Quarterly report pursuant to Section 13 or 15(d)

Notes Receivable

v3.19.1
Notes Receivable
3 Months Ended
Mar. 31, 2019
Notes Receivable [Abstract]  
Notes Receivable

3.    Notes Receivable



The table below provides information relating to Bluegreen’s notes receivable and related allowance for loan losses (in thousands):





 

 

 

 



 

 

 

 



 

March 31,

 

December 31,



 

2019

 

2018

Notes receivable:

 

 

 

 

VOI notes receivable - non-securitized

$

150,421 

 

124,642 

VOI notes receivable - securitized

 

421,309 

 

447,850 

Notes receivable secured by homesites (1)

 

805 

 

898 

Gross notes receivable

 

572,535 

 

573,390 

Allowance for loan losses - non-securitized

 

(33,628)

 

(28,258)

Allowance for loan losses - securitized

 

(103,198)

 

(105,875)

Allowance for loan losses - homesites (1)

 

(80)

 

(90)

Notes receivable, net

$

435,629 

 

439,167 

Allowance as a % of gross notes receivable

 

24% 

 

23% 





(1)

Notes receivable secured by homesites were originated through a business, substantially all the assets of which were sold by Bluegreen in 2012.    



The weighted-average interest rate on Bluegreen’s notes receivable was 15.1% at both March 31, 2019 and December 31, 2018.   All of Bluegreen’s VOI notes receivable bear interest at fixed rates. Bluegreen’s VOI notes receivable are generally secured by property located in Florida, Missouri, Nevada, South Carolina, Tennessee, and Wisconsin.



Credit Quality of Notes Receivable and the Allowance for Loan Losses



Bluegreen monitors the credit quality of its receivables on an ongoing basis. Bluegreen holds large amounts of homogeneous VOI notes receivable and assesses uncollectibility based on pools of receivables as Bluegreen does not believe that there are significant concentrations of credit risk with any individual counterparty or groups of counterparties. In estimating loan losses, Bluegreen 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):







 

 

 

 



 

 

 

 



 

For the Three Months Ended



 

March 31,



 

2019

 

2018

Balance, beginning of period

$

134,223 

 

123,791 

Provision for loan losses

 

11,145 

 

8,006 

Write-offs of uncollectible receivables

 

(8,462)

 

(9,100)

Balance, end of period

$

136,906 

 

122,697 





The percentage of gross notes receivable outstanding by FICO score of the borrower at the time of origination was as follows:







 

 

 

 



 

 

 

 



March 31,

 

December 31,

 

FICO Score

2019

 

2018

 

700+

57.00 

%

57.00 

%

600-699

39.00 

 

39.00 

 

<699

3.00 

 

3.00 

 

No score (1)

1.00 

 

1.00 

 

Total

100.00 

%

100.00 

%



(1)

VOI notes receivable attributable to borrowers without a FICO score are primarily related to foreign borrowers.



The table below sets forth information regarding the delinquency status of Bluegreen’s VOI notes receivable (in thousands):





 

 

 

 



 

 

 

 



 

March 31,

 

December 31,



 

2019

 

2018

Current

$

538,368 

 

541,783 

31-60 days

 

5,328 

 

5,783 

61-90 days

 

4,511 

 

4,516 

> 90 days (1)

 

23,523 

 

20,410 

Total

$

571,730 

 

572,492 





(1)

Includes $17.4 million and $14.3 million as of March 31, 2019 and December 31, 2018, 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.