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Atlanticus Reports Third Quarter 2023 Financial Results
Источник: Nasdaq GlobeNewswire / 08 ноя 2023 17:10:22 America/New_York
Third Quarter 2023 Receivables growth of 18.1% over prior year, with over
3.4 million accounts served (1), allowing for continued strong resultsATLANTA, Nov. 08, 2023 (GLOBE NEWSWIRE) -- Atlanticus Holdings Corporation (NASDAQ: ATLC) (Atlanticus, the Company, we, our or us), a financial technology company which enables its bank, retail and healthcare partners to offer more inclusive financial services to millions of everyday Americans, today announced its financial results for the third quarter ended September 30, 2023. An accompanying earnings presentation is available in the Investors section of the Company’s website at www.atlanticus.com or by clicking [here].
Financial and Operating Highlights
Third Quarter 2023 Highlights (all comparisons to the Third Quarter 2022)
- Managed receivables2 increased 12.9% to $2.3 billion
- Total operating revenue increased 6.1% to $294.9 million.
- Return on average shareholders’ equity of 20.4%3
- Purchase volume of $706.5 million.
- Over 380,000 new accounts served during the quarter, over 3.4 million total accounts serviced1
- Net income attributable to common shareholders of $18.9 million, or $1.03 per diluted common share
1 )In our calculation of total accounts serviced, we include all accounts with account activity and accounts that have open lines of credit at the end of the referenced period.
2) Managed receivables is a non-GAAP financial measure and excludes the results of our Auto Finance receivables. See Non-GAAP Financial Measures for important additional information
3 )Return on average shareholders’ equity is calculated using Net Income attributable to common shareholders as the numerator and the average of Total shareholders’ equity as of September 30, 2023 and June 30, 2023 as the denominator, annualized.
Management CommentaryJeff Howard, President and Chief Executive Officer at Atlanticus stated, “Our third quarter results once again deliver strong profitability, attractive return on capital, and reasonable growth as we navigate an evolving macro-economic landscape. We have maintained our conservative approach to underwriting that began in mid-2022 and we continue to monitor the consumers we serve as they adjust to a higher cost of living and benefit from higher wage growth. Despite this conservative approach, we are seeing growth across each of our product offerings. While some of our retail credit partners have experienced volume reductions, our year-over-year retail credit purchase activity grew by double digits in the quarter. This growth is attributable to our diverse array of industry segments served and continued product enhancements that allow us to bring greater value to our partners by serving more of their customers. Our general purpose managed receivables also grew year-over-year, despite our tightened underwriting and the run-off of higher delinquency receivables purchased prior to the rapid increase in inflation. Our more conservative underwriting has also led to a meaningful reduction in portfolio delinquency compared to the same period last year.
“While our current rate of growth is predicated on our confidence in achieving attractive returns on our shareholders’ capital in this environment, we remain excited about long term growth potential that exists across our various product lines. Throughout our history, we have seen the greatest opportunities coming out of periods of economic uncertainty. As prime originators tighten, our second-look offering provides even greater value to our retail partners. As capital becomes more restrictive, many newer entrants to the general purpose card space have reduced their offerings. Across our retail credit, general purpose credit card, healthcare payments and auto lines of business, we make up a small percentage of the total addressable market. With these industry dynamics, our ample liquidity, and well-structured balance sheet, we are positioned for long term sustained growth.”
