Sunlight recognizes receivables primarily related to (a) advances that Sunlight remits to contractors to facilitate the installation of residential solar energy systems and home improvement equipment, (b) Indirect Channel Loans held by Sunlight that it purchased from its Bank Partner and other parties, and (c) undivided 5.0% loan participations in certain Indirect Channel Loans that Sunlight purchased from its Bank Partner. The following tables summarize Sunlight’s financing receivables and changes thereto:


	Advances(a)		Other Financing Receivables(b)				Total
			Loan Participations from Affiliate(c)		Balance Sheet Loans(d)
June 30, 2023
Amounts outstanding	$	8,097	$	3,271	$	268	$	11,636
Unamortized discount	—		(240)		(29)		(269)
Allowance for credit losses	(1,775)		(100)		(7)		(1,882)
Carrying value	$	6,322	$	2,931	$	232	$	9,485
December 31, 2022
Amounts outstanding	$	52,129	$	3,635	$	309	$	56,073
Unamortized discount	—		(279)		(31)		(310)
Allowance for credit losses	(6,736)		(94)		(8)		(6,838)
Carrying value	$	45,393	$	3,262	$	270	$	48,925

a.Represents advance payments made by Sunlight to certain contractors, generally on a short-term basis, in anticipation of a project’s substantial completion, including advances of $1.0 million and $1.5 million, net of allowances of $0.5 million and $0.1 million, to Sunlight contractors not associated with specific installation projects at June 30, 2023 and December 31, 2022, respectively.





	For the Three Months Ended June 30,				For the Six Months Ended June 30,

	2023		2022		2023		2022
Allowance for Credit Losses — Advances
Beginning Balance	$	2,319	$	505	$	6,736	$	238
Provision for credit losses(a)	(200)		2,982		(699)		3,249
Realized losses(b)	(344)		—		(4,262)		—
Ending Balance	$	1,775	$	3,487	$	1,775	$	3,487

Allowance for Credit Losses — Loan Participations
Beginning Balance	$	143	$	31	$	94	$	140
Provision for credit losses	(38)		142		16		42
Realized losses	(5)		(66)		(10)		(75)
Ending Balance	$	100	$	107	$	100	$	107

Allowance for Credit Losses — Balance Sheet Loans
Beginning Balance	$	8	$	42	$	8	$	8
Provision for credit losses	7,852		918		10,007		1,389
Realized losses	(7,853)		(921)		(10,008)		(1,358)
Ending Balance	$	7	$	39	$	7	$	39





	For the Three Months Ended June 30,				For the Six Months Ended June 30,

	2023		2022		2023		2022
Changes in Carrying Value — Loan Participations
Beginning Balance	$	3,036	$	3,911	$	3,263	$	4,059

Proceeds from principal repayments, net	(161)		(206)		(353)		(497)
Accretion of loan discount	18		17		37		60
Provision for credit losses	38		(142)		(16)		(42)
Ending Balance	$	2,931	$	3,580	$	2,931	$	3,580

Changes in Carrying Value — Balance Sheet Loans
Beginning Balance	$	233	$	215	$	269	$	254
Purchases, net(c)	7,846		990		10,007		1,438
Proceeds from principal repayments, net	5		(73)		(40)		(89)
Accretion of loan discount	—		—		3		—
Provision for credit losses	(7,852)		(918)		(10,007)		(1,389)
Ending Balance	$	232	$	214	$	232	$	214

a.Includes an adjustment of $0.5 million to provision for credit losses during the six months ended June 30, 2023 upon adoption of ASC 326 effective January 1, 2023.

b.Sunlight charged-off advances totaling $4.4 million for the six months ended June 30, 2023, of which $3.6 million was attributable to one of Sunlight’s contractors during the three months ended March 31, 2023.

c.During the three and six months ended June 30, 2023 and 2022, Sunlight purchased 167, 24, 247 and 48 Indirect Channel Loans with an aggregate UPB of $6.6 million, $0.6 million, $9.1 million and $1.1 million, respectively.

