Consumer Loans Receivable

9 Months Ended

Dec. 26, 2020

The following table summarizes consumer loans receivable (in thousands):


	December 26, 2020		March 28, 2020
Loans held for investment (at Acquisition Date, defined below)	$	33,726	$	37,779
Loans held for investment (originated after Acquisition Date)	17,873		20,140
Loans held for sale	22,014		14,671
Construction advances	13,923		13,400
	87,536		85,990
Deferred financing fees and other, net	(2,525)		(1,919)
Allowance for loan losses	(3,419)		(1,767)
	81,592		82,304
Less current portion	(42,091)		(32,376)
	$	39,501	$	49,928

The Company acquired consumer loans receivable as part of the acquisition of Palm Harbor Homes, Inc. in April 2011 ("Acquisition Date"). The allowance for loan losses reflects our judgment of the probable loss exposure on loans held for investment. On March 29, 2020 we adopted ASU 2016-13 using the prospective transition approach for acquired consumer loans receivable assets that were previously accounted for under ASC 310-30. We determined that $1.7 million of the existing purchase discount for such consumer loans was related to credit factors and was reclassified to the allowance for loan losses upon adoption. The remaining discount on the acquired consumer loans was determined to be related to non-credit factors and will be accreted into interest income over the life of the loans.

The following table represents changes in the estimated allowance for loan losses, including related additions and deductions to the allowance for loan losses (in thousands):


	Three Months Ended				Nine Months Ended
	December 26, 2020		December 28, 2019		December 26, 2020		December 28, 2019
Allowance for loan losses at beginning of period	$	3,910	$	415	$	1,767	$	415
Impact of adoption of ASU 2016-13	—		—		2,276		—
Change in estimated loan losses, net	(491)		16		(424)		16
Charge-offs	—		—		(200)		—
Recoveries	—		—		—		—
Allowance for loan losses at end of period	$	3,419	$	431	$	3,419	$	431

The consumer loans held for investment had the following characteristics:


	December 26, 2020		March 28, 2020
Weighted average contractual interest rate	8.4	%	8.4	%
Weighted average effective interest rate	9.5	%	9.3	%
Weighted average months to maturity	159		164

The following table is a consolidated summary of the delinquency status of the outstanding amortized cost of consumer loans receivable (in thousands):


	December 26, 2020		March 28, 2020
Current	$	84,200	$	83,861
31 to 60 days	834		547
61 to 90 days	178		307
91+ days	2,324		1,275
	$	87,536	$	85,990

The following table disaggregates CountryPlace's gross consumer loans receivable by credit quality indicator and fiscal year of origination (in thousands):


	December 26, 2020
	2021		2020		2019		2018		2017		Prior		Total		March 28, 2020
Prime- FICO score 680 and greater	$	21,087	$	4,191	$	1,832	$	996	$	1,761	$	24,582	$	54,449	$	55,513
Near Prime- FICO score 620-679	11,502		4,074		1,809		1,141		614		10,875		30,015		27,767
Sub-Prime- FICO score less than 620	426		54		—		—		85		1,786		2,351		2,142
No FICO score	151		—		28		—		—		542		721		568
	$	33,166	$	8,319	$	3,669	$	2,137	$	2,460	$	37,785	$	87,536	$	85,990

Loan contracts secured by geographically concentrated collateral could experience higher rates of delinquencies, default and foreclosure losses than loan contracts secured by collateral that is more geographically dispersed. As of December 26, 2020, 37% of the outstanding principal balance of consumer loans receivable portfolio was concentrated in Texas and 20% was concentrated in Florida. As of March 28, 2020, 36% of the outstanding principal balance of the consumer loans receivable portfolio was concentrated in Texas and 16% was concentrated in Florida. Other than Texas and Florida, no state had concentrations in excess of 10% of the principal balance of the consumer loans receivable as of December 26, 2020 or March 28, 2020.

Collateral for repossessed loans is acquired through foreclosure or similar proceedings and is recorded at the estimated fair value of the home less the costs to sell. At repossession, the fair value of the collateral is determined based on the historical recovery rates of previously charged-off loans; the loan is charged off and the loss is recorded to the allowance for loan losses. Repossessed homes totaled approximately $162,000 and $1.5 million as of December 26, 2020 and March 28, 2020, respectively, and are included in Prepaid expenses and other current assets in the Consolidated Balance Sheets. Foreclosure or similar proceedings in progress totaled approximately $606,000 and $560,000 as of December 26, 2020 and March 28, 2020, respectively.