Financial Results For the
Three Months Ended September 30,($ in thousands, except per
share data)2023 2022 % Change Total operating revenue $ 294,913 $ 277,874 6.1 % Other non-operating revenue (6 ) 80 nm Total revenue 294,907 277,954 6.1 % Interest expense (28,274 ) (21,514 ) 31.4 % Provision for losses on
loans, interest and fees
receivable recorded at
amortized cost(538 ) (381 ) nm Changes in fair value of
loans, interest and fees
receivable recorded at fair
value(177,854 ) (163,624 ) 8.7 % Net margin $ 88,241 $ 92,435 -4.5 % Total operating expenses $ 56,483 $ 53,119 6.3 % Net income $ 24,973 $ 32,370 -22.9 % Net income attributable to
controlling interests$ 25,240 $ 32,571 -22.5 % Preferred dividends and
discount accretion$ (6,341 ) $ (6,296 ) nm Net income attributable to
common shareholders$ 18,899 $ 26,275 -28.1 % Net income attributable to
common shareholders per
common share—basic$ 1.30 $ 1.81 -28.2 % Net income attributable to
common shareholders per
common share—diluted$ 1.03 $ 1.41 -27.0 % *nm = not meaningful
Managed Receivables
Managed receivables increased 12.9% to $2.3 billion with over $265.1 million in net receivables growth from September 30, 2022, largely driven by growth in the private label credit and general purpose credit card products offered by our bank partners. Total accounts served increased 4.6% to 3.4 million. While some of our merchant partners continue to face year-over-year growth challenges, others are still benefiting from continued consumer spending and a growing economy. Our general purpose credit card portfolio continues to grow in terms of total customers served and therefore we continue to experience growth in total managed receivables. We expect the pace of growth, near-term, to slow however, when compared to earlier periods due to tightened underwriting standards adopted during the second quarter 2022 (and continued in subsequent quarters).
Total Operating Revenue
Total operating revenue consists of: 1) interest income, finance charges and late fees on consumer loans, 2) other fees on credit products including annual and merchant fees and 3) ancillary, interchange and servicing income on loan portfolios.
During the quarter ended September 30, 2023, total operating revenue increased 6.1% to $294.9 million when compared to the quarter ended September 30, 2022. Fee billings on our fair value receivables increased from $229.7 million for the quarter ended September 30, 2022 to $248.0 million for the quarter ended September 30, 2023.
We continue to experience period-over-period growth in all segments of our business including private label credit and general purpose credit card receivables and to a lesser extent in our Auto Finance receivables. We expect net period-over-period growth in our total interest income and related fees for these operations for the fourth quarter of 2023, albeit at a decreased growth rate to that experienced in 2022. Growth in future periods is dependent on the addition of new retail partners and the expansion of existing relationships to expand the reach of private label credit operations and the level of marketing investment for the general purpose credit card operations.
Interest Expense
Interest expense was $28.3 million for the quarter ended September 30, 2023, compared to $21.5 million for the quarter ended September 30, 2022. The elevated expenses were primarily driven by the planned increases in outstanding debt in proportion to growth in our receivables coupled with increases in the cost of capital.
Outstanding notes payable, net of unamortized debt issuance costs and discounts, associated with our private label credit and general purpose credit card platform increased from $1,473.1 million as of September 30, 2022 to $1,719.7 million as of September 30, 2023. Recent increases in the federal funds rate have started to increase our interest expense as we have raised additional capital (or replaced existing facilities) over the last two years. We anticipate additional debt financing over the next few quarters as we continue to grow, coupled with increased effective interest rates resulting from federal funds rate increases. As such, we expect our quarterly interest expense for these operations to increase compared to prior periods. However, we do not expect our interest expense to increase significantly in the short term (absent raising additional capital) because over 85% of interest rates on our outstanding debt are fixed.
Changes in Fair Value of Loans, Interest and Fees Receivable Recorded at Fair Value
Changes in fair value of loans, interest and fees receivable recorded at fair value increased to $177.9 million for the quarter ended September 30, 2023, compared to $163.6 million for the quarter ended September 30, 2022. This increase was largely driven by growth in underlying receivables.
We include asset performance degradation in our forecasts to reflect the possibility of delinquency rates increasing in the near term (and the corresponding increase in charge-offs and decrease in payments) above the level that historical and current trends would suggest. As receivables associated with both 1) assets acquired prior to our tightened underwriting standards (mentioned above) and 2) those assets negatively impacted by inflation, gradually become a smaller percentage of the portfolio, we expect to see overall improvements in the measured fair value of our portfolios of acquired receivables.
