Bluegreen Vacations Holding Corp. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Notes Receivable

Notes Receivable

3 Months Ended

Mar. 31, 2019

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.