Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2021 | May 05, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2021 | |
Document Transition Report | false | |
Entity File Number | 001-37680 | |
Entity Registrant Name | ELEVATE CREDIT, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 46-4714474 | |
Entity Address, Address Line One | 4150 International Plaza, | |
Entity Address, Address Line Two | Suite 300 | |
Entity Address, City or Town | Fort Worth, | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 76109 | |
City Area Code | (817) | |
Local Phone Number | 928-1500 | |
Title of 12(b) Security | Common Shares, $0.0004 par value | |
Trading Symbol | ELVT | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 35,752,680 | |
Entity Central Index Key | 0001651094 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 | |
ASSETS | |||
Cash and cash equivalents* | [1] | $ 140,300 | $ 197,983 |
Restricted cash | 3,035 | 3,135 | |
Loans receivable, net of allowance for loan losses of $39,037 and $48,399, respectively* | [1] | 335,285 | 374,832 |
Prepaid expenses and other assets* | [1] | 10,806 | 10,060 |
Operating lease right of use assets | 7,304 | 8,320 | |
Receivable from CSO lenders | 198 | 1,255 | |
Receivable from payment processors* | [1] | 5,263 | 6,147 |
Deferred tax assets, net | 22,600 | 25,958 | |
Property and equipment, net | 32,547 | 34,000 | |
Goodwill, net | 6,776 | 6,776 | |
Intangible assets, net | 230 | 1,133 | |
Total assets | 564,344 | 669,599 | |
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||
Accounts payable and accrued liabilities (See Note 13)* | [1] | 42,816 | 52,252 |
Operating lease liabilities | 11,294 | 11,952 | |
Deferred revenue* | [1] | 2,226 | 3,134 |
Notes payable, net (See Note 5)* | [1] | 341,035 | 438,403 |
Total liabilities | 397,371 | 505,741 | |
COMMITMENTS, CONTINGENCIES AND GUARANTEES (Note 11) | |||
STOCKHOLDERS’ EQUITY | |||
Preferred stock; $0.0004 par value; 24,500,000 authorized shares; none issued and outstanding at March 31, 2021 and December 31, 2020. | 0 | 0 | |
Common stock; $0.0004 par value; 300,000,000 authorized shares; 44,960,438 and 44,960,438 issued; 35,654,988 and 37,954,138 outstanding, respectively | 18 | 18 | |
Additional paid-in capital | 201,618 | 200,433 | |
Treasury stock; at cost; 9,305,450 and 7,006,300 shares of common stock, respectively | (26,611) | (16,492) | |
Accumulated deficit | (8,052) | (20,101) | |
Total stockholders’ equity | 166,973 | 163,858 | |
Total liabilities and stockholders’ equity | $ 564,344 | $ 669,599 | |
[1] | These balances include certain assets and liabilities of variable interest entities (“VIEs”) that can only be used to settle the liabilities of that respective VIE. All assets of the Company are pledged as security for the Company’s outstanding debt, including debt held by the VIEs. For further information regarding the assets and liabilities included in the Company's consolidated accounts, see Note 4—Variable Interest Entities. |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 | |
Statement of Financial Position [Abstract] | |||
Loans receivable, allowance for credit loss | [1] | $ 39,037 | $ 48,399 |
Preferred stock, par value (in usd per share) | $ 0.0004 | $ 0.0004 | |
Preferred stock, shares authorized (in shares) | 24,500,000 | 24,500,000 | |
Preferred stock, shares issued (in shares) | 0 | 0 | |
Preferred stock, shares outstanding (in shares) | 0 | 0 | |
Common stock, par value (in usd per share) | $ 0.0004 | $ 0.0004 | |
Common stock, shares authorized (in shares) | 300,000,000 | 300,000,000 | |
Common stock, shares issued (in shares) | 44,960,438 | 44,960,438 | |
Common stock, shares outstanding (in shares) | 35,654,988 | 37,954,138 | |
Treasury stock, common stock (in shares) | 9,305,450 | 7,006,300 | |
[1] | These balances include certain assets and liabilities of variable interest entities (“VIEs”) that can only be used to settle the liabilities of that respective VIE. All assets of the Company are pledged as security for the Company’s outstanding debt, including debt held by the VIEs. For further information regarding the assets and liabilities included in the Company's consolidated accounts, see Note 4—Variable Interest Entities. |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Income Statement [Abstract] | ||
Revenues | $ 89,733 | $ 162,467 |
Cost of sales: | ||
Provision for loan losses | 20,970 | 78,575 |
Direct marketing costs | 4,383 | 10,969 |
Other cost of sales | 2,047 | 2,670 |
Total cost of sales | 27,400 | 92,214 |
Gross profit | 62,333 | 70,253 |
Operating expenses: | ||
Compensation and benefits | 19,008 | 23,474 |
Professional services | 7,079 | 7,926 |
Selling and marketing | 533 | 954 |
Occupancy and equipment | 4,956 | 4,636 |
Depreciation and amortization | 5,243 | 4,296 |
Other | 775 | 1,071 |
Total operating expenses | 37,594 | 42,357 |
Operating income | 24,739 | 27,896 |
Other expense: | ||
Net interest expense (See Note 13) | (8,786) | (13,656) |
Non-operating income (loss) | 207 | (4,263) |
Total other expense | (8,579) | (17,919) |
Income from continuing operations before taxes | 16,160 | 9,977 |
Income tax expense | 3,444 | 2,055 |
Net income from continuing operations | 12,716 | 7,922 |
Net loss from discontinued operations | 0 | (12,833) |
Net income (loss) | $ 12,716 | $ (4,911) |
Basic earnings per share | ||
Continuing operations (in usd per share) | $ 0.35 | $ 0.18 |
Discontinued operations (in usd per share) | 0 | (0.29) |
Basic earnings per share (in usd per share) | 0.35 | (0.11) |
Diluted earnings per share | ||
Continuing operations (in usd per share) | 0.34 | 0.18 |
Discontinued operations (in usd per share) | 0 | (0.29) |
Diluted earnings (loss) per share (in usd per share) | $ 0.34 | $ (0.11) |
Basic weighted average shares outstanding (in shares) | 36,582,502 | 43,161,716 |
Diluted weighted average shares outstanding (in shares) | 37,579,050 | 43,631,737 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | ||
Net income (loss) | $ 12,716 | $ (4,911) |
Other comprehensive income (loss), net of tax: | ||
Foreign currency translation adjustment, net of tax of $0 and $(14), respectively | 0 | (2,003) |
Total other comprehensive income (loss), net of tax | 0 | (2,003) |
Total comprehensive income (loss) | $ 12,716 | $ (6,914) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) (Parenthetical) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Statement of Comprehensive Income [Abstract] | ||
Foreign currency translation adjustment, tax expense (tax benefit) | $ 0 | $ (14,000) |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED) - USD ($) $ in Thousands | Total | RSUs | Stock Option | Preferred Stock | Common Stock | Common StockRSUs | Common StockStock Option | Additional paid-in capital | Additional paid-in capitalRSUs | Treasury Stock | Treasury StockRSUs | Treasury StockStock Option | Accumulated deficit | Accumulated deficitRSUs | Accumulated deficitStock Option | Accumulated other comprehensive income (loss) | United States | United StatesAdditional paid-in capital | United Kingdom | United KingdomAdditional paid-in capital |
Balance at beginning (in shares) at Dec. 31, 2019 | 0 | 43,676,826 | 768,910 | |||||||||||||||||
Balance at beginning at Dec. 31, 2019 | $ 156,489 | $ 0 | $ 18 | $ 193,061 | $ (3,344) | $ (34,342) | $ 1,096 | |||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||
Share-based compensation | $ 2,748 | $ 2,748 | $ 27 | $ 27 | ||||||||||||||||
Exercise of stock options, net (in shares) | 34,185 | |||||||||||||||||||
Exercise of stock options, net | (51) | (51) | ||||||||||||||||||
Vesting of restricted stock units, net (in shares) | 28,913 | |||||||||||||||||||
Vesting of restricted stock units, net | (314) | (314) | ||||||||||||||||||
Comprehensive loss: | ||||||||||||||||||||
Foreign currency translation adjustment net of tax of $(14) | (2,003) | (2,003) | ||||||||||||||||||
Treasury stock acquired (in shares) | 928,386 | 928,386 | ||||||||||||||||||
Treasury stock acquired | (4,203) | $ (4,203) | ||||||||||||||||||
Treasury stock reissued (in shares) | 188,961 | 188,961 | ||||||||||||||||||
Treasury stock reissued | $ 0 | $ 830 | $ (830) | |||||||||||||||||
Net income from continuing operations | 7,922 | 7,922 | ||||||||||||||||||
Net loss from discontinued operations | (12,833) | (12,833) | ||||||||||||||||||
Balance at end (in shares) at Mar. 31, 2020 | 0 | 43,000,499 | 1,508,335 | |||||||||||||||||
Balance at ending at Mar. 31, 2020 | 147,782 | $ 0 | $ 18 | 195,471 | $ (6,717) | (40,083) | (907) | |||||||||||||
Balance at beginning (in shares) at Dec. 31, 2020 | 0 | 37,954,138 | 7,006,300 | |||||||||||||||||
Balance at beginning at Dec. 31, 2020 | 163,858 | $ 0 | $ 18 | 200,433 | $ (16,492) | (20,101) | 0 | |||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||
Share-based compensation | 1,602 | 1,602 | ||||||||||||||||||
Exercise of stock options, net (in shares) | 12,500 | |||||||||||||||||||
Vesting of restricted stock units, net (in shares) | 265,857 | |||||||||||||||||||
Comprehensive loss: | ||||||||||||||||||||
Foreign currency translation adjustment net of tax of $(14) | 0 | |||||||||||||||||||
Treasury stock acquired (in shares) | 2,480,741 | 2,480,741 | ||||||||||||||||||
Treasury stock acquired | (10,813) | $ (10,813) | ||||||||||||||||||
Treasury stock reissued (in shares) | 169,091 | 12,500 | 169,091 | 12,500 | ||||||||||||||||
Treasury stock reissued | $ (417) | $ 27 | $ (417) | $ 621 | $ 73 | $ (621) | $ (46) | |||||||||||||
Net income from continuing operations | 12,716 | 12,716 | ||||||||||||||||||
Net loss from discontinued operations | 0 | |||||||||||||||||||
Balance at end (in shares) at Mar. 31, 2021 | 0 | 35,654,988 | 9,305,450 | |||||||||||||||||
Balance at ending at Mar. 31, 2021 | $ 166,973 | $ 0 | $ 18 | $ 201,618 | $ (26,611) | $ (8,052) | $ 0 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED) (Parenthetical) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Statement of Stockholders' Equity [Abstract] | ||
Foreign currency translation adjustment, tax expense (tax benefit) | $ 0 | $ (14,000) |
CONDENSED CONSOLIDATED STATEM_6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | ||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||
Net income (loss) | $ 12,716 | $ (4,911) | |
Less: Net loss from discontinued operations, net of tax | 0 | 12,833 | |
Net income from continuing operations | 12,716 | 7,922 | |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Depreciation and amortization | 5,243 | 4,296 | |
Provision for loan losses | 20,970 | 78,575 | |
Share-based compensation | 1,602 | 2,748 | |
Amortization of debt issuance costs | 182 | 171 | |
Amortization of loan premium | 946 | 1,523 | |
Amortization of operating leases | (191) | (116) | |
Deferred income tax expense, net | 3,359 | 416 | |
Non-operating (gain) loss | (207) | 4,263 | |
Changes in operating assets and liabilities: | |||
Prepaid expenses and other assets | (744) | (52) | |
Income taxes payable | 0 | 1,639 | |
Receivables from payment processors | 884 | 1,600 | |
Receivables from CSO lenders | 1,057 | 1,875 | |
Interest receivable | (4,334) | (18,054) | |
Deferred revenue | (873) | (2,811) | |
Accounts payable and accrued liabilities | (8,730) | (10,694) | |
Net cash provided by continuing operating activities | 31,880 | 73,301 | |
Net cash provided by discontinued operating activities | 0 | 3,398 | |
Net cash provided by operating activities | 31,880 | 76,699 | |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Loans receivable originated or participations purchased | (133,899) | (226,399) | |
Principal collections and recoveries on loans receivable | 156,203 | 210,883 | |
Participation premium paid | (1,081) | (1,400) | |
Purchases of property and equipment | (3,383) | (4,520) | |
Proceeds from sale of intangible assets | 1,250 | 0 | |
Net cash provided by (used in) continuing investing activities | 19,090 | (21,436) | |
Net cash provided by discontinued investing activities | 0 | 2,978 | |
Net cash provided by (used in) investing activities | 19,090 | (18,458) | |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from notes payable | 5,000 | 6,500 | |
Payments of notes payable | (102,550) | (34,000) | |
Debt issuance costs paid | 0 | (51) | |
Common stock repurchased | (10,813) | (4,203) | |
Proceeds from stock option exercises | 27 | 27 | |
Taxes paid related to net share settlement of equity awards | (417) | (314) | |
Net cash used in continuing financing activities | (108,753) | (32,041) | |
Net cash used in discontinued financing activities | 0 | (12,939) | |
Net cash used in financing activities | (108,753) | (44,980) | |
Net increase (decrease) in cash, cash equivalents and restricted cash | (57,783) | 13,261 | |
Change in cash, cash equivalents and restricted cash from discontinued operations | 0 | 6,563 | |
Change in cash, cash equivalents and restricted cash from continuing operations | (57,783) | 19,824 | |
Cash and cash equivalents, beginning of period | 197,983 | [1] | 71,215 |
Restricted cash, beginning of period | 3,135 | 2,235 | |
Cash, cash equivalents and restricted cash, beginning of period | 201,118 | 73,450 | |
Cash and cash equivalents, end of period | 140,300 | [1] | 91,139 |
Restricted cash, end of period | 3,035 | 2,135 | |
Cash, cash equivalents and restricted cash, end of period | 143,335 | 93,274 | |
Supplemental cash flow information: | |||
Interest paid | 9,603 | 13,677 | |
Taxes paid | 41 | 0 | |
Non-cash activities: | |||
CSO fees charged-off included in Deferred revenues and Loans receivable | 30 | 423 | |
CSO fees on loans paid-off prior to maturity included in Receivable from CSO lenders and Deferred revenue | 5 | 21 | |
Annual membership fee included in Deferred revenues and Loans receivable | 0 | 1 | |
Reissuances of Treasury stock | $ 694 | $ 830 | |
[1] | These balances include certain assets and liabilities of variable interest entities (“VIEs”) that can only be used to settle the liabilities of that respective VIE. All assets of the Company are pledged as security for the Company’s outstanding debt, including debt held by the VIEs. For further information regarding the assets and liabilities included in the Company's consolidated accounts, see Note 4—Variable Interest Entities. |
Basis of Presentation and Accou
