CAR platform, which we acquired in April 2005.

CAR primarily 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.

territories. 

Through our CAR operations, we generate revenues on purchased loans through interest earned on the face value of the installment agreements combined with the accretion of discounts on loans purchased.

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.

We generate revenues on purchased loans through interest earned on the face value of the installment agreements combined with the accretion of discounts on loans purchased.

We generally earn discount income over the life of the applicable loan.

1 unchanged sentence

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 December 31, 2022, our CAR operations served more than 610 dealers in 32 states and two U.S.

These operations continue to perform well (achieving consistent profitability and generating positive cash flows and growth).

As of December 31, 2023, our CAR operations served 650 dealers in 32 states and two U.S.

The core operations continue to perform well (achieving consistent profitability and generating positive cash flows and growth).

Fair Value Option

We elected the fair value option to account for certain loans receivable associated with our private label credit and general purpose credit card platform that were acquired on or after January 1, 2020.

We believe the use of fair value for these receivables more closely approximates the true economics of these receivables, better matching the yields and corresponding charge-offs.

We believe the fair value option also enables us to report GAAP net income that provides increased transparency into our profitability and asset quality.

Receivables arising in accounts originated prior to January 1, 2020, continued to be accounted for in our 2020 and 2021 financial statements at amortized cost, net.

We estimate the Fair Value Receivables using a discounted cash flow model, which considers various factors such as expected yields on consumer receivables, the timing of expected payments, customer default rates, estimated costs to service the portfolio, interest rates, and valuations of comparable portfolios.

As a result of this fair value adoption, our loans, interest and fees receivable arising in accounts originated subsequent to January 1, 2020, are carried at fair value with changes in fair value recognized directly in earnings, and certain fee billings (such as annual membership fees and merchant fees) and origination costs associated with these receivables no longer being deferred.

We account for certain loans receivable associated with our private label credit and general purpose credit card platform using fair value accounting.

We believe the use of fair value for these receivables more closely approximates the true economics of these receivables, better matching the yields and corresponding charge-offs.

We believe the fair value option also enables us to report generally accepted accounting principles in the U.S.

GAAP") net income that provides increased transparency into our profitability and asset quality.

As a result of this fair value adoption, our loans, interest and fees receivable are carried at fair value with changes in fair value recognized directly in earnings, and certain fee billings (such as annual membership fees and merchant fees) and origination costs associated with these receivables no longer being deferred.

We reevaluate the fair value of our Fair Value Receivables at the end of each quarter.

As discussed elsewhere in this Report we adopted ASU 2016-13 on January 1, 2022. This ASU requires the use of an impairment model (the current expected credit loss (“CECL”) model) that is based on expected rather than incurred losses. The ASU also allows for a one-time fair value election for receivables.

Upon adoption, we elected the fair value option for all remaining loans receivable associated with our private label credit and general purpose credit card platform previously recorded at amortized cost and recorded an increase to our Allowances for uncollectible loans, interest and fees receivable for our remaining Loans, interest and fees receivable associated with our Auto Finance Segment. See Note 2, “Significant Accounting Policies and Consolidated Financial Statement Components-Recent Accounting Pronouncements”

to our consolidated financial statements included herein for further discussion of our adoption of ASU 2016-13.

As discussed elsewhere in this Report we adopted ASU 2016-13 on January 1, 2022.

This ASU requires the use of an impairment model (the current expected credit loss ("CECL") model) that is based on expected rather than incurred losses.

The ASU also allows for a one-time fair value election for receivables.

for our remaining Loans at amortized cost associated with our Auto Finance Segment.

See Note 2, "Significant Accounting Policies and Consolidated Financial Statement Components-Recent Accounting Pronouncements" to our consolidated financial statements included herein for further discussion of our adoption of ASU 2016-13.

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.

As of the date of filing this Annual Report on Form 10-K, the duration and severity of the effects of the COVID-19 pandemic remain uncertain.

Likewise, we do not know the duration and severity of the impact of the COVID-19 pandemic on all members of the Company’s ecosystem –

our bank partner, merchants and consumers –

as well as our employees.

The Biden administration has indicated that the COVID-19 national and public health emergencies will end on May 11, 2023. 