Total Operating Expenses
Total operating expenses increased 6.3% in the quarter when compared to the same period in 2022.
For the quarter, operating expenses increased, driven by increases in variable servicing costs associated with growth in our receivables as well as growth in both the number of employees and inflationary compensation pressure. Marketing costs, corresponding to growth in our serviced accounts also contributed to increases for the quarter.
We expect continued increases in many of these costs for the remainder of 2023 as we continue to grow the number of consumers served and hire additional talent to meet our anticipated levels of marketing, origination, and receivables.
Net Income Attributable to Common Shareholders
Net income attributable to common shareholders decreased 28.1% to $18.9 million, or $1.03 per diluted share for the quarter ended September 30, 2023.
Share Repurchases
We repurchased and retired 285,906 shares of our common stock at an aggregate cost of $9.4 million, in the quarter ended September 30, 2023.
We will continue to evaluate the best use of our capital to increase shareholder value over time.
About Atlanticus Holdings Corporation
Empowering Better Financial Outcomes for Everyday Americans
Atlanticus™ technology enables bank, retail, and healthcare partners to offer more inclusive financial services to everyday Americans through the use of proprietary analytics. We apply the experience gained and infrastructure built from servicing over 20 million customers and over $38 billion in consumer loans over more than 25 years of operating history to support lenders that originate a range of consumer loan products. These products include retail and healthcare private label credit and general purpose credit cards marketed through our omnichannel platform, including retail point-of-sale, healthcare point-of-care, direct mail solicitation, internet-based marketing, and partnerships with third parties. Additionally, through our Auto Finance subsidiary, Atlanticus serves the individual needs of automotive dealers and automotive non-prime financial organizations with multiple financing and service programs.
Forward-Looking Statements
This press release contains forward-looking statements that reflect the Company's current views with respect to, among other things, its business, long-term growth plans, operations, financial performance, revenue, amount and pace of growth of managed receivables, total interest income and related fees and charges, debt financing, liquidity, interest expense, operating expense, fair value of receivables, provision for losses on loans, delinquencies on receivables and economic developments. You generally can identify these statements by the use of words such as outlook, potential, continue, may, seek, approximately, predict, believe, expect, plan, intend, estimate or anticipate and similar expressions or the negative versions of these words or comparable words, as well as future or conditional verbs such as will, should, would, likely and could. These statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those included in the forward-looking statements. These risks and uncertainties include those risks described in the Company's filings with the Securities and Exchange Commission and include, but are not limited to, risks related to COVID-19 and its impact on the Company, bank partners, merchant partners, consumers, loan demand, the capital markets, labor availability, supply chains and the economy in general; the Company's ability to retain existing, and attract new, merchant partners and funding sources; changes in market interest rates; increases in loan delinquencies; its ability to operate successfully in a highly regulated industry; the outcome of litigation and regulatory matters; the effect of management changes; cyberattacks and security vulnerabilities in its products and services; and the Company's ability to compete successfully in highly competitive markets. The forward-looking statements speak only as of the date on which they are made, and, except to the extent required by federal securities laws, the Company disclaims any obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. In light of these risks and uncertainties, there is no assurance that the events or results suggested by the forward-looking statements will in fact occur, and you should not place undue reliance on these forward-looking statements.