Basis of Presentation and Accounting Changes | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Accounting Changes | BASIS OF PRESENTATION AND ACCOUNTING CHANGES Business Operations Elevate Credit, Inc. (the “Company”) is a Delaware corporation. The Company provides technology-driven, progressive online credit solutions to non-prime consumers. The Company uses advanced technology and proprietary risk analytics to provide more convenient and more responsible financial options to its customers, who are not well-served by either banks or legacy non-prime lenders. The Company currently offers unsecured online installment loans, lines of credit and credit cards in the United States (the “US”). The Company’s products, Rise, Elastic and Today Card, reflect its mission of “Good Today, Better Tomorrow” and provide customers with access to competitively priced credit and services while helping them build a brighter financial future with credit building and financial wellness features. In the United Kingdom ("UK"), the Company previously offered unsecured installment loans via the internet through its wholly owned subsidiary, Elevate Credit International Limited, (“ECIL”) under the brand name of Sunny. On June 29, 2020, ECIL entered into administration in accordance with the provisions of the UK Insolvency Act 1986 and pursuant to a resolution of the board of directors of ECIL. The onset of Coronavirus Disease 2019 ("COVID-19") coupled with the lack of clarity within the UK regulatory environment led to the decision to place ECIL into administration. The management, business, affairs and property of ECIL have been placed into the direct control of the appointed administrators, KPMG LLP. Accordingly, the Company deconsolidated ECIL as of June 29, 2020 and presents ECIL's results as discontinued operations for all periods presented. See Note 12—Discontinued Operations for more information regarding the presentation of ECIL. Basis of Presentation The accompanying unaudited condensed consolidated financial statements as of March 31, 2021 and for the three month periods ended March 31, 2021 and 2020 include the accounts of the Company, its wholly owned subsidiaries and variable interest entities ("VIEs") where the Company is the primary beneficiary. All significant intercompany transactions and accounts have been eliminated. The unaudited condensed consolidated financial information included in this report has been prepared in accordance with accounting principles generally accepted in the US (“US GAAP”) for interim financial information and Article 10 of Regulation S-X and conform, as applicable, to general practices within the finance company industry. The principles for interim financial information do not require the inclusion of all the information and footnotes required by US GAAP for complete financial statements. Therefore, these unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements for the year ended December 31, 2020 in the Company's Annual Report on Form 10-K, filed with the U.S. Securities and Exchange Commission ("SEC") on February 26, 2021. In the opinion of the Company’s management, the unaudited condensed consolidated financial statements include all adjustments, all of which are of a normal recurring nature, necessary for a fair presentation of the results for the interim periods. The Company's business is seasonal in nature so the results of operations for the three months ended March 31, 2021 are not necessarily indicative of the results to be expected for the full year. Use of Estimates The preparation of the unaudited condensed consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant items subject to such estimates and assumptions include the valuation of the allowance for loan losses, goodwill, long-lived and intangible assets, deferred revenues, contingencies, the income tax provision, valuation of share-based compensation, operating lease right of use assets, operating lease liabilities and the valuation allowance against deferred tax assets. The Company bases its estimates on historical experience, current data and assumptions that are believed to be reasonable. Actual results in future periods could differ from those estimates. As the impact of the COVID-19 pandemic continues to evolve, estimates and assumptions about future events and their effects cannot be determined with certainty and therefore require increased judgment. These estimates and assumptions may change in future periods and will be recognized in the condensed consolidated financial statements as new events occur and additional information becomes known. To the extent the Company’s actual results differ materially from those estimates and assumptions, the Company's future financial statements could be affected. Revenue Recognition The Company recognizes consumer loan fees as revenues for each of the loan products it offers. Revenues on the Condensed Consolidated Statements of Operations include: finance charges, lines of credit fees, fees for services provided through CSO programs (“CSO fees”), and interest, as well as any other fees or charges permitted by applicable laws and pursuant to the agreement with the borrower. Other revenues also include marketing and licensing fees received from the originating lender related to the Elastic product and Rise bank-originated loans and from CSO fees related to the Rise product. Revenues related to these fees are recognized when the service is performed. The Company accrues finance charges on installment loans on a constant yield basis over their terms. The Company accrues and defers fixed fees such as CSO fees and lines of credit fees when they are assessed and recognizes them to earnings as they are earned over the life of the loan. The Company accrues interest on credit cards based on the amount of the credit card balance outstanding and the related contractual interest rate. Credit card membership fees are amortized to revenue over the card membership period. Other credit card fees, such as late payment fees and returned payment fees, are accrued when assessed. The Company does not accrue finance charges and other fees on installment loans or lines of credit for which payment is greater than 60 days past due. Credit card interest charges are recognized based on the contractual provisions of the underlying arrangements and are not accrued when payment is past due more than 90 days. Installment loans and lines of credit are considered past due if a grace period has not been requested and a scheduled payment is not paid on its due date. Credit cards have a grace period of 25 days and are considered delinquent after the grace period. Payments received on past due loans are applied against the loan and accrued interest balance to bring the loan current. Payments are generally first applied to accrued fees and interest and then to the principal loan balance. The spread of COVID-19 since March 2020 has created a global public health crisis that has resulted in unprecedented disruption to businesses and economies. In response to the pandemic's effects, and in accordance with federal and state guidelines, the Company expanded its payment flexibility programs for its customers, including payment deferrals. This program allows for a deferral of payments for an initial period of 30 to 60 days, and generally up to a maximum of 180 days on a cumulative basis. A customer will return to the normal payment schedule after the end of the deferral period with the extension of the maturity date equivalent to the deferral period, which is generally not to exceed an additional 180 days. The finance charges will continue to accrue at a lower effective interest rate over the expected term of the loan as adjusted for the deferral period provided (not to exceed an amount greater than the amount at which the borrower could settle the loan) or placed on non-accrual status. The Company’s business is affected by seasonality, which can cause significant changes in portfolio size and profit margins from quarter to quarter. Although this seasonality does not impact the Company’s policies for revenue recognition, it does generally impact the Company’s results of operations by potentially causing an increase in its profit margins in the first quarter of the year and decreased margins in the second through fourth quarters. Installment Loans, Lines of Credit and Credit Cards Installment loans, lines of credit and credit cards, including receivables for finance charges, fees and interest, are unsecured and reported as Loans receivable, net of allowance for loan losses on the Condensed Consolidated Balance Sheets. Installment loans are multi-payment loans that require the pay-down of portions of the outstanding principal balance in multiple installments through the Rise brand. Line of credit accounts include customer cash advances made through the Elastic brand and the Rise brand in two states (which were discontinued in September 2020). Credit cards represent credit card receivable balances, uncollected billed interest and fees through the Today Card brand. The Company offers Rise installment products directly to customers. Elastic lines of credit, Rise bank-originated installment loans and Today credit card receivables represent participation interests acquired from third-party lenders through a wholly owned subsidiary or by a VIE. Based on agreements with the third-party lenders, the VIEs pay a loan premium on the participation interests purchased. The loan premium is amortized over the expected life of the outstanding loan amount. See Note 4—Variable Interest Entities for more information regarding these participation interests in Rise and Elastic receivables. The Company considers impaired loans as accounts over 60 days past due (for installment loans and lines of credit) or 120 days past due (for credit cards), or loans which become uncollectible based on information that the Company becomes aware of (e.g., receipt of customer bankruptcy notice). The impaired loans are charged-off at the time that they are deemed to be uncollectible. A modification of finance receivable terms is considered a troubled debt restructuring ("TDR") if the borrower is experiencing financial difficulty and the Company grants a concession it would not otherwise have considered to a borrower. The Company typically considers TDRs to include all installment and line of credit loans that were modified by granting principal and interest forgiveness or by extension of the maturity date for more than 60 days as a part of a loss mitigation strategy. On March 22, 2020, federal and state banking regulators issued a joint statement on working with customers affected by COVID-19 (the "Interagency Statement"). The Interagency Statement includes guidance on accounting for loan modifications. In accordance with the Interagency Statement, the Company, and the bank originators the Company supports, have elected to not recognize modified loans as TDRs if the borrower was both: 1) not more than 30 days past due as of March 1, 2020 (or at the requested modification date if originated on or after March 1, 2020); and 2) the modification stems from the effects of the COVID-19 outbreak. The modifications offered by the Company to borrowers that meet both qualifications may include short-term payment deferrals less than six months, interest or fee waivers, extensions of payment terms or delays in payment that are insignificant. If the borrower was not current at March 1, 2020, the Company offers similar modifications that are considered TDRs. This election is applicable from March 1, 2020 until the earlier of 60 days following the date the COVID-19 national emergency comes to an end or January 1, 2022. Operating Segments The Company determines operating segments based on how its chief operating decision-maker manages the business, including making operating decisions, deciding how to allocate resources and evaluating operating performance. The Company's chief operating decision-maker is its Chief Executive Officer, who reviews the Company's operating results monthly on a consolidated basis. The Company has one reportable segment, which provides online financial services for non-prime consumers. The Company has aggregated all components of its business into a single reportable segment based on the similarities of the economic characteristics, the nature of the products and services, the distribution methods, the type of customers and the nature of the regulatory environments. With the disposal of ECIL, all of the Company's assets and revenue are in one geographic location, therefore, segment reporting based on geography has been discontinued. Property and Equipment, net Property and equipment are stated at cost, net of accumulated depreciation and amortization. The following table summarizes the components of net property and equipment. In January 2021, certain assets were determined to be impaired in relation to a sublease of facility space. (Dollars in thousands) March 31, 2021 December 31, 2020 Property and equipment, gross $ 119,483 $ 116,748 Accumulated depreciation and amortization (86,936) (82,748) Property and equipment, net $ 32,547 $ 34,000 Goodwill and Indefinite Lived Intangible Assets Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in each business combination. In accordance with Accounting Standards Codification ("ASC") 350-20-35, Goodwill— Subsequent Measurement , the Company performs a quantitative approach method impairment review of goodwill and intangible assets with an indefinite life annually at October 1 and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. As a result of the recent global economic impact and uncertainty due to COVID-19, the Company concluded a triggering event had occurred as of March 31, 2020, and accordingly, performed interim impairment testing on the goodwill balances of its reporting units. The Company performed a detailed qualitative and quantitative assessment of each reporting unit and concluded that the goodwill associated with the previously consolidated UK reporting unit was impaired as the fair value of the UK reporting unit was less than its carrying amount. The impairment loss of $9.3 million was included in Loss from discontinued operations due to the deconsolidation of ECIL. While there was a decline in the fair value of the Elastic reporting unit at March 31, 2020, there was no impairment identified during the quantitative assessment. The Company completed its annual test as of October 1, 2020 and determined that there was no evidence of impairment of goodwill or indefinite lived intangible assets. The Company has $6.8 million of goodwill (all related to the Elastic reporting unit) remaining on the Condensed Consolidated Balance Sheets as of March 31, 2021. Prior to the adoption of ASU No. 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment ("ASU 2017-04"), the Company’s impairment evaluation of goodwill was already based on comparing the fair value of the Company’s reporting units to their carrying value. The adoption of ASU 2017-04 as of January 1, 2020 had no impact on the Company's evaluation procedures. The fair value of the reporting units is determined based on a weighted average of the income and market approaches. The income approach establishes fair value based on estimated future cash flows of the reporting units, discounted by an estimated weighted-average cost of capital developed using the capital asset pricing model, which reflects the overall level of inherent risk of the reporting units. The income approach uses the Company’s projections of financial performance for a six Leases The Company determines if an arrangement is a lease at inception. Operating leases are included in Operating lease right of use (“ROU”) assets and Operating lease liabilities on its Condensed Consolidated Balance Sheets. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. As most of its leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of future payments. The operating lease ROU asset may also include initial direct costs incurred and excludes any lease payments made and lease incentives. The Company's lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components. The lease and non-lease components are accounted for as a single lease component. In accordance with ASC 360-10-35, Property, Plant & Equipment— Subsequent Measurement , the Company evaluates its ROU assets along with its Property and equipment, net for impairment annually and between annual tests as needed based on changes in circumstances or other triggering events. During the first quarter, the Company entered into a sublease for facility space, triggering an impairment assessment. The Company determined the asset group with the subleased ROU asset and related LHI was impaired. A total impairment loss of $742 thousand is included in Non-operating income (loss) in the Condensed Consolidated Statements of Operations. Treasury Stock The Company evaluates each stock repurchase transaction in the period in which it is completed. If the repurchase transaction is significantly in excess of the current market price at purchase, the Company will identify whether the price paid included payment for other agreements, rights, and privileges. Repurchase transactions that do not contain these elements or are not significantly in excess of the current market price at purchase are accounted for using the cost method. The Company anticipates using its treasury stock to fulfill certain employee stock compensation grants and settlements. The Company has elected to use a first in, first out ("FIFO") method for assigning share cost at reissuance. Any gain or loss in the stock value will be credited or charged to paid in capital upon subsequent reissuance of the shares, with losses in excess of previously recognized gains charged to retained earnings. The Company is not obligated to purchase or reissue any shares at any time in accordance with its previously disclosed share repurchase plan. Recently Adopted Accounting Standards In August 2018, the FASB issued Accounting Standards Update ("ASU") No. 