What changed in this filing

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Item 1. Financial Statements

2025-11-10 compared with 2025-08-07 · 308 added, 141 removed, 1110 unchanged (29% of the section changed)

3 unchanged sentences

(Dollars in thousands)

Unrestricted cash and cash equivalents (including $ 156.1 million and $ 140.2 million associated with variable interest entities at June 30, 2025 and December 31, 2024, respectively)

September 30,

Unrestricted cash and cash equivalents (including $ 170.5 million and $ 140.2 million associated with variable interest entities at September 30, 2025 and December 31, 2024, respectively)

$ 425,023 $ 375,416

Restricted cash and cash equivalents (including $ 121.5 million and $ 98.8 million associated with variable interest entities at June 30, 2025 and December 31, 2024, respectively)

Restricted cash and cash equivalents (including $ 73.6 million and $ 98.8 million associated with variable interest entities at September 30, 2025 and December 31, 2024, respectively)

100,914 124,220

Loans at fair value (including $ 2,945.3 million and $ 2,542.9 million associated with variable interest entities at June 30, 2025 and December 31, 2024, respectively)

Loans at fair value (including $ 6,200.6 million and $ 2,542.9 million associated with variable interest entities at September 30, 2025 and December 31, 2024, respectively)

6,350,009 2,630,274

Loans at amortized cost, net (including $ 4.9 million and $ 4.9 million of allowance for credit losses at June 30, 2025 and December 31, 2024, respectively;

and $ 19.7 million and $ 19.8 million of deferred revenue at June 30, 2025 and December 31, 2024, respectively)

Loans at amortized cost, net (including $ 4.6 million and $ 4.9 million of allowance for credit losses at September 30, 2025 and December 31, 2024, respectively;

and $ 21.5 million and $ 19.8 million of deferred revenue at September 30, 2025 and December 31, 2024, respectively)

85,004 84,332

1 unchanged sentence

13,458 10,519

Intangible assets, net (Note 2)

Operating lease right-of-use assets

7 unchanged sentences

25,924 24,188

Notes payable, net (including $ 2,431.0 million and $ 2,128.0 million associated with variable interest entities at June 30, 2025 and December 31, 2024, respectively)

Notes payable, net (including $ 5,297.8 million and $ 2,128.0 million associated with variable interest entities at September 30, 2025 and December 31, 2024, respectively)

5,332,680 2,199,448

7 unchanged sentences

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

Series A preferred stock, 400,000 shares issued and outstanding (liquidation preference - $ 40.0 million) at June 30, 2025 and December 31, 2024 (Note 5) (1)

Series A preferred stock, 400,000 shares issued and outstanding (liquidation preference - $ 40.0 million) at September 30, 2025 and December 31, 2024 (Note 6) (1)

40,000 40,000

1 unchanged sentence

Shareholders' Equity

Series B preferred stock, no par value, 3,457,443 shares issued and outstanding at June 30, 2025 (liquidation preference - $ 86.4 million);

Series B preferred stock, no par value, 3,563,762 shares issued and outstanding at September 30, 2025 (liquidation preference - $ 89.1 million);

3,301,179 shares issued and outstanding at December 31, 2024 (liquidation preference - $ 82.5 million) (1)

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

15,125,831 and 14,904,192 shares issued and outstanding at June 30, 2025 and December 31, 2024, respectively

15,127,014 and 14,904,192 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively

Paid-in capital

15 unchanged sentences

For the Three Months Ended

For the Six Months Ended

For the Nine Months Ended

September 30,

Revenue and other income:

7 unchanged sentences

495,292 350,954 1,233,985 956,769

Other non-operating income

Other non-operating (loss) income

( 616 ) 270 20 1,184

15 unchanged sentences

( 35,301 ) ( 14,848 ) ( 80,584 ) ( 38,848 )

Depreciation and amortization

( 1,491 ) ( 656 ) ( 3,173 ) ( 1,963 )

22 unchanged sentences

Condensed Consolidated Statements of Shareholders’ Equity and Temporary Equity (Unaudited)

For the Six Months Ended June 30, 2025 and June 30, 2024

For the Nine Months Ended September 30, 2025 and September 30, 2024

(Dollars in thousands)

56 unchanged sentences

3,457,443 $ — 15,125,831 $ — $ 112,399 $ 450,925 $ ( 4,146 ) $ 559,178 $ 40,000 $ —

Series A preferred stock dividends ($ 1.50 dividend per share)

— — — — — ( 600 ) — ( 600 ) — —

Series B preferred stock dividends ($ 0.48 dividend per share)

— — — — — ( 1,707 ) — ( 1,707 ) — —

Stock option exercises and proceeds related thereto

— — 10,242 — 157 — — 157 — —

Compensatory stock issuances, net of forfeitures

— — ( 8,632 ) — — — — — — —

Issuance of series B preferred stock, net

106,319 — — — 2,298 — — 2,298 — —

Stock-based compensation costs

— — — — 920 — — 920 — —

Redemption and retirement of common shares

— — (427 ) — ( 25 ) — — ( 25 ) — —

Net income (loss)

— — — — — 24,977 ( 389 ) 24,588 — —

Balance at September 30, 2025

3,563,762 $ — 15,127,014 $ — $ 115,749 $ 473,595 $ ( 4,535 ) $ 584,809 $ 40,000 $ —

Series B Preferred Stock

53 unchanged sentences

3,300,704 $ — 14,748,938 $ — $ 88,705 $ 345,110 $ ( 2,907 ) $ 430,908 $ 40,000 $ 100,400

Accretion of discount associated with issuance of subsidiary equity

— — — — — ( 75 ) — ( 75 ) — 75

Series A preferred stock dividends ($ 1.50 dividend per share)

— — — — — ( 604 ) — ( 604 ) — —

Series B preferred stock dividends ($ 0.48 dividend per share)

— — — — — ( 1,573 ) — ( 1,573 ) — —

Class B preferred units dividends ($ 0.04 dividend per share)

— — — — — ( 4,064 ) — ( 4,064 ) — —

Stock option exercises and proceeds related thereto

— — 1,700 — 26 — — 26 — —

Compensatory stock issuances, net of forfeitures

— — ( 583 ) — — — — — — —

Stock-based compensation costs

— — — — 979 — — 979 — —

Redemption and retirement of preferred shares and preferred units

— — — — — — — — — ( 25,500 )

Redemption and retirement of common shares

— — ( 11,193 ) — ( 324 ) — — ( 324 ) — —

Net income (loss)

— — — — — 29,543 ( 354 ) 29,189 — —

Balance at September 30, 2024

3,300,704 $ — 14,738,862 $ — $ 89,386 $ 368,337 $ ( 3,261 ) $ 454,462 $ 40,000 $ 74,975

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

19 unchanged sentences

( 266,552 ) ( 186,886 )

Increase in income tax liability

Increase (decrease) in income tax liability

( 424 ) ( 202 )

Increase in accounts payable and accrued expenses

Increase (decrease) in accounts payable and accrued expenses

9,276 ( 1,026 )

( 12,398 ) ( 3,417 )

Net cash provided by operating activities

7 unchanged sentences

1,681,888 1,397,362

Acquisition of new subsidiary

Purchases and development of property

20 unchanged sentences

681,916 225,289

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

( 16,401 ) 23,510

Net increase in cash and cash equivalents and restricted cash and cash equivalents

Cash and cash equivalents and restricted cash equivalents at beginning of period

16 unchanged sentences

$ ( 2,027 ) $ ( 1,047 )

Cash assumed upon acquisition of Mercury

See accompanying notes.

