Atlanticus Holdings Corporation

Atlanticus Holdings Corporation announced September 17 that it had completed the sale of CAR, its entire Auto Finance segment, to an unaffiliated buyer for approximately $71.2 million. The consideration consists of $56.2 million in cash, about 78.9% of the total, and a $15 million seller note making up the remaining 21.1%. Atlanticus plans to use the cash to reduce debt and invest in higher-growth product lines, including retail and healthcare private-label credit and general-purpose credit cards. Approximately 154 employees associated with CAR are transitioning to the buyer. The company reported second-quarter interest expense of $123.4 million, compared with $53.7 million a year earlier, and the sale announcement did not quantify an earnings-accretion estimate or disclose the seller note's interest rate, maturity or security.

Atlanticus Holdings Corporation reported record second-quarter results, with total operating revenue and other income rising 89% year over year to $744.3 million, driven by the Mercury acquisition and expansion of legacy portfolios. Net income attributable to common shareholders increased 67% to $47.4 million, or $2.50 per diluted share, while return on average equity reached 28.1%, exceeding the company's long-term target of 20%. Total managed receivables grew 126% year over year to $6.9 billion, and the company added a record 790,000 new customers during the quarter. Management noted that the Mercury integration is ahead of plan, with full technology and operational integration expected by mid-Q1 2027, and the company achieved its first AAA asset-backed securities bond ratings.

The nine personal loan stocks tracked by this publication reported a strong first quarter, with aggregate revenues surpassing analysts' consensus estimates by 7% and next-quarter revenue guidance coming in 0.7% above expectations. OneMain Holdings reported revenues of $1.26 billion, up 6.6% year on year and in line with estimates, but delivered the slowest revenue growth of the group. Sezzle was the best performer, with revenues of $135.5 million beating estimates by 5.3% and full-year EPS guidance exceeding expectations, while Affirm was the weakest despite revenues of $1.04 billion exceeding estimates by 4.3%, as it significantly missed EPS estimates. Atlanticus Holdings achieved the fastest revenue growth at 87.2% to $556.8 million but had the weakest performance against analyst estimates, and FirstCash reported revenues of $1.05 billion, up 25.7% and beating estimates across EBITDA and EPS. Since their latest earnings results, personal loan stocks have seen share prices rise 24% on average.