LOANS RECEIVABLE AND REVENUE

9 Months Ended

Sep. 30, 2021

Receivables [Abstract]

LOANS RECEIVABLE AND REVENUE

LOANS RECEIVABLE AND REVENUERevolving LOC revenues include interest income on outstanding revolving balances, MDR related to Canada POS Lending and other usage or maintenance fees as permitted by underlying statutes. Unsecured and Secured Installment revenue includes interest income and non-sufficient-funds or returned-items fees on late or defaulted payments on past-due loans, known as late fees. Late fees comprise less than 1% of Installment revenues. Single-Pay revenues represent deferred presentment or other fees as defined by the underlying state, provincial or national regulations. Ancillary revenue includes revenue from a number of ancillary financial products such as check cashing, proprietary general-purpose reloadable prepaid debit cards (Opt+), demand deposit accounts (Revolve Finance), credit protection insurance in the Canadian market, retail installment sales and money transfer services.

The following table summarizes revenue by product (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Revolving LOC	$	78,262	$	58,711	$	209,033	$	186,429
Unsecured Installment	72,056		67,408		213,233		260,328
Secured Installment	13,743		16,692		41,591		62,379
Single-Pay	26,568		25,084		75,298		92,973
Total Installment	112,367		109,184		330,122		415,680
Ancillary	18,651		14,108		54,369		43,209
Total revenue(1)	$	209,280	$	182,003	$	593,524	$	645,318
(1) Includes revenue from CSO programs of $43.4 million and $36.7 million for the three months ended September 30, 2021 and 2020, respectively, and $119.7 million and $142.5 million for the nine months ended September 30, 2021 and 2020.

The following tables summarize loans receivable by product and the related delinquent loans receivable (in thousands):

	September 30, 2021
	Revolving LOC		Unsecured Installment		Secured Installment		Single-Pay(1)		Total Installment - Company Owned		Total
Current loans receivable	$	665,130	$	61,852	$	31,911	$	40,331	$	134,094	$	799,224
Delinquent loans receivable	54,924		20,953		7,255		—		28,208		83,132
Total loans receivable	720,054		82,805		39,166		40,331		162,302		882,356
Less: allowance for losses	(52,262)		(14,330)		(3,482)		(2,469)		(20,281)		(72,543)
Loans receivable, net	$	667,792	$	68,475	$	35,684	$	37,862	$	142,021	$	809,813
(1) Of the $40.3 million of Single-Pay receivables, $11.1 million relate to mandated extended payment options for certain Canada Single-Pay loans.

	September 30, 2021
	Revolving LOC		Unsecured Installment		Secured Installment		Total Installment - Company Owned		Total
Delinquent loans receivable
0-30 days past due	$	27,449	$	7,933	$	3,667	$	11,600	$	39,049
31-60 days past due	12,721		5,914		1,876		7,790		20,511
61 + days past due	14,754		7,106		1,712		8,818		23,572
Total delinquent loans receivable	$	54,924	$	20,953	$	7,255	$	28,208	$	83,132

	December 31, 2020
	Revolving LOC		Unsecured Installment		Secured Installment		Single-Pay(1)		Total Installment - Company Owned		Total
Current loans receivable	$	321,105	$	78,235	$	40,358	$	43,780	$	162,373	$	483,478
Delinquent loans receivable	37,779		24,190		8,275		—		32,465		70,244
Total loans receivable	358,884		102,425		48,633		43,780		194,838		553,722
Less: allowance for losses	(51,958)		(24,073)		(7,047)		(3,084)		(34,204)		(86,162)
Loans receivable, net	$	306,926	$	78,352	$	41,586	$	40,696	$	160,634	$	467,560
(1) Of the $43.8 million of Single-Pay receivables, $11.2 million relate to mandated extended payment options for certain Canada Single-Pay loans.

	December 31, 2020
	Revolving LOC		Unsecured Installment		Secured Installment		Total Installment - Company Owned		Total
Delinquent loans receivable
0-30 days past due	$	17,517	$	10,361	$	3,764	$	14,125	$	31,642
31-60 days past due	9,276		7,124		2,199		9,323		18,599
61 + days past due	10,986		6,705		2,312		9,017		20,003
Total delinquent loans receivable	$	37,779	$	24,190	$	8,275	$	32,465	$	70,244

The following tables summarize loans Guaranteed by the Company under CSO programs and the related delinquent receivables (in thousands):

	September 30, 2021
	Unsecured Installment		Secured Installment		Total Installment - Guaranteed by the Company
Current loans receivable Guaranteed by the Company	$	34,090	$	740	$	34,830
Delinquent loans receivable Guaranteed by the Company	8,385		207		8,592
Total loans receivable Guaranteed by the Company	42,475		947		43,422
Less: Liability for losses on CSO lender-owned consumer loans	(6,973)		(34)		(7,007)
Loans receivable Guaranteed by the Company, net	$	35,502	$	913	$	36,415

