Loans Held for Investment and Allowance for Loan Losses

12 Months Ended

Dec. 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 December 31 (in thousands):

	2018		2017
Term loans	$	956,755	$	804,227
Lines of credit	188,199		132,012
Total unpaid principal balance	1,144,954		936,239
Net deferred origination costs	24,203		16,557
Total loans held for investment	$	1,169,157	$	952,796

During the twelve months ended December 31, 2018 and 2017, we paid $0.8 million and $13.8 million, respectively to purchase term loans that we previously sold to a third party.

We include both loans we originate and loans funded by our issuing bank partners and later purchased by us as part of our originations. During the years ended December 31, 2018, 2017 and 2016 we purchased loans from our issuing bank partner in the amount of $470.5 million, $523.0 million and $534.1 million, respectively.

The change in the allowance for loan losses for the years ended December 31, consisted of the following (in thousands):

	2018			2017			2016
Balance at January 1	$	109,015		$	110,162		$	53,311
Recoveries of loans previously charged off	13,179			17,199			7,270
Loans charged off	(130,695		)	(171,272		)	(100,382		)
Provision for loan losses	148,541			152,926			149,963
Allowance for loan losses at December 31	$	140,040		$	109,015		$	110,162

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 twelve months ended December 31, 2018, 2017 and 2016, previously charged-off loans sold accounted for $1.0 million, $8.3 million and $4.4 million, respectively, of recoveries of loans previously charged off.

As of December 31, 2018 and December 31, 2017, our off-balance sheet credit exposure related to the undrawn line of credit balances was $264.2 million and $204.6 million, respectively. The related reserve on unfunded loan commitments was $5.9 million and $4.4 million as of December 31, 2018 and December 31, 2017, respectively. Net adjustments to the liability 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 non-delinquent, paying and non-paying delinquent loans as of December 31 (in thousands):

	2018		2017
Current loans	$	1,031,449	$	850,060
Delinquent: paying (accrual status)	54,427		49,252
Delinquent: non-paying (non-accrual status)	59,078		36,927
Total	$	1,144,954	$	936,239

The portion of the allowance for loan losses attributable to current loans was $125.5 million and $74.0 million as of December 31, 2018 and December 31, 2017, respectively, while the portion of the allowance for loan losses attributable to delinquent loans was $14.5 million and $35.0 million as of December 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 December 31 (in thousands):

	2018		2017
By delinquency status:
Current loans	$	1,031,449	$	850,060
1-14 calendar days past due	27,655		23,611
15-29 calendar days past due	14,665		12,528
30-59 calendar days past due	21,470		22,059
60-89 calendar days past due	19,031		12,809
90 + calendar days past due	30,684		15,172
Total unpaid principal balance	$	1,144,954	$	936,239