The impact that the cessation of certain benefits provided under emergency relief programs will have on our consumers is uncertain.

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

Additionally, earlier government stimulus programs decreased consumer need for credit products and generally led to an increase in customer payments. While we have seen improvements in consumer spending behavior, receivables purchases could decline relative to the prior year if purchase behavior is further impacted by economic inflation.

A number of our merchants have recently experienced labor shortages and supply chain disruptions.

These trends could decrease or delay consumer spending and our receivables growth.

Borrowers impacted by COVID-19 requesting hardship assistance have been receiving temporary relief from payments.

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, merchants and consumers, while caring for the safety of our employees and their families.

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

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

and, in particular, “– 

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.

In March 2020, a national emergency was declared under the National Emergencies Act due to a new strain of coronavirus.

The reaction to the COVID-19 pandemic negatively impacted global supply chains and business operations.

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

As a result of persistently high inflation, interest rates have been on the rise.

Russia’s invasion of Ukraine and the ongoing regional conflict in the Middle East have intensified supply chain disruptions and heightened uncertainty surrounding the near-term outlook for the broader economy.

The impacts of responses to the COVID-19 pandemic by both consumers and governments, rising energy costs, inflation, rising interest rates, and unresolved geopolitical tensions could significantly affect the economic outlook.

The duration and severity of the effects of these impacts on our financial condition, results of operations and liquidity remain uncertain.

Borrowers impacted by COVID-19 requesting hardship assistance may have received temporary relief from payments or fee waivers.

While these measures mitigated credit losses, related economic disruptions subsequently resulted in increased portfolio credit losses.

The Biden administration ended the COVID-19 national and public health emergencies on May 11, 2023.

The long term impact that the cessation of certain benefits provided under emergency relief programs will have on our consumers is uncertain although the remaining financial statement impact for those customers previously provided the aforementioned short-term payment deferrals and fee waivers is not material.

The Company remains committed to serving our bank partners, merchant partners, health care providers and consumers.

For more information, refer to Part I, Item 1A "Risk Factors" and, in particular, "Other Risks of our Business – The reaction to COVID-19 has caused severe disruptions in the U.S.

economy and may have a further adverse impacts on our performance, results of operations and access to capital " and "Other Risks of our Business – Our business and operations may be negatively affected by rising prices and interest rates ."

Receivables Management and Risk Mitigation

CaaS Segment.

We manage our investments in receivables using credit scoring, credit file data, non-credit-bureau attributes, and our proprietary risk evaluation systems developed and refined over more than 25 years of operating history.

We manage our investments in receivables using credit scoring, credit file data, non-credit-bureau attributes, and our proprietary risk evaluation systems developed and refined over more than 25 years of operating history.

These strategies include assisting our issuing bank partners with the management of transaction authorizations, account renewals, credit line modifications and collection programs.

3 unchanged sentences

We believe that by combining external credit file data along with historical and current customer activity, we are able to better predict the true risk associated with current and delinquent receivables.

For our private label credit and general purpose credit card finance activities as well as the accounts that are open to purchases, we generally assist our issuing bank partners with managing credit lines to reward customers who are performing well and to mitigate losses from delinquent customer segments.

For our private label credit and general purpose credit card finance activities as well as the accounts that are open to purchases, we generally assist our issuing bank partners with managing credit lines to reward customers who are performing well and to mitigate losses from delinquent customer segments.

We also assist our issuing bank partners with employing strategies to reduce otherwise open credit lines for customers demonstrating indicators of increased credit or bankruptcy risk.

6 unchanged sentences

In most instances, the reserve accounts are cross-collateralized across all accounts presented by any single dealer.

CAR monitors performance at the dealer portfolio level (by product type) to adjust pricing, the reserve account, and to determine the size and scope of future account purchases from such dealer.

CAR monitors performance at the dealer portfolio level (by product type) to adjust pricing, the reserve account, and to determine the size and scope of future account purchases from such dealer.

CAR provides dealers with specific purchase guidelines based upon each product offering and delegates approval authority to assist in the monitoring of transactions during the loan acquisition process.