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract ("ASU 2018-15"). The purpose of ASU 2018-15 is to provide additional guidance on the accounting for costs of implementation activities performed in a cloud computing arrangement that is a service contract. This guidance is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. The Company elected to adopt this ASU prospectively as of January 1, 2020 and has implemented a control structure to identify cloud computing arrangements for appropriate accounting treatment similar to its procedures for right of use assets. At March 31, 2021, the Company has capitalized implementation costs associated with cloud computing arrangements of $1.0 million. At adoption, ASU 2018-15 did not have a material impact on the Company's condensed consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement ("ASU 2018-13"). The purpose of ASU 2018-13 is to modify the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement . This guidance is effective for public companies for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years and requires both a prospective and retrospective approach to adoption based on amendment specifications. Early adoption of any removed or modified disclosures is permitted. Additional disclosures may be delayed until their effective date. The adoption of ASU 2018-13 at January 1, 2020 did not have a material impact on the Company's condensed consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment ("ASU 2017-04"). The purpose of ASU 2017-04 is to simplify the subsequent measurement of goodwill. The amendments modify the concept of impairment from the condition that exists when the carrying amount of goodwill exceeds its implied fair value to the condition that exists when the carrying amount of a reporting unit exceeds its fair value. An entity no longer will determine goodwill impairment by calculating the implied fair value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination. This guidance is effective for public companies for goodwill impairment tests in fiscal years beginning after December 15, 2019. The Company has adopted all of the amendments of ASU 2017-04 as of January 2020 with no impact to the Company's condensed consolidated financial statements. The Company used the simplified subsequent measurement requirements per ASU 2017-04 in its impairment analysis. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") was enacted in response to COVID-19. Among other things, the CARES Act provides income tax relief inclusive of permitting NOL carryovers and carrybacks to offset 100% of taxable income for taxable years beginning before 2021. In addition, the CARES Act allows NOLs incurred in 2018, 2019, and 2020 to be carried back to each of the five preceding taxable years to generate a refund of previously paid income taxes. The Company has reviewed the tax relief provisions of the CARES Act regarding its eligibility and determined that the impact is likely to be insignificant with regard to its effective tax rate. Certain portions of the CARES Act were amended by the Consolidated Appropriations Act ("CAA") on December 27, 2020. The Company continues to monitor and evaluate its eligibility for the amended CARES Act tax relief provisions to identify any that may become applicable in the future. On March 11, 2021, the American Rescue Plan Act ("ARP Act") was signed into law. The Company reviewed the tax relief provisions of the ARP Act, including the Company's eligibility for such provisions, and determined that the impact is likely to be insignificant with regard to the Company's effective tax rate. The Company continues to monitor and evaluate its eligibility under the ARP Act tax relief provisions to identify any portions that may become applicable in the future. In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes ("ASU 2019-12"). The purpose of ASU 2019-12 is to reduce complexity in the accounting standards for income taxes by removing certain exceptions as well as clarifying certain allocations. This update also addresses the split recognition of franchise taxes that are partially based on income between income-based tax and non-income-based tax. This guidance is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. Early adoption is permitted. The adoption of ASU 2019-12 at January 1, 2021 did not have a material impact on the Company's condensed consolidated financial statements. Accounting Standards to be Adopted in Future Periods In March 2020, the FASB issued ASU No. 2020-03, Codification Improvements to Financial Instruments ("ASU 2020-03"). The purpose of ASU 2020-03 is to clarify, correct errors in or make minor improvements to the codification. Among other revisions, the amendments clarify that an entity should record an allowance for credit losses when an entity regains control of financial assets sold in accordance with Topic 326. ASU 2020-03 also clarifies disclosure requirements for debt securities under Topic 942 and affirms that all entities are required to provide the fair value option disclosures within paragraphs 825-10-50-24 through 50-32 of the codification. The amendments in this update are effective on the latter of the issuance of ASU 2020-03 or the effective date of their related topic. The Company does not anticipate the adoption of ASU 2020-03 to have a material impact on the Company's condensed consolidated financial statements. In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting ("ASU 2020-04"). The purpose of ASU 2020-04 is to provide optional guidance for a period of time related to accounting for reference rate reform on financial reporting. It is intended to reduce the potential burden of reviewing contract modifications related to discontinued rates. The amendments and expedients in this update are effective as of March 12, 2020 through December 31, 2022 and may be elected by topic. The Company is assessing the potential impact of electing all or portions of ASU 2020-04 on the Company's condensed consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"). ASU 2016-13 is intended to replace the incurred loss impairment methodology in current US GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates to improve the quality of information available to financial statement users about expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. In April 2019, the FASB issued ASU No. 2019-04, Codification Improvements to Topic 326, Financial Instruments ("ASU 2019-04"). This amendment clarifies the guidance in ASU 2016-13. The guidance in ASU 2016-13 was further clarified by ASU No. 2019-11, Codification Improvements to Topic 326, Financial Instruments ("ASU 2019-11") issued in November 2019. ASU 2019-11 provides transition relief such as permitting entities an accounting policy election regarding existing TDRs, among other things. In May 2019, the FASB issued ASU No. 2019-05, Financial Instruments-Credit Losses (Topic 326): Targeted Transition Relief ("ASU 2019-05"). The purpose of this amendment is to provide entities that have certain instruments within the scope of Subtopic 326-20, Financial Instruments-Credit Losses-Measured at Amortized Cost, with an option to irrevocably elect the fair value option in Subtopic 825-10, Financial Instruments-Overall , on an instrument-by-instrument basis. Election of this option is intended to increase comparability of financial statement information and reduce costs for certain entities to comply with ASU 2016-13. For public entities, ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. In November 2019, the FASB issued ASU No. 2019-10, Financial Instruments - Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates ("ASU 2019-10") . The purpose of this amendment is to create a two-tier rollout of major updates, staggering the effective dates between larger public companies and all other entities. This granted certain classes of companies, including Smaller Reporting Companies ("SRCs"), additional time to implement major FASB standards, including ASU 2016-13. Larger public companies will still have an effective date for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. All other entities are permitted to defer adoption of ASU 2016-13, and its related amendments, until the earlier of fiscal periods beginning after December 15, 2022. In February 2020, the FASB issued ASU No. 2020-02, Financial Instruments - Credit Losses (Topic 326), and Leases (Topic 842): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 119 and Update to SEC Section on Effective Date Related to Accounting Standards Update No. 2016-12 ("ASU 2020-02") . ASU 2020-02 updates the SEC staff guidance related to ASU 2016-13 and all contingent amendments. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | EARNINGS PER SHARE Basic earnings per share ("EPS") is computed by dividing net income (loss) by the weighted average number of common shares outstanding ("WASO") during each period. Also, basic EPS includes any fully vested stock and unit awards that have not yet been issued as common stock. There are no unissued fully vested stock and unit awards at March 31, 2021 and 2020. Diluted EPS is computed by dividing net income (loss) by the WASO during each period plus any unvested stock option awards granted, vested unexercised stock options and unvested restricted stock units ("RSUs") using the treasury stock method but only to the extent that these instruments dilute earnings per share. The computation of earnings per share was as follows for three months ended March 31, 2021 and 2020: Three Months Ended March 31, (Dollars in thousands, except share and per share amounts) 2021 2020 Numerator (basic and diluted): Net income from continuing operations $ 12,716 $ 7,922 Net loss from discontinued operations — (12,833) Net income (loss) $ 12,716 $ (4,911) Denominator (basic): Basic weighted average number of shares outstanding 36,582,502 43,161,716 Denominator (diluted): Basic weighted average number of shares outstanding 36,582,502 43,161,716 Effect of potentially dilutive securities: Employee share plans (options, RSUs and ESPP) 996,548 470,021 Diluted weighted average number of shares outstanding 37,579,050 43,631,737 Basic and diluted earnings (loss) per share: Continuing operations $ 0.35 $ 0.18 Discontinued operations — (0.29) Basic earnings (loss) per share $ 0.35 $ (0.11) Continuing operations $ 0.34 $ 0.18 Discontinued operations — (0.29) Diluted earnings (loss) per share $ 0.34 $ (0.11) For the three months ended March 31, 2021 and 2020, the Company excluded the following potential common shares from its dilute d earnings (loss) per share calculation because including these shares would be anti-dilutive: • 1,008,359 and 1,862,170 common shares issuable upon exercise of the Company's stock options; and • 615,439 and 3,584,019 common shares issuable upon vesting of the Company's RSUs. |
Loans Receivable and Revenue
Loans Receivable and Revenue | 3 Months Ended |
Mar. 31, 2021 | |
Receivables [Abstract] | |
Loans Receivable and Revenue | LOANS RECEIVABLE AND REVENUE Revenues generated from the Company’s consumer loans for the three months ended March 31, 2021 and 2020 were as follows: Three Months Ended March 31, (Dollars in thousands) 2021 2020 Finance charges $ 53,192 $ 96,164 Lines of credit fees 35,480 58,574 CSO fees 551 7,341 Other 510 388 Total revenues $ 89,733 $ 162,467 The Company's portfolio consists of installment loans, lines of credit and credit card receivables, which are considered the portfolio segments for all periods presented. The Rise product is primarily installment loans with lines of credit offered in two states, which ceased lines of credit origination activity in September 2020. The Elastic product is a line of credit product and the Today Card, is a credit card product, both offered in the US. The following reflects the credit quality of the Company’s loans receivable as of March 31, 2021 and December 31, 2020 as delinquency status has been identified as the primary credit quality indicator. The Company classifies its loans as either current or past due. A customer in good standing may request up to a 16-day grace period when or before a payment becomes due and, if granted, the loan is considered current during the grace period. In response to the COVID-19 pandemic, the Company, along with the banks it supports, has also expanded existing payment flexibility programs to provide temporary payment relief to certain customers who meet the program’s qualifications. These programs allow for a deferral of payments for an initial period of 30 to 60 days, which the Company may extend for an additional 30 days, generally for a maximum of 180 days on a cumulative basis. A customer will return to the normal payment schedule after the end of the deferral period, with the extension of the maturity date equivalent to the deferral period, which is generally not to exceed an additional 180 days. Customers that were 30 days past due or less as of March 1, 2020 or the date the customer requested the deferral are considered current. Customers more than 30 days past due as of March 1, 2020 or the date the customer requested the deferral are considered delinquent. As of March 31, 2021, 3.4% of customers have been provided relief through a COVID-19 payment deferral program for a total of $11.8 million in loans with deferred payments . The Company believes that the allowance for loan losses is adequate to absorb the losses inherent in the portfolio as of March 31, 2021 . Installment loans, lines of credit and credit cards not impacted by COVID are considered past due if a grace period has not been requested and a scheduled payment is not paid on its due date. All impaired loans that were not accounted for as a TDR as of March 31, 2021 and December 31, 2020 have been charged off. March 31, 2021 (Dollars in thousands) Rise Elastic Today Total Current loans $ 197,952 $ 134,680 $ 13,636 $ 346,268 Past due loans 19,322 5,711 1,516 26,549 Total loans receivable 217,274 140,391 15,152 372,817 Net unamortized loan premium 248 1,257 — 1,505 Less: Allowance for loan losses (26,470) (10,749) (1,818) (39,037) Loans receivable, net $ 191,052 $ 130,899 $ 13,334 $ 335,285 December 31, 2020 (Dollars in thousands) Rise Elastic Today Total Current loans $ 222,937 $ 154,950 $ 12,954 $ 390,841 Past due loans 22,383 6,926 1,564 30,873 Total loans receivable 245,320 161,876 14,518 421,714 Net unamortized loan premium 239 1,278 — 1,517 Less: Allowance for loan losses (33,288) (13,201) (1,910) (48,399) Loans receivable, net $ 212,271 $ 149,953 $ 12,608 $ 374,832 Total loans receivable includes approximately $13.3 million and $19.2 million of loans in a non-accrual status at March 31, 2021 and December 31, 2020, respectively. Additionally, total loans receivable includes approximately $21.4 million and $25.3 million of interest receivable at March 31, 2021 and December 31, 2020, respectively. The carrying value for Loans receivable, net of the allowance for loan losses approximates the fair value due to the short-term nature of the loans receivable. The changes in the allowance for loan losses for the three months ended March 31, 2021 and 2020 are as follows: Three Months Ended March 31, 2021 (Dollars in thousands) Rise Elastic Today Total Balance beginning of period $ 33,968 $ 13,201 $ 1,910 $ 49,079 Provision for loan losses 15,298 5,091 581 20,970 Charge-offs (24,773) (8,383) (709) (33,865) Recoveries of prior charge-offs 2,099 840 36 2,975 Total 26,592 10,749 1,818 39,159 Accrual for CSO lender owned loans (122) — — (122) Balance end of period $ 26,470 $ 10,749 $ 1,818 $ 39,037 Three Months Ended March 31, 2020 (Dollars in thousands) Rise Elastic Today Total Balance beginning of period $ 52,099 $ 28,852 $ 1,041 $ 81,992 