Contact:
Investor Relations
(770) 828-2000
investors@atlanticus.comAtlanticus Holdings Corporation and Subsidiaries
Consolidated Balance Sheets (Unaudited)
(Dollars in thousands)September 30, December 31, 2023 2022 Assets Unrestricted cash and cash equivalents (including $162.7 million and $202.2
million associated with variable interest entities at September 30, 2023 and
December 31, 2022, respectively)$ 355,707 $ 384,984 Restricted cash and cash equivalents (including $25.6 million and $27.6 million
associated with variable interest entities at September 30, 2023 and December
31, 2022, respectively)44,315 48,208 Loans, interest and fees receivable: Loans, interest and fees receivable, at fair value (including $2,031.3 million and
$1,735.9 million associated with variable interest entities at September 30, 2023
and December 31, 2022, respectively)2,049,993 1,817,976 Loans, interest and fees receivable, gross 118,007 105,267 Allowances for uncollectible loans, interest and fees receivable (1,831 ) (1,643 ) Deferred revenue (18,288 ) (16,190 ) Net loans, interest and fees receivable 2,147,881 1,905,410 Property at cost, net of depreciation 12,014 10,013 Operating lease right-of-use assets 11,344 11,782 Prepaid expenses and other assets 25,640 27,417 Total assets $ 2,596,901 $ 2,387,814 Liabilities Accounts payable and accrued expenses $ 48,170 $ 44,332 Operating lease liabilities 20,363 20,112 Notes payable, net (including $1,719.7 million and $1,586.0 million associated
with variable interest entities at September 30, 2023 and December 31, 2022,
respectively)1,788,098 1,653,306 Senior notes, net 144,352 144,385 Income tax liability 81,176 60,689 Total liabilities 2,082,159 1,922,824 Commitments and contingencies Preferred stock, no par value, 10,000,000 shares authorized: Series A preferred stock, 400,000 shares issued and outstanding at September
30, 2023 (liquidation preference - $40.0 million); 400,000 shares issued and
outstanding at December 31, 2022 (1)40,000 40,000 Class B preferred units issued to noncontrolling interests 100,175 99,950 Shareholders' Equity Series B preferred stock, no par value, 3,256,561 shares issued and outstanding at
September 30, 2023 (liquidation preference - $81.4 million); 3,204,640 shares
issued and outstanding at December 31, 2022 (1)— — Common stock, no par value, 150,000,000 shares authorized: 14,651,321 and
14,453,415 shares issued and outstanding at September 30, 2023 and December
31, 2022, respectively— — Paid-in capital 95,838 121,996 Retained earnings 280,956 204,415 Total shareholders’ equity 376,794 326,411 Noncontrolling interests (2,227 ) (1,371 ) Total equity 374,567 325,040 Total liabilities, preferred stock and equity $ 2,596,901 $ 2,387,814 (1) Both the Series A preferred stock and the Series B preferred stock have no par value and are part of the same aggregate 10,000,000 shares authorized
Atlanticus Holdings Corporation and Subsidiaries
Consolidated Statements of Income (Unaudited)
(Dollars in thousands, except per share data)For the Three Months Ended For the Nine Months Ended September 30, September 30, 2023 2022 2023 2022 Revenue: Consumer loans, including past due fees $ 224,682 $ 218,016 $ 654,425 $ 574,369 Fees and related income on earning assets 59,853 48,518 167,084 169,055 Other revenue 10,378 11,340 25,137 34,016 Total operating revenue, net 294,913 277,874 846,646 777,440 Other non-operating revenue (6 ) 80 140 380 Total revenue 294,907 277,954 846,786 777,820 Interest expense (28,274 ) (21,514 ) (76,723 ) (57,849 ) Provision for losses on loans, interest and fees receivable recorded at amortized cost (538 ) (381 ) (1,551 ) (710 ) Changes in fair value of loans, interest and fees receivable recorded at fair value (177,854 ) (163,624 ) (505,505 ) (414,863 ) Net margin 88,241 92,435 263,007 304,398 Operating expenses: Salaries and benefits 11,360 10,363 32,593 31,888 Card and loan servicing 25,864 24,775 74,013 71,447 Marketing and