1 unchanged sentence

Notes to Condensed Consolidated Financial Statements

June 30, 2025 and 2024

September 30, 2025 and 2024

Description of Our Business

3 unchanged sentences

We provide technology and other support services to lenders who offer an array of financial products and services, including private label and general purpose card products, to consumers who may have been declined by other providers of credit.

Private label and general purpose card products are originated by The Bank of Missouri and WebBank (collectively, our “bank partners”).

Private label and general purpose card products are originated by The Bank of Missouri, WebBank and First Bank and Trust (collectively, our “bank partners”).

Our bank partners originate these accounts through multiple channels, including retail and healthcare point-of-sale locations, direct mail solicitation, digital marketing and partnerships with third parties.

15 unchanged sentences

Private label credit products associated with the healthcare space are generally issued under the Curae brand while all other retail partnerships, including those in consumer electronics, furniture, elective medical procedures, and home-improvement use the Fortiva brand or use our retail partners’ brands.

Our general purpose credit cards use the Aspire, Imagine and Fortiva brand names.

General purpose credit cards use the Aspire, Imagine, Mercury and Fortiva brand names.

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.

12 unchanged sentences

See Note 7 "Fair Values of Assets and Liabilities" for more information on our fair value measurements.

Acquisition of Mercury Financial LLC

On September 11, 2025, the Company closed the acquisition of all outstanding equity interests of Mercury Financial LLC (“Mercury”), a leading data- and tech-centric credit card platform utilized by bank partners to provide credit cards to near-prime consumers in the U.S.

The acquisition aligns with Atlanticus’ strategic objective to expand its consumer credit offerings and increase scale within its credit card operations.

At the closing, Mercury became a wholly-owned subsidiary of Atlanticus.

Total purchase consideration was approximately $ 166.5 million in cash.

In addition to the purchase consideration, the seller has the opportunity under the purchase agreement to receive earn out payments for up to three years following the closing of the acquisition in an amount equal to 75 % of the amount by which the charge-offs of Mercury’s acquired receivables are less than agreed-upon charge-off levels.

We have determined the contingent consideration meets the definition of a derivative instrument under Accounting Standards Codification ("ASC") 815, "Derivatives and Hedging".

We have recorded the derivative at fair value within Accounts payable and accrued expenses on the accompanying condensed consolidated balance sheets, calculated using internally-developed estimates.

These estimates on performance of the acquired portfolio include expected credit losses, payment rates, servicing costs, discount rates and yields earned on our general purpose credit card receivables.

See Note 7, "Fair Values of Assets and Liabilities" for more information.

As a result of the acquisition, the Company added approximately 1.3 million credit card serviced accounts, $ 3.2 billion in credit card receivables and assumed $ 2.8 billion in collateralized debt.

Additionally, the Company acquired certain identifiable finite-lived intangible assets primarily associated with internally developed software.

The Company expensed approximately $ 2.5 million of acquisition costs and approximately $ 4.3 million of severance costs within Other expense and Salaries and benefits, respectively, during the three and nine months ended September 30, 2025.

The condensed consolidated statement of operations includes, for the three and nine months ended September 30, 2025, Mercury’s operating results from September 11, 2025 through September 30, 2025.

For that period, Mercury contributed approximately $ 49.9 million of revenue and $( 7.0 ) million of net loss.

See Note 7 "Fair Values of Assets and Liabilities" and Note 10 "Notes Payable" for more information on the acquired credit card receivables and assumed debt obligations and see Note 3 "Significant Accounting Policies and Condensed Consolidated Financial Statement Components" for more information on our finite-lived intangible assets.

The acquisition was accounted for as an asset acquisition under ASC 805, "Business Combinations".

Fair values of assets acquired and liabilities assumed were determined using management estimates and third -party valuations (e.g., replacement cost method).

Significant Accounting Policies and Condensed Consolidated Financial Statement Components

12 unchanged sentences

Certain disclosures have been revised to conform to current year presentation.

We maintain two categories of Loans on our condensed consolidated balance sheets:

those that are carried at fair value (Loans at fair value) and those that are carried at net amortized cost (Loans at amortized cost).

Consolidation The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries.

Consolidation

The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries.

The Company’s policy is to consolidate the financial statements of entities in which it has a controlling financial interest.

11 unchanged sentences

Our restricted cash balances also include minimum cash balances held in accounts at the request of certain of our business partners.

Loans, Interest and Fees Receivable We maintain two categories of Loans on our condensed consolidated balance sheets:

Loans, Interest and Fees Receivable

We maintain two categories of Loans on our condensed consolidated balance sheets:

those that are carried at fair value (Loans at fair value) and those that are carried at net amortized cost (Loans at amortized cost).

10 unchanged sentences

Loans and finance receivables include accrued and unpaid interest and fees.

All receivables associated with our private label credit and general purpose credit cards are included within this category of receivables.

All receivables associated with private label credit and general purpose credit cards are included within this category of receivables.

Under the fair value option, fees such as annual fees are taken into income when billed to the consumer or upon loan acquisition and any cost associated with the loan acquisition are expensed in the period incurred.

6 unchanged sentences

Our loans at amortized cost, net, currently consist of receivables associated with our Auto Finance segment’s operations and are presented in the condensed consolidated balance sheets net of the related allowance for credit losses and deferred revenue.

We purchased auto loans with outstanding principal of $ 48.2 million, $ 96.3 million, $ 51.2 million and $ 112.2 million for the three and six months ended June 30, 2025 and 2024, respectively, through our pre-qualified network of independent automotive dealers and automotive finance companies.

We purchased auto loans with outstanding principal of $ 53.8 million, $ 150.1 million, $ 48.9 million and $161.1 million for the three and nine months ended September 30, 2025 and 2024, respectively, through our pre-qualified network of independent automotive dealers and automotive finance companies.

We show an allowance for credit losses for our loans at amortized cost.

7 unchanged sentences

Certain of our loans at amortized cost also contain components of deferred revenue related to loan discounts on the purchase of our auto finance receivables.

As of June 30, 2025 and December 31, 2024, the weighted average remaining accretion period for the $ 19.7 million and $ 19.8 million of deferred revenue reflected in the condensed consolidated balance sheets was 22 and 24 months, respectively.

As of September 30, 2025 and December 31, 2024, the weighted average remaining accretion period for the $ 21.5 million and $ 19.8 million of deferred revenue reflected in the condensed consolidated balance sheets was 22 and 24 months, respectively.

A roll-forward (in millions) of our allowance for credit losses by class of receivable is as follows:

For the Three Months Ended June 30,

For the Three Months Ended September 30,

Notes Receivable

9 unchanged sentences

$ ( 6.7 ) $ ( 4.6 ) $ ( 11.3 ) $ — $ ( 4.6 ) $ ( 4.6 )

( 1 ) For the three months ended June 30, 2025, we recorded a provision for credit losses associated with our notes receivable from consumer technology platforms that are included in Prepaid expenses and other assets on our condensed consolidated balance sheets.

For the Six Months Ended June 30,

( 1 ) For the three months ended September 30, 2025, we recorded a provision for credit losses associated with our notes receivable from consumer technology platforms that are included in Prepaid expenses and other assets on our condensed consolidated balance sheets.

For the Nine Months Ended September 30,

Notes Receivable

9 unchanged sentences

$ ( 6.7 ) $ ( 4.6 ) $ ( 11.3 ) $ — $ ( 4.6 ) $ ( 4.6 )

( 1 ) For the six months ended June 30, 2025, we recorded a provision for credit losses associated with our notes receivable from consumer technology platforms that are included in Prepaid expenses and other assets on our condensed consolidated balance sheets.