6 unchanged sentences

The goal of the collections process is to collect as much of the account balance that is owed in the most customer-friendly and cost-effective manner possible.

This collection process has continued to evolve over the course of more than 25 years of operating history, with the utilization of digital and mobile processes helping to both aid in collections and facilitate better communication with the consumer throughout the collection process.

We oversee and manage third-party collectors, who employ these digital and mobile processes along with the traditional cross-section of letters, emails and telephone calls to encourage payment.

This collection process has continued to evolve over the course of more than 25 years of operating history, with the utilization of digital and mobile processes helping to both facilitate better communication with the consumer and aid in collections throughout the collection process.

We oversee and manage third-party collectors, who employ these digital and mobile processes along with the traditional cross-section of letters, emails and telephone calls to encourage payment.

Collectors also sometimes offer flexibility with respect to the application of payments in order to encourage larger or prompter payments.

2 unchanged sentences

This allows collectors to readily identify the potential economic loss associated with the charge off of a particular receivable (i.e., the excess of principal purchases and cash advances funded over payments received throughout the life of the account).

The selection of collection techniques, including, for example, the order in which payments are applied or the provision of payments or credits to induce or in exchange for a payment, impacts the statistical performance of the portfolios that we present under “Consolidated Results of Operations—CaaS Segment”

within Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

The selection of collection techniques, including, for example, the order in which payments are applied or the provision of payments or credits to induce or in exchange for a payment, impacts the statistical performance of the portfolios that we present under "Consolidated Results of Operations—CaaS Segment" within Item 7, "Management’s Discussion and Analysis of Financial Condition and Results of Operations."

Collectors employ various and evolving tools when collecting on the receivables, and they routinely test and evaluate new tools in their effort toward improving collections with a greater degree of service and efficiency.

3 unchanged sentences

Collectors may also decrease minimum payments owed under certain collection programs.

Additionally, collectors employ re-aging techniques in compliance with Federal Financial Institutions Examination Council ("FFIEC") guidelines, as discussed below.

Moreover, collections are managed in accordance with the voluntary Consumer Credit Counseling Service (“CCCS”) program by waiving a certain percentage of a receivable under certain circumstances.

Additionally, collectors employ re-aging techniques in compliance with Federal Financial Institutions Examination Council ("FFIEC") guidelines, as discussed below.

Moreover, collections are managed in accordance with the voluntary Consumer Credit Counseling Service ("CCCS") program by waiving a certain percentage of a receivable under certain circumstances.

All of these programs are utilized based on the degree of economic success and customer service they achieve.

Collectors regularly monitor and adapt collection strategies, techniques, technology and training to optimize efforts to reduce delinquencies and charge offs.

Collectors regularly monitor and adapt collection strategies, techniques, technology and training to optimize efforts to reduce delinquencies and charge offs.

The output from these collection strategies and techniques is analyzed to identify the strategies and techniques that are most likely to result in curing a delinquent receivable in the most cost-effective manner, rather than treating all delinquent receivables the same based on the mere passage of time.

As in all aspects of risk management, the results of each of the above strategies is compared with other collection strategies and resources are devoted to those strategies that yield the best results.

Results are measured based on, among other things, delinquency rates, expected losses and costs to collect.

Results are measured based on, among other things, customer satisfaction, delinquency rates, expected losses and costs to collect.

Existing strategies are then adjusted based on these results.

We believe that routinely testing, measuring and adjusting collection strategies results in lower bad debt losses and operating expenses.

Interest and fees for most credit products are discontinued when loans, interest and fees receivable become contractually 90 or more days past due and loans, interest and fees receivable are charged off when they become contractually more than 180 days past due.

For all products, receivables are charged off within 30 days of notification and confirmation of bankruptcy or death of the obligor.

We believe that routinely testing, measuring and adjusting collection strategies results in a better collection experience, lower bad debt losses and operating expenses.

Interest and fees for most credit products are discontinued when loans, interest and fees receivable become contractually 90 or more days past due.

Loans, interest and fees receivable are charged off when they become contractually more than 180 days past due.

For all products, receivables are charged off within 30 days of notification and confirmation of bankruptcy or death of the obligor.

However, in some cases of death, receivables are not charged off if there is a surviving, contractually liable individual or an estate large enough to pay the debt in full.