solicitation 12,599 11,053 37,491 51,857 Depreciation 647 488 1,908 1,630 Other 6,013 6,440 19,149 28,086 Total operating expenses 56,483 53,119 165,154 184,908 Income before income taxes 31,758 39,316 97,853 119,490 Income tax expense (6,785 ) (6,946 ) (22,172 ) (8,568 ) Net income 24,973 32,370 75,681 110,922 Net loss attributable to noncontrolling interests 267 201 860 684 Net income attributable to controlling interests 25,240 32,571 76,541 111,606 Preferred dividends and discount accretion (6,341 ) (6,296 ) (18,857 ) (18,759 ) Net income attributable to common shareholders $ 18,899 $ 26,275 $ 57,684 $ 92,847 Net income attributable to common shareholders per common share—basic $ 1.30 $ 1.81 $ 3.99 $ 6.32 Net income attributable to common shareholders per common share—diluted $ 1.03 $ 1.41 $ 3.14 $ 4.85 Atlanticus Holdings Corporation and Subsidiaries
Consolidated Statements of Shareholders’ Equity and Temporary Equity (Unaudited)
For the Three and Nine Months Ended September 30, 2023
(Dollars in thousands)Series B Preferred Stock Common Stock Temporary Equity Shares Issued Amount Shares Issued Amount Paid-In Capital Retained Earnings Noncontrolling Interests Total Equity Class B Preferred Units Series A Preferred Stock Balance at December 31, 2022 3,204,640 $ — 14,453,415 $ — $ 121,996 $ 204,415 $ (1,371 ) $ 325,040 $ 99,950 $ 40,000 Accretion of discount associated with issuance of subsidiary equity — — — — (75 ) — — (75 ) 75 — Discount associated with repurchase of preferred stock — — — — 16 — — 16 — — Preferred dividends — — — — (6,168 ) — — (6,168 ) — — Stock option exercises and proceeds related thereto — — 1,258 — 19 — — 19 — — Compensatory stock issuances, net of forfeitures — — 146,227 — — — — — — — Issuance of series B preferred stock, net 51,327 — — — 1,069 — — 1,069 — — Contributions by owners of noncontrolling interests — — — — — — 4 4 — — Stock-based compensation costs — — — — 931 — — 931 — — Redemption and retirement of preferred shares (1,806 ) — — — (45 ) — — (45 ) — — Redemption and retirement of common shares — — (72,354 ) — (1,947 ) — — (1,947 ) — — Net income (loss) — — — — — 26,212 (318 ) 25,894 — — Balance at March 31, 2023 3,254,161 $ — 14,528,546 $ — $ 115,796 $ 230,627 $ (1,685 ) $ 344,738 $ 100,025 $ 40,000 Accretion of discount associated with issuance of subsidiary equity — — — — (75 ) — — (75 ) 75 — Preferred dividends — — — — (6,214 ) — — (6,214 ) — — Stock option exercises and proceeds related thereto — — 5,160 — 40 — — 40 — — Compensatory stock issuances, net of forfeitures — — (220 ) — — — — — — — Issuance of series B preferred stock, net 2,100 — — — 43 — — 43 — — Stock-based compensation costs — — — — 1,031 — — 1,031 — — Redemption and retirement of common shares — — (105,447 ) — (2,988 ) — — (2,988 ) — — Net income (loss) — — — — — 25,089 (275 ) 24,814 — — Balance at June 30, 2023 3,256,261 $ — 14,428,039 $ — $ 107,633 $ 255,716 $ (1,960 ) $ 361,389 $ 100,100 $ 40,000 Accretion of discount associated with issuance of subsidiary equity — — — — (75 ) — — (75 ) 75 — Preferred dividends — — — — (6,266 ) — — (6,266 ) — — Stock option exercises and proceeds related thereto — — 510,028 — 3,031 — — 3,031 — — Compensatory stock issuances, net of forfeitures — — (840 ) — — — — — — — Issuance of series B preferred stock, net 300 — — — 6 — — 6 — — Stock-based compensation costs — — — — 908 — — 908 — — Redemption and retirement of common shares — — (285,906 ) — (9,399 ) — — (9,399 ) — — Net income (loss) — — — — — 25,240 (267 ) 24,973 — — Balance at September 30, 2023 3,256,561 $ — 14,651,321 $ — $ 95,838 $ 280,956 $ (2,227 ) $ 374,567 $ 100,175 $ 40,000 Additional Information
Additional trends and data with respect to our private label credit and general purpose credit card receivables can be found in our latest Form 10-Q filing with the Securities and Exchange Commission under Management's Discussion and Analysis of Financial Condition and Results of Operations.
