Net Investment in Leases (Tables)

9 Months Ended

Sep. 30, 2021

The Company’s net investment in leases were comprised of the following as of September 30, 2021 and December 31, 2020 ($ in thousands):


	September 30, 2021		December 31, 2020
Total undiscounted cash flows	$	1,538,758	$	1,020,921
Unguaranteed estimated residual value		367,804		345,284
Present value discount		(1,420,066)		(926,233)
Allowance for losses on net investment in leases		(9,136)		(10,871)
Net investment in leases⁽¹⁾	$	477,360	$	429,101

Schedule of future minimum lease payments to be collected under sales-type leases


	Amount
2021 (remaining three months)	$	7,372
2022		30,590
2023		43,272
2024		43,029
2025		31,955
Thereafter		1,382,540
Total undiscounted cash flows	$	1,538,758

Schedule of changes in allowance for losses on net investment in leases


	Three Months Ended				Nine Months Ended
	September 30, 2021		September 30, 2020		September 30, 2021		September 30, 2020
Allowance for losses on net investment in leases at beginning of period	$	9,005	$	10,937	$	10,871	$	—
Initial allowance recorded upon adoption of new accounting standard⁽¹⁾		—		—		—		9,111
Provision for (recovery of) losses on net investment in leases⁽²⁾		131		176		(1,735)		2,002
Allowance for losses on net investment in leases at end of period	$	9,136	$	11,113	$	9,136	$	11,113

(1)	The Company recorded an initial allowance for losses on net investment in leases of $9.1 million upon the adoption of ASU 2016-13 on January 1, 2020.

(2)

During the three and nine months ended September 30, 2021, the Company recorded a provision for (recovery of) losses on net investment in leases of $0.1 million and ($1.7) million, respectively. The provision for losses for the three months ended September 30, 2021 resulted from market changes since June 30, 2021 and the recovery of losses for the nine months ended September 30, 2021 was due primarily to asset sales and an improving macroeconomic forecast on commercial real estate markets since December 31, 2020. During the three and nine months ended September 30, 2020, the Company recorded a provision for losses on net investment in leases of $0.2 million and $2.0 million, respectively, due primarily to the macroeconomic impact of COVID-19 on commercial real estate markets and the adoption of ASU 2016-13.