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Finance Receivables, Credit Quality Information, and Allowance for Credit Losses | 3 Months Ended
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Mar. 31, 2023
Receivables [Abstract] |
Finance Receivables, Credit Quality Information, and Allowance for Credit Losses | Note 3. Finance Receivables, Credit Quality Information, and Allowance for Credit Losses Net finance receivables for the periods indicated consisted of the following:
Dollars in thousands |  | March 31, 2023 |  |  | December 31, 2022 |
Small loans |  | $ | 456,313 |  |  | $ | 481,605 |
Large loans |  |  | 1,211,836 |  |  |  | 1,208,185 |
Retail loans |  |  | 8,081 |  |  |  | 9,603 |
Net finance receivables |  | $ | 1,676,230 |  |  | $ | 1,699,393 |
Net finance receivables included net deferred origination fees and costs of $14.5 million and $16.0 million as of March 31, 2023 and December 31, 2022, respectively. The credit quality of the Company’s finance receivable portfolio is dependent on the Company’s ability to enforce sound underwriting standards, maintain diligent servicing of the portfolio, and respond to changing economic conditions as it grows its portfolio. The allowance for credit losses uses FICO scores and delinquency as key data points in estimating the allowance. The Company uses six FICO band categories to assess FICO scores. The first three FICO band categories include subprime FICO scores below 620. The fourth and fifth FICO band categories include near-prime FICO scores ranging from 620 to 659. The sixth FICO band category includes prime FICO scores of 660 or higher. Net finance receivables by product, FICO band at origination, and origination year as of March 31, 2023 are as follows:
|  | Net Finance Receivables by Origination Year |
Dollars in thousands |  | 2023 (1) |  |  | 2022 |  |  | 2021 |  |  | 2020 |  |  | 2019 |  |  | Prior |  |  | Total Net Finance Receivables |
Small Loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
FICO Band |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
1 |  | $ | 25,427 |  |  | $ | 45,683 |  |  | $ | 7,203 |  |  | $ | 859 |  |  | $ | 168 |  |  | $ | 41 |  |  | $ | 79,381 |
2 |  |  | 9,447 |  |  |  | 29,996 |  |  |  | 4,131 |  |  |  | 397 |  |  |  | 32 |  |  |  | 12 |  |  |  | 44,015 |
3 |  |  | 13,113 |  |  |  | 38,952 |  |  |  | 4,409 |  |  |  | 286 |  |  |  | 26 |  |  |  | 1 |  |  |  | 56,787 |
4 |  |  | 14,303 |  |  |  | 46,107 |  |  |  | 5,019 |  |  |  | 311 |  |  |  | 20 |  |  |  | 8 |  |  |  | 65,768 |
5 |  |  | 16,770 |  |  |  | 54,149 |  |  |  | 6,000 |  |  |  | 263 |  |  |  | 12 |  |  |  | 3 |  |  |  | 77,197 |
6 |  |  | 29,848 |  |  |  | 91,324 |  |  |  | 11,495 |  |  |  | 478 |  |  |  | 18 |  |  |  | 2 |  |  |  | 133,165 |
Total small loans |  | $ | 108,908 |  |  | $ | 306,211 |  |  | $ | 38,257 |  |  | $ | 2,594 |  |  | $ | 276 |  |  | $ | 67 |  |  | $ | 456,313 |
Current period credit losses (2) |  | $ | 14 |  |  | $ | 11,463 |  |  | $ | 4,599 |  |  | $ | 285 |  |  | $ | 17 |  |  | $ | 2 |  |  | $ | 16,380 |
Large Loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
FICO Band |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