( 1 ) For the nine months ended September 30, 2025, we recorded a provision for credit losses associated with our notes receivable from consumer technology platforms that are included in Prepaid expenses and other assets on our condensed consolidated balance sheets.

September 30,

Allowance for credit losses:

16 unchanged sentences

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

An aging of our delinquent loans at amortized cost (in millions) as of June 30, 2025 and December 31, 2024 is as follows:

An aging of our delinquent loans at amortized cost (in millions) as of September 30, 2025 and December 31, 2024 is as follows:

September 30,

30-59 days past due

9 unchanged sentences

This could include a restructuring of the loan terms to alleviate the burden of the borrower's near-term cash requirements, such as a modification of terms to reduce or defer cash payments to help the borrower attempt to improve its financial condition.

For the six months ended June 30, 2025 and 2024, no Loans at amortized cost qualified as a FDM.

We experienced effective tax rates of 24.4 % and 24.0 % for the three and six months ended June 30, 2025, respectively, compared to 15.6 % and 18.5 % for the three and six months ended June 30, 2024, respectively.

Our effective tax rates for the three and six months ended June 30, 2025, are above the statutory rate principally due to our ( 1 ) state and foreign income tax expense, including the effects of law changes enacted in the three months ended June 30, 2025, in certain states in which we operate, ( 2 ) the tax effects of deduction disallowance under Section 162 (m) of the Internal Revenue Code of 1986 as amended (the “Code”) with respect to compensation paid to our covered employees, and ( 3 ) taxes on global intangible low-taxed income.

Offsetting the foregoing items were the tax effects of deductions ( 1 ) associated with the exercises of stock options and the vesting of restricted stock at the times when the fair value of our stock exceeded such share-based awards’ grant date values, and ( 2 ) of amounts characterized in our condensed consolidated financial statements as dividends on a preferred stock issuance, such amounts which constituted deductible interest expense on a debt issuance for tax purposes.

Our effective tax rates for the three and six months ended June 30, 2024, are below the statutory rate principally due to the tax effects of our deduction of ( 1 ) amounts characterized in our condensed consolidated financial statements as dividends on a preferred stock issuance, such amounts which constituted deductible interest expense on a debt issuance for tax purposes, and ( 2 ) a loss related to our unrecovered investment in a foreign subsidiary—such subsidiary which ceased operations in the three months ended June 30, 2024, and with respect to which we had used permanently reinvested earnings” accounting in our condensed consolidated financial statements.

Offsetting the foregoing items were ( 1 ) state and foreign income tax expense including the effects of law changes enacted in the three months ended June 30, 2024 in certain states in which we operate, ( 2 ) taxes on global intangible low-taxed income, and ( 3 ) the tax effects of deduction disallowance under Section 162 (m) of the Code with respect to compensation paid to our covered employees.

For the nine months ended September 30, 2025 and 2024, no Loans at amortized cost qualified as a FDM.

Intangible assets and amortization

As part of the acquisition of Mercury, we acquired $ 32.4 million of identifiable finite-lived intangible assets primarily associated with internally developed software.

These intangible assets are carried at the fair value at acquisition less accumulated amortization.

Amortization is computed on a straight-line basis over the useful lives of the related assets which is estimated to be 5 years from the date of acquisition.

Details of our finite-lived intangible assets were as follows (in thousands):

As of September 30, 2025

Intangible assets - gross carrying amount 32,430

Accumulated amortization ( 541 )

Net carrying amount 31,889

Amortization expense related to these finite-lived intangible assets was $ 0.5 million for the three and nine month periods ended September 30, 2025, and is included within depreciation and amortization in the condensed consolidated statements of income.

Rewards Liability

Certain of our credit card accounts are associated with customer reward programs, which allow the customer to earn rewards that can be redeemed for statement credits, gift cards, cash back or applied against purchases on certain online platforms.

The amount of reward that a customer earns varies based on the terms and conditions of the reward program and product.

When rewards are earned by a customer, rewards expense is recorded as an offset to interchange income, as a component of Other revenue (on our Condensed Consolidated Statements of Income), with a corresponding increase to the customer rewards liability within Accounts payable and accrued expenses (on our Condensed Consolidated Balance Sheets).

The customer rewards liability is computed based on the estimated redemption cost of rewards earned and is reduced as rewards are redeemed.

In estimating the customer rewards liability, the Company considers historical redemption and spending behavior, as well as the terms and conditions of the reward programs, among other factors.

The Company expects that the majority of rewards earned by customers will eventually be redeemed.

We experienced effective tax rates of 24.0 % and 24.0 % for the three and nine months ended September 30, 2025, respectively, compared to 21.5 % and 19.7 % for the three and nine months ended September 30, 2024, respectively.

Our effective tax rates for the three and nine months ended September 30, 2025, are above the statutory rate principally due to our ( 1 ) state and foreign income tax expense, including the effects of law changes enacted in the nine months ended September 30, 2025, in certain states in which we operate, ( 2 ) the tax effects of deduction disallowance under Section 162 (m) of the Internal Revenue Code of 1986 as amended (the “Code”) with respect to compensation paid to our covered employees, and ( 3 ) taxes on global intangible low-taxed income.

Offsetting the foregoing items were the tax effects of deductions ( 1 ) associated with the exercises of stock options and the vesting of restricted stock at the times when the fair value of our stock exceeded such share-based awards’ grant date values, and ( 2 ) of amounts characterized in our condensed consolidated financial statements as dividends on preferred stock (which was outstanding until its redemption in the first quarter of 2025 ), such amounts which constituted deductible interest expense on debt for tax purposes.

Our effective tax rates for the three and nine months ended September 30, 2024, are below the statutory rate principally due to the tax effects of our deduction of ( 1 ) amounts characterized in our condensed consolidated financial statements as dividends on preferred stock (which was outstanding at varying amounts in 2024 ), such amounts which constituted deductible interest expense on debt for tax purposes, and ( 2 ) exercises 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.

Offsetting the foregoing items were ( 1 ) state and foreign income tax expense including the effects of law changes enacted in certain states in which we operate, ( 2 ) the tax effects of deduction disallowance under Section 162 (m) of the Code with respect to compensation paid to our covered employees and ( 3 ) taxes on global intangible low-taxed income.

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 condensed 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.

Our interest expense was $ 90 thousand for the six months ended June 30, 2025, and $ 93 thousand for the six months ended June 30, 2024.

Such interest expense was $ 135 thousand for the nine months ended September 30, 2025, and $ 140 thousand for the nine months ended September 30, 2024.

On July 4, 2025, the One Big Beautiful Bill Act ("OBBBA") was enacted into law.

The OBBBA includes significant changes to existing U.S.

federal and international tax provisions.

We evaluated the impact of these provisions on our overall tax positions, and we do not anticipate a significant impact on our annual effective tax rate.

Revenue Recognition and Revenue from Contracts with Customers

24 unchanged sentences

Revenue from Contracts with Customers

The majority of our revenue is earned from financial instruments and is not included within the scope of Accounting Standards Codification ("ASC") 606, "Revenue from Contracts with Customers".

The majority of our revenue is earned from financial instruments and is not included within the scope of ASC 606, "Revenue from Contracts with Customers".

We have determined that revenue from contracts with customers would primarily consist of merchant fees and interchange revenues in our CaaS segment and servicing revenue and other customer-related fees in both our CaaS segment and our Auto Finance segment.

1 unchanged sentence

We earn a portion of the interchange fee the card networks charge merchants for the transaction and these fees are settled daily.

Additionally, within interchange revenues are network incentives which are earned when credit card transactions, associated with accounts we service, are processed through interchange networks.

