Quarterly report pursuant to Section 13 or 15(d)

Consumer Receivables

v3.23.3
Consumer Receivables
9 Months Ended
Sep. 30, 2023
Receivables [Abstract]  
CONSUMER RECEIVABLES

3. CONSUMER RECEIVABLES

 

The Company’s finance receivables consist of secured personal loans and principal amounts of Instacash advances. Secured loan principal balances are partially given to the borrower upon origination while the remaining balance is deposited into an escrow account. The funds in the escrow account may be used to pay the secured personal loan in full or can be released to the borrower once the secured personal loan is paid in full. Until such time, the funds in the escrow account may be collected by the Company in the event the borrower becomes contractually past due. Accrued interest receivables represent the interest accrued on the loan receivables based upon the daily principal amount outstanding except for loans that are on nonaccrual status.

 

The Company’s policy is to suspend recognition of interest income on secured personal loans and place the secured personal loan on nonaccrual status when the account is more than 60 days past due on a contractual basis or when, in the Company’s estimation, the collectability of the account is uncertain, and the account is less than 90 days contractually past due. Any accrued interest receivable that becomes 90 days past due on a contractual basis is charged-off by reversing net interest income on loan receivables. Net charge-offs of accrued interest income were $396 and $568 for the three months ended September 30, 2023 and 2022 and $1,069 and $1,614 for the nine months ended September 30, 2023 and 2022.

 

Fees receivables represent the amounts due to the Company for tips and instant transfer fees related to the Instacash earned wage access product. Subscription receivables represent the amounts billed to customers for subscription services.

 

The credit quality and future repayment of consumer receivables are dependent upon the customer’s ability to perform under the terms of the agreement. Factors such as unemployment rates and housing values, among others, may impact the customer’s ability to perform under the loan or Instacash advance terms though no direct correlation between charge-off rates and these factors has been identified in the Company's analysis. When assessing provision for losses on consumer receivables, the Company takes into account the composition and delinquency status of the outstanding consumer receivables and the related forecasted principal loss rates based on recent historical experience. Recent historical loss rates are updated on a quarterly basis. Charge-offs of consumer receivable balances occur after becoming ninety days past contractually due unless specific circumstances are identified on an individual or group of receivables that indicate charge-off is not appropriate. The level of exceptions to charge-offs occurring once ninety days past due is not material. Consumer receivable charge-offs typically occur within one year of origination. The tables below show consumer receivables balances as of September 30, 2023 and December 31, 2022 and the consumer receivables activity, charge-off rates and aging by product for the three and nine months ended September 30, 2023 and 2022.

 

Consumer receivables consisted of the following:

 

 

September 30,

 

 

December 31,

 

 

2023

 

 

2022

 

Loan receivables

$

73,842

 

 

$

73,451

 

Instacash receivables

 

97,586

 

 

 

77,688

 

Finance receivables

 

171,428

 

 

 

151,139

 

Fees receivable

 

13,671

 

 

 

14,019

 

Subscription receivables

 

3,487

 

 

 

3,419

 

Deferred loan origination costs

 

94

 

 

 

331

 

Accrued interest receivable

 

1,472

 

 

 

1,068

 

Consumer receivables, before allowance for credit losses

$

190,152

 

 

$

169,976

 

 

Changes in the allowance for losses on loan receivables were as follows:

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Beginning balance

$

6,249

 

 

$

5,757

 

 

$

5,784

 

 

$

6,494

 

Provision for credit losses on receivables

 

3,205

 

 

 

1,344

 

 

 

6,808

 

 

 

7,445

 

Loan receivables charged off

 

(3,660

)

 

 

(5,089

)

 

 

(10,417

)

 

 

(13,494

)

Recoveries

 

808

 

 

 

3,331

 

 

 

4,427

 

 

 

4,898

 

Ending balance

$

6,602

 

 

$

5,343

 

 

$

6,602

 

 

$

5,343

 

 

Changes in the allowance for losses on Instacash receivables were as follows:

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Beginning balance

$

22,311

 

 

$

16,401

 

 

$

23,240

 

 

$

15,131

 

Provision for credit losses on receivables

 

17,846

 

 

 

22,275

 

 

 

46,348

 

 

 

59,232

 

Instacash receivables charged off

 

(23,217

)

 

 

(28,681

)

 

 

(62,815

)

 

 

(75,360

)

Recoveries

 

4,820

 

 

 

6,332

 

 

 

14,987

 

 

 

17,324

 

Ending balance

$

21,760

 

 

$

16,327

 

 

$

21,760

 

 

$

16,327

 

 

Changes in the allowance for losses on fees receivable were as follows:

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Beginning balance

$

2,100

 

 

$

548

 

 

$

908

 

 

$

420

 

Provision for credit losses on receivables

 

2,628

 

 

 

2,553

 

 

 

10,671

 

 

 

6,758

 

Fees receivable charged off

 

(2,957

)

 

 

(3,246

)

 

 

(11,082

)

 

 

