Loans Held for Investment and Allowance for Loan Losses

3 Months Ended

Mar. 31, 2019

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, 2019 and December 31, 2018 (in thousands):

	March 31, 2019		December 31, 2018
Term loans	$	962,777	$	956,755
Lines of credit	214,832		188,199
Total Unpaid Principal Balance	1,177,609		1,144,954
Net deferred origination costs	24,922		24,203
Total loans held for investment	$	1,202,531	$	1,169,157

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 three months ended March 31, 2019 and 2018 we purchased loans from our issuing bank partner in the amount of $111.5 million and $139.2 million, respectively.

The change in the allowance for loan losses for the three months ended March 31, 2019 and 2018 consisted of the following (in thousands):

	Three Months Ended March 31,
	2019			2018
Balance at beginning of period	$	140,040		$	109,015
Recoveries of loans previously charged off	3,914			3,345
Loans charged off	(39,839		)	(29,732		)
Provision for loan losses	43,291			36,293
Allowance for loan losses at end of period	$	147,406		$	118,921

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. We did not sell any previously charged-off loans for the three months ended March 31, 2019. For the three months ended March 31, 2018 loans sold accounted for $0.5 million of recoveries of loans previously charged off.

As of March 31, 2019 and December 31, 2018, our off-balance sheet credit exposure related to the undrawn line of credit balances was $269.3 million and $264.2 million, respectively. The related reserve on unfunded loan commitments was $5.9 million as of March 31, 2019 and December 31, 2018, 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 related to non-delinquent, paying and non-paying delinquent loans as of March 31, 2019 and December 31, 2018 (in thousands):

	March 31, 2019		December 31, 2018
Current loans	$	1,053,903	$	1,031,449
Delinquent: paying (accrual status)	55,613		54,427
Delinquent: non-paying (non-accrual status)	68,093		59,078
Total	$	1,177,609	$	1,144,954

The portion of the allowance for loan losses attributable to current loans was $69.5 million and $85.7 million as of March 31, 2019 and December 31, 2018, respectively, while the portion of the allowance for loan losses attributable to delinquent loans was $77.9 million and $54.3 million as of March 31, 2019 and December 31, 2018, 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, 2019 and December 31, 2018 (in thousands):

	March 31, 2019		December 31, 2018
By delinquency status:
Current loans	$	1,053,903	$	1,031,449
1-14 calendar days past due	21,051		27,655
15-29 calendar days past due	17,749		14,665
30-59 calendar days past due	26,815		21,470
60-89 calendar days past due	18,811		19,031
90 + calendar days past due	39,280		30,684
Total unpaid principal balance	$	1,177,609	$	1,144,954