1 |  | $ | 20,579 |  |  | $ | 53,571 |  |  | $ | 18,258 |  |  | $ | 5,773 |  |  | $ | 2,529 |  |  | $ | 997 |  |  | $ | 101,707 |
2 |  |  | 10,843 |  |  |  | 35,941 |  |  |  | 12,410 |  |  |  | 3,038 |  |  |  | 951 |  |  |  | 177 |  |  |  | 63,360 |
3 |  |  | 21,404 |  |  |  | 96,791 |  |  |  | 34,620 |  |  |  | 6,468 |  |  |  | 1,770 |  |  |  | 202 |  |  |  | 161,255 |
4 |  |  | 29,658 |  |  |  | 130,747 |  |  |  | 46,263 |  |  |  | 9,216 |  |  |  | 2,697 |  |  |  | 148 |  |  |  | 218,729 |
5 |  |  | 30,643 |  |  |  | 132,220 |  |  |  | 48,096 |  |  |  | 10,220 |  |  |  | 2,499 |  |  |  | 116 |  |  |  | 223,794 |
6 |  |  | 71,624 |  |  |  | 256,380 |  |  |  | 91,388 |  |  |  | 19,109 |  |  |  | 4,326 |  |  |  | 164 |  |  |  | 442,991 |
Total large loans |  | $ | 184,751 |  |  | $ | 705,650 |  |  | $ | 251,035 |  |  | $ | 53,824 |  |  | $ | 14,772 |  |  | $ | 1,804 |  |  | $ | 1,211,836 |
Current period credit losses (2) |  | $ | 8 |  |  | $ | 13,653 |  |  | $ | 12,142 |  |  | $ | 1,696 |  |  | $ | 529 |  |  | $ | 69 |  |  | $ | 28,097 |
Retail Loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
FICO Band |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
1 |  | $ | 4 |  |  | $ | 5 |  |  | $ | 5 |  |  | $ | 14 |  |  | $ | 5 |  |  | $ | 6 |  |  | $ | 39 |
2 |  |  | — |  |  |  | 422 |  |  |  | 77 |  |  |  | 4 |  |  |  | 4 |  |  |  | — |  |  |  | 507 |
3 |  |  | — |  |  |  | 1,185 |  |  |  | 482 |  |  |  | 45 |  |  |  | 8 |  |  |  | 4 |  |  |  | 1,724 |
4 |  |  | — |  |  |  | 1,219 |  |  |  | 799 |  |  |  | 178 |  |  |  | 10 |  |  |  | 5 |  |  |  | 2,211 |
5 |  |  | — |  |  |  | 973 |  |  |  | 643 |  |  |  | 149 |  |  |  | 11 |  |  |  | 6 |  |  |  | 1,782 |
6 |  |  | — |  |  |  | 989 |  |  |  | 655 |  |  |  | 159 |  |  |  | 14 |  |  |  | 1 |  |  |  | 1,818 |
Total retail loans |  | $ | 4 |  |  | $ | 4,793 |  |  | $ | 2,661 |  |  | $ | 549 |  |  | $ | 52 |  |  | $ | 22 |  |  | $ | 8,081 |
Current period credit losses (2) |  | $ | — |  |  | $ | 44 |  |  | $ | 62 |  |  | $ | 15 |  |  | $ | 8 |  |  | $ | 3 |  |  | $ | 132 |
Total Loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
FICO Band |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
1 |  | $ | 46,010 |  |  | $ | 99,259 |  |  | $ | 25,466 |  |  | $ | 6,646 |  |  | $ | 2,702 |  |  | $ | 1,044 |  |  | $ | 181,127 |
2 |  |  | 20,290 |  |  |  | 66,359 |  |  |  | 16,618 |  |  |  | 3,439 |  |  |  | 987 |  |  |  | 189 |  |  |  | 107,882 |
3 |  |  | 34,517 |  |  |  | 136,928 |  |  |  | 39,511 |  |  |  | 6,799 |  |  |  | 1,804 |  |  |  | 207 |  |  |  | 219,766 |
4 |  |  | 43,961 |  |  |  | 178,073 |  |  |  | 52,081 |  |  |  | 9,705 |  |  |  | 2,727 |  |  |  | 161 |  |  |  | 286,708 |
5 |  |  | 47,413 |  |  |  | 187,342 |  |  |  | 54,739 |  |  |  | 10,632 |  |  |  | 2,522 |  |  |  | 125 |  |  |  | 302,773 |
6 |  |  | 101,472 |  |  |  | 348,693 |  |  |  | 103,538 |  |  |  | 19,746 |  |  |  | 4,358 |  |  |  | 167 |  |  |  | 577,974 |
Total loans |  | $ | 293,663 |  |  | $ | 1,016,654 |  |  | $ | 291,953 |  |  | $ | 56,967 |  |  | $ | 15,100 |  |  | $ | 1,893 |  |  | $ | 1,676,230 |
Current period credit losses (2) |  | $ | 22 |  |  | $ | 25,160 |  |  | $ | 16,803 |  |  | $ | 1,996 |  |  | $ | 554 |  |  | $ | 74 |  |  | $ | 44,609 |