Provision for loan losses 54,569 23,497 509 78,575 Charge-offs (60,137) (29,648) (666) (90,451) Recoveries of prior charge-offs 5,176 2,443 24 7,643 Total 51,707 25,144 908 77,759 Accrual for CSO lender owned loans (1,571) — — (1,571) Balance end of period $ 50,136 $ 25,144 $ 908 $ 76,188 As of March 31, 2021 and December 31, 2020, estimated losses of approximately $0.1 million and $0.7 million for the CSO owned loans receivable guaranteed by the Company of approximately $0.2 million and $2.2 million, respectively, are initially recorded at fair value and are included in Accounts payable and accrued liabilities in the Condensed Consolidated Balance Sheets. Troubled Debt Restructurings In certain circumstances, the Company modifies the terms of its finance receivables for borrowers experiencing financial difficulties. Modifications may include principal and/or interest forgiveness. A modification of finance receivable terms is considered a TDR if the Company grants a concession to a borrower for economic or legal reasons related to the borrower’s financial difficulties that would not otherwise have been considered. Management considers TDRs to include all installment and line of credit loans that were granted principal and interest forgiveness as a part of a loss mitigation strategy for Rise and Elastic, unless excluded by policy. Once a loan has been classified as a TDR, it is assessed for impairment based on the present value of expected future cash flows discounted at the loan's original effective interest rate considering all available evidence. The following table summarizes the financial effects, excluding impacts related to credit loss allowance and impairment, of TDRs for the three months ended March 31, 2021 and 2020: Three Months Ended March 31, (Dollars in thousands) 2021 2020 Outstanding recorded investment before TDR $ 5,134 $ 6,428 Outstanding recorded investment after TDR 5,039 6,110 Total principal and interest forgiveness included in charge-offs within the Allowance for loan losses $ 95 $ 318 A loan that has been classified as a TDR remains classified as a TDR until it is liquidated through payoff or charge-off. The table below presents the Company's average outstanding recorded investment and interest income recognized on TDR loans for the three months ended March 31, 2021 and 2020: Three Months Ended March 31, (Dollars in thousands) 2021 2020 Average outstanding recorded investment(1) $ 25,154 $ 17,199 Interest income recognized $ 2,814 $ 3,730 1. Simple average as of March 31, 2021 and 2020, respectively. The table below presents the Company's loans modified as TDRs as of March 31, 2021 and December 31, 2020: (Dollars in thousands) 2021 2020 Current outstanding investment $ 17,253 $ 21,261 Delinquent outstanding investment 6,261 5,532 Outstanding recorded investment 23,514 26,793 Less: Impairment included in Allowance for loan losses (5,975) (7,533) Outstanding recorded investment, net of impairment $ 17,539 $ 19,260 |
Variable Interest Entities
Variable Interest Entities | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Variable Interest Entities | VARIABLE INTEREST ENTITIES The Company is involved with five entities that are deemed to be a VIE: Elastic SPV, Ltd., EF SPV, Ltd., EC SPV, Ltd. and two Credit Services Organization ("CSO") lenders. Under ASC 810-10-15, Variable Interest Entities , a VIE is an entity that: (1) has an insufficient amount of equity investment at risk to permit the entity to finance its activities without additional subordinated financial support by other parties; (2) the equity investors are unable to make significant decisions about the entity’s activities through voting rights or similar rights; or (3) the equity investors do not have the obligation to absorb expected losses or the right to receive residual returns of the entity. The Company is required to consolidate a VIE if it is determined to be the primary beneficiary, that is, the enterprise has both (1) the power to direct the activities of a VIE that most significantly impact the entity’s economic performance and (2) the obligation to absorb losses of the entity that could potentially be significant to the VIE. The Company evaluates its relationships with VIEs to determine whether it is the primary beneficiary of a VIE at the time it becomes involved with the entity and it re-evaluates that conclusion each reporting period. Elastic SPV, Ltd. On July 1, 2015, the Company entered into several agreements with a third-party lender and Elastic SPV, Ltd. (“ESPV”), an entity formed by third-party investors for the purpose of purchasing loan participations from the third-party lender. Per the terms of the agreements, the Company provides customer acquisition services to generate loan applications submitted to the third-party lender. In addition, the Company licenses loan underwriting software and provides services to the third-party lender to evaluate the credit quality of those loan applications in accordance with the third-party lender’s credit policies. ESPV accounts for the loan participations acquired in accordance with ASC 860-10-40, Transfers and Services, Derecognition , as the lines of credit acquired meet the criteria of a participation interest. Once the third-party lender originates the loan, ESPV has the right, but not the obligation, to purchase a 90% interest in each Elastic line of credit. Victory Park Management, LLC (“VPC”) entered into an agreement (the "ESPV Facility") under which it loans ESPV all funds necessary up to a maximum borrowing amount to purchase such participation interests in exchange for a fixed return (see Note 5—Notes Payable—ESPV Facility). The Company entered into a separate credit default protection agreement with ESPV whereby the Company agreed to provide credit protection to the investors in ESPV against Elastic loan losses in return for a credit premium. The Company does not hold a direct ownership interest in ESPV, however, as a result of the credit default protection agreement, ESPV was determined to be a VIE and the Company qualifies as the primary beneficiary. The following table summarizes the assets and liabilities of the VIE that are included within the Company’s Condensed Consolidated Balance Sheets at March 31, 2021 and December 31, 2020: (Dollars in thousands) March 31, December 31, ASSETS Cash and cash equivalents $ 63,606 $ 97,345 Loans receivable, net of allowance for loan losses of $10,749 and $13,202, respectively 130,899 149,951 Prepaid expenses and other assets 7 — Receivable from payment processors 3,153 3,652 Total assets $ 197,665 $ 250,948 LIABILITIES AND SHAREHOLDER’S EQUITY Accounts payable and accrued liabilities ($10,536 and $23,337, respectively, eliminates upon consolidation) $ 14,387 $ 27,663 Deferred revenue 2,054 2,300 Reserve deposit liability ($23,150 and $23,150, respectively, eliminates upon consolidation) 23,150 23,150 Notes payable, net 158,074 197,835 Total liabilities and shareholder’s equity $ 197,665 $ 250,948 EF SPV, Ltd. On October 15, 2018, the Company entered into several agreements with a third-party lender and EF SPV, Ltd. (“EF SPV”), an entity formed by third-party investors for the purpose of purchasing loan participations from the third-party lender. Per the terms of the agreements, the Company provides customer acquisition services to generate loan applications submitted to the third-party lender. In addition, the Company licenses loan underwriting software and provides services to the third-party lender to evaluate the credit quality of those loan applications in accordance with the third-party lender’s credit policies. EF SPV accounts for the loan participations acquired in accordance with ASC 860-10-40, Transfers and Services, Derecognition , as the installment loans acquired meet the criteria of a participation interest. Once the third-party lender originates the loan, EF SPV has the right, but not the obligation, to purchase a 96% interest in each Rise bank originated installment loan. VPC lends EF SPV all funds necessary up to a maximum borrowing amount to purchase such participation interests in exchange for a fixed return (see Note 5—Notes Payable—EF SPV Facility). The Company entered into a separate credit default protection agreement with EF SPV whereby the Company agreed to provide credit protection to the investors in EF SPV against Rise bank originated loan losses in return for a credit premium. The Company does not hold a direct ownership interest in EF SPV, however, as a result of the credit default protection agreement, EF SPV was determined to be a VIE and the Company qualifies as the primary beneficiary. The following table summarizes the assets and liabilities of the VIE that are included within the Company’s Condensed Consolidated Balance Sheets at March 31, 2021 and December 31, 2020: (Dollars in thousands) March 31, December 31, ASSETS Cash and cash equivalents $ 20,471 $ 35,450 Loans receivable, net of allowance for loan losses of $9,816 and $14,342, respectively 78,007 83,869 Receivable from payment processors ($365 and $231, respectively, eliminates upon consolidation) 822 713 Total assets $ 99,300 $ 120,032 LIABILITIES AND SHAREHOLDER’S EQUITY Accounts payable and accrued liabilities ($14,575 and $16,459, respectively, eliminates upon consolidation) $ 15,566 $ 17,599 Reserve deposit liability ($8,950 and $8,950, respectively, eliminates upon consolidation) 8,950 8,950 Notes payable, net 74,784 93,483 Total liabilities and shareholder’s equity $ 99,300 $ 120,032 EC SPV, Ltd. In July 2020, the Company entered into several agreements with a third-party lender and EC SPV, Ltd. (“EC SPV”), an entity formed by third-party investors for the purpose of purchasing loan participations from the third-party lender. Per the terms of the agreements, the Company provides customer acquisition services to generate loan applications submitted to the third-party lender. In addition, the Company licenses loan underwriting software and provides services to the third-party lender to evaluate the credit quality of those loan applications in accordance with the third-party lender’s credit policies. EC SPV accounts for the loan participations acquired in accordance with ASC 860-10-40, Transfers and Services, Derecognition , as the installment loans acquired meet the criteria of a participation interest. Once the third-party lender originates the loan, EC SPV has the right to purchase an interest in each Rise bank originated installment loan. The third-party lender retains 5% of the balances of all the loans originated and sells the remaining 95% participation to EC SPV. VPC will lend EC SPV all funds necessary up to a maximum borrowing amount to purchase such participation interests in exchange for a fixed return (see Note 5—Notes Payable—EC SPV Facility). The Company entered into a separate credit default protection agreement with EC SPV whereby the Company agreed to provide credit protection to the investors in EC SPV against Rise bank originated loan losses in return for a credit premium. The Company does not hold a direct ownership interest in EC SPV, however, as a result of the credit default protection agreement, EC SPV was determined to be a VIE and the Company qualifies as the primary beneficiary. The following table summarizes the assets and liabilities of the VIE that are included within the Company’s Condensed Consolidated Balance Sheets at March 31, 2021 and December 31, 2020: (Dollars in thousands) March 31, December 31, ASSETS Cash and cash equivalents $ 9,723 $ 9,377 Restricted cash 1,000 1,000 Loans receivable, net of allowance for loan losses of $4,294 and $1,634, respectively 23,656 19,231 Receivable from payment processors ($12 and $6, respectively, eliminates upon consolidation) 321 211 Total assets $ 34,700 $ 29,819 LIABILITIES AND SHAREHOLDER’S EQUITY Accounts payable and accrued liabilities ($827 and $803, respectively, eliminates upon consolidation) $ 1,404 $ 1,541 Reserve deposit liability ($3,500 and $3,500,respectively, eliminates upon consolidation) 3,500 3,500 Notes payable, net 29,796 24,778 Total liabilities and shareholder’s equity $ 34,700 $ 29,819 CSO Lenders The two CSO lenders are considered VIE's of the Company; however, the Company does not have any ownership interest in the CSO lenders, does not exercise control over them, and is not the primary beneficiary, and therefore, does not consolidate the CSO lenders’ results with its results. |
Notes Payable, Net
Notes Payable, Net | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Notes Payable, Net | NOTES PAYABLE, NET The Company has four debt facilities with VPC, the Rise SPV, LLC credit facility (the "VPC Facility"), the ESPV Facility, the EF SPV Facility, and effective July 31, 2020, the EC SPV Facility. The facilities had the following terms as of March 31, 2021. VPC Facility The VPC Facility is primarily used to fund the Rise loan portfolio and also had a subordinated debt component used for general corporate purposes, which was repaid in January 2021. It provides the following term notes at: • A maximum borrowing amount of $200 million (amended as of July 31, 2020) used to fund the Rise loan portfolio (“US Term Note”). Upon the February 1, 2019 amendment date, the interest rate on the debt outstanding as of the amendment date was fixed through the January 1, 2024 maturity date at 10.23% (base rate of 2.73% plus 7.5%, which was reduced to 7.25% and 7.00% on January 1, 2020 and 2021, respectively, as part of the amendment). At December 31, 2020, the weighted average base rate on the outstanding balance was 2.73% and the overall interest rate was 9.98%. At March 31, 2021, the weighted average base rate on the outstanding balance was 2.73% and the overall interest rate was 9.73%. All future borrowings under this facility will bear an interest rate at a base rate (defined as the greater of 3-month LIBOR, the five-year LIBOR swap rate or 1%) plus 7.0% at the borrowing date. • Revolving feature providing the option to pay down up to 20% of the outstanding balance, excluding the 4 th Tranche Term Note, once per year during the first quarter. Amounts paid down may be drawn again at a later date prior to maturity. The US Term Note matures on January 1, 2024. There are no principal payments due or scheduled until the maturity date. All assets of the Company are pledged as collateral to secure the VPC Facility. The VPC Facility contains certain covenants for the Company such as minimum cash requirements and a minimum book value of equity requirement. There are also certain covenants for the product portfolio underlying the facility including, among other things, excess spread requirements, maximum roll rate and charge-off rate levels, and maximum loan-to-value ratios. The Company was in compliance with all covenants related to the VPC Facility as of March 31, 2021 and December 31, 2020. The VPC Facility previously included a term note (the "4 th Tranche Term Note") used to fund working capital with a maximum borrowing amount of $18 million and a base rate of 2.73% plus 13%. The interest rate at December 31, 2020 was 15.73%. In January 2021, the Company paid off this term note prior to its maturity on February 1, 2021. Prior to ECIL entering administration and being classified a discontinued operation by the Company on June 29, 2020, the VPC Facility included a note used to fund the UK Sunny loan portfolio (“UK Term Note”). Upon deconsolidation of ECIL, this note was removed from the Company's Condensed Consolidated Balance Sheets and was presented within Liabilities from discontinued operations in all prior periods presented. Under the terms of the VPC Facility, Elevate Credit, Inc. (the "Parent") had provided a guarantee to VPC for the repayment of the debt of any subsidiary, which included the outstanding debt of ECIL. Repayment of the UK Term Note was completed by ECIL in the third quarter of 2020 and any guarantee obligation associated with the UK Term Note was released with the repayment. ESPV Facility The ESPV Facility has a maximum borrowing