Servicing revenue is generated by meeting contractual performance obligations related to the collection of amounts due on receivables, and is settled with the customer net of our fee, which can be settled daily or monthly.

4 unchanged sentences

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

For the Three Months Ended June 30, 2025

For the Three Months Ended September 30, 2025

Interchange revenues, net (1)

10 unchanged sentences

$ 84,977 $ 187 $ 85,164

For the Six Months Ended June 30, 2025

For the Nine Months Ended September 30, 2025

Interchange revenues, net (1)

10 unchanged sentences

$ 222,810 $ 539 $ 223,349

For the Three Months Ended June 30, 2024

For the Three Months Ended September 30, 2024

Interchange revenues, net (1)

10 unchanged sentences

$ 62,703 $ 199 $ 62,902

For the Six Months Ended June 30, 2024

For the Nine Months Ended September 30, 2024

Interchange revenues, net (1)

10 unchanged sentences

$ 155,022 $ 622 $ 155,644

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

( 1 ) Interchange revenue is presented net of customer reward expense and includes network incentives for credit card transactions processed through interchange networks.

( 2 ) Merchant fees are included in Consumer loans, including past due fees on our condensed consolidated statements of income.

Asset Acquisitions

The Company follows the guidance in ASC 805, "Business Combinations", for determining the appropriate accounting treatment for asset acquisitions.

Accounting Standards Update ("ASU") 2017 - 01, "Clarifying the Definition of a Business", provides an initial fair value screen to determine if substantially all of the fair value of the assets acquired is concentrated in a single asset or group of similar assets.

If the initial screening test is not met, the set is considered a business based on whether there are inputs and substantive processes in place.

Based on the results of this analysis and conclusion on an acquisition’s classification of a business combination or an asset acquisition, the accounting treatment is derived.

If the acquisition is deemed to be a business, the purchase method of accounting is applied.

Identifiable assets acquired and liabilities assumed at the acquisition date are recorded at fair value.

If the transaction is deemed to be an asset acquisition, the cost accumulation and allocation model is used whereby the assets and liabilities are recorded based on the purchase price and allocated to the individual assets and liabilities based on relative fair values.

See Note 2 "Acquisition of Mercury Financial LLC" for further discussion on our recent acquisition.

Recent Accounting Pronouncements

In November 2024, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2024 - 03, "Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures" which requires disaggregated disclosure of income statement expenses for public business entities.

In July 2025, the Financial Accounting Standards Board ("FASB") issued ASU 2025 - 05, "Financial Instruments – Credit Losses (Topic 326 ):

Measurement of Credit Losses for Accounts Receivable and Contract Assets", which improves transparency to provide all entities with a practical expedient when estimating expected credit losses for current accounts receivable and current contract assets arising from transactions accounted for under Topic 606.

All entities may elect a practical expedient that assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset.

The new guidance is effective for fiscal years beginning after December 15, 2025, and interim reporting periods within those annual periods.

Early adoption is permitted.

ASU 2025 - 05 is not expected to have a significant impact to the Company’s consolidated financial statements when adopted.

In November 2024, the FASB issued ASU 2024 - 03, "Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures" which requires disaggregated disclosure of income statement expenses for public business entities.

The ASU does not change the expense captions an entity presents on the face of the income statement.

17 unchanged sentences

Income before income taxes is used regularly in the forecasting and budgeting process when assessing performance on a quarterly basis and making decisions about capital and personnel allocations.

Our CaaS segment includes the operations of two operating segments aggregated into one reportable segment which includes our private label credit and general purpose credit cards, which, through our bank partners, provide financing solutions to consumers.

Our CaaS segment includes the operations of two operating segments aggregated into one reportable segment which includes our private label credit and our general purpose credit card receivables (including those general purpose credit card receivables acquired as part of our acquisition of Mercury), which, through our bank partners, provide financing solutions to consumers.

Our Auto Finance reportable segment purchases and/or service loans secured by automobiles and provides other financing options to independent automotive dealers and automotive finance companies.

7 unchanged sentences

Reportable segment information (in thousands) is as follows:

Three Months Ended June 30, 2025

Three Months Ended September 30, 2025

Revenue and other income:

8 unchanged sentences

Other non-operating income

7 ( 623 ) ( 616 )

Total revenue and other income

20 unchanged sentences

$ 29,575 $ 2,904 $ 32,479

Six Months Ended June 30, 2025

Nine Months Ended September 30, 2025

Revenue and other income:

31 unchanged sentences

$ 6,988,809 $ 90,923 $ 7,079,732

Three Months Ended June 30, 2024

Three Months Ended September 30, 2024

Revenue and other income:

8 unchanged sentences

Other non-operating income

( 31 ) 301 270

Total revenue and other income

18 unchanged sentences

( 57,335 ) ( 5,739 ) ( 63,074 )

Income before income taxes

Income (loss) before income taxes

$ 37,769 $ ( 483 ) $ 37,286

Six Months Ended June 30, 2024

Nine Months Ended September 30, 2024

Revenue and other income:

8 unchanged sentences

Other non-operating income

330 854 1,184

Total revenue and other income

22 unchanged sentences

Shareholders’ Equity and Preferred Stock

During the three and six months ended June 30, 2025 and 2024, we repurchased and contemporaneously retired 41,381 shares, 68,633 shares, 49,203 shares and 67,236 shares of our common stock at an aggregate cost of $ 1.9 million, $ 3.2 million, $ 1.3 million and $ 1.8 million, 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, 2025 and 2024, we repurchased and contemporaneously retired 427 shares, 69,060 shares, 11,193 shares and 78,429 shares of our common stock at an aggregate cost of $ 0.0 million, $ 3.2 million, $ 0.3 million and $ 2.1 million, 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.

Preferred Stock

1 unchanged sentence

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.

No shares of Series B Preferred Stock were repurchased in the three and six months ended June 30, 2025 and 2024.

No shares of Series B Preferred Stock were repurchased in the three and nine months ended September 30, 2025 and 2024.

On August 10, 2022, we entered into an At Market Issuance Sales Agreement (the "Preferred Stock Sales Agreement") providing for the sale by the Company of up to an aggregate offering price of $ 100.0 million of our (i) Series B preferred stock and (ii) 6.125 % Senior Notes due 2026 (the "2026 Senior Notes") from time to time through a sales agent, in connection with the Company's Series B preferred stock and 2026 Senior Notes "at-the-market" offering program (the "Preferred Stock ATM Program").

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

During the three and six months ended June 30, 2025 and 2024, we sold 142,603 shares, 156,264 shares, 0 shares and 44,143 shares, respectively, of our Series B preferred stock under our Preferred Stock ATM Program for net proceeds of $ 3.2 million, $ 3.5 million, $ 0 and $ 1.1 million, respectively.

During the three and six months ended June 30, 2025 and 2024, no 2026 Senior Notes were sold under the Company's Preferred Stock ATM Program.

During the three and six months ended June 30, 2025 and 2024, we sold $ 8.1 million, $ 25.8 million, $ 0 and $ 0 , respectively, principal amount of our 2029 Senior Notes under our Preferred Stock ATM Program for net proceeds of $ 7.9 million, $ 25.3 million, $ 0 and $ 0 , respectively.

During the three and six months ended June 30, 2025 and 2024, we sold 0 common shares, 200,000 common shares, 0 common shares and 0 common shares, respectively, under the Company’s Common Stock ATM Program for net proceeds of $ 0 , $ 11.6 million, $ 0 and $ 0 , respectively.