Risk Ratings — As further described in Note 2, management evaluates Sunlight’s advances for impairment using risk ratings assigned on a scale of “1” (low risk) through “5” (higher risk). The following table allocates the advance amount outstanding based on Sunlight’s internal risk ratings:


		Total
Risk Tier(a)		Contractors	Amount Outstanding		% of Amount Outstanding
June 30, 2023
1	Low risk	40	$	2,304	28.5	%
2	Low-to-medium risk	68	2,490		30.8
3	Medium risk	26	884		10.9
4	Medium-to-high risk	9	261		3.2
5	Higher risk	2	2,158		26.6
		145	$	8,097	100.0	%
December 31, 2022
1	Low risk	130	$	14,585	28.0	%
2	Low-to-medium risk	152	23,686		45.4
3	Medium risk	70	3,868		7.4
4	Medium-to-high risk	28	9,793		18.8
5	Higher risk	8	197		0.4
		388	$	52,129	100.0	%

a.At June 30, 2023 and December 31, 2022, the average risk rating of Sunlight’s advances was 2.7 (“medium risk”) and 2.2 (“low-to-medium risk”), weighted by total advance amounts outstanding, respectively.


Payment Delinquency	Amount Outstanding(a)		% of Amount Outstanding
June 30, 2023
Current	$	3,008	42.3	%
Less than 30 days	143		2.0
30 days	156		2.2
60 days	59		0.8
90+ days(b)	3,751		52.7
	$	7,117	100.0	%
December 31, 2022
Current	$	27,257	53.8	%
Less than 30 days	7,456		14.7
30 days	5,197		10.3
60 days	3,099		6.1
90+ days(b)	7,620		15.1
	$	50,629	100.0	%

a.Excludes advances of $1.0 million and $1.5 million to Sunlight contractors not associated with specific installation projects and was not delinquent at June 30, 2023 and December 31, 2022, respectively.

b.As further discussed in Note 2, Sunlight generally evaluates amounts delinquent for 90 days or more for impairment. Sunlight assessed advances 90 days or more, along with other factors that included the contractor’s risk tier and historical loss experience, and established loss allowances of $1.3 million and $2.0 million at June 30, 2023 and December 31, 2022, respectively.



	June 30, 2023				December 31, 2022
Contractor	Amount Outstanding		% of Total		Amount Outstanding		% of Total
1	$	2,146	26.5	%	$	4,326	8.3	%
2	511		6.3		554		1.1
3	278		3.4		2,711		5.2
4	211		2.6		241		0.5
5	164		2.0		—		—
6	154		1.9		—		—
7	136		1.7		10		—
8	134		1.7		34		0.1
9	126		1.6		7,348		14.1
10	122		1.5		99		0.2
Other(a)	4,115		50.8		36,806		70.5
	$	8,097	100.0	%	$	52,129	100.0	%

a.At June 30, 2023 and December 31, 2022, Sunlight recorded advances receivable from 135 and 378 counterparties not individually listed in the table above with average balances of $0.0 million and $0.1 million, respectively. At December 31, 2022, Sunlight recorded advances receivable from individual counterparties of $4.1 million, $3.9 million, $1.4 million and $1.0 million that represent the largest advance concentrations included in “Other,” based on the amount outstanding.

Vintage — The following table presents the amortized cost basis by year of origination and credit quality indicators of advances held by Sunlight at June 30, 2023:


		Year of Origination(a)
		2023		2022		2021		Prior		Total

Risk Tier
1	Low risk	$	1,512	$	293	$	—	$	—	$	1,805
2	Low-to-medium risk	1,663		764		35		28		2,490
3	Medium risk	754		130		—		—		884
4	Medium-to-high risk	21		49		74		117		261
5	Higher risk	—		1,677		—		—		1,677
		$	3,950	$	2,913	$	109	$	145	$	7,117




Payment Delinquency
Current		$	3,008	$	—	$	—	$	—	$	3,008
Less than 30 days		143		—		—		—		143
30 days		156		—		—		—		156
60 days		59		—		—		—		59
90+ days(b)		584		2,913		109		145		3,751
		$	3,950	$	2,913	$	109	$	145	$	7,117

Current-period gross write-offs(c):
For the Three Months Ended June 30, 2023		$	54	$	354	$	—	$	—	$	408
For the Six Months Ended June 30, 2023		427		4,244		—		182		4,853

b.As discussed in Note 2, Sunlight generally evaluates amounts 90 days or more past due for impairment. Sunlight assessed advances 90 days or more past due, along with other factors that included the contractor’s risk tier and historical loss experience, and established loss allowances of $1.3 million and $2.0 million at June 30, 2023 and December 31, 2022, respectively.

