| Notes Receivable |
4. Notes Receivable
The table below provides information relating to Bluegreen’s notes receivable and related allowance for loan losses as of March 31, 2018 and December 31, 2017 (in thousands):
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March 31,
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December 31,
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2018
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2017
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Notes receivable:
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VOI notes receivable - non-securitized
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$
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164,974
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184,971
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VOI notes receivable - securitized
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380,642
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364,349
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Notes receivable secured by homesites (1)
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1,198
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1,329
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Gross notes receivable
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546,814
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550,649
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Allowance for loan losses - non-securitized
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(36,292)
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(38,497)
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Allowance for loan losses - securitized
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(86,285)
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(85,161)
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Allowance for loan losses – homesites (1)
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(120)
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(133)
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Notes receivable, net
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$
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424,117
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426,858
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Allowance as a % of gross notes receivable
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22%
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22%
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(1)
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Notes receivable secured by homesites were originated through a business, substantially all of the assets of which were sold by Bluegreen in 2012.
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The weighted-average interest rate on Bluegreen’s notes receivable was 15.3% at both March 31, 2018 and December 31, 2017, respectively. Bluegreen’s VOI notes receivable bear interest at fixed rates.
Credit Quality of Notes Receivable and the Allowance for Loan Losses
Bluegreen holds large amounts of homogeneous VOI notes receivable and assesses uncollectibility based on pools of receivables. In estimating variable considerations, Bluegreen’s management does not use a single primary indicator of credit quality but instead evaluates its VOI notes receivable based upon a static pool analysis that incorporates the aging of the respective receivables, default trends and prepayment rates by origination year, as well as the FICO scores of the borrowers.
The activity in Bluegreen’s allowance for loan losses (including notes receivable secured by homesites) was as follows (in thousands):
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For the Three Months Ended
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March 31,
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2018
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Balance, beginning of period
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$
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123,791
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Provision for loan losses
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8,006
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Write-offs of uncollectible receivables
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(9,100)
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Balance, end of period
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$
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122,697
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The following table shows the delinquency status of Bluegreen’s VOI notes receivable as of March 31, 2018 and December 31, 2017 (in thousands):
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March 31,
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December 31,
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2018
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2017
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Current
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$
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520,383
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525,482
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31-60 days
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5,113
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6,088
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61-90 days
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4,353
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4,897
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> 90 days (1)
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15,767
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12,853
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Total
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$
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545,616
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549,320
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(1)
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Includes $10.6 million and $7.6 million as of March 31, 2018 and December 31, 2017, respectively, related to VOI notes receivable that, as of such date, had defaulted, but the related VOI note receivable balance had not yet been charged off in accordance with the provisions of certain of Bluegreen's receivable-backed notes payable transactions. These VOI notes receivable have been reflected in the allowance for loan losses.
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