Notes Receivable |
6 Months Ended |
|---|---|
Jun. 30, 2021 | |
| Notes Receivable [Abstract] | |
| Notes Receivable | 4. Notes Receivable The table below provides information relating to the Company’s notes receivable and its allowance for loan losses (dollars in thousands): As of June 30, December 31, 2021 2020Notes receivable secured by VOIs: VOI notes receivable - non-securitized $ 185,215 $ 156,078VOI notes receivable - securitized 375,105 395,315 Gross VOI notes receivable 560,320 551,393Allowance for loan losses - non-securitized (48,898) (38,750)Allowance for loan losses - securitized (96,820) (103,294) Allowance for loan losses (145,718) (142,044) VOI notes receivable, net $ 414,602 $ 409,349Allowance as a % of Gross VOI notes receivable 26% 26% The weighted-average interest rate charged on the Company’s notes receivable secured by VOIs was 15.1% and 15.0% at June 30, 2021 and December 31, 2020, respectively. All of the Company’s VOI loans bear interest at fixed rates. the Company’s VOI notes receivable are substantially secured by property located in Florida, Missouri, Nevada, South Carolina, Tennessee, and Wisconsin. Allowance for Loan Losses The activity in the Company’s allowance for loan losses was as follows (in thousands): For the Six Months Ended June 30, 2021 2020Balance, beginning of period $ 142,044 $ 140,630Provision for loan losses 30,807 32,199Less: Write-offs of uncollectible receivables (27,133) (25,200)Balance, end of period $ 145,718 $ 147,629 The Company monitors the credit quality of its receivables on an ongoing basis. The Company holds large amounts of homogeneous VOI notes receivable and assess uncollectibility based on pools of receivables as we do not believe that there are significant concentrations of credit risk with any individual counterparty or groups of counterparties. In estimating loan losses, we do not use a single primary indicator of credit quality but instead evaluate our 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. During 2020, and to a lesser extent in 2021, the COVID-19 pandemic had a material adverse impact on unemployment in the United States and economic conditions in general and the impact may continue for some time. During the six months ended June 30, 2020, the Company recorded an additional allowance of $12.0 million which included our estimate at that time of customer defaults as a result of changing economic factors related to the COVID-19 pandemic. We believe that the COVID-19 pandemic may continue to have an impact on the collectability of its VOI notes receivable. We continue to evaluate the impact of the COVID-19 pandemic on our default or delinquency rates as the current situation is rapidly changing and highly uncertain. Our estimate may not prove to be correct and our allowance for loan losses may not prove to be adequate. Additional information about our VOI notes receivable by year of origination as of June 30, 2021 is as follows (in thousands): Year of Origination 2021 2020 2019 2018 2017 2016 and Prior Total 701+ $ 55,296 $ 58,631 $ 71,201 $ 47,010 $ 31,431 $ 51,113 $ 314,682601-700 37,648 38,738 39,152 29,624 20,964 47,002 213,128<601 (1) 1,803 3,542 4,079 2,705 1,767 5,018 18,914Other (2) — 1,109 1,393 3,183 2,561 5,350 13,596Total by FICO score $ 94,747 $ 102,020 $ 115,825 $ 82,522 $ 56,723 $ 108,483 $ 560,320 (1)Includes VOI notes receivable attributable to borrowers without a FICO score (who are primarily foreign borrowers).(2)Includes $9.6 million related to VOI notes receivable that, as of June 30, 2021, had defaulted, but the related VOI note receivable balance had not yet been charged off in accordance with the provisions of certain receivable-backed notes payable transactions. These VOI notes receivable have been reflected in the allowance for loan losses. Additional information about our VOI notes receivable by year of origination as of December 31, 2020 is as follows (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 $ 313,360601-700 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 19,486Other (2) 29 567 3,805 3,476 2,336 5,251 15,464Total by FICO score $ 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 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: June 30, December 31, 2021 2020FICO Score 700+58% 59%601-69938 37 <6003 3 No Score (1)1 1 Total100% 100% (1)VOI notes receivable attributable to borrowers without a FICO score (who are primarily foreign borrowers). The Company’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 June 30, 2021 and December 31, 2020, $19.7 million and $24.0 million, respectively, of our VOI notes receivable were more than 90 days past due, and accordingly, consistent with our policy, were not accruing interest income. After approximately 127 days past due, 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 June 30, 2021 and December 31, 2020, respectively, and is included within other assets in the Company’s unaudited consolidated balance sheets herein. The following table shows the delinquency status of our VOI notes receivable as of June 30, 2021 and December 31, 2020 (in thousands): As of June 30, December 31, 2021 2020Current $ 532,881 $ 517,11131-60 days 4,327 5,77861-90 days 3,451 4,541Over 91 days (1) 19,661 23,963Total $ 560,320 $ 551,393 (1)Includes $9.6 million and $11.4 million related to VOI notes receivable that, as of June 31, 2021 and December 31, 2020, respectively, had defaulted, but the related VOI note receivable balance had not yet been charged off in accordance with the provisions of certain receivable-backed notes payable transactions. These VOI notes receivable have been reflected in the allowance for loan losses. |