Loans and Loan Participations — The following section presents certain characteristics of Sunlight’s investments in loans and loan participations. Unless otherwise indicated, loan participation amounts are shown at Sunlight’s 5.0% interest in the underlying loan pool held by Sunlight’s Bank Partner.


Payment Delinquency(a)	Loan Participations from Affiliate			Balance Sheet Loans(b)			Total
	Loans	UPB		Loans	UPB		Loans	UPB		% of UPB
June 30, 2023
Current	3,181	$	3,189	16	$	268	3,197	$	3,457	97.7	%
Less than 30 days	60	58		—	—		60	58		1.6
30 days	6	7		—	—		6	7		0.2
60 days	10	14		—	—		10	14		0.4
90+ days	3	3		—	—		3	3		0.1
	3,260	$	3,271	16	$	268	3,276	$	3,539	100.0	%
December 31, 2022
Current	3,302	$	3,502	14	$	240	3,316	$	3,742	94.9	%
Less than 30 days	89	101		3	69		92	170		4.3
30 days	15	17		—	—		15	17		0.4
60 days	6	9		—	—		6	9		0.2
90+ days	6	6		—	—		6	6		0.2
	3,418	$	3,635	17	$	309	3,435	$	3,944	100.0	%

a.As further described in Note 2, Sunlight places loans delinquent greater than 90 days on nonaccrual status. Such loans had carrying values of $0.0 million and $0.0 million at June 30, 2023 and December 31, 2022, respectively. Sunlight does not consider the average carrying values and interest income recognized (including interest income recognized using a cash-basis method) material.

Loan Collateral Concentrations — The following table presents the UPB of Balance Sheet Loans, including Sunlight’s relevant participation percentage of the Indirect Channel Loans underlying the participation interests held by Sunlight, based upon the state in which the borrower lived at the time of loan origination:



	June 30, 2023				December 31, 2022
State	UPB		% of Total		UPB		% of Total
Texas	$	654	18.5	%	$	732	18.6	%
California	636		18.0		698		17.7
Florida	295		8.3		371		9.4
New York	246		7.0		269		6.8
New Jersey	235		6.6		256		6.5
Massachusetts	167		4.7		174		4.4
Arizona	164		4.6		178		4.5
Pennsylvania	141		4.0		159		4.0
South Carolina	122		3.4		137		3.5
Missouri	101		2.9		111		2.8
Other(a)	778		22.0		859		21.8
	$	3,539	100.0	%	$	3,944	100.0	%

a.Sunlight only participates in residential solar loans originated within the United States, including 31 and 31 states not individually listed in the table above, none of which individually amount to more than 2.7% and 2.6% of the UPB at June 30, 2023 and December 31, 2022, respectively.

Vintage — The following table presents the amortized cost basis by year of origination and credit quality indicators of loans and loan participations held by Sunlight at June 30, 2023:


	Year of Origination
	2023		2022		2021		Prior		Total

FICO
780 and greater	$	—	$	—	$	13	$	860	$	873
720-779	—		—		3		1,236		1,239
660-719(a)	—		—		6		1,084		1,090
600-659	—		—		—		68		68
Less than 600	—		—		—		—		—
	$	—	$	—	$	22	$	3,248	$	3,270

Current-period gross write-offs(b)(c):
For the Three Months Ended June 30, 2023	$	189	$	6,155	$	1,421	$	65	$	7,830
For the Six Months Ended June 30, 2023	189		8,038		1,645		118		9,990

b.Includes gross write-offs of $0.0 million related to Sunlight’s 5.0% participation interest in a pool of residential solar loans and $7.7 million related to Indirect Channel Loans during the three months ended June 30, 2023.

c.Includes gross write-offs of $0.0 million related to Sunlight’s 5.0% participation interest in a pool of residential solar loans and $9.9 million related to Indirect Channel Loans during the six months ended June 30, 2023.