amount of $350 million used to purchase loan participations from a third-party lender. Upon the February 1, 2019 amendment date, the interest rate on the debt outstanding as of the amendment date was fixed at 15.48% (base rate of 2.73% plus 12.75%). Effective July 1, 2019, the interest rate on the debt outstanding as of the amendment date was set at 10.23% (base rate of 2.73% plus 7.5%, which was reduced to 7.25% and 7.00% on January 1, 2020 and 2021, respectively, as part of the amendment). At December 31, 2020 the weighted average base rate on the outstanding balance was 2.72% and the overall interest rate was 9.97%. At March 31, 2021, the weighted average base rate on the outstanding balance was 2.72% and the overall interest rate was 9.72%. All future borrowings under this facility will bear an interest rate at a base rate (defined as the greater of 3-month LIBOR, the five-year LIBOR swap rate or 1%) plus 7.0% at the borrowing date. The ESPV Term Note has a revolving feature providing the option to pay down up to 20% of the outstanding balance once per year during the first quarter. Amounts paid down may be drawn again at a later date prior to maturity. The ESPV Term Note matures on January 1, 2024. There are no principal payments due or scheduled until the maturity date. All assets of the Company and ESPV are pledged as collateral to secure the ESPV Facility. The ESPV Facility contains certain covenants for the Company such as minimum cash requirements and a minimum book value of equity requirement. There are also certain covenants for the product portfolio underlying the facility including, among other things, excess spread requirements, maximum roll rate and charge-off rate levels, and maximum loan-to-value ratios. The Company was in compliance with all covenants related to the ESPV Facility as of March 31, 2021 and December 31, 2020. EF SPV Facility The EF SPV Facility has a maximum borrowing amount of $250 million (amended as of July 31, 2020) used to purchase loan participations from a third-party lender. Prior to execution of the agreement with VPC effective February 1, 2019, EF SPV was a borrower on the US Term Note under the VPC Facility and the interest rate paid on this facility was a base rate (defined as 3-month LIBOR, with a 1% floor) plus 11%. Upon the February 1, 2019 amendment date, $43 million was re-allocated into the EF SPV Facility and the interest rate on the debt outstanding as of the amendment date was fixed through the January 1, 2024 maturity date at 10.23% (base rate of 2.73% plus 7.5%, which was reduced to 7.25% and 7.00% on January 1, 2020 and 2021, respectively, as part of the amendment). The weighted average base rate on the outstanding balance at December 31, 2020 was 2.45% and the overall interest rate was 9.70%. The weighted average base rate on the outstanding balance at March 31, 2021 was 2.45% and the overall interest rate was 9.45%. All future borrowings under this facility will bear an interest rate at a base rate (defined as the greater of 3-month LIBOR, the five-year LIBOR swap rate or 1%) plus 7.0% at the borrowing date. The EF SPV Term Note has a revolving feature providing the option to pay down up to 20% of the outstanding balance once per year during the first quarter. Amounts paid down may be drawn again at a later date prior to maturity. The EF SPV Term Note matures on January 1, 2024. There are no principal payments due or scheduled until the maturity date. All assets of the Company and EF SPV are pledged as collateral to secure the EF SPV Facility. The EF SPV Facility contains certain covenants for the Company such as minimum cash requirements and a minimum book value of equity requirement. There are also certain covenants for the product portfolio underlying the facility including, among other things, excess spread requirements, maximum roll rate and charge-off rate levels, and maximum loan-to-value ratios. The Company was in compliance with all covenants related to the EF SPV Facility as of March 31, 2021 and December 31, 2020. EC SPV Facility VPC entered into a new debt facility with EC SPV on July 31, 2020. The EC SPV Facility has a maximum borrowing amount of $100 million used to purchase loan participations from a third-party lender. The weighted average base rate on the outstanding balance at December 31, 2020 was 2.73% and the overall interest rate was 9.98%. The weighted average base rate on the outstanding balance at March 31, 2021 was 2.73% and the overall interest rate was 9.73%. All future borrowings under this facility will bear an interest rate at a base rate (defined as the greater of 3-month LIBOR, the five-year LIBOR swap rate or 1%) plus 7.0% at the borrowing date. The EC SPV Term Note has a revolving feature providing the option to pay down up to 20% of the outstanding balance once per year during the first quarter. Amounts paid down may be drawn again at a later date prior to maturity. The EC SPV Term Note matures on January 1, 2024. There are no principal payments due or scheduled until the maturity date. All assets of the Company and EC SPV are pledged as collateral to secure the EC SPV Facility. The EC SPV Facility contains certain covenants for the Company such as minimum cash requirements and a minimum book value of equity requirement. There are also certain covenants for the product portfolio underlying the facility including, among other things, excess spread requirements, maximum roll rate and charge-off rate levels, and maximum loan-to-value ratios. The Company was in compliance with all covenants related to the EC SPV Facility as of March 31, 2021 and December 31, 2020. VPC, ESPV, EF SPV and EC SPV Facilities: The outstanding balances of Notes payable, net of debt issuance costs, are as follows: (Dollars in thousands) March 31, December 31, US Term Note bearing interest at the base rate + 7.0% (2021) or + 7.25% (2020) $ 78,600 $ 104,500 4 th Tranche Term Note bearing interest at the base rate + 13% — 18,050 ESPV Term Note bearing interest at the base rate + 7.0% (2021) or + 7.25% (2020) 159,600 199,500 EF SPV Term Note bearing interest at the base rate + 7.0% (2021) or + 7.25% (2020) 74,800 93,500 EC SPV Term Note bearing interest at the base rate + 7.0% (2021) or + 7.25% (2020) 30,000 25,000 Debt issuance costs (1,965) (2,147) Total $ 341,035 $ 438,403 The change in the facility balances includes the following: • US Term Note - Paydown of $25.9 million in the first quarter of 2021; • 4 th Tranche Term Note - Debt obligation of $18.1 million paid off in the first quarter of 2021; • ESPV Term Note - Paydown of $39.9 million in the first quarter of 2021; • EF SPV Term note - Paydown of $18.7 million in the first quarter of 2021; and • EC SPV Term Note - Draw of $5 million in the first quarter of 2021. Per the terms of the February 2019 amendments and the July 31, 2020 EC SPV agreement, the Company qualified for a 25 bps rate reduction on the VPC, ESPV, EF SPV and EC SPV facilities effective January 1, 2021. The Company has evaluated the interest rates for its debt and believes they represent market rates based on the Company’s size, industry, operations and recent amendments. As a result, the carrying value for the debt approximates the fair value. Future debt maturities as of March 31, 2021 are as follows: Year (dollars in thousands) March 31, 2021 Remainder of 2021 $ — 2022 — 2023 — 2024 343,000 2025 — Thereafter — Total $ 343,000 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Mar. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | GOODWILL AND INTANGIBLE ASSETS The Company’s goodwill represents the excess purchase price over the estimated fair market value of the net assets acquired by the predecessor parent company, Think Finance, Inc. (“Think Finance”) related to the Elastic and previously consolidated UK reporting units. The Company performs an impairment review of goodwill and intangible assets with an indefinite life annually at October 1. As a result of the recent global economic impact and uncertainty due to the COVID-19 pandemic, the Company concluded a triggering event had occurred as of March 31, 2020, and accordingly, performed interim impairment testing on the goodwill balances of its reporting units. The Company performed a detailed qualitative and quantitative assessment of each reporting unit and concluded that the goodwill associated with the previously consolidated UK reporting unit was impaired as the fair value of the UK reporting unit was less than its carrying amount. The impairment loss of $9.3 million was included in Loss from discontinued operations due to the deconsolidation of ECIL. While there was a decline in the fair value of the Elastic reporting unit at March 31, 2020, there was no impairment identified during the quantitative assessment. The annual test was completed as of October 1, 2020 and the Company determined that there was no evidence of impairment of goodwill or indefinite life intangible assets. No events or circumstances occurred between October 2, 2020 and March 31, 2021 that would more likely than not reduce the fair value of the Elastic reporting unit below the carrying amount. The Company has $6.8 million of goodwill (all related to the Elastic reporting unit) on the Condensed Consolidated Balance Sheets as of March 31, 2021 and December 31, 2020, respectively. Of the total goodwill balance, approximately $270 thousand is deductible for tax purposes. The Company's impairment evaluation of goodwill is based on comparing the fair value of the respective reporting unit to its carrying value. The fair value of the reporting unit is determined based on a weighted average of the income and market approaches. The income approach establishes fair value based on estimated future cash flows of the reporting unit, discounted by an estimated weighted-average cost of capital developed using the capital asset pricing model, which reflects the overall level of inherent risk of the reporting unit. The income approach uses the Company's projections of financial performance for a six The carrying value of acquired intangible assets as of March 31, 2021 is presented in the table below: (Dollars in thousands) Cost Accumulated Net Assets subject to amortization: Acquired technology $ 211 $ (211) $ — Non-compete 2,461 (2,461) — Customers 126 (126) — Assets not subject to amortization: Domain names 230 — 230 Total $ 3,028 $ (2,798) $ 230 The carrying value of acquired intangible assets as of December 31, 2020 is presented in the table below: (Dollars in thousands) Cost Accumulated Amortization Net Assets subject to amortization: Acquired technology $ 211 $ (211) $ — Non-compete 2,461 (1,859) 602 Customers 126 (126) — Assets not subject to amortization: Domain names 531 — 531 Total $ 3,329 $ (2,196) $ 1,133 With Robert Johnson's decision to not run for reelection to the Company's Board of Directors in March 2021, the remaining non-compete agreements expired and the Company accelerated the amortization of the assets to coincide with his announcement. Total amortization expense recognized for the three months ended March 31, 2021 and 2020 was approximately $602 thousand and $30 thousand, respectively. As of March 31, 2021, there were no intangible assets subject to amortization with any remaining life. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2021 | |
Leases [Abstract] | |
Leases | LEASES The Company has non-cancelable operating leases for facility space and equipment with varying terms. All of the leases for facility space qualified for capitalization under FASB ASC 842, Leases . These leases have remaining lease terms of two The Company analyzes contracts above certain thresholds to identify leases and lease components. Lease and non-lease components are not separated for facility space leases. The Company uses its contractual borrowing rate to determine lease discount rates when an implicit rate is not available. In January 2021, the Company entered into a sublease contract with an independent third party for facility space related to a right-of-use asset. The Company's obligation under the original lease was not relieved. As the sublease income is immaterial, payments received are recognized as an offset to Occupancy and equipment in the Condensed Consolidated Statements of Operations. The signing of the sublease triggered an impairment evaluation and the Company determined the related right-of-use asset was impaired. An impairment loss of $549 thousand was recognized in Non-operating income (loss) in the Condensed Consolidated Statements of Operations. Total gross lease cost for the three months ended March 31, 2021 and 2020, included in Occupancy and equipment in the Condensed Consolidated Statements of Operations, is detailed in the table below: Three Months Ended March 31, Lease cost (dollars in thousands) 2021 2020 Operating lease cost $ 768 $ 808 Short-term lease cost — — Total lease cost $ 768 $ 808 Further information related to leases is as follows: Three Months Ended March 31, Supplemental cash flows information (dollars in thousands) 2021 2020 Cash paid for amounts included in the measurement of lease liabilities $ 958 $ 924 Right-of-use assets obtained in exchange for lease obligations $ — $ — Weighted average remaining lease term 3.3 years 4.7 years Weighted average discount rate 10.23 % 10.23 % Future minimum lease payments as of March 31, 2021 are as follows: Year (dollars in thousands) Operating Leases 2021 $ 2,918 2022 3,984 2023 3,486 2024 1,438 2025 1,254 Thereafter 638 Total future minimum lease payments $ 13,718 Less: Imputed interest (2,424) Operating lease liabilities $ 11,294 |
Share-Based Compensation
Share-Based Compensation | 3 Months Ended |