	September 30, 2021
	Unsecured Installment		Secured Installment		Total Installment - Guaranteed by the Company
Delinquent loans receivable
0-30 days past due	$	6,798	$	166	$	6,964
31-60 days past due	1,247		35		1,282
61+ days past due	340		6		346
Total delinquent loans receivable	$	8,385	$	207	$	8,592

	December 31, 2020
	Unsecured Installment		Secured Installment		Total Installment - Guaranteed by the Company
Current loans receivable Guaranteed by the Company	$	37,096	$	775	$	37,871
Delinquent loans receivable Guaranteed by the Company	6,079		155		6,234
Total loans receivable Guaranteed by the Company	43,175		930		44,105
Less: Liability for losses on CSO lender-owned consumer loans	(7,160)		(68)		(7,228)
Loans receivable Guaranteed by the Company, net	$	36,015	$	862	$	36,877

	December 31, 2020
	Unsecured Installment		Secured Installment		Total Installment - Guaranteed by the Company
Delinquent loans receivable
0-30 days past due	$	5,435	$	103	$	5,538
31-60 days past due	490		37		527
61 + days past due	154		15		169
Total delinquent loans receivable	$	6,079	$	155	$	6,234

The following tables summarize activity in the ALL and the liability for losses on CSO lender-owned consumer loans in total (in thousands):

	Three Months Ended September 30, 2021
	Revolving LOC		Unsecured Installment		Secured Installment		Single-Pay		Total Installment		Other		Total
Allowance for loan losses:
Balance, beginning of period	$	44,847	$	16,701	$	3,880	$	2,432	$	23,013	$	—	$	67,860
Charge-offs	(27,974)		(18,400)		(4,252)		(24,640)		(47,292)		(869)		(76,135)
Recoveries	8,564		4,811		1,996		18,493		25,300		401		34,265
Net charge-offs	(19,410)		(13,589)		(2,256)		(6,147)		(21,992)		(468)		(41,870)
Provision for losses	27,800		11,223		1,858		6,223		19,304		468		47,572
Effect of foreign currency translation	(975)		(5)		—		(39)		(44)		—		(1,019)
Balance, end of period	$	52,262	$	14,330	$	3,482	$	2,469	$	20,281	$	—	$	72,543
Liability for losses on CSO lender-owned consumer loans:
Balance, beginning of period	$	—	$	5,234	$	31	$	—	$	5,265	$	—	$	5,265
Increase in liability	—		1,739		3		—		1,742		—		1,742
Balance, end of period	$	—	$	6,973	$	34	$	—	$	7,007	$	—	$	7,007

	Three Months Ended September 30, 2020
	Revolving LOC		Unsecured Installment		Secured Installment		Single-Pay		Total Installment		Other		Total
Allowance for loan losses:
Balance, beginning of period	$	47,319	$	18,798	$	7,883	$	2,802	$	29,483	$	—	$	76,802
Charge-offs	(22,781)		(14,781)		(6,648)		(21,473)		(42,902)		(972)		(66,655)
Recoveries	4,618		5,186		2,635		17,034		24,855		498		29,971
Net charge-offs	(18,163)		(9,595)		(4,013)		(4,439)		(18,047)		(474)		(36,684)
Provision for losses	21,655		9,647		3,239		4,799		17,685		474		39,814
Effect of foreign currency translation	606		9		—		35		44		—		650
Balance, end of period	$	51,417	$	18,859	$	7,109	$	3,197	$	29,165	$	—	$	80,582
Liability for losses on CSO lender-owned consumer loans:
Balance, beginning of period	$	—	$	5,128	$	36	$	—	$	5,164	$	—	$	5,164
Increase in liability	—		1,002		32		—		1,034		—		1,034
Balance, end of period	$	—	$	6,130	$	68	$	—	$	6,198	$	—	$	6,198

	Nine Months Ended September 30, 2021
	Revolving LOC		Unsecured Installment		Secured Installment		Single-Pay		Total Installment		Other		Total
Allowance for loan losses:
Balance, beginning of period	$	51,958	$	24,073	$	7,047	$	3,084	$	34,204	$	—	$	86,162
Charge-offs	(81,175)		(58,337)		(14,979)		(68,680)		(141,996)		(2,525)		(225,696)
Recoveries	23,351		16,811		6,756		57,321		80,888		1,331		105,570
Net charge-offs	(57,824)		(41,526)		(8,223)		(11,359)		(61,108)		(1,194)		(120,126)
Provision for losses	58,274		31,782		4,658		10,743		47,183		1,194		106,651
Effect of foreign currency translation	(146)		1		—		1		2		—		(144)
Balance, end of period	$	52,262	$	14,330	$	3,482	$	2,469	$	20,281	$	—	$	72,543
Liability for losses on CSO lender-owned consumer loans:
Balance, beginning of period	$	—	$	7,160	$	68	$	—	$	7,228	$	—	$	7,228
Decrease in liability	—		(187)		(34)		—		(221)		—		(221)
Balance, end of period	$	—	$	6,973	$	34	$	—	$	7,007	$	—	$	7,007