During the three and nine months ended September 30, 2025 and 2024, we sold 106,319 shares, 262,583 shares, 0 shares and 44,143 shares, respectively, of our Series B preferred stock under our Preferred Stock ATM Program for net proceeds of $ 2.3 million, $ 5.8 million, $ 0 and $ 1.1 million, respectively.

During the three and nine months ended September 30, 2025 and 2024, no 2026 Senior Notes were sold under the Company's Preferred Stock ATM Program.

During the three and nine months ended September 30, 2025 and 2024, we sold $ 5.6 million, $ 31.4 million, $ 13.5 million and $ 13.5 million, respectively, principal amount of our 2029 Senior Notes under our Preferred Stock ATM Program for net proceeds of $ 5.5 million, $ 30.8 million, $ 13.4 million and $ 13.4 million, respectively.

During the three and nine months ended September 30, 2025 and 2024, we sold 0 common shares, 200,000 common shares, 0 common shares and 0 common shares, respectively, under the Company’s Common Stock ATM Program for net proceeds of $ 0 , $ 11.6 million, $ 0 and $ 0 , respectively.

Redeemable Preferred Stock

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The Series A Preferred Stock is perpetual and has no maturity date.

The Company may, at its option, redeem the shares of Series A Preferred Stock on or after January 1, 2025 at a redemption price equal to $ 100 per share, plus any accumulated and unpaid dividends.

At the request of holders of a majority of the shares of Series A Preferred Stock, the Company shall offer to redeem all of the Series A Preferred Stock at a redemption price equal to $100 per share, plus any accumulated and unpaid dividends, at the option of the holders thereof, on or after January 1, 2024.

The Company may, at its option, redeem the shares of Series A Preferred Stock at a redemption price equal to $ 100 per share, plus any accumulated and unpaid dividends.

Upon the election by the holders of a majority of the shares of Series A Preferred Stock, each share of the Series A Preferred Stock is convertible into the number of shares of the Company’s common stock as is determined by dividing (i) the sum of (a) $100 and (b) any accumulated and unpaid dividends on such share by (ii) an initial conversion price equal to $ 10 per share, subject to certain adjustment in certain circumstances to prevent dilution.

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• The fair value of the loans takes into consideration net charge-offs for the remaining life of the loans with no separate allowance for credit loss calculation;

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

• Certain fee billings (such as non-refundable annual fees) and expenses of loans 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;

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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 asset or liability.

The table below summarizes (in thousands) by fair value hierarchy the June 30, 2025 and December 31, 2024 fair values and carrying amounts of ( 1 ) our assets that are carried at fair value in our condensed 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, 2025 (1)

The table below summarizes (in thousands) by fair value hierarchy the September 30, 2025 and December 31, 2024 fair values and carrying amounts of ( 1 ) our assets that are carried at fair value in our condensed consolidated financial statements and ( 2 ) our assets not carried at fair value, but for which fair value disclosures are required:

Assets – As of September 30, 2025 (1)

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

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For our loans 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.

For the six months ended June 30, 2025 and 2024, we estimate the portion of fair value changes considered to be attributable to changes in instrument-specific credit risk to be $ 7.5 million and $( 0.5 ) million, respectively.

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, 2025 and 2024:

For the nine months ended September 30, 2025 and 2024, we estimate the portion of fair value changes considered to be attributable to changes in instrument-specific credit risk to be $ 8.9 million and $ 11.3 million, respectively.

Loans at Fair Value

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$ 2,630,274 $ 2,173,759

Acquisition of Mercury receivables at fair value

Changes in fair value of loans at fair value, included in earnings

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( 2,322,966 ) ( 1,868,085 )

Balance at June 30,(3)

Balance at September 30,(3)

$ 6,350,009 $ 2,511,619

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( 2 ) Total Changes in fair value of loans is included in our condensed consolidated statements of income.

( 3 ) As of June 30, 2025 and June 30, 2024, the aggregate unpaid principal balance included within loans at fair value was $ 2,788 million and $ 2,197 million, respectively.

( 3 ) As of September 30, 2025 and September 30, 2024, the aggregate unpaid principal balance included within loans at fair value was $ 6,199 million and $ 2,420 million, respectively.

The unrealized gains and losses for assets within the Level 3 category presented in the tables above include changes in fair value that are attributable to both observable and unobservable inputs.

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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, 2025 and December 31, 2024 fair values and carrying amounts of our liabilities not carried at fair value, but for which fair value disclosures are required:

Liabilities – As of June 30, 2025

The table below summarizes (in thousands) by fair value hierarchy the September 30, 2025 and December 31, 2024 fair values and carrying amounts of our liabilities not carried at fair value, but for which fair value disclosures are required:

Liabilities – As of September 30, 2025

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

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$ — $ — $ 17,469 $ 17,469

Contingent consideration

$ — $ — $ 40,000 $ 40,000

Liabilities not carried at fair value

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$ — $ — $ 13,644 $ 13,644

Contingent consideration

$ — $ — $ — $ —

Liabilities not carried at fair value

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$ 281,703 $ — $ — $ 281,552

Bank partner fees carried at fair value in accordance with ASC 815, "Derivatives and Hedging", reflect the estimated fair value of future compensation we owe our bank partners associated with the regulatory oversight and other services they provide on our acquired receivables, the underlying accounts of which they continue to own and service.

Bank partner fees carried at fair value in accordance with ASC 815, reflect the estimated fair value of future compensation we owe our bank partners associated with the regulatory oversight and other services they provide on our acquired receivables, the underlying accounts of which they continue to own and service.

This compensation is based on both a fixed and variable component, dependent on the underlying performance of the acquired receivables.

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We recognize the fair value of these Bank partner fees within Card and loan servicing on the accompanying condensed consolidated statements of income on the date we acquire the underlying receivable.

Additionally, as part of our acquisition of Mercury, the seller has the opportunity under the purchase agreement to receive earn out payments for up to three years following the closing of the acquisition in an amount equal to 75 % of the amount by which the charge-offs of Mercury’s acquired receivables are less than agreed-upon charge-off levels.

We have determined the contingent consideration meets the definition of a derivative instrument under ASC 815.

We have recorded the derivative at fair value within Accounts payable and accrued expenses on the accompanying condensed consolidated balance sheets, calculated using internally-developed estimates.

For our credit and debt facilities where market prices are not available, we assess the fair value of these liabilities based on our estimate of future cash flows generated from their underlying credit card receivables collateral, net of servicing compensation required under the note facilities.

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Other Relevant Data

Other relevant data (in thousands) as of June 30, 2025 and December 31, 2024 concerning certain assets we carry at fair value are as follows:

Other relevant data (in thousands) as of September 30, 2025 and December 31, 2024 concerning certain assets we carry at fair value are as follows:

Loans at Fair Value Pledged as Collateral under Structured Financings

As of June 30, 2025

As of September 30, 2025

As of December 31, 2024

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

June 30, 2025

September 30, 2025

December 31, 2024

Unrestricted cash and cash equivalents

$ 156.1 $ 140.2

Restricted cash and cash equivalents

Loans at fair value

2,945.3 2,542.9

Total Assets held by VIEs

$ 3,222.9 $ 2,781.9

Notes Payable, net held by VIEs

$ 2,431.0 $ 2,128.0

We have operating leases primarily associated with our corporate offices and regional service centers as well as for certain equipment.

We have operating leases primarily associated with our corporate offices, ancillary office locations associated with our recent acquisition of Mercury and regional service centers.

Additionally, we have operating leases for certain equipment.

Our leases have remaining lease terms of 1 to 10 years, some of which include options, at our discretion, to extend the leases for additional periods generally on one -year revolving periods.

