Finance Receivables

3 Months Ended

Mar. 31, 2022

Finance ReceivablesFinance receivables at fair value: The components of installment finance receivables at fair value as of March 31, 2022 and December 31, 2021 were as follows (in thousands):


	March 31, 2022		December 31, 2021
Unpaid principal balance of finance receivables - accrual	$	309,971	$	307,059
Unpaid principal balance of finance receivables - non-accrual	22,546		25,185
Unpaid principal balance of finance receivables	$	332,517	$	332,244

Finance receivables at fair value - accrual	$	367,724	$	369,576
Finance receivables at fair value - non-accrual	3,448		3,677
Finance receivables at fair value, excluding accrued interest and fees receivable	371,172		373,253
Accrued interest and fees receivable	10,673		10,637
Finance receivables at fair value	$	381,845	$	383,890

Difference between unpaid principal balance and fair value	$	38,655	$	41,009

The Company’s policy is to discontinue and reverse the accrual of interest income on installment finances receivables at the earlier of 60 days past due on a recency basis or 90 days past due on a contractual basis. As of March 31, 2022, the aggregate unpaid principal balance and fair value of installment finance receivables 90 days or more past due was $10.1 million and $1.5 million, respectively. As of December 31, 2021, the aggregate unpaid principal balance and fair value of installment finance receivables 90 days or more past due was $10.5 million and $1.5 million, respectively.

Changes in the fair value of installment finance receivables at fair value for the three months ended March 31, 2022 and 2021 were as follows (in thousands):


	Three Months Ended March 31,
	2022		2021
Balance at the beginning of the period	$	383,890	$	289,166
Originations of principal	154,021		105,834
Repayments of principal and recoveries	(106,577)		(104,195)
Accrued interest and fees receivable	36		1,366
Charge-offs, net (1)	(47,171)		(19,833)
Net change in fair value (1)	(2,354)		(2,556)
Balance at the end of the period	$	381,845	$	269,782

(1) Included in "Change in fair value of finance receivables" in the consolidated statements of operations.

Finance receivables at amortized cost, net: The components of finance receivables carried at amortized cost as of March 31, 2022 and December 31, 2021 were as follows (in thousands):


	March 31, 2022		December 31, 2021
Finance receivables	$	5,942	$	5,285
Accrued interest and fees	32		24
Unearned annual fee income	(232)		(286)
Allowance for credit losses	(931)		(803)
Finance receivables at amortized cost, net	$	4,811	$	4,220

Changes in the allowance for credit losses on finance receivables for the three months ended March 31, 2022 and 2021 were as follows (in thousands):


	Three Months Ended March 31,
	2022		2021
Beginning balance	$	803	$	55,031
Effects of adopting fair value option	—		(55,031)
Provisions for credit losses on finance receivables	457		7
Finance receivables charged off	(329)		—

Ending balance	$	931	$	7

The Company released the reserve for repurchase liability for third-party lender losses on January 1, 2021 upon election of the fair value option for its installment finance receivables. As such, there was no reserve for repurchase liability for third-party losses as of January 1, 2021 and thereafter.

The following is an assessment of the credit quality of finance receivables at amortized cost and presents the recency and contractual delinquency of the finance receivable portfolio as of March 31, 2022 and December 31, 2021 (in thousands):


	March 31, 2022				December 31, 2021
	Recency delinquency		Contractual delinquency		Recency delinquency		Contractual delinquency
Current	$	5,037	$	5,045	$	5,016	$	4,993
Delinquency
30-59 days	422		369		152		171
60-89 days	366		392		102		104
90+ days	117		136		15		17
Total delinquency	905		897		269		292
Finance receivables	$	5,942	$	5,942	$	5,285	$	5,285

In accordance with the Company’s income recognition policy, finance receivables in non-accrual status as of March 31, 2022 and December 31, 2021 were $0.5 million and $0.1 million, respectively.