	Nine Months Ended September 30, 2020
	Revolving LOC		Unsecured Installment		Secured Installment		Single-Pay		Total Installment		Other		Total
Allowance for loan losses:
Balance, beginning of period	$	55,074	$	35,587	$	10,305	$	5,869	$	51,761	$	—	$	106,835
Charge-offs	(104,074)		(83,468)		(31,505)		(83,162)		(198,135)		(3,000)		(305,209)
Recoveries	17,129		17,982		8,505		68,804		95,291		1,475		113,895
Net charge-offs	(86,945)		(65,486)		(23,000)		(14,358)		(102,844)		(1,525)		(191,314)
Provision for losses	83,987		48,766		19,804		11,850		80,420		1,525		165,932
Effect of foreign currency translation	(699)		(8)		—		(164)		(172)		—		(871)
Balance, end of period	$	51,417	$	18,859	$	7,109	$	3,197	$	29,165	$	—	$	80,582
Liability for losses on CSO lender-owned consumer loans:
Balance, beginning of period	$	—	$	10,553	$	70	$	—	$	10,623	$	—	$	10,623
Decrease in liability	—		(4,423)		(2)		—		(4,425)		—		(4,425)
Balance, end of period	$	—	$	6,130	$	68	$	—	$	6,198	$	—	$	6,198

As of September 30, 2021, Revolving LOC and Installment loans classified as nonaccrual were $5.1 million and $6.1 million, respectively. As of December 31, 2020, Revolving LOC and Installment loans classified as nonaccrual were $4.4 million and $6.2 million, respectively. The Company's loans receivable inherently considers nonaccrual loans in its estimate of the ALL as delinquencies are a primary input into the Company's roll rate-based model.

TDR Loans Receivable

In certain circumstances, the Company modifies the terms of its loans receivable for borrowers. Under U.S. GAAP, a modification of loans receivable terms is considered a TDR if the borrower is experiencing financial difficulty and the Company grants a concession to the borrower it would not have otherwise granted under the terms of the original agreement. In response to COVID-19 in 2020, the Company established an enhanced Customer Care Program, which enables its team members to provide relief to customers in various ways, ranging from due date changes, interest or fee forgiveness, payment waivers or extended payment plans, depending on a customer’s individual circumstances. The Company modifies loans only if it believes the customer has the ability to pay under the restructured terms. The Company continues to accrue and collect interest on these loans in accordance with the restructured terms.

The Company records its ALL related to TDRs by discounting the estimated cash flows associated with the respective TDR at the effective interest rate immediately after the loan modification and records any difference between the discounted cash flows and the carrying value as an allowance adjustment. A loan that has been classified as a TDR remains so classified until the loan is paid off or charged off. A TDR is charged off consistent with the Company's policies for the related loan product. For additional information on the Company's loss recognition policy, see the 2020 Form 10-K.

The table below presents TDRs that are related to the Customer Care Program implemented in response to COVID-19, included in both gross loans receivable and the impairment included in the ALL (in thousands):

	As of September 30, 2021		As of December 31, 2020
Current TDR gross receivables	$	11,754	$	13,563
Delinquent TDR gross receivables	4,196		6,309
Total TDR gross receivables	15,950		19,872
Less: Impairment included in the allowance for loan losses	(2,829)		(3,482)
Less: Additional allowance	(2,536)		(4,497)
Outstanding TDR receivables, net of impairment	$	10,585	$	11,893

The tables below present loans modified and classified as TDRs during the periods presented (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Pre-modification TDR loans receivable	$	3,586	$	9,007	$	11,953	$	37,948
Post-modification TDR loans receivable	3,182		8,186		10,654		34,195
Total concessions included in gross charge-offs	$	404	$	821	$	1,299	$	3,753

There were $2.9 million and $5.1 million of loans classified as TDRs that were charged off and included as a reduction in the ALL during the three months ended September 30, 2021 and 2020, respectively, and $11.0 million and $6.0 million during the nine months ended September 30, 2021 and 2020, respectively. The Company had commitments to lend additional funds of approximately $2.1 million to customers with available and unfunded Revolving LOC loans classified as TDRs as of September 30, 2021.

The table below presents the Company's average outstanding TDR loans receivable, interest income recognized on TDR loans and number of TDR loans for the periods presented (dollars in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Average outstanding TDR loans receivable	$	16,190	$	20,484	$	17,911	$	21,011
Interest income recognized	4,155		6,510		14,277		10,907
Number of TDR loans	2,624		5,361		8,872		22,190