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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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Weighted average discount rate

As of June 30, 2025 , scheduled payments of lease liabilities were as follows (in thousands):

As of September 30, 2025 , scheduled payments of lease liabilities were as follows (in thousands):

Gross Lease Payment

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Operating lease liabilities

As part of our recent acquisition of Mercury, we assumed two separate operating leases for offices in Wilmington, Delaware and Austin, Texas.

The leases cover approximately 30,000 square feet and have remaining terms of approximately 1 and 2 years.

Obligations under these leases are included in the tables above.

In August 2021, we entered into an operating lease agreement for our corporate headquarters in Atlanta, Georgia (the "Headquarters lease") with an unaffiliated third party.

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The other lease terms for the Expansion space are the same as those for the initial space leased under the Headquarters lease.

The total remaining commitment under this lease is approximately $ 31.4 million and is included in the table above.

The total remaining commitment under the Headquarters lease and Expansion space lease is approximately $ 30.8 million and is included in the table above.

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

As of June 30, 2025, we had no material non-cancelable capital leases with initial or remaining terms of more than one year.

As of September 30, 2025, 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, 2025 and December 31, 2024 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, 2025

Other notes payable outstanding as of September 30, 2025 and December 31, 2024 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:

September 30, 2025

December 31, 2024

Revolving credit facilities at a weighted average interest rate equal to 7.3 % as of June 30, 2025 ( 7.0 % as of December 31, 2024) secured by the financial and operating assets of CAR and/or certain receivables and restricted cash with a combined aggregate carrying amount of $ 3,148.1 million as of June 30, 2025 ($ 2,723.5 million as of December 31, 2024)

Revolving credit facilities at a weighted average interest rate equal to 7.4 % as of September 30, 2025 ( 7.0 % as of December 31, 2024) secured by the financial and operating assets of CAR and/or certain receivables and restricted cash with a combined aggregate carrying amount of $ 6,358.7 million as of September 30, 2025 ($ 2,723.5 million as of December 31, 2024)

Revolving credit facility, not to exceed $ 65.0 million (expiring December 1, 2026 ) (1) (2) (3)

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Revolving credit facility, not to exceed $ 50.0 million (expiring October 30, 2026 ) (2) (3) (4) (5)

Revolving credit facility, not to exceed $ 100.0 million (expiring December 15, 2025 ) (2) (3) (4) (5) (6)

Revolving credit facility, not to exceed $ 100.0 million (expiring May 15, 2026 ) (2) (3) (4) (5) (6)

Revolving credit facility, not to exceed $ 75.0 million (expiring July 20, 2026 ) (2) (3) (4) (5)

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Revolving credit facility, not to exceed $ 158.3 million (expiring August 5, 2027 ) (2) (3) (4) (5) (6)

Revolving credit facility, not to exceed $ 100.0 million (expiring March 15, 2027 ) (3) (4) (5) (6)

Revolving credit facility, repaid in July 2025

Revolving credit facility, not to exceed $ 25.0 million (expiring August 30, 2027 ) (2) (3) (4) (5)

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Revolving credit facility, not to exceed $ 350.0 million (expiring July 16, 2029 ) (3) (4) (5) (6)

Revolving credit facility, not to exceed $ 125.0 million (expiring January 15, 2030 ) (3) (4) (5) (6)

Revolving credit facility, not to exceed $ 200.0 million (expiring February 15, 2029 ) (3) (4) (5) (6)

Revolving credit facility, not to exceed $ 361.9 million (expiring March 31, 2028 ) (2) (3) (4) (5) (6)

Revolving credit facility, not to exceed $ 379.1 million (expiring July 1, 2029 ) (3) (4) (5) (6)

Revolving credit facility, not to exceed $ 750.0 million (expiring February 20, 2029 ) (3) (4) (5) (6)

Revolving credit facility, not to exceed $ 700.0 million (expiring July 20, 2029 ) (3) (4) (5) (6)

Revolving credit facility, not to exceed $ 250.0 million (expiring November 20, 2026 ) (3) (4) (5) (6)

Revolving credit facility, not to exceed $ 374.0 million (expiring April 20, 2029 ) (3) (4) (5) (6)

Revolving credit facility, not to exceed $ 500.0 million (expiring June 21, 2027 ) (3) (4) (5) (6)

Other facilities

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

As of June 30, 2025 , the Prime Rate was 7.50 %, the Term Secured Overnight Financing Rate ("Term SOFR") was 4.32 % and the Secured Overnight Financing Rate ("SOFR") was 4.45 %.

In 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 $ 48.8 million was drawn as of June 30, 2025).

As of September 30, 2025 , the Prime Rate was 7.25 %, the Term Secured Overnight Financing Rate ("Term SOFR") was 4.13 % and the Secured Overnight Financing Rate ("SOFR") was 4.24 %.

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

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

In 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 $ 29.7 million was drawn as of June 30, 2025).

This facility is secured by the financial and operating assets of CAR and accrues interest at an annual rate equal to SOFR plus a range between 2.25 % and 2.6 % 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, 2025, the facility's borrowing limit was $ 65.0 million and the facility matures on December 1, 2026.

As of September 30, 2025, the facility's borrowing limit was $ 65.0 million and the facility matures on December 1, 2026.

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 December 2017, we (through a wholly owned subsidiary) entered a revolving credit facility with a (as subsequently amended) $ 75.0 million revolving borrowing limit that is available to the extent of outstanding eligible principal receivables (of which $ 59.6 million was drawn as of June 30, 2025).

This facility is secured by the loans, interest and fees receivable and related restricted cash and accrues interest at an annual rate equal to Term Secured Overnight Financing Rate ("Term SOFR") plus 3.6 %.

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The note is guaranteed by Atlanticus.

In 2018, we (through a wholly owned subsidiary) entered 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 $ 0.0 million was outstanding as of June 30, 2025) that can be drawn upon to the extent of outstanding eligible receivables.

In 2018, we (through a wholly owned subsidiary) entered 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 $ 0 was outstanding as of September 30, 2025) that can be drawn upon to the extent of outstanding eligible receivables.

The interest rate on the notes equals the SOFR plus 3.75 %.

The facility matures on December 15, 2025, 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 June 30, 2025, the aggregate borrowing limit was $ 100.0 million.

In June 2019, we (through a wholly owned subsidiary) entered a revolving credit facility with a (as subsequently amended) $ 40.0 million revolving borrowing limit that is available to the extent of outstanding eligible principal receivables (of which $ 17.5 million was drawn as of June 30, 2025).

The facility matures on May 15, 2026, 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, 2025, 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 the Term SOFR plus 2.85 %.

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The note is guaranteed by Atlanticus.

In January 2021, we (through a wholly owned subsidiary) entered a revolving credit facility with a (as subsequently amended) $ 75.0 million borrowing limit (of which $ 64.6 million was drawn as of June 30, 2025) 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) $ 75.0 million borrowing limit (of which $ 57.7 million was drawn as of September 30, 2025) 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 %.

1 unchanged sentence

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

In June 2021, we (through a wholly owned subsidiary) sold $ 300.0 million of ABS secured by certain credit card receivables (expiring May 15, 2026 through December 15, 2026).

In June 2021, we (through a wholly owned subsidiary) sold $ 300.0 million of Asset backed securities ("ABS") secured by certain credit card receivables (expiring May 15, 2026 through December 15, 2026).

The terms of the ABS allow for a four -year revolving structure with a subsequent 11 -month to 18 -month amortization period.

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

The ABS is currently in a scheduled amortization period.

In November 2021, we (through a wholly owned subsidiary) sold $ 300.0 million of ABS secured by certain credit card receivables (expiring May 15, 2026).

