Quarterly report pursuant to Section 13 or 15(d)

Notes Receivable

v3.21.1
Notes Receivable
3 Months Ended
Mar. 31, 2021
Notes Receivable [Abstract]  
Notes Receivable


4. Notes Receivable

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

As of

March 31,

December 31,

2021

2020

Notes receivable secured by VOIs:

VOI notes receivable - non-securitized

$

179,389

$

156,078

VOI notes receivable - securitized

365,417

395,315

Gross VOI notes receivable

544,806

551,393

Allowance for loan losses - non-securitized

(46,907)

(38,750)

Allowance for loan losses - securitized

(96,335)

(103,294)

Allowance for loan losses

(143,242)

(142,044)

VOI notes receivable, net

$

401,564

$

409,349

Allowance as a % of Gross VOI notes receivable

26%

26%

The weighted-average interest rate charged on Bluegreen’s notes receivable secured by VOIs was 15.1% and 15.0% at March 31, 2021 and December 31, 2020, respectively. All of Bluegreen’s VOI loans 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.

Allowance for Loan Losses

The activity in Bluegreen’s allowance for loan losses was as follows (in thousands):

For the Three Months Ended

March 31,

2021

2020

Balance, beginning of period

$

142,044

$

140,630

Provision for loan losses

12,319

30,353

Less: Write-offs of uncollectible receivables

(11,121)

(15,817)

Balance, end of period

$

143,242

$

155,166

Bluegreen monitors the credit quality of its receivables on an ongoing basis. Bluegreen holds large amounts of homogeneous VOI notes receivable and assess uncollectibility based on pools of receivables as it 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 COVID-19 pandemic has had a material adverse impact on unemployment in the United States and economic conditions in general and the impact may continue for some time. In March 2020, Bluegreen recorded an additional allowance of $12.0 million which included its estimate at that time of customer defaults as a result of changing economic factors related to the COVID-19 pandemic. Bluegreen believes that the COVID-19 pandemic will continue to have an impact on the collectability of its VOI notes receivable. Bluegreen continues to evaluate the impact of the COVID-19 pandemic on its default or delinquency rates as it is rapidly changing and highly uncertain. Bluegreen’s estimates may not prove to be correct and its allowance for loan losses may not prove to be adequate.

Additional information about Bluegreen’s VOI notes receivable by year of origination is as follows as of March 31, 2021 (in thousands):

Year of Origination

2021

2020

2019

2018

2017

2016 and Prior

Total

701+

$

20,054

$

64,272

$

77,853

$

51,834

$

34,447

$

56,733

$

305,193

601-700

13,783

41,385

42,192

31,643

22,725

51,915

203,643

<601 (1)

718

3,744

4,272

2,821

1,996

5,602

19,153

Other (2)

605

1,179

3,678

3,620

7,735

16,817

Total by FICO score

$

34,555

$

110,006

$

125,496

$

89,976

$

62,788

$

121,985

$

544,806

Defaults

$

$

2,054

3,272

$

2,780

$

1,909

$

1,106

$

11,121

Allowance for loan loss

$

9,036

$

33,497

$

36,001

$

25,168

$

15,308

$

24,232

$

143,242

Delinquency status:

Current

$

34,485

$

105,915

$

119,847

$

83,452

$

57,110

$

110,863

$

511,672

31-60 days

70

1,118

1,245

890

402

865

4,590

61-90 days

1,015

1,302

667

738

912

4,634

Over 91 days (2)

1,958

3,102

4,967

4,538

9,345

23,910

Total

$

34,555

$

110,006

$

125,496

$

89,976

$

62,788

$

121,985

$

544,806

(1)Includes VOI notes receivable attributable to borrowers without a FICO score (who are primarily foreign borrowers).

(2)Includes $13.1 million related to VOI notes receivable that, as of March 31, 2021, 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.


Additional information about Bluegreen’s VOI notes receivable by year of origination is as follows as of December 31, 2020 (in thousands):

Year of Origination

2020

2019

2018

2017

2016

2015 and Prior

Total

701+

$

70,874

$

85,294

$

56,490

$

37,371

$

27,638

$

35,693

$

313,360

601-700

42,095

44,672

34,181

24,700

22,656

34,779

203,083

<601 (1)

3,737

4,491

3,003

2,113

2,188

3,954

19,486

Other (2)

29

567

3,805

3,476

2,336

5,251

15,464

Total by FICO score

$

116,735

$

135,024

$

97,479

$

67,660

$

54,818

$

79,677

$

551,393

Defaults

$

1,678

$

13,678

14,297

$

9,331

$

7,299

$

9,244

$

55,527

Allowance for loan loss

$

33,441

$

37,845

$

27,552

$

16,794

$

12,097

$

14,315

$

142,044

Delinquency status:

Current

$

113,954

$

129,817

$

89,744

$

61,279

$

50,671

$

71,646

$

517,111

31-60 days

1,040

1,531

1,093

925

547

642

5,778

61-90 days

807

1,137

931

777

365

524

4,541

Over 91 days (2)

934

2,539

5,711

4,679

3,235

6,865

23,963

Total

$

116,735

$

135,024

$

97,479

$

67,660

$

54,818

$

79,677

$

551,393

(1)Includes VOI notes receivable attributable to borrowers without a FICO score (who are primarily foreign borrowers).

(2)Includes $11.4 million related to VOI notes receivable that, as of December 31,2020, 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.

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

As of

March 31,

December 31,

2021

2020

FICO Score

No Score (1)

1

%

1

%

<600

3

3

601-699

38

37

700+

58

59

100

%

100

%

(1)VOI notes receivable attributable to borrowers without a FICO score (who are primarily foreign borrowers).

Bluegreen’s notes receivable are carried at amortized cost less an allowance for loan losses. Interest income is suspended, and previously accrued but unpaid interest income is reversed, on all delinquent notes receivable when principal or interest payments are more than 90 days contractually past due and not resumed until such loans are less than 90 days past due. As of March 31, 2021 and December 31, 2020, $23.9 million and $24.0 million, respectively, of Bluegreen’s VOI notes receivable were more than 90 days past due, and accordingly, consistent with its policy, were not accruing interest income. After approximately 127 days, Bluegreen’s VOI notes receivable are generally written off against the allowance for loan loss. Accrued interest was $3.8 million and $3.9 million as of March 31, 2021 and December 31, 2020, respectively, and is included within other assets in the Company’s unaudited consolidated balance sheets herein.