(1) Includes loans originated during the three months ended March 31, 2023. (2) Represents credit losses for the three months ended March 31, 2023. Net finance receivables by product, FICO band at origination, and origination year as of December 31, 2022 are as follows:
|  | Net Finance Receivables by Origination Year |
Dollars in thousands |  | 2022 |  |  | 2021 |  |  | 2020 |  |  | 2019 |  |  | 2018 |  |  | Prior |  |  | Total Net Finance Receivables |
Small Loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
FICO Band |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
1 |  | $ | 63,362 |  |  | $ | 10,842 |  |  | $ | 1,388 |  |  | $ | 246 |  |  | $ | 47 |  |  | $ | 7 |  |  | $ | 75,892 |
2 |  |  | 41,683 |  |  |  | 6,785 |  |  |  | 664 |  |  |  | 56 |  |  |  | 26 |  |  |  | 2 |  |  |  | 49,216 |
3 |  |  | 53,444 |  |  |  | 7,659 |  |  |  | 520 |  |  |  | 39 |  |  |  | — |  |  |  | 1 |  |  |  | 61,663 |
4 |  |  | 62,609 |  |  |  | 8,980 |  |  |  | 544 |  |  |  | 33 |  |  |  | — |  |  |  | 1 |  |  |  | 72,167 |
5 |  |  | 71,448 |  |  |  | 10,650 |  |  |  | 505 |  |  |  | 22 |  |  |  | — |  |  |  | — |  |  |  | 82,625 |
6 |  |  | 119,199 |  |  |  | 19,886 |  |  |  | 929 |  |  |  | 28 |  |  |  | — |  |  |  | — |  |  |  | 140,042 |
Total small loans |  | $ | 411,745 |  |  | $ | 64,802 |  |  | $ | 4,550 |  |  | $ | 424 |  |  | $ | 73 |  |  | $ | 11 |  |  | $ | 481,605 |
Large Loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
FICO Band |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
1 |  | $ | 60,836 |  |  | $ | 20,653 |  |  | $ | 7,219 |  |  | $ | 3,286 |  |  | $ | 826 |  |  | $ | 539 |  |  | $ | 93,359 |
2 |  |  | 41,174 |  |  |  | 15,955 |  |  |  | 4,044 |  |  |  | 1,409 |  |  |  | 111 |  |  |  | 121 |  |  |  | 62,814 |
3 |  |  | 112,336 |  |  |  | 44,805 |  |  |  | 8,637 |  |  |  | 2,811 |  |  |  | 172 |  |  |  | 137 |  |  |  | 168,898 |
4 |  |  | 150,559 |  |  |  | 57,913 |  |  |  | 12,063 |  |  |  | 3,931 |  |  |  | 152 |  |  |  | 67 |  |  |  | 224,685 |
5 |  |  | 150,793 |  |  |  | 59,154 |  |  |  | 13,060 |  |  |  | 3,735 |  |  |  | 172 |  |  |  | 37 |  |  |  | 226,951 |
6 |  |  | 290,648 |  |  |  | 109,931 |  |  |  | 24,038 |  |  |  | 6,552 |  |  |  | 263 |  |  |  | 46 |  |  |  | 431,478 |
Total large loans |  | $ | 806,346 |  |  | $ | 308,411 |  |  | $ | 69,061 |  |  | $ | 21,724 |  |  | $ | 1,696 |  |  | $ | 947 |  |  | $ | 1,208,185 |
Retail Loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
FICO Band |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
1 |  | $ | 8 |  |  | $ | 7 |  |  | $ | 28 |  |  | $ | 12 |  |  | $ | 4 |  |  | $ | 3 |  |  | $ | 62 |
2 |  |  | 475 |  |  |  | 92 |  |  |  | 9 |  |  |  | 10 |  |  |  | — |  |  |  | — |  |  |  | 586 |
3 |  |  | 1,310 |  |  |  | 599 |  |  |  | 71 |  |  |  | 14 |  |  |  | 1 |  |  |  | 3 |  |  |  | 1,998 |
4 |  |  | 1,389 |  |  |  | 979 |  |  |  | 263 |  |  |  | 28 |  |  |  | 2 |  |  |  | 4 |  |  |  | 2,665 |
5 |  |  | 1,083 |  |  |  | 775 |  |  |  | 218 |  |  |  | 27 |  |  |  | 3 |  |  |  | 5 |  |  |  | 2,111 |
6 |  |  | 1,123 |  |  |  | 802 |  |  |  | 224 |  |  |  | 31 |  |  |  | — |  |  |  | 1 |  |  |  | 2,181 |
Total retail loans |  | $ | 5,388 |  |  | $ | 3,254 |  |  | $ | 813 |  |  | $ | 122 |  |  | $ | 10 |  |  | $ | 16 |  |  | $ | 9,603 |