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

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

The terms of the ABS allowed for a three -year revolving structure with a subsequent 18 -month amortization period.

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

The facility was repaid in May 2025.

In May 2022, we (through a wholly owned subsidiary) entered a (as subsequently amended) $ 325.0 million ABS agreement (of which $ 325.0 million was drawn as of June 30, 2025) secured by certain credit card receivables (expiring November 15, 2028).

In May 2022, we (through a wholly owned subsidiary) entered a (as subsequently amended) $ 325.0 million ABS agreement (of which $ 325.0 million was drawn as of September 30, 2025) secured by certain credit card receivables (expiring November 15, 2028).

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

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

In August 2022, we (through a wholly owned subsidiary) entered a (as subsequently amended) $ 158.3 million ABS agreement secured by certain credit card receivables (of which $ 0 was outstanding as of June 30, 2025) that can be drawn upon to the extent of outstanding eligible receivables.

The interest rate on the notes is based on the Term SOFR plus 4.2 %.

In August 2022, we (through a wholly owned subsidiary) entered a (as subsequently amended) $ 158.3 million ABS agreement secured by certain credit card receivables (of which $ 31.7 million was outstanding as of September 30, 2025) that can be drawn upon to the extent of outstanding eligible receivables.

The interest rate on the notes is based on the Term SOFR plus a range between 1.80 % and 6.85 % based on class of notes.

The facility matures on (as subsequently amended) August 5, 2027.

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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 7.32 %.

In May 2023, 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 $ 12.5 million was drawn as of June 30, 2025).

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

The weighted average interest rate on the securities was fixed at 7.32 %.

The facility was repaid in July 2025.

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 Term SOFR plus 3.75 %.

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This facility was secured by the loans, interest and fees receivable and related restricted cash and accrued interest at an annual rate equal to the Term SOFR plus 2.15 %.

In conjunction with this financing, we (through as wholly owned subsidiary) also entered a revolving credit facility with a $ 32.8 million revolving limit.

In conjunction with this financing, we (through a wholly owned subsidiary) also entered a revolving credit facility with a $ 32.8 million revolving limit.

The facility matured on (as subsequently amended) April 28, 2025.

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The interest rate on the securities is fixed at 6.60 %.

In March 2025, we (through a wholly owned subsidiary) entered a $ 200.0 million ABS agreement secured by certain private label credit card receivables (of which $ 175.0 million was outstanding as of June 30, 2025) that can be drawn upon to the extent of outstanding eligible receivables.

In March 2025, we (through a wholly owned subsidiary) entered a $ 200.0 million ABS agreement secured by certain private label credit card receivables (of which $ 100.00 million was outstanding as of September 30, 2025) that can be drawn upon to the extent of outstanding eligible receivables.

The interest rate on the notes is based on a commercial paper rate plus 2.00 %.

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The terms of the ABS allow for a 32 -month revolving structure with an 18 -month amortization period.

The weighted average interest rate on the securities is fixed at 6.76 %.

In July 2025, we (through a wholly owned subsidiary) sold $ 125.0 million of ABS secured by certain private label credit receivables (expiring January 15, 2030).

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 6.74 %.

In August 2025, we (through a wholly owned subsidiary) sold $ 200.0 million of ABS secured by certain private label credit receivables (expiring February 15, 2029).

The terms of the ABS allow for a 25 -month revolving structure with an 18 -month amortization period.

The interest rate on the securities is fixed at 5.82 %.

As of June 30, 2025, we were in compliance with the covenants underlying our various notes payable and credit facilities.

As part of our acquisition of Mercury, we assumed outstanding notes payable which are collateralized by the associated acquired receivables.

Following are descriptions of the assumed notes payable.

Revolving credit facility to sell up to an aggregate (as subsequently amended) $ 361.9 million of notes that are secured by the receivables and other assets of the trust (of which $ 295.0 million was outstanding as of September 30, 2025) that can be drawn upon to the extent of outstanding eligible receivables.

The interest rate on the notes is based on the Term SOFR plus a range between 2.40 % to 7.80 %.

The facility matures on March 31, 2028.

Revolving credit facility to sell up to an aggregate $ 379.1 million of notes that are secured by the receivables and other assets of the trust (of which $ 159.0 million was outstanding as of September 30, 2025) that can be drawn upon to the extent of outstanding eligible receivables.

Depending on the class of notes, the interest rate on the notes is based on either a commercial paper rate plus 2.25 % or Term SOFR plus 8.15 %.

The facility matures on July 1, 2029.

ABS of $ 750.0 million secured by certain credit card receivables (expiring February 20, 2029).

Depending upon the class of notes, the interest rate on notes is based on either SOFR plus 2.75 % or has a weighted average interest rate fixed at 11.50 %.

The terms of the ABS allow for a 24 -month revolving structure with a 36 -month amortization period.

ABS of $ 700.0 million secured by certain credit card receivables (expiring July 20, 2029).

The terms of the ABS allow for a 24 -month revolving structure with an 36 -month amortization period.

The weighted average interest rate on the securities is fixed at 7.46 %.

Revolving credit facility to sell up to an aggregate $ 374.0 million of notes that are secured by the receivables and other assets of the trust (of which $ 159.0 million was outstanding as of September 30, 2025) that can be drawn upon to the extent of outstanding eligible receivables.

Depending on the class of notes, the interest rate on the notes is based on either a commercial paper rate plus 2.15 % or Term SOFR plus 8.50 %.

The facility matures on April 20, 2029.

ABS of $ 250.0 million secured by certain credit card receivables (expiring November 20, 2026).

The terms of the ABS allow for a 12 -month revolving structure with an 12 -month amortization period.

The interest rate on the notes is based on the Term SOFR plus a range between 2.00 % to 7.50 %.

ABS of $ 500.0 million secured by certain credit card receivables (expiring June 21, 2027).

The terms of the ABS allow for a 15 -month revolving structure with an 12 -month amortization period.

The interest rate on the notes is based on the Term SOFR plus a range between 2.00 % to 7.50 %.

As of September 30, 2025, 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 2026 Senior Notes into interest expense over the expected life of such notes.

Amortization of these fees for the three and six months ended June 30, 2025 and 2024 totaled $ 0.3 million, $ 0.7 million, $ 0.3 million and $ 0.7 million, respectively.

We repurchased $ 0.0 and $ 0.4 million of the outstanding principal amount of these 2026 Senior Notes in the three and six months ended June 30, 2024, respectively.

Amortization of these fees for the three and nine months ended September 30, 2025 and 2024 totaled $ 0.4 million, $ 1.1 million, $ 0.4 million and $ 1.1 million, respectively.

We repurchased $ 0.0 and $ 0.4 million of the outstanding principal amount of these 2026 Senior Notes in the three and nine months ended September 30, 2024, respectively.

There have been no repurchases in 2025.

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We are amortizing fees associated with the issuance of the 2029 Senior Notes into interest expense over the expected life of such notes.

Amortization of these fees for the three and six months ended June 30, 2025 and 2024 totaled $ 0.3 million, $ 0.7 million, $ 0.1 million and $ 0.2 million, respectively.

The 2026 Senior Notes and 2029 Senior Notes are collectively included on our condensed consolidated balance sheet as "Senior Notes, net." See Note 4 "Shareholders' Equity and Preferred Stock" for more information.

Amortization of these fees for the three and nine months ended September 30, 2025 and 2024 totaled $ 0.4 million, $ 1.1 million, $ 0.3 million and $ 0.5 million, respectively.

In August 2025, we issued $ 400.0 million principal amount of 9.750 % Senior Notes due 2030 (the "2030 Senior Notes").