The determination of whether an account is contractually past due is relevant to the delinquency and charge-off data provided under the “Consolidated Results of Operations—CaaS Segment”

caption within Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Various factors are relevant in analyzing whether an account is contractually past due (e.g., whether an account has not satisfied its minimum payment due requirement), which is the trigger for moving receivables through various delinquency stages and ultimately to charge-off status.

For private label credit and general purpose credit card accounts, a cardholder's account is considered to be delinquent if the cardholder has not made the required payment as of the payment due date. 

The determination of whether an account is contractually past due is relevant to the delinquency and charge-off data provided under the "Consolidated Results of Operations—CaaS Segment" caption within Item 7, "Management’s Discussion and Analysis of Financial Condition and Results of Operations." Various factors are relevant in analyzing whether an account is contractually past due (e.g., whether an account has not satisfied its minimum payment due requirement), which is the trigger for moving receivables through various delinquency stages and ultimately to charge-off status.

Additionally, collectors may re-age accounts that meet qualifications for re-aging consistent with FFIEC guidelines.

Re-aging involves changing the delinquency status of an account.

Collectors work cooperatively with customers demonstrating a willingness and ability to repay their indebtedness and who satisfy other criteria but are unable to pay the entire past due amount.

Collectors work cooperatively with customers demonstrating a willingness and ability to repay their indebtedness and who satisfy other criteria but are unable to pay the entire past due amount.

Generally, to qualify for re-aging, an account must have been opened for at least nine months and may not be re-aged more than once in a twelve-month period or twice in a five-year period.

4 unchanged sentences

however, this impact generally changes such delinquencies and charge offs by less than 10% and 5%, respectively.

We anticipate that further investments in Artificial Intelligence ("AI") will enable us to refine our customer-centric approach to customer service and collections. 

We anticipate that further investments in large language models will enable us to refine our customer-centric approach to customer service and collections.

As discussed above, typically, once an account is 90 days or more past due, the account is placed on a non-accrual status.

Placement on a non-accrual status results in the use of programs under which the contractual interest associated with a receivable may be reduced or eliminated, or a certain amount of accrued fees is waived, provided a minimum number or amount of payments have been made. Following this adjustment, if a customer demonstrates a willingness and ability to resume making monthly payments and meets the additional criteria discussed above, collectors will re-age the customer’s account.

Following this adjustment, if a customer demonstrates a willingness and ability to resume making monthly payments and meets the additional criteria discussed above, collectors will re-age the customer’s account.

When an account is re-aged, collectors adjust the status of the account to bring a delinquent account current, but generally do not make any further modifications to the payment terms or amount owed.

Thus, we do not recognize an impairment or write-down solely due to the re-aging process.

Once an account is placed on a non-accrual status, it is closed for further purchases.

We believe that re-ages help customers to manage difficult repayment periods, return to good standing and avoid further deterioration to their credit scores. 

Auto Finance Segment.

1 unchanged sentence

The collection process includes contacting the customer by phone or mail, skip tracing and using starter interrupt devices to minimize delinquencies.

Uncollectible accounts in our CAR operation generally are returned to the dealer under an agreement with the dealer to charge the balance on the account against the dealer’s reserve account.

Uncollectible accounts in our CAR operation generally are returned to the dealer under an agreement with the dealer to charge the balance on the account against reserve accounts established for each dealer.

Autos are generally not repossessed in our CAR operation as a result of the agreements that we have with the dealers unless there are insufficient dealer reserves to offset the loss or if a dealer requests repossession.