Calculation of Non-GAAP Financial Measures
This press release presents information about managed receivables, which is a non-GAAP financial measure provided as a supplement to the results provided in accordance with accounting principles generally accepted in the United States of America (GAAP). In addition to financial measures presented in accordance with GAAP, we present managed receivables, total managed yield, combined principal net charge-offs, and fair value to face value ratio, all of which are non-GAAP financial measures. These non-GAAP financial measures aid in the evaluation of the performance of our credit portfolios, including our risk management, servicing and collection activities and our valuation of purchased receivables. The credit performance of our managed receivables provides information concerning the quality of loan originations and the related credit risks inherent with the portfolios. Management relies heavily upon financial data and results prepared on the managed basis in order to manage our business, make planning decisions, evaluate our performance and allocate resources.
These non-GAAP financial measures are presented for supplemental informational purposes only. These non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation from, or as a substitute for, GAAP financial measures. These non-GAAP financial measures may differ from the non-GAAP financial measures used by other companies. A reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measures or the calculation of the non-GAAP financial measures are provided below for each of the fiscal periods indicated.
These non-GAAP financial measures include only the performance of those receivables underlying consolidated subsidiaries (for receivables carried at amortized cost basis and fair value) and exclude the performance of receivables held by our former equity method investee. As the receivables underlying our former equity method investee reflect a small and diminishing portion of our overall receivables base, we do not believe their inclusion or exclusion in the overall results is material. Additionally, we calculate average managed receivables based on the quarter-end balances.
The comparison of non-GAAP managed receivables to our GAAP financial statements requires an understanding that managed receivables reflect the face value of loans, interest and fees receivable without any consideration for potential loan losses or other adjustments to reflect fair value.
A reconciliation of Loans, interest and fees receivable, at fair value to Loans, interest and fees
receivable, at face value is as follows:At or for the Three Months Ended 2023 2022 2021 (in Millions) Sep. 30 (1) Jun. 30 (1) Mar. 31 (1) Dec. 31 (1) Sep. 30 (1) Jun. 30 (1) Mar. 31 (1) Dec. 31 (1) Loans, interest and fees
receivable, at fair value$ 2,050.0 $ 1,916.1 $ 1,795.6 $ 1,818.0 $ 1,728.1 $ 1,616.9 $ 1,405.8 $ 1,026.4 Fair value mark against
receivable (2)$ 265.2 $ 257.9 $ 260.1 $ 302.1 $ 322.3 $ 293.0 $ 272.9 $ 208.9 Loans, interest and fees
receivable, at face value$ 2,315.2 $ 2,174.0 $ 2,055.7 $ 2,120.1 $ 2,050.4 $ 1,909.9 $ 1,678.7 $ 1,235.3 Fair value to face value ratio
(3)88.5 % 88.1 % 87.3 % 85.8 % 84.3 % 84.7 % 83.7 % 83.1 % (1 ) We elected the fair value option to account for certain loans receivable associated with our private label credit and general purpose credit card platform that were acquired on or after January 1, 2020, and, as discussed in more detail in the Form 10-Q for the quarter ended September 30, 2023, on January 1, 2022, we elected the fair value option under ASU 2016-13 for those private label credit and general purpose credit card receivables that were previously accounted for under the amortized cost method. (2 ) The fair value mark against receivables reflects the difference between the face value of a receivable and the net present value of the expected cash flows associated with that receivable. (3 ) The Fair value to face value ratio is calculated using Loans, interest and fees receivable, at fair value as the numerator, and Loans, interest and fees receivable, at face value, as the denominator.