Total Loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
FICO Band |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
1 |  | $ | 124,206 |  |  | $ | 31,502 |  |  | $ | 8,635 |  |  | $ | 3,544 |  |  | $ | 877 |  |  | $ | 549 |  |  | $ | 169,313 |
2 |  |  | 83,332 |  |  |  | 22,832 |  |  |  | 4,717 |  |  |  | 1,475 |  |  |  | 137 |  |  |  | 123 |  |  |  | 112,616 |
3 |  |  | 167,090 |  |  |  | 53,063 |  |  |  | 9,228 |  |  |  | 2,864 |  |  |  | 173 |  |  |  | 141 |  |  |  | 232,559 |
4 |  |  | 214,557 |  |  |  | 67,872 |  |  |  | 12,870 |  |  |  | 3,992 |  |  |  | 154 |  |  |  | 72 |  |  |  | 299,517 |
5 |  |  | 223,324 |  |  |  | 70,579 |  |  |  | 13,783 |  |  |  | 3,784 |  |  |  | 175 |  |  |  | 42 |  |  |  | 311,687 |
6 |  |  | 410,970 |  |  |  | 130,619 |  |  |  | 25,191 |  |  |  | 6,611 |  |  |  | 263 |  |  |  | 47 |  |  |  | 573,701 |
Total loans |  | $ | 1,223,479 |  |  | $ | 376,467 |  |  | $ | 74,424 |  |  | $ | 22,270 |  |  | $ | 1,779 |  |  | $ | 974 |  |  | $ | 1,699,393 |
The contractual delinquency of the net finance receivables portfolio by product and aging for the periods indicated are as follows:
|  | March 31, 2023 |
|  | Small |  |  | Large |  |  | Retail |  |  | Total |
Dollars in thousands |  | $ |  |  | % |  |  | $ |  |  | % |  |  | $ |  |  | % |  |  | $ |  |  | % |
Current |  | $ | 374,823 |  |  |  | 82.1 | % |  | $ | 1,057,248 |  |  |  | 87.2 | % |  | $ | 6,283 |  |  |  | 77.8 | % |  | $ | 1,438,354 |  |  |  | 85.8 | %
1 to 29 days past due |  |  | 35,890 |  |  |  | 7.9 | % |  |  | 79,982 |  |  |  | 6.6 | % |  |  | 851 |  |  |  | 10.5 | % |  |  | 116,723 |  |  |  | 7.0 | %
Delinquent accounts |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
30 to 59 days |  |  | 9,406 |  |  |  | 2.1 | % |  |  | 17,822 |  |  |  | 1.6 | % |  |  | 200 |  |  |  | 2.4 | % |  |  | 27,428 |  |  |  | 1.6 | %
60 to 89 days |  |  | 9,165 |  |  |  | 2.0 | % |  |  | 15,847 |  |  |  | 1.3 | % |  |  | 166 |  |  |  | 2.1 | % |  |  | 25,178 |  |  |  | 1.5 | %
90 to 119 days |  |  | 9,218 |  |  |  | 2.0 | % |  |  | 13,768 |  |  |  | 1.1 | % |  |  | 162 |  |  |  | 2.0 | % |  |  | 23,148 |  |  |  | 1.4 | %
120 to 149 days |  |  | 8,550 |  |  |  | 1.9 | % |  |  | 13,497 |  |  |  | 1.1 | % |  |  | 216 |  |  |  | 2.7 | % |  |  | 22,263 |  |  |  | 1.3 | %
150 to 179 days |  |  | 9,261 |  |  |  | 2.0 | % |  |  | 13,672 |  |  |  | 1.1 | % |  |  | 203 |  |  |  | 2.5 | % |  |  | 23,136 |  |  |  | 1.4 | %
Total delinquency |  | $ | 45,600 |  |  |  | 10.0 | % |  | $ | 74,606 |  |  |  | 6.2 | % |  | $ | 947 |  |  |  | 11.7 | % |  | $ | 121,153 |  |  |  | 7.2 | %
Total net finance receivables |  | $ | 456,313 |  |  |  | 100.0 | % |  | $ | 1,211,836 |  |  |  | 100.0 | % |  | $ | 8,081 |  |  |  | 100.0 | % |  | $ | 1,676,230 |  |  |  | 100.0 | %
Net finance receivables in nonaccrual status |  | $ | 27,983 |  |  |  | 6.1 | % |  | $ | 43,045 |  |  |  | 3.6 | % |  | $ | 603 |  |  |  | 7.5 | % |  | $ | 71,631 |  |  |  | 4.3 | %
|  | December 31, 2022 |
|  | Small |  |  | Large |  |  | Retail |  |  | Total |
Dollars in thousands |  | $ |  |  | % |  |  | $ |  |  | % |  |  | $ |  |  | % |  |  | $ |  |  | % |