The 2030 Senior Notes bear interest at the rate of 9.75 % per annum.

Interest on the 2030 Senior Notes is payable semi-annually in arrears on March 1 and September 1 of each year.

The 2030 Senior Notes will mature on September 1, 2030.

We are amortizing fees associated with the issuance of the 2030 Senior Notes into interest expense over the expected life of such notes.

Amortization of these fees for the three and nine months ended September 30, 2025 totaled $ 0.1 million and $ 0.1 million, respectively.

The 2026 Senior Notes, 2029 Senior Notes and 2030 Senior Notes are collectively included on our condensed consolidated balance sheet as "Senior Notes, net." See Note 5 "Shareholders' Equity and Preferred Stock" for more information.

Commitments and Contingencies

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 $ 3.1 billion at June 30, 2025.

Unfunded commitments under these products aggregated $ 6.7 billion at September 30, 2025.

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, 2025, CAR had unfunded outstanding floor-plan financing commitments totaling $ 8.9 million.

As of September 30, 2025, CAR had unfunded outstanding floor-plan financing commitments totaling $ 10.5 million.

Each draw against unused commitments is reviewed for conformity to pre-established guidelines and is not unconditional.

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 $ 32.4 million remains pledged as of June 30, 2025 to support various ongoing contractual obligations.

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 $ 30.4 million remains pledged as of September 30, 2025 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, 2025, we have assessed the likelihood of any potential payments related to the aforementioned contingencies as remote.

As of September 30, 2025, 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 when 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 $ 120.2 million as of June 30, 2025.

As an acquirer of receivables, our potential exposure under this program, if all eligible participants applied for this benefit, was $ 174.3 million as of September 30, 2025.

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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Concentrations

We acquire all of our fair value receivables under agreements with two third -party originating institutions.

Our top five retail partnerships accounted for over 80 % of our private label receivables outstanding as of June 30, 2025.

We acquire all of our fair value receivables under agreements with three third -party originating institutions.

Our top five retail partnerships accounted for over 85 % of our private label receivables outstanding as of September 30, 2025.

The volume of receivables purchased each period varies based on a number of factors, including seasonal consumer purchase patterns, growth (or contraction) within retail locations and consumer application volumes that retail partners may direct to our bank partners versus competitors that offer similar financing products.

During the three and six months ended June 30, 2025 and 2024, we had receivable purchases from our top five retail partners of the following (in millions):

During the three and nine months ended September 30, 2025 and 2024, we had receivable purchases from our top five retail partners of the following (in millions):

Gross Purchases

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,

Largest Retail Partners

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Our general purpose credit card and private label credit receivables base is spread across individual consumers in the U.S.

As of June 30, 2025 , only one state (Texas) had receivables concentration in excess of 10% of our total pool of receivables.

As of September 30, 2025 , only one state (Texas) had receivables concentration in excess of 10% of our total pool of receivables.

We are involved in various legal proceedings that are incidental to the conduct of our business.

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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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$ 1.21 $ 1.27 $ 4.21 $ 3.35

Shares related to unvested share-based payment awards included in our basic and diluted share counts were 371,800 and 362,087 for the three and six months ended June 30, 2025, respectively, compared to 390,096 and 341,837 for the three and six months ended June 30, 2024, respectively.

As their effects were anti-dilutive, we excluded stock options to purchase 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, 2024.

There were no such anti-dilutive stock options for the three and six months ended June 30, 2025.

For the three and six months ended June 30, 2025 and 2024, 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.

Shares related to unvested share-based payment awards included in our basic and diluted share counts were 363,134 and 362,440 for the three and nine months ended September 30, 2025, respectively, compared to 384,193 and 356,059 for the three and nine months ended September 30, 2024, respectively.

There were no such anti-dilutive stock options for the three and nine months ended September 30, 2025.

For the three and nine months ended September 30, 2025 and 2024, 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 6, "Redeemable Preferred Stock," for a further discussion of these convertible securities.

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

As of June 30, 2025, 40,197 shares remained available for issuance under the ESPP and 1,906,039 shares remained available for issuance under the Fourth Amended 2014 Plan.

Exercises and vesting under our stock-based compensation plans resulted in no income tax-related charges to paid-in capital during the three and six months ended June 30, 2025 and 2024.

As of September 30, 2025, 39,215 shares remained available for issuance under the ESPP and 1,915,098 shares remained available for issuance under the Fourth Amended 2014 Plan.

Exercises and vesting under our stock-based compensation plans resulted in no income tax-related charges to paid-in capital during the three and nine months ended September 30, 2025 and 2024.

Restricted Stock and Restricted Stock Units

During the three and six months ended June 30, 2025 and 2024, we granted 65,411 shares, 74,414 shares, 3,007 shares and 209,636 shares of restricted stock and restricted stock units (net of any forfeitures), respectively, with aggregate grant date fair values of $ 3.4 million, $ 3.8 million, $ 0.1 million and $ 6.5 million, respectively.

We incurred expenses of $ 0.9 million, $ 1.8 million, $ 1.0 million and $ 1.9 million during the three and six months ended June 30, 2025 and 2024, respectively, related to restricted stock awards.

During the three months ended September 30, 2025 and 2024, we had forfeitures (net of grants) of 8,632 shares and 583 shares of restricted stock and restricted stock units, respectively, with aggregate grant date fair values $ 0.3 million and $ 0 , respectively.

For the nine months ended September 30, 2025 and 2024, we had grants (net of forfeitures) of 65,782 shares and 209,053 shares of restricted stock and restricted stock units, respectively, with aggregate grant date fair values of $ 3.6 million and $ 6.5 million, respectively.

We incurred expenses of $ 0.9 million, $ 2.7 million, $ 1.0 million and $ 2.8 million during the three and nine months ended September 30, 2025 and 2024, respectively, related to restricted stock awards.

When we grant restricted stock and restricted stock units, we defer the grant date value of the restricted stock and restricted stock unit and amortize that value (net of the value of anticipated forfeitures) as compensation expense with an offsetting entry to the paid-in capital component of our condensed consolidated shareholders’ equity.

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, 2025, our unamortized deferred compensation costs associated with non-vested restricted stock awards were $ 8.5 million with a weighted-average remaining amortization period of 3.2 years.

As of September 30, 2025, our unamortized deferred compensation costs associated with non-vested restricted stock awards were $ 7.3 million with a weighted-average remaining amortization period of 3.1 years.

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

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( 13,911 ) $ 33.11

Outstanding at June 30, 2025

Outstanding at September 30, 2025

361,185 $ 35.60

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The option period may not exceed 10 years from the date of grant.

We had expense of $ 0.1 million and $ 0.1 million related to stock option-related compensation costs during the three and six months ended June 30, 2024, respectively.

We had expense of $ 0.0 million and $ 0.1 million related to stock option-related compensation costs during the three and nine months ended September 30, 2024, respectively.

There has been no expense related to stock option-related compensation costs in 2025.

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Expired/Forfeited

Outstanding at June 30, 2025

Outstanding at September 30, 2025

145,291 $ 32.96 0.5 $ 3,722,508

Exercisable at June 30, 2025

Exercisable at September 30, 2025

145,291 $ 32.96 0.5 $ 3,722,508

No options were issued during the three and six months ended June 30, 2025 and 2024.

We had no unamortized deferred compensation costs associated with non-vested stock options at both June 30, 2025 and December 31, 2024.

No options were issued during the three and nine months ended September 30, 2025 and 2024.

We had no unamortized deferred compensation costs associated with non-vested stock options at both September 30, 2025 and December 31, 2024.

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

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