Mar. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Share-Based Compensation | SHARE-BASED COMPENSATION Share-based compensation expense recognized for the three months ended March 31, 2021 and 2020 totaled approximately $1.6 million and $2.7 million, respectively. 2016 Omnibus Incentive Plan The 2016 Omnibus Incentive Plan ("2016 Plan") was adopted by the Company’s Board of Directors on January 5, 2016 and approved by the Company’s stockholders thereafter. The 2016 Plan became effective on June 23, 2016. The 2016 Plan provides for the grant of incentive stock options to the Company’s employees, and for the grant of non-qualified stock options, stock appreciation rights, restricted stock, RSUs, dividend equivalent rights, cash-based awards (including annual cash incentives and long-term cash incentives), and any combination thereof to the Company’s employees, directors and consultants. In connection with the 2016 Plan, the Company has reserved but not issued 8,523,799 shares of common stock, which includes shares that would otherwise return to the 2014 Equity Incentive Plan (the "2014 Plan") as a result of forfeiture, termination, or expiration of awards previously granted under the 2014 Plan and outstanding when the 2016 Plan became effective. The 2016 Plan will automatically terminate 10 years following the date it became effective, unless the Company terminates it sooner. In addition, the Company’s Board of Directors has the authority to amend, suspend or terminate the 2016 Plan provided such action does not impair the rights under any outstanding award. As of March 31, 2021, the total number of shares available for future grants under the 2016 Plan was 3,570,917 shares. The Company has in the past and may in the future make grants of share-based compensation as inducement awards to new employees who are outside the 2016 Plan. The Company's board may rely on the employment inducement exception under NYSE Rule 303A.08 in order to approve the grants. 2014 Equity Incentive Plan The Company adopted the 2014 Plan on May 1, 2014. The 2014 Plan permitted the grant of incentive stock options, non-statutory stock options, and restricted stock. On April 27, 2017, the Company's Board of Directors terminated the 2014 Plan as to future awards and confirmed that underlying shares corresponding to awards under the 2014 Plan that were outstanding at the time the 2016 Plan became effective, that are forfeited, terminated or expired, will become available for issuance under the 2016 Plan. For the three months ended March 31, 2021, the Company had the following activity related to outstanding share-based awards: Stock Options Stock options are awarded to encourage ownership of the Company's common stock by employees and to provide increased incentive for employees to render services and to exert maximum effort for the success of the Company. The Company's stock options generally permit net-share settlement upon exercise. The option exercise price, vesting schedule and exercise period are determined for each grant by the administrator of the applicable plan. The Company's stock options generally have a 10-year contractual term and vest over a 4-year period. A summary of stock option activity as of and for the three months ended March 31, 2021 is presented below: Stock Options Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (in years) Outstanding at December 31, 2020 886,685 $ 5.94 Granted — — Exercised (12,500) 2.13 Expired (1,250) 6.31 Forfeited — — Outstanding at March 31, 2021 872,935 6.00 3.74 Options exercisable at March 31, 2021 872,935 $ 6.00 3.74 At March 31, 2021, there were no unrecognized compensation costs related to unvested stock options to be recognized. The total intrinsic value of options exercised for the three months ended March 31, 2021 was $30 thousand. Restricted Stock Units RSUs are awarded to serve as a key retention tool for the Company to retain its executives and key employees. RSUs will transfer value to the holder even if the Company’s stock price falls below the price on the date of grant, provided that the recipient provides the requisite service during the period required for the award to “vest.” The weighted-average grant-date fair value for RSUs granted under the 2016 Plan during the three months ended March 31, 2021 was $4.46. These RSUs primarily vest 25% on the first anniversary of the effective date, and 25% each year thereafter, until full vesting on the fourth anniversary of the effective date. A summary of RSU activity as of and for the three months ended March 31, 2021 is presented below: RSUs Shares Weighted Average Grant-Date Fair Value Unvested at December 31, 2020 2,924,086 $ 4.17 Granted 1,489,435 4.46 Vested (1) (265,857) 3.91 Forfeited (67,720) 4.65 Unvested at March 31, 2021 4,079,944 4.28 Expected to vest at March 31, 2021 2,996,212 $ 4.35 (1) During the year ended March 31, 2021, certain RSUs were net share-settled to cover the required withholding tax and the remaining amounts were converted into an equivalent number of shares of the Company's common stock. The Company withheld 96,766 shares for applicable income and other employment taxes and remitted the cash to the appropriate taxing authorities. At March 31, 2021, there was approximately $9.3 million of unrecognized compensation cost related to unvested RSUs which is expected to be recognized over a weighted average period of 2.8 years. During the three months ended March 31, 2021, the total intrinsic value of RSUs that vested during the period was approximately $1.1 million. As of March 31, 2021, the aggregate intrinsic value of the vested and expected to vest RSUs was approximately $8.7 million. Employee Stock Purchase Plan The Company offers an Employee Stock Purchase Plan ("ESPP") to eligible US employees. There are currently 2,196,257 shares authorized and 1,083,949 reserved for the ESPP. There were no shares purchased under the ESPP for the three months ended March 31, 2021. For the three months ended March 31, 2021 and 2020, $171 thousand and $141 thousand , re |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS The accounting guidance on fair value measurements establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The Company groups its assets and liabilities measured at fair value in three levels of the fair value hierarchy, based on the fair value measurement technique, as described below: Level 1—Valuation is based upon quoted prices (unadjusted) for identical assets and liabilities in active exchange markets that the Company has the ability to access at the measurement date. Level 2—Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques with significant assumptions and inputs that are observable in the market or can be derived principally from or corroborated by observable market data. Level 3—Valuation is derived from model-based techniques that use inputs and significant assumptions that are supported by little or no observable market data. These unobservable assumptions reflect estimates of assumptions that market participants would use in pricing the asset or liability. Valuation techniques include the use of pricing models, discounted cash flow models and similar techniques. The Company monitors the market conditions and evaluates the fair value hierarchy levels at least quarterly. For any transfers in and out of the levels of the fair value hierarchy, the Company discloses the fair value measurement at the beginning of the reporting period during which the transfer occurred. For the three month periods ended March 31, 2021 and 2020, there were no significant transfers between levels. The level of fair value hierarchy within which a fair value measurement in its entirety falls is based on the lowest-level input that is most significant to the fair value measurement in its entirety. In the determination of the classification of assets and liabilities in Level 2 or Level 3 of the fair value hierarchy, the Company considers all available information, including observable market data, indications of market conditions, and its understanding of the valuation techniques and significant inputs used. Based upon the specific facts and circumstances, judgments are made regarding the significance of the Level 3 inputs to the fair value measurements of the respective assets and liabilities in their entirety. If the valuation techniques that are most significant to the fair value measurements are principally derived from assumptions and inputs that are corroborated by little or no observable market data, the asset or liability is classified as Level 3. Financial Assets and Liabilities Not Measured at Fair Value The Company has evaluated Loans receivable, net of allowance for loan losses, Receivable from CSO lenders, Receivable from payment processors and Accounts payable and accrued expenses, and believes the carrying value approximates the fair value due to the short-term nature of these balances. The Company has also evaluated the interest rates for Notes payable, net and believes they represent market rates based on the Company’s size, industry, operations and recent amendments. As a result, the carrying value for Notes payable, net approximates the fair value. The Company classifies its fair value measurement techniques for the fair value disclosures associated with Loans receivable, net of allowance for loan losses, Receivable from CSO lenders, Receivable from payment processors, Accounts payable and accrued liabilities and Notes payable, net as Level 3 in accordance with ASC 820-10, Fair Value Measurements and Disclosures (“ASC 820-10”). |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES Income tax expense for the three months ended March 31, 2021 and 2020 consists of the following: Three Months Ended March 31, (Dollars in thousands) 2021 2020 Current income tax expense: Federal $ — $ 1,152 State 86 487 Total current income tax expense 86 1,639 Deferred income tax expense (benefit): Federal 3,577 73 State (219) 343 Total deferred income tax expense 3,358 416 Total income tax expense $ 3,444 $ 2,055 No material penalties or interest related to taxes were recognized for the three months ended March 31, 2021 and 2020. The Company’s effective tax rates for continuing operations for the three months ended March 31, 2021 and 2020, including discrete items, were 21.3% and 20.6%, respectively. For the three months ended March 31, 2021 and 2020, the Company’s effective tax rate differed from the standard corporate federal income tax rate of 21% due to permanent non-deductible items and corporate state tax obligations in the states where it has lending activities. The Company's cash effective tax rate was approximately 1.0%. On March 11, 2021, the American Rescue Plan Act ("ARP Act") was signed into law. The Company reviewed the tax relief provisions of the ARP Act, including the Company's eligibility for such provisions, and determined that the impact is likely to be insignificant with regard to the Company's effective tax rate. The Company continues to monitor and evaluate its eligibility under the ARP Act tax relief provisions to identify any portions that may become applicable in the future. The Company's tax provision for interim periods is determined using an estimate of its annual effective tax rate, adjusted for discrete items arising in that quarter. In each quarter, the Company updates its estimate of the annual effective tax rate, and if the estimated annual effective tax rate changes, the Company would make a cumulative adjustment in that quarter. For purposes of evaluating the need for a deferred tax valuation allowance, significant weight is given to evidence that can be objectively verified. The following provides an overview of the assessment that was performed for the deferred tax assets, net. Deferred tax assets, net At March 31, 2021 and December 31, 2020, the Company did not establish a valuation allowance for its deferred tax assets (“DTA”) based on management’s expectation of generating sufficient taxable income in a look forward period over the next one Significant factors included the following: • The Company is in a three-year cumulative pre-tax income position in 2021. Additionally, the Company has a history utilizing its past NOL carryforwards. • Due to the short-term nature of the loan portfolio and the other material items that comprise the deferred tax assets, net, the Company estimates that the majority of these deferred tax items will reverse within one The Company has given due consideration to all the factors and has concluded that the deferred tax asset is expected to be realized based on management’s expectation of generating sufficient taxable income and the reversal of tax timing differences in a look-forward period over the next one |
Commitments, Contingencies and
Commitments, Contingencies and Guarantees | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments, Contingencies and Guarantees | COMMITMENTS, CONTINGENCIES AND GUARANTEES Contingencies Currently and from time to time, the Company may become a defendant in various legal and regulatory actions that arise in the ordinary course of business. The Company generally cannot predict the eventual outcome, the timing of the resolution or the potential losses, fines or penalties of such legal and regulatory actions. Actual outcomes or losses may differ materially from the Company's current assessments and estimates, which could have a material adverse effect on the Company's business, prospects, results of operations, financial condition or cash flows. In accordance with applicable accounting guidance, the Company establishes an accrued liability for litigation, regulatory matters and other legal proceedings when those matters present material loss contingencies that are both probable and reasonably estimable. Even when an accrual is recorded, the Company may be exposed to loss in excess of any amounts accrued. Other Matters: In December 2019, the Think Finance, Inc. ("TFI") bankruptcy plan was confirmed, and any potential future claims from the TFI Creditors' Committee were assigned to the Think Finance Litigation Trust (“TFLT”). On August 14, 2020, the TFLT filed an adversary proceeding against Elevate Credit, Inc. in the United States Bankruptcy Court for the Northern District of Texas, alleging certain avoidance claims related to Elevate's spin-off from TFI under the Bankruptcy Code and the Texas Uniform Fraudulent Transfer Act ("TUFTA"). If it were determined that the spin-off constituted a fraudulent conveyance or that there were other avoidance actions associated with the spin-off, then the spin-off could be deemed void and there could be a number of different remedies imposed against Elevate, including without limitation, the requirement that Elevate has to pay money damages. While the TFLT values this claim at $246 million, the Company believes that it has valid defenses to the claim and intends to vigorously defend itself against this claim. Additionally, a class action lawsuit against Elevate was filed on August 14, 2020 in the Eastern District of Virginia alleging violations of usurious interest and aiding and abetting various racketeering activities related to the operations of TFI prior to and immediately after the 2014 spin-off. Elevate views this lawsuit as without merit and intends to vigorously defend its position. Based upon preliminary settlement discussions in the fourth quarter of 2020, the Company accrued a contingent loss in the amount of $17 million for estimated losses related to the TFLT and class action disputes within Accounts payable and accrued liabilities on the Condensed Consolidated Balance Sheets at March 31, 2021 and December 31, 2020. On June 5, 2020, the District of Columbia (the "District") sued Elevate in the Superior Court of the District of Columbia alleging that Elevate may have violated the District's Consumer Protection Procedures Act and the District of Columbia's Municipal Regulations in connection with loans issued by banks in the District of Columbia. This action has been removed to federal court, but the District has filed a motion to remand to the Superior Court on August 3, 2020. Elevate disagrees that it has violated the above referenced laws and regulations and it intends to vigorously defend its position. In addition, on January 27, 2020, an Elevate wholly-owned subsidiary and other non-affiliated service providers to banks were sued in a class action lawsuit in Washington state. The Plaintiff in the case claims that Elevate and the other non-affiliated service providers to banks have violated Washington’s Consumer Protection Act by engaging in unfair or deceptive practices. The lawsuit was removed to federal court. On January 12, 2021, the court granted Rise's motion to dismiss, however Plaintiffs amended the complaint on January 25, 2021, suing Elevate alleging it is the true lender and violated Washington's Consumer Protection Act. Elevate disagrees that it has violated the above referenced law and it intends to vigorously defend its position. In California, two separate actions have been filed seeking damages and public injunctive relief and alleging unconscionable interest rates on Rise loans - one lawsuit in the Superior Court of California, and one demand for arbitration. The Plaintiffs in these actions assert claims under the “unlawful,” “unfair,” and “fraudulent” prongs of the California Unfair Competition Law (“UCL”) and for breach of contract and civil conspiracy. The “unlawful” UCL claims are premised upon alleged violations of (a) the California Financing Law’s prohibition on unconscionable loans and (b) the California False Advertising Law. The arbitration claimant further alleges violations of the Electronic Fund Transfer Act and the Rosenthal Fair Debt Collection Practices Act. Plaintiff dismissed the state court actions. Elevate disagrees that it has violated the above referenced laws and it intends to vigorously defend its position. Commitments The Elastic product, which offers lines of credit to consumers, had approximately $287.6 million and $275.9 million in available and unfunded credit lines at March 31, 2021 and December 31, 2020, respectively. The Today Card product had approximately $9.0 million and $5.4 million in available and unfunded credit lines as of March 31, 2021 and December 31, 2020, respectively. From May 2017 through September 2020, the Rise product offered lines of