1 unchanged sentence

CaaS Segment.

business is regulated directly and indirectly under various federal and state consumer protection, collection and other laws, rules and regulations, including the federal Credit Card Accountability Responsibility and Disclosure Act of 2009 (the “CARD Act”), the federal Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”), the federal Truth In Lending Act (“TILA”), the federal Equal Credit Opportunity Act, the federal Fair Credit Reporting Act, the federal Fair Debt Collection Practices Act, the Federal Trade Commission (“FTC”) Act, the federal Gramm-Leach-Bliley Act and the federal Telemarketing and Consumer Fraud and Abuse Prevention Act.

business is regulated directly and indirectly under various federal and state consumer protection, collection and other laws, rules and regulations, including the federal Credit Card Accountability Responsibility and Disclosure Act of 2009 (the "CARD Act"), the federal Dodd-Frank Wall Street Reform and Consumer Protection Act ("Dodd-Frank"), the federal Truth In Lending Act ("TILA"), the federal Equal Credit Opportunity Act, the federal Fair Credit Reporting Act, the federal Fair Debt Collection Practices Act, the Federal Trade Commission ("FTC") Act, the federal Gramm-Leach-Bliley Act and the federal Telemarketing and Consumer Fraud and Abuse Prevention Act.

These laws, rules and regulations, among other things, impose disclosure requirements when consumer products are advertised, when an account is opened, when monthly billing statements are sent and when consumer obligations are collected.

1 unchanged sentence

Many of our issuing bank partners' products are designed for customers at the lower end of the credit score range.

These products are priced to reflect the higher credit risk of these customers.

These products are priced to reflect the higher credit risk of these customers.

Because of the inherently greater credit risks of these customers and the resulting higher interest and fees, we and our issuing bank partners may be subject to greater regulatory scrutiny.

5 unchanged sentences

Privacy and Data Security Laws and Regulations .

We are required to manage, use, and store large amounts of personally identifiable information, principally the confidential personal and financial data of our issuing bank partners’

customers, in the ordinary course of our business.

We are required to manage, use, and store large amounts of personally identifiable information, principally the confidential personal and financial data of our issuing bank partners’ customers, in the ordinary course of our business.

We depend on our IT networks and systems, and those of third parties, to process, store, and transmit that information.

4 unchanged sentences

federal and state laws and regulations designed to protect confidential personal and financial data.

For example, we must comply with guidelines under the Gramm-Leach-Bliley Act that require each financial institution to develop, implement and maintain a written, comprehensive information security program containing safeguards that are appropriate to the financial institution’s size and complexity, the nature and scope of the financial institution’s activities and the sensitivity of any customer information at issue.

Additionally, various federal banking regulatory agencies, and all 50 states, the District of Columbia, Puerto Rico and the Virgin Islands, have enacted data security regulations and laws requiring customer notification in the event of a security breach.

Additionally, various federal banking regulatory agencies, and all 50 states, the District of Columbia, Puerto Rico and the Virgin Islands, have enacted data security regulations and laws requiring customer notification in the event of a security breach.

CaaS Segment.

We face substantial competition from both financial service and financial technology companies, the intensity of which varies depending upon economic and liquidity cycles.

Our financial performance is, in part, a function of the performance of our investments in receivables and the aggregate outstanding amount of such receivables. The private label credit and general purpose credit card finance activities of our issuing bank partners compete with national, regional and local bankcard and consumer credit issuers, other general purpose credit card issuers and retail credit card and merchant credit issuers.

Our financial performance is, in part, a function of the performance of our investments in receivables and the aggregate outstanding amount of such receivables.

The private label credit and general purpose credit card finance activities of our issuing bank partners compete with facilitators and providers of legacy payment and consumer loan methods, such as credit and debit cards, including those provided by card issuing banks; technology solutions, including those provided by financial technology or payment companies; mobile wallets, such as Apple and PayPal; and pay-over-time solutions providers, including Block and Klarna.

Many of these competitors are substantially larger than we are, have significantly greater financial resources than we do and have significantly lower costs of funds than we have.

2 unchanged sentences

Our auto finance operations target automobile dealers that oftentimes are not able to access indirect lending from major financial institutions or captive finance companies.

We compete mainly with a handful of national and regional companies focused on this credit segment and a large number of smaller, regional private companies with a narrow geographic focus.

We compete mainly with a handful of national and regional companies focused on this credit segment and a large number of smaller, regional private companies with a narrow geographic focus.

Individual dealers with access to capital may also compete in this segment through the purchase of receivables from peer dealers in their markets.

Human Capital

As of December 31, 2022, we had 357 employees, including 2 part-time employees, all of whom are principally employed within the U.S.

As of December 31, 2023, we had 386 employees, all of whom are employed within the U.S.

