Loans Held for Investment and Allowance for Loan Losses

3 Months Ended

Mar. 31, 2018

Receivables [Abstract]

Loans Held for Investment and Allowance for Loan Losses

Loans Held for Investment and Allowance for Loan Losses

Loans Held for Investment and Allowance for Loan Losses

Loans held for investment consisted of the following as of March 31, 2018 and December 31, 2017 (in thousands):

	March 31, 2018		December 31, 2017
Term loans	$	847,403	$	804,227
Lines of credit	145,192		132,012
Total unpaid principal balance	992,595		936,239
Net deferred origination costs	18,349		16,557
Total loans held for investment	$	1,010,944	$	952,796

We include both loans we originate and loans originated by our issuing bank partners and later purchased by us as part of our originations. During the three months ended March 31, 2018 and 2017 we purchased loans in the amount of $139.2 million and $145.0 million, respectively.

The change in the allowance for loan losses for the three months ended March 31, 2018 and 2017 consisted of the following (in thousands):

	Three Months Ended March 31,
	2018			2017
Balance at beginning of period	$	109,015		$	110,162
Recoveries of loans previously charged off	3,345			2,617
Loans charged off	(29,732		)	(40,884		)
Provision for loan losses	36,293			46,180
Allowance for loan losses at end of period	$	118,921		$	118,075

When loans are charged-off, we typically continue to attempt to recover amounts from the respective borrowers and guarantors, including, when we deem it appropriate, through formal legal action. Alternatively, we may sell previously charged-off loans to a third-party debt collector.  The proceeds from these sales are recorded as a component of the recoveries of loans previously charged off. For the three months ended March 31, 2018 and 2017, previously charged-off loans sold accounted for $0.5 million and $1.9 million, respectively, of recoveries of loans previously charged off.

As of March 31, 2018 and December 31, 2017, our off-balance sheet credit exposure related to the undrawn line of credit balances was $209.6 million and $204.6 million, respectively. The related reserve on unfunded loan commitments was $4.6 million and $4.4 million as of March 31, 2018 and December 31, 2017, respectively. Net adjustments to the accrual for unfunded loan commitments are included in general and administrative expense.

The following table contains information, on a combined basis, regarding the unpaid principal balance of loans we originated and the amortized cost of loans purchased from third parties other than our issuing bank partner related to current, paying and non-paying delinquent loans as of March 31, 2018 and December 31, 2017 (in thousands):

	March 31, 2018		December 31, 2017
Current loans	$	904,660	$	850,060
Delinquent: paying (accrual status)	50,338		49,252
Delinquent: non-paying (non-accrual status)	37,597		36,927
Total	$	992,595	$	936,239

The portion of the allowance for loan losses attributable to current loans was $79.5 million and $74.0 million as of March 31, 2018 and December 31, 2017, respectively, while the portion of the allowance for loan losses attributable to delinquent loans was $39.4 million and $35.0 million as of March 31, 2018 and December 31, 2017, respectively.

The following table shows an aging analysis of the unpaid principal balance related to loans held for investment by delinquency status as of March 31, 2018 and December 31, 2017 (in thousands):

	March 31, 2018		December 31, 2017
By delinquency status:
Current loans	$	904,660	$	850,060
1-14 calendar days past due	21,080		23,611
15-29 calendar days past due	12,068		12,528
30-59 calendar days past due	19,557		22,059
60-89 calendar days past due	13,850		12,809
90 + calendar days past due	21,380		15,172
Total unpaid principal balance	$	992,595	$	936,239