The calculation of managed receivables is as follows:At or for the Three Months Ended 2023 2022 2021 (in Millions) Sep. 30
(1)Jun. 30
(1)Mar. 31
(1)Dec. 31
(1)Sep. 30
(1)Jun. 30
(1)Mar. 31
(1)Dec. 31 Loans, interest
and fees receivable,
gross$ — $ — $ — $ — $ — $ — $ — $ 375.7 Loans, interest
and fees
receivable,
gross from fair
value
reconciliation
above2,315.2 2,174.0 2,055.7 2,120.1 2,050.4 1,909.9 1,678.7 1,235.3 Total
managed
receivables$ 2,315.2 $ 2,174.0 $ 2,055.7 $ 2,120.1 $ 2,050.4 $ 1,909.9 $ 1,678.7 $ 1,611.0 (1 ) On January 1, 2022, we elected the fair value option under ASU 2016-13 for those private label credit and general purpose credit card receivables that were previously accounted for under the amortized cost method. A reconciliation of our operating revenues, net of finance and fee charge-offs, to comparable amounts used in our calculation of Total managed yield is as follows:
At or for the Three Months Ended 2023 2022 2021 (in Millions) Sep. 30 Jun. 30 Mar. 31 Dec. 31 Sep. 30 Jun. 30 Mar. 31 Dec. 31 Consumer loans, including
past due fees$ 214.6 $ 210.3 $ 200.5 $ 202.9 $ 208.9 $ 182.8 $ 156.5 $ 144.1 Fees and related income on
earning assets59.8 62.9 44.3 48.0 48.5 65.8 54.7 53.8 Other revenue 10.2 7.6 6.7 8.5 11.1 12.2 10.0 9.7 Adjustments due to
acceleration of merchant
fee discount amortization
under fair value accounting(6.8) (10.6) (0.5) 3.4 (7.9) (12.1) 1.8 (3.4) Adjustments due to
acceleration of annual fees
recognition under fair value
accounting(3.1) (9.8) 7.3 7.9 10.0 (6.6) (1.3) (4.4) Removal of finance charge-
offs(47.1) (54.2) (61.7) (58.3) (45.3) (41.2) (32.5) (28.1) Total managed yield $ 227.6 $ 206.2 $ 196.6 $ 212.4 $ 225.3 $ 200.9 $ 189.2 $ 171.7 The calculation of Combined principal net charge-offs is as follows:
At or for the Three Months Ended 2023 2022 2021 (in Millions) Sep. 30
(1)Jun. 30
(1)Mar. 31
(1)Dec. 31
(1)Sep. 30
(1)Jun. 30
(1)Mar. 31
(1)Dec. 31 Net losses on impairment of loans,
interest and fees receivable recorded
at fair value$ 173.5 $ 180.0 $ 191.9 $ 182.3 $ 134.4 $ 126.5 $ 101.3 $ 46.7 Gross charge-offs on non-fair value
accounts— — — — — — — 38.7 Finance charge-offs (2) (47.1) (54.2) (61.7) (58.3) (45.3) (41.2) (32.5) (28.1) Recoveries on non-fair value
accounts— — — — — — — (4.1) Combined principal net charge-offs $ 126.4 $ 125.8 $ 130.2 $ 124.0 $ 89.1 $ 85.3 $ 68.8 $ 53.2 (1 ) On January 1, 2022, we implemented the fair value method under ASU 2016-13 for those private label credit and general purpose credit card receivables that were previously accounted for under the amortized cost method. (2 ) Finance charge-offs are included as a component of our Provision for losses on loans, interest and fees receivable recorded at amortized cost and Changes in fair value of loans, interest and fees receivable recorded at fair value in the consolidated statements of income.