We also engage temporary employees and consultants as needed to support our operations.

None of our employees are represented by a labor union, and we consider our relationships with our employees to be good. 

Our management team members, on average, have over 15 years of tenure with the Company. 

This experience through macro-economic cycles guides our customer centric decision making. 

None of our employees are represented by a labor union, and we consider our relationships with our employees to be good.

Our management team members, on average, have over 15 years of tenure with the Company.

This experience through macro-economic cycles guides our customer centric decision making.

We believe that our success and future growth depends greatly on our ability to attract, develop and retain top talent.

We strive to ensure that we are a diverse, inclusive and safe environment that fosters creativity and innovation.

To succeed in a competitive labor market, we seek to provide our employees with opportunities to grow and develop in their careers, supported by fair compensation, benefits and health and wellness programs.

Below is additional information about our human capital management.

Health and Safety.

The health and safety of our employees and their families is a top priority.

We communicate regularly with employees and provide resources for health, wellness and engagement. 

Diversity and Inclusion.

The Company believes that an inclusive and diverse work environment serves the interests of all of our employees, encourages employee acceptance, development and retention, and helps us to exceed customer expectations and meet our growth objectives.

We are committed to building a culture that fosters diversity, values inclusion and promotes individuality. 

Compensation and Benefits.

We have demonstrated a history of investing in our workforce by offering a comprehensive compensation and benefits program to our employees.

Salaries and wages paid to our employees are competitive based on position, skill and experience level, knowledge, and geographic location.

In addition, we maintain an employee stock purchase plan, an equity incentive plan and a 401(k) plan (that provides for a matching contribution by us) for eligible employees.

We also provide, among other benefits, healthcare and insurance benefits, health savings and flexible spending accounts, a healthcare advocacy service, employer paid disability leave, employer paid life insurance, paid time off, paid parental leave, employer paid telehealth, employee giving, and employee assistance programs.

Training and Talent Development.

Our ability to grow and succeed in a highly competitive industry depends on the continued engagement, training and development of our employees.

The Company’s talent development programs are designed to provide employees with the resources to help them achieve their career goals, build management skills and lead their organizations.

We have a strong value proposition that leverages our unique culture, collaborative working environment and shared sense of purpose to attract talent.

We provide a wide variety of opportunities for professional growth for all employees with classroom and online training and on‑the‑job experience and counseling.

Trademarks, Trade Names and Service Marks

1 unchanged sentence

We consider these trademarks, trade names and service marks to be readily identifiable with, and valuable to, our business.

This Annual Report on Form 10-K also contains trade names and trademarks of other companies that are the property of their respective owners.

This Annual Report on Form 10-K also contains trade names and trademarks of other companies that are the property of their respective owners.

Corporate Headquarters and Where to Access Additional Information

We are headquartered in Atlanta, Georgia, and our principal executive offices are located at Five Concourse Parkway, Suite 300, Atlanta, Georgia 30328.

Our headquarters telephone number is (770) 828-2000, and our website is www.Atlanticus.com .

We make available free of charge on our website certain of our recent SEC filings, including our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements and amendments to those filings as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. These reports are also available on the SEC's website at http://www.sec.gov .

Certain corporate governance materials, including our Board of Directors committee charters and our Code of Business Conduct and Ethics, are posted on our website under the heading “Investors”

and then "Corporate Information—Governance Documents." From time to time, the corporate governance materials on our website may be updated as necessary to comply with rules issued by the SEC or the NASDAQ Stock Market, or as desirable to further the continued effective and efficient governance of our company.

Our headquarters telephone number is (770) 828-2000, and our website is www.Atlanticus.com .

We make available free of charge on our website certain of our recent SEC filings, including our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements and amendments to those filings as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.

These reports are also available on the SEC's website at http://www.sec.gov .

Certain corporate governance materials, including our Board of Directors committee charters and our Code of Business Conduct and Ethics, are posted on our website under the heading "Investors" and then "Corporate Information—Governance Documents." From time to time, the corporate governance materials on our website may be updated as necessary to comply with rules issued by the SEC or the NASDAQ Stock Market, or as desirable to further the continued effective and efficient governance of our company.

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-K

Item 1. Business