(8,731

)

Recoveries

 

627

 

 

 

744

 

 

 

1,901

 

 

 

2,152

 

Ending balance

$

2,398

 

 

$

599

 

 

$

2,398

 

 

$

599

 

 

Changes in the allowance for losses on subscription receivables were as follows:

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Beginning balance

$

1,095

 

 

$

418

 

 

$

1,292

 

 

$

278

 

Provision for credit losses on receivables

 

1,442

 

 

 

1,256

 

 

 

3,367

 

 

 

4,018

 

Subscription receivables charged off

 

(1,452

)

 

 

(1,487

)

 

 

(4,173

)

 

 

(4,426

)

Recoveries

 

228

 

 

 

177

 

 

 

827

 

 

 

494

 

Ending balance

$

1,313

 

 

$

364

 

 

$

1,313

 

 

$

364

 

 

The following is an assessment of the repayment performance of loan receivables as of September 30, 2023 and December 31, 2022 and presents the contractual delinquency of the loan receivables portfolio:

 

 

September 30, 2023

 

 

December 31, 2022

 

 

Amount

 

 

Percent

 

 

Amount

 

 

Percent

 

Current

$

63,385

 

 

 

85.9

%

 

$

63,578

 

 

 

86.6

%

 

 

 

 

 

 

 

 

 

 

 

Delinquency:

 

 

 

 

 

 

 

 

 

 

 

31 to 60 days

 

5,856

 

 

 

7.9

%

 

 

5,579

 

 

 

7.6

%

61 to 90 days

 

4,601

 

 

 

6.2

%

 

 

4,294

 

 

 

5.8

%

Total delinquency

 

10,457

 

 

 

14.1

%

 

 

9,873

 

 

 

13.4

%

Loan receivables before allowance for credit losses

$

73,842

 

 

 

100.0

%

 

$

73,451

 

 

 

100.0

%

 

Loan receivables that are 61 to 90 days contractually past due are placed on non-accrual status.

 

The following is an assessment of the repayment performance of Instacash receivables as of September 30, 2023 and December 31, 2022 and presents the contractual delinquency of the Instacash receivables portfolio:

 

 

September 30, 2023

 

 

December 31, 2022

 

 

Amount

 

 

Percent

 

 

Amount

 

 

Percent

 

Current

$

82,813

 

 

 

84.9

%

 

$

70,003

 

 

 

90.1

%

 

 

 

 

 

 

 

 

 

 

 

Delinquency:

 

 

 

 

 

 

 

 

 

 

 

31 to 60 days

 

7,953

 

 

 

8.1

%

 

 

7,685

 

 

 

9.9

%

61 to 90 days

 

6,820

 

 

 

7.0

%

 

 

 

 

 

0.0

%

Total delinquency

 

14,773

 

 

 

15.1

%

 

 

7,685

 

 

 

9.9

%

Instacash receivables before allowance for credit losses

$

97,586

 

 

 

100.0

%

 

$

77,688

 

 

 

100.0

%

 

The following is an assessment of the repayment performance of fees receivable as of September 30, 2023 and December 31, 2022 and presents the contractual delinquency of the fees receivable portfolio:

 

 

September 30, 2023

 

 

December 31, 2022

 

 

Amount

 

 

Percent

 

 

Amount

 

 

Percent

 

Current

$

11,579

 

 

 

84.7

%

 

$

10,645

 

 

 

75.9

%

 

 

 

 

 

 

 

 

 

 

 

Delinquency:

 

 

 

 

 

 

 

 

 

 

 

31 to 60 days

 

1,118

 

 

 

8.2

%

 

 

3,374

 

 

 

24.1

%

61 to 90 days

 

974

 

 

 

7.1

%

 

 

 

 

 

0.0

%

Total delinquency

 

2,092

 

 

 

15.3

%

 

 

3,374

 

 

 

24.1

%

Fees receivable before allowance for credit losses

$

13,671

 

 

 

100.0

%

 

$

14,019

 

 

 

100.0

%

 

The following is an assessment of the repayment performance of subscription receivables as of September 30, 2023 and December 31, 2022 and presents the contractual delinquency of the subscription receivables portfolio:

 

 

September 30, 2023

 

 

December 31, 2022

 

 

Amount

 

 

Percent

 

 

Amount

 

 

Percent

 

Current

$

2,477

 

 

 

71.1

%

 

$

2,487

 

 

 

72.8

%

 

 

 

 

 

 

 

 

 

 

 

Delinquency:

 

 

 

 

 

 

 

 

 

 

 

31 to 60 days

 

569

 

 

 

16.3

%

 

 

534

 

 

 

15.6

%

61 to 90 days

 

441

 

 

 

12.6

%

 

 

398

 

 

 

11.6

%

Total delinquency

 

1,010

 

 

 

28.9

%

 

 

932

 

 

 

27.2

%

Subscription receivables before allowance for credit losses

$

3,487

 

 

 

100.0

%

 

$

3,419

 

 

 

100.0

%