credit to consumers in certain states. At both March 31, 2021 and December 31, 2020, there were no remaining available and unfunded Rise credit lines. While these amounts represented the total available unused credit lines, the Company has not experienced and does not anticipate that all line of credit customers will access their entire available credit lines at any given point in time. The Company has not recorded a loan loss reserve for unfunded credit lines as the Company has the ability to cancel commitments within a relatively short timeframe. Effective June 2017, the Company entered into a seven-year lease agreement for office space in California. Upon the commencement of the lease, the Company was required to provide the lessor with an irrevocable and unconditional $500 thousand letter of credit. Provided the Company is not in default of any terms of the lease agreement, the outstanding required balance of the letter of credit will be reduced by $100 thousand per year beginning on the second anniversary of the lease commencement and ending on the fifth anniversary of the lease agreement. The minimum balance of the letter of credit will be at least $100 thousand throughout the duration of the lease. At March 31, 2021 and December 31, 2020, the Company had $200 thousand and $300 thousand, respectively, of cash balances securing the letter of credit which is included in Restricted cash within the Condensed Consolidated Balance Sheets. Guarantees CSO Program: In connection with its CSO programs, the Company guarantees consumer loan payment obligations to CSO lenders and is required to purchase any defaulted loans it has guaranteed. The guarantee represents an obligation to purchase specific loans that go into default. UK Debt Guarantee: Under the terms of the VPC Facility, Elevate Credit, Inc. (the "Parent") had provided a guarantee to VPC for the repayment of the UK Term Note. ECIL completed payment of the UK Term Note in the third quarter of 2020 and any guarantee obligation associated with the UK Term Note was released with the repayment. Indemnifications and contingent loss accrual In the ordinary course of business, the Company may indemnify customers, vendors, lessors, investors, and other parties for certain matters subject to various terms and scopes. For example, the Company may indemnify certain parties for losses due to the Company's breach of certain agreements or due to certain services it provides. As the Company has previously disclosed, the Company has also entered into separate indemnification agreements with the Company’s directors and executive officers, in addition to the indemnification provided for in the Company’s amended and restated bylaws. These agreements, among other things, provide that the Company will indemnify its directors and executive officers for certain expenses, including attorneys’ fees, judgments, penalties, fines and settlement amounts incurred by a director or executive officer in any action or proceeding arising out of their services as one of the Company’s or, where applicable, TFI’s directors or executive officers, or any of the Company’s subsidiaries or any other company or enterprise to which the person provides services at the Company’s request. The indemnification agreements also set forth certain procedures that will apply in the event of a claim for indemnification thereunder. As of March 31, 2021 and December 31, 2020, the Company accrued approximately $0.0 million and $4.4 million, respectively, for a contingent loss related to a legal matter. This contingent loss was based on a probable settlement composed of both cash and certain amounts that were subject to valuation adjustments until the final settlement. The accrual was recognized as Non-operating loss in the Condensed Consolidated Statements of Operations and as Accounts payable and accrued liabilities on the Condensed Consolidated Balance Sheets. The Company accrued $4.3 million at March 31, 2020. As of March 31, 2021, the contingent loss was settled and no further accrual remains. The table below presents a rollforward of the amounts accrued and paid for the three months ended March 31, 2021 and 2020. Three Months Ended March 31, (Dollars in thousands) 2021 2020 Beginning balance $ 4,424 $ — Accruals — 4,263 Payments (4,424) — Net contingent loss related to a legal matter $ — $ 4,263 |
Discontinued Operations
Discontinued Operations | 3 Months Ended |
Mar. 31, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | DISCONTINUED OPERATIONS As a result of the recent global economic impact and uncertainty due to the COVID-19 pandemic, the Company concluded a triggering event had occurred as of March 31, 2020, and accordingly, performed interim impairment testing on the goodwill balances of its reporting units. The Company performed a detailed qualitative and quantitative assessment of each reporting unit and concluded that the goodwill associated with the previously consolidated UK reporting unit was impaired as the fair value of the UK reporting unit was less than its carrying amount. The impairment loss of $9.3 million was included in Loss from discontinued operations due to the deconsolidation of ECIL. On June 29, 2020, ECIL entered into administration in accordance with the provisions of the UK Insolvency Act 1986 and pursuant to a resolution of the board of directors of ECIL. The management, business, affairs and property of ECIL have been placed into the direct control of the appointed administrators, KPMG LLP. Accordingly, the Company deconsolidated ECIL as of June 29, 2020 and presents ECIL's results as Discontinued operations for all periods presented. The table below presents the financial results of ECIL, which are considered Discontinued operations and are excluded from the Company's results of continuing operations: Three Months Ended March 31, (Dollars in thousands) 2021 2020 Revenues $ — $ 14,988 Cost of sales: Provision for loan losses — 4,178 Direct marketing costs — 1,102 Other cost of sales — 5,660 Total cost of sales — 10,940 Gross profit — 4,048 Operating expenses: Compensation and benefits — 2,717 Professional services — 1,281 Selling and marketing — 470 Occupancy and equipment — 1,113 Depreciation and amortization — 501 Other — 180 Total operating expenses — 6,262 Operating (loss) income — (2,214) Other expense: Net interest expense — (539) Foreign currency transaction loss — (812) Impairment loss — (9,251) Total other expense — (10,602) Gain (loss) from discontinued operations before taxes — (12,816) Income tax benefit — (17) Net income (loss) from discontinued operations $ — $ (12,833) At March 31, 2021 and December 31, 2020, the Company had no assets or liabilities related to the discontinued operations of ECIL. |
Related Parties
Related Parties | 3 Months Ended |
Mar. 31, 2021 | |
Related Party Transactions [Abstract] | |
Related Parties | RELATED PARTIES Expenses related to the Company's board of directors, including board fees, travel reimbursements, share-based compensation and a consulting arrangement with a related party for the three months ended March 31, 2021 and 2020 are included in Professional services within the Condensed Consolidated Statements of Operations and were as follows: Three Months Ended March 31, (Dollars in thousands) 2021 2020 Fees and travel expenses $ 122 $ 133 Stock compensation (1) 79 979 Consulting — 100 Total board related expenses $ 201 $ 1,212 (1) Includes Elevate's former CEO from January 1, 2020 through July 17, 2020. During the year ended December 31, 2017, a member of the board of directors entered into a direct investment of $800 thousand in the Rise portion of the VPC Facility. For the three months ended March 31, 2021 and 2020, the interest payments on this loan were $19.6 thousand and $20.2 thousand, respectively. At March 31, 2021 and December 31, 2020, the Company had approximate ly $122 thousand and $110 thousand, respectively, due to board members related to the above expenses, which is included in Accounts payable and accrued liabilities within the Condensed Consolidated Balance Sheets. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS The Company evaluated subsequent events as of the date these financial statements are made available and determined there has been no material subsequent events that required recognition or additional disclosure in these condensed consolidated financial statements, except as follows: For the period from April 1, 2021 to May 4, 2021, the Company repurchased 1,159,502 shar es of its common stock on the open market for a total purchase price of $3.6 million, inc luding any fees or commissions. |
Basis of Presentation and Acc_2
Basis of Presentation and Accounting Changes (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements as of March 31, 2021 and for the three month periods ended March 31, 2021 and 2020 include the accounts of the Company, its wholly owned subsidiaries and variable interest entities ("VIEs") where the Company is the primary beneficiary. All significant intercompany transactions and accounts have been eliminated. |
Use of Estimates | Use of Estimates The preparation of the unaudited condensed consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant items subject to such estimates and assumptions include the valuation of the allowance for loan losses, goodwill, long-lived and intangible assets, deferred revenues, contingencies, the income tax provision, valuation of share-based compensation, operating lease right of use assets, operating lease liabilities and the valuation allowance against deferred tax assets. The Company bases its estimates on historical experience, current data and assumptions that are believed to be reasonable. Actual results in future periods could differ from those estimates. |
Revenue Recognition | Revenue Recognition The Company recognizes consumer loan fees as revenues for each of the loan products it offers. Revenues on the Condensed Consolidated Statements of Operations include: finance charges, lines of credit fees, fees for services provided through CSO programs (“CSO fees”), and interest, as well as any other fees or charges permitted by applicable laws and pursuant to the agreement with the borrower. Other revenues also include marketing and licensing fees received from the originating lender related to the Elastic product and Rise bank-originated loans and from CSO fees related to the Rise product. Revenues related to these fees are recognized when the service is performed. The Company accrues finance charges on installment loans on a constant yield basis over their terms. The Company accrues and defers fixed fees such as CSO fees and lines of credit fees when they are assessed and recognizes them to earnings as they are earned over the life of the loan. The Company accrues interest on credit cards based on the amount of the credit card balance outstanding and the related contractual interest rate. Credit card membership fees are amortized to revenue over the card membership period. Other credit card fees, such as late payment fees and returned payment fees, are accrued when assessed. The Company does not accrue finance charges and other fees on installment loans or lines of credit for which payment is greater than 60 days past due. Credit card interest charges are recognized based on the contractual provisions of the underlying arrangements and are not accrued when payment is past due more than 90 days. Installment loans and lines of credit are considered past due if a grace period has not been requested and a scheduled payment is not paid on its due date. Credit cards have a grace period of 25 days and are considered delinquent after the grace period. Payments received on past due loans are applied against the loan and accrued interest balance to bring the loan current. Payments are generally first applied to accrued fees and interest and then to the principal loan balance. The spread of COVID-19 since March 2020 has created a global public health crisis that has resulted in unprecedented disruption to businesses and economies. In response to the pandemic's effects, and in accordance with federal and state guidelines, the Company expanded its payment flexibility programs for its customers, including payment deferrals. This program allows for a deferral of payments for an initial period of 30 to 60 days, and generally up to a maximum of 180 days on a cumulative basis. A customer will return to the normal payment schedule after the end of the deferral period with the extension of the maturity date equivalent to the deferral period, which is generally not to exceed an additional 180 days. The finance charges will continue to accrue at a lower effective interest rate over the expected term of the loan as adjusted for the deferral period provided (not to exceed an amount greater than the amount at which the borrower could settle the loan) or placed on non-accrual status. |
Installment Loans, Lines of Credit and Credit Cards | Installment Loans, Lines of Credit and Credit Cards Installment loans, lines of credit and credit cards, including receivables for finance charges, fees and interest, are unsecured and reported as Loans receivable, net of allowance for loan losses on the Condensed Consolidated Balance Sheets. Installment loans are multi-payment loans that require the pay-down of portions of the outstanding principal balance in multiple installments through the Rise brand. Line of credit accounts include customer cash advances made through the Elastic brand and the Rise brand in two states (which were discontinued in September 2020). Credit cards represent credit card receivable balances, uncollected billed interest and fees through the Today Card brand. The Company offers Rise installment products directly to customers. Elastic lines of credit, Rise bank-originated installment loans and Today credit card receivables represent participation interests acquired from third-party lenders through a wholly owned subsidiary or by a VIE. Based on agreements with the third-party lenders, the VIEs pay a loan premium on the participation interests purchased. The loan premium is amortized over the expected life of the outstanding loan amount. See Note 4—Variable Interest Entities for more information regarding these participation interests in Rise and Elastic receivables. The Company considers impaired loans as accounts over 60 days past due (for installment loans and lines of credit) or 120 days past due (for credit cards), or loans which become uncollectible based on information that the Company becomes aware of (e.g., receipt of customer bankruptcy notice). The impaired loans are charged-off at the time that they are deemed to be uncollectible. A modification of finance receivable terms is considered a troubled debt restructuring ("TDR") if the borrower is experiencing financial difficulty and the Company grants a concession it would not otherwise have considered to a borrower. The Company typically considers TDRs to include all installment and line of credit loans that were modified by granting principal and interest forgiveness or by extension of the maturity date for more than 60 days as a part of a loss mitigation strategy. |
Operating Segments | Operating Segments The Company determines operating segments based on how its chief operating decision-maker manages the business, including making operating decisions, deciding how to allocate resources and evaluating operating performance. The Company's chief operating decision-maker is its Chief Executive Officer, who reviews the Company's operating results monthly on a consolidated basis. The Company has one reportable segment, which provides online financial services for non-prime consumers. The Company has aggregated all components of its business into a single reportable segment based on the similarities of the economic characteristics, the nature of the products and services, the distribution methods, the type of customers and the nature of the regulatory environments. With the disposal of ECIL, all of the Company's assets and revenue are in one geographic location, therefore, segment reporting based on geography has been discontinued. |