Current |  | $ | 388,978 |  |  |  | 80.7 | % |  | $ | 1,034,981 |  |  |  | 85.7 | % |  | $ | 7,543 |  |  |  | 78.6 | % |  | $ | 1,431,502 |  |  |  | 84.2 | %
1 to 29 days past due |  |  | 48,924 |  |  |  | 10.2 | % |  |  | 97,855 |  |  |  | 8.1 | % |  |  | 1,269 |  |  |  | 13.2 | % |  |  | 148,048 |  |  |  | 8.7 | %
Delinquent accounts |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
30 to 59 days |  |  | 13,144 |  |  |  | 2.8 | % |  |  | 22,712 |  |  |  | 1.8 | % |  |  | 352 |  |  |  | 3.7 | % |  |  | 36,208 |  |  |  | 2.2 | %
60 to 89 days |  |  | 12,251 |  |  |  | 2.5 | % |  |  | 18,828 |  |  |  | 1.6 | % |  |  | 273 |  |  |  | 2.8 | % |  |  | 31,352 |  |  |  | 1.8 | %
90 to 119 days |  |  | 8,714 |  |  |  | 1.8 | % |  |  | 15,427 |  |  |  | 1.3 | % |  |  | 152 |  |  |  | 1.6 | % |  |  | 24,293 |  |  |  | 1.4 | %
120 to 149 days |  |  | 5,572 |  |  |  | 1.2 | % |  |  | 10,675 |  |  |  | 0.9 | % |  |  | 10 |  |  |  | 0.1 | % |  |  | 16,257 |  |  |  | 1.0 | %
150 to 179 days |  |  | 4,022 |  |  |  | 0.8 | % |  |  | 7,707 |  |  |  | 0.6 | % |  |  | 4 |  |  |  | 0.0 | % |  |  | 11,733 |  |  |  | 0.7 | %
Total delinquency |  | $ | 43,703 |  |  |  | 9.1 | % |  | $ | 75,349 |  |  |  | 6.2 | % |  | $ | 791 |  |  |  | 8.2 | % |  | $ | 119,843 |  |  |  | 7.1 | %
Total net finance receivables |  | $ | 481,605 |  |  |  | 100.0 | % |  | $ | 1,208,185 |  |  |  | 100.0 | % |  | $ | 9,603 |  |  |  | 100.0 | % |  | $ | 1,699,393 |  |  |  | 100.0 | %
Net finance receivables in nonaccrual status |  | $ | 20,810 |  |  |  | 4.3 | % |  | $ | 39,039 |  |  |  | 3.2 | % |  | $ | 212 |  |  |  | 2.2 | % |  | $ | 60,061 |  |  |  | 3.5 | %
The accrual of interest income on finance receivables is suspended when an account becomes 90 days delinquent. If a loan is charged off, the accrued interest is reversed as a reduction of interest and fee income. During the three months ended March 31, 2023 and 2022, the Company reversed $4.7 million and $3.7 million of accrued interest as reductions of interest and fee income, respectively. The following is a reconciliation of the allowance for credit losses by product for the three months ended March 31, 2023 and 2022:
Dollars in thousands |  | Small |  |  | Large |  |  | Retail |  |  | Total |
Beginning balance at January 1, 2023 |  | $ | 57,915 |  |  | $ | 119,592 |  |  | $ | 1,293 |  |  | $ | 178,800 |
Provision for credit losses |  |  | 19,819 |  |  |  | 27,709 |  |  |  | 140 |  |  |  | 47,668 |
Credit losses |  |  | (16,380 | ) |  |  | (28,097 | ) |  |  | (132 | ) |  |  | (44,609 | )
Recoveries |  |  | 758 |  |  |  | 1,178 |  |  |  | 5 |  |  |  | 1,941 |
Ending balance at March 31, 2023 |  | $ | 62,112 |  |  | $ | 120,382 |  |  | $ | 1,306 |  |  | $ | 183,800 |
Net finance receivables at March 31, 2023 |  | $ | 456,313 |  |  | $ | 1,211,836 |  |  | $ | 8,081 |  |  | $ | 1,676,230 |
Allowance as percentage of net finance receivables at March 31, 2023 |  |  | 13.6 | % |  |  | 9.9 | % |  |  | 16.2 | % |  |  | 11.0 | %
Dollars in thousands |  | Small |  |  | Large |  |  | Retail |  |  | Total |
Beginning balance at January 1, 2022 |  | $ | 61,294 |  |  | $ | 96,494 |  |  | $ | 1,512 |  |  | $ | 159,300 |
Provision for credit losses |  |  | 12,646 |  |  |  | 17,952 |  |  |  | 260 |  |  |  | 30,858 |
Credit losses |  |  | (16,255 | ) |  |  | (16,260 | ) |  |  | (265 | ) |  |  | (32,780 | )
Recoveries |  |  | 645 |  |  |  | 747 |  |  |  | 30 |  |  |  | 1,422 |
Ending balance at March 31, 2022 |  | $ | 58,330 |  |  | $ | 98,933 |  |  | $ | 1,537 |  |  | $ | 158,800 |
Net finance receivables at March 31, 2022 |  | $ | 438,153 |  |  | $ | 997,226 |  |  | $ | 10,692 |  |  | $ | 1,446,071 |
Allowance as percentage of net finance receivables at March 31, 2022 |  |  | 13.3 | % |  |  | 9.9 | % |  |  | 14.4 | % |  |  | 11.0 | %
T he Company uses certain loan modification programs for borrowers experiencing financial difficulties as a loss mitigation strategy to improve collectability of the loans and assist customers through financial setbacks. Programs consist of offering payment deferrals, refinancing, and, in limited instances, settlements. Customers may also pursue financial assistance through external sources, such as filing for bankruptcy protection. Modification programs available to our customers are described in more detail below: • Customers are generally limited to two deferrals of their monthly payment in a rolling twelve-month period unless it is determined that an exception is warranted (e.g. due to a natural disaster or pandemic). Since the COVID-19 pandemic, customers have been temporarily allowed up to three deferrals in a rolling twelve-month period. • Customers with delinquent loans who have made recent payments and have verified current employment are allowed to refinance their loan with a reduced interest rate and/or term extension, making the monthly payments more affordable. • The Company may also agree to settle a past-due loan by accepting less than the full principal balance owed in certain limited cases once it is determined that collection of the entire outstanding balance is unlikely. • Customers who receive bankruptcy protection may receive principal forgiveness, interest rate reductions, and/or term extensions. The information relating to modifications made to borrowers experiencing financial difficulty for the periods indicated are as follows:
| As of and for the Three Months Ended March 31, 2023 |
| Principal Forgiveness |  |  | Deferrals |  |  | Interest Rate Reduction & Term Extension |  |  | Total |
Dollars in thousands | Amortized Cost Basis |  |  | % of Net Finance Receivables |  |  | Amortized Cost Basis |  |  | % of Net Finance Receivables |  |  | Amortized Cost Basis |  |  | % of Net Finance Receivables |  |  | Amortized Cost Basis |  |  | % of Net Finance Receivables |
Small loans | $ | 3 |  |  |  | — |  |  | $ | 1,707 |  |  |  | 0.4 | % |  | $ | 958 |  |  |  | 0.2 | % |  | $ | 2,668 |  |  |  | 0.6 | %
Large loans |  | 24 |  |  |  | — |  |  |  | 3,079 |  |  |  | 0.3 | % |  |  | 4,636 |  |  |  | 0.4 | % |  |  | 7,739 |  |  |  | 0.6 | %
Total | $ | 27 |  |  |  | — |  |  | $ | 4,786 |  |  |  | 0.3 | % |  | $ | 5,594 |  |  |  | 0.3 | % |  | $ | 10,407 |  |  |  | 0.6 | %
The financial effects of the modifications made to borrowers experiencing financial difficulty for the three months ended March 31, 2023 are as follows:
Loan Modification | Product | Financial Effect
Principal forgiveness | Small loans | Reduced the amortized cost basis of the loans by $0.1 million.
Large loans | Reduced the amortized cost basis of the loans by $0.2 million.
Deferrals | Small loans | Provided an average of 3 monthly payment deferrals through our standard deferral program. The payment deferrals were added to the end of the original loan terms of these borrowers.
Large loans | Provided an average of 3 monthly payment deferrals through our standard deferral program. The payment deferrals were added to the end of the original loan terms of these borrowers.
Interest rate reduction | Small loans | Reduced the weighted-average contractual interest rate from 35.5% to 22.9%.
Large loans | Reduced weighted-average contractual interest rate from 30.3% to 18.0%.
Term extension | Small loans | Added a weighted-average 1.2 years to the life of loans.
Large loans | Added a weighted-average 1.3 years to the life of loans.
The following table provides the amortized cost basis for modifications made to borrowers experiencing financial difficulty on or after January 1, 2023 that subsequently defaulted. The Company defines payment default as 90 days past due for this disclosure. The respective amounts for each modification for the periods indicated are as follows:
|  | March 31, 2023 |
Dollars in thousands |  | Principal Forgiveness |  |  | Deferrals |  |  | Interest Rate Reduction & Term Extension |  |  | Total |
Small loans |  | $ | — |  |  | $ | 33 |  |  | $ | — |  |  | $ | 33 |
Large loans |  |  | — |  |  |  | 21 |  |  |  | — |  |  |  | 21 |
Total |  | $ | — |  |  | $ | 54 |  |  | $ | — |  |  | $ | 54 |
The contractual delinquencies of loans that were modified to borrowers experiencing financial difficulty on or after January 1, 2023 for the periods indicated are as follows:
|  | March 31, 2023 |
Dollars in thousands |  | Current |  |  | 30 - 89 Days Past Due |  |  | 90+ Days Past Due |  |  | Total |
Small loans |  | $ | 2,354 |  |  | $ | 281 |  |  | $ | 34 |  |  | $ | 2,669 |
Large loans |  |  | 7,324 |  |  |  | 393 |  |  |  | 17 |  |  |  | 7,734 |
Total |  | $ | 9,678 |  |  | $ | 674 |  |  | $ | 51 |  |  | $ | 10,403 |
Prior to January 1, 2023, the Company classified a loan as a TDR finance receivable when the Company modified a loan’s contractual terms for economic or other reasons related to the borrower’s financial difficulties and granted a concession that it would not have otherwise considered. The amount of TDR net finance receivables and the related TDR allowance for credit losses for the periods indicated are as follows:
|  | March 31, 2022 |
Dollars in thousands |  | TDR Net Finance Receivables |  |  | TDR Allowance for Credit Losses |
Small loans |  | $ | 3,249 |  |  | $ | 1,078 |
Large loans |  |  | 13,295 |  |  |  | 3,782 |
Retail loans |  |  | 58 |  |  |  | 19 |
Total |  | $ | 16,602 |  |  | $ | 4,879 |
The following table provides the number and amount of net finance receivables modified and classified as TDRs during the periods presented:
|  | Three Months Ended |
|  | March 31, 2022 |
Dollars in thousands |  | Number of Loans |  |  | TDR Net Finance Receivables (1) |
Small loans |  |  | 766 |  |  | $ | 1,464 |
Large loans |  |  | 760 |  |  |  | 4,043 |
Retail loans |  |  | 3 |  |  |  | 5 |
Total |  |  | 1,529 |  |  | $ | 5,512 |
(1) Represents the post-modification net finance receivables balance of loans that have been modified during the period and resulted in a TDR. The following table provides the number of accounts and amortized cost basis of finance receivables that subsequently defaulted within the periods indicated (that were modified as a TDR in the preceding 12 months). The Company defines payment default as 90 days past due for this disclosure. The respective amounts and activity for the periods indicated are as follows:
|  | Three Months Ended |
|  | March 31, 2022 |
Dollars in thousands |  | Number of Loans |  |  | TDR Net Finance Receivables (1) |
Small loans |  |  | 254 |  |  | $ | 478 |
Large loans |  |  | 210 |  |  |  | 1,212 |
Retail loans |  |  | 2 |  |  |  | 6 |
Total |  |  | 466 |  |  | $ | 1,696 |
(1) Only includes defaults occurring within 12 months of a loan being designated as a TDR. Represents the corresponding balance of TDR net finance receivables at the end of the month in which they defaulted.

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