Property and Equipment, net | Property and Equipment, netProperty and equipment are stated at cost, net of accumulated depreciation and amortization. |
Goodwill and Indefinite Lived Intangible Assets | Goodwill and Indefinite Lived Intangible Assets Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable intangible assets acquired in each business combination. In accordance with Accounting Standards Codification ("ASC") 350-20-35, Goodwill— Subsequent Measurement , the Company performs a quantitative approach method impairment review of goodwill and intangible assets with an indefinite life annually at October 1 and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. As a result of the recent global economic impact and uncertainty due to COVID-19, the Company concluded a triggering event had occurred as of March 31, 2020, and accordingly, performed interim impairment testing on the goodwill balances of its reporting units. The Company performed a detailed qualitative and quantitative assessment of each reporting unit and concluded that the goodwill associated with the previously consolidated UK reporting unit was impaired as the fair value of the UK reporting unit was less than its carrying amount. The impairment loss of $9.3 million was included in Loss from discontinued operations due to the deconsolidation of ECIL. While there was a decline in the fair value of the Elastic reporting unit at March 31, 2020, there was no impairment identified during the quantitative assessment. The Company completed its annual test as of October 1, 2020 and determined that there was no evidence of impairment of goodwill or indefinite lived intangible assets. The Company has $6.8 million of goodwill (all related to the Elastic reporting unit) remaining on the Condensed Consolidated Balance Sheets as of March 31, 2021. Prior to the adoption of ASU No. 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment ("ASU 2017-04"), the Company’s impairment evaluation of goodwill was already based on comparing the fair value of the Company’s reporting units to their carrying value. The adoption of ASU 2017-04 as of January 1, 2020 had no impact on the Company's evaluation procedures. The fair value of the reporting units is determined based on a weighted average of the income and market approaches. The income approach establishes fair value based on estimated future cash flows of the reporting units, discounted by an estimated weighted-average cost of capital developed using the capital asset pricing model, which reflects the overall level of inherent risk of the reporting units. The income approach uses the Company’s projections of financial performance for a six |
Leases | Leases The Company determines if an arrangement is a lease at inception. Operating leases are included in Operating lease right of use (“ROU”) assets and Operating lease liabilities on its Condensed Consolidated Balance Sheets. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. As most of its leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of future payments. The operating lease ROU asset may also include initial direct costs incurred and excludes any lease payments made and lease incentives. The Company's lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. The Company has lease agreements with lease and non-lease components. The lease and non-lease components are accounted for as a single lease component. In accordance with ASC 360-10-35, Property, Plant & Equipment— Subsequent Measurement , the Company evaluates its ROU assets along with its Property and equipment, net for impairment annually and between annual tests as needed based on changes in circumstances or other triggering events. During the first quarter, the Company entered into a sublease for facility space, triggering an impairment assessment. The Company determined the asset group with the subleased ROU asset and related LHI was impaired. A total impairment loss of $742 thousand is included in Non-operating income (loss) in the Condensed Consolidated Statements of Operations. |
Treasury Stock | Treasury Stock The Company evaluates each stock repurchase transaction in the period in which it is completed. If the repurchase transaction is significantly in excess of the current market price at purchase, the Company will identify whether the price paid included payment for other agreements, rights, and privileges. Repurchase transactions that do not contain these elements or are not significantly in excess of the current market price at purchase are accounted for using the cost method. The Company anticipates using its treasury stock to fulfill certain employee stock compensation grants and settlements. The Company has elected to use a first in, first out ("FIFO") method for assigning share cost at reissuance. Any gain or loss in the stock value will be credited or charged to paid in capital upon subsequent reissuance of the shares, with losses in excess of previously recognized gains charged to retained earnings. The Company is not obligated to purchase or reissue any shares at any time in accordance with its previously disclosed share repurchase plan. |
Recently Adopted Accounting Standards and Accounting Standards to be Adopted in Future Periods | Recently Adopted Accounting Standards In August 2018, the FASB issued Accounting Standards Update ("ASU") No. 2018-15, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract ("ASU 2018-15"). The purpose of ASU 2018-15 is to provide additional guidance on the accounting for costs of implementation activities performed in a cloud computing arrangement that is a service contract. This guidance is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. The Company elected to adopt this ASU prospectively as of January 1, 2020 and has implemented a control structure to identify cloud computing arrangements for appropriate accounting treatment similar to its procedures for right of use assets. At March 31, 2021, the Company has capitalized implementation costs associated with cloud computing arrangements of $1.0 million. At adoption, ASU 2018-15 did not have a material impact on the Company's condensed consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement ("ASU 2018-13"). The purpose of ASU 2018-13 is to modify the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement . This guidance is effective for public companies for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years and requires both a prospective and retrospective approach to adoption based on amendment specifications. Early adoption of any removed or modified disclosures is permitted. Additional disclosures may be delayed until their effective date. The adoption of ASU 2018-13 at January 1, 2020 did not have a material impact on the Company's condensed consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment ("ASU 2017-04"). The purpose of ASU 2017-04 is to simplify the subsequent measurement of goodwill. The amendments modify the concept of impairment from the condition that exists when the carrying amount of goodwill exceeds its implied fair value to the condition that exists when the carrying amount of a reporting unit exceeds its fair value. An entity no longer will determine goodwill impairment by calculating the implied fair value of goodwill by assigning the fair value of a reporting unit to all of its assets and liabilities as if that reporting unit had been acquired in a business combination. This guidance is effective for public companies for goodwill impairment tests in fiscal years beginning after December 15, 2019. The Company has adopted all of the amendments of ASU 2017-04 as of January 2020 with no impact to the Company's condensed consolidated financial statements. The Company used the simplified subsequent measurement requirements per ASU 2017-04 in its impairment analysis. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") was enacted in response to COVID-19. Among other things, the CARES Act provides income tax relief inclusive of permitting NOL carryovers and carrybacks to offset 100% of taxable income for taxable years beginning before 2021. In addition, the CARES Act allows NOLs incurred in 2018, 2019, and 2020 to be carried back to each of the five preceding taxable years to generate a refund of previously paid income taxes. The Company has reviewed the tax relief provisions of the CARES Act regarding its eligibility and determined that the impact is likely to be insignificant with regard to its effective tax rate. Certain portions of the CARES Act were amended by the Consolidated Appropriations Act ("CAA") on December 27, 2020. The Company continues to monitor and evaluate its eligibility for the amended CARES Act tax relief provisions to identify any that may become applicable in the future. On March 11, 2021, the American Rescue Plan Act ("ARP Act") was signed into law. The Company reviewed the tax relief provisions of the ARP Act, including the Company's eligibility for such provisions, and determined that the impact is likely to be insignificant with regard to the Company's effective tax rate. The Company continues to monitor and evaluate its eligibility under the ARP Act tax relief provisions to identify any portions that may become applicable in the future. In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes ("ASU 2019-12"). The purpose of ASU 2019-12 is to reduce complexity in the accounting standards for income taxes by removing certain exceptions as well as clarifying certain allocations. This update also addresses the split recognition of franchise taxes that are partially based on income between income-based tax and non-income-based tax. This guidance is effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. Early adoption is permitted. The adoption of ASU 2019-12 at January 1, 2021 did not have a material impact on the Company's condensed consolidated financial statements. Accounting Standards to be Adopted in Future Periods In March 2020, the FASB issued ASU No. 2020-03, Codification Improvements to Financial Instruments ("ASU 2020-03"). The purpose of ASU 2020-03 is to clarify, correct errors in or make minor improvements to the codification. Among other revisions, the amendments clarify that an entity should record an allowance for credit losses when an entity regains control of financial assets sold in accordance with Topic 326. ASU 2020-03 also clarifies disclosure requirements for debt securities under Topic 942 and affirms that all entities are required to provide the fair value option disclosures within paragraphs 825-10-50-24 through 50-32 of the codification. The amendments in this update are effective on the latter of the issuance of ASU 2020-03 or the effective date of their related topic. The Company does not anticipate the adoption of ASU 2020-03 to have a material impact on the Company's condensed consolidated financial statements. In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting ("ASU 2020-04"). The purpose of ASU 2020-04 is to provide optional guidance for a period of time related to accounting for reference rate reform on financial reporting. It is intended to reduce the potential burden of reviewing contract modifications related to discontinued rates. The amendments and expedients in this update are effective as of March 12, 2020 through December 31, 2022 and may be elected by topic. The Company is assessing the potential impact of electing all or portions of ASU 2020-04 on the Company's condensed consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"). ASU 2016-13 is intended to replace the incurred loss impairment methodology in current US GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates to improve the quality of information available to financial statement users about expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. In April 2019, the FASB issued ASU No. 2019-04, Codification Improvements to Topic 326, Financial Instruments ("ASU 2019-04"). This amendment clarifies the guidance in ASU 2016-13. The guidance in ASU 2016-13 was further clarified by ASU No. 2019-11, Codification Improvements to Topic 326, Financial Instruments ("ASU 2019-11") issued in November 2019. ASU 2019-11 provides transition relief such as permitting entities an accounting policy election regarding existing TDRs, among other things. In May 2019, the FASB issued ASU No. 2019-05, Financial Instruments-Credit Losses (Topic 326): Targeted Transition Relief ("ASU 2019-05"). The purpose of this amendment is to provide entities that have certain instruments within the scope of Subtopic 326-20, Financial Instruments-Credit Losses-Measured at Amortized Cost, with an option to irrevocably elect the fair value option in Subtopic 825-10, Financial Instruments-Overall , on an instrument-by-instrument basis. Election of this option is intended to increase comparability of financial statement information and reduce costs for certain entities to comply with ASU 2016-13. For public entities, ASU 2016-13 is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. In November 2019, the FASB issued ASU No. 2019-10, Financial Instruments - Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates ("ASU 2019-10") . The purpose of this amendment is to create a two-tier rollout of major updates, staggering the effective dates between larger public companies and all other entities. This granted certain classes of companies, including Smaller Reporting Companies ("SRCs"), additional time to implement major FASB standards, including ASU 2016-13. Larger public companies will still have an effective date for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. All other entities are permitted to defer adoption of ASU 2016-13, and its related amendments, until the earlier of fiscal periods beginning after December 15, 2022. In February 2020, the FASB issued ASU No. 2020-02, Financial Instruments - Credit Losses (Topic 326), and Leases (Topic 842): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 119 and Update to SEC Section on Effective Date Related to Accounting Standards Update No. 2016-12 ("ASU 2020-02") . ASU 2020-02 updates the SEC staff guidance related to ASU 2016-13 and all contingent amendments. |
Basis of Presentation and Acc_3
Basis of Presentation and Accounting Changes (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Property, plant and equipment | The following table summarizes the components of net property and equipment. In January 2021, certain assets were determined to be impaired in relation to a sublease of facility space. (Dollars in thousands) March 31, 2021 December 31, 2020 Property and equipment, gross $ 119,483 $ 116,748 Accumulated depreciation and amortization (86,936) (82,748) Property and equipment, net $ 32,547 $ 34,000 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
Computation of earnings (loss) per share | The computation of earnings per share was as follows for three months ended March 31, 2021 and 2020: Three Months Ended March 31, (Dollars in thousands, except share and per share amounts) 2021 2020 Numerator (basic and diluted): Net income from continuing operations $ 12,716 $ 7,922 Net loss from discontinued operations — (12,833) Net income (loss) $ 12,716 $ (4,911) Denominator (basic): Basic weighted average number of shares outstanding 36,582,502 43,161,716 Denominator (diluted): Basic weighted average number of shares outstanding 36,582,502 43,161,716 Effect of potentially dilutive securities: Employee share plans (options, RSUs and ESPP) 996,548 470,021 Diluted weighted average number of shares outstanding 37,579,050 43,631,737 Basic and diluted earnings (loss) per share: Continuing operations $ 0.35 $ 0.18 Discontinued operations — (0.29) Basic earnings (loss) per share $ 0.35 $ (0.11) Continuing operations $ 0.34 $ 0.18 Discontinued operations — (0.29) Diluted earnings (loss) per share $ 0.34 $ (0.11) |
Loans Receivable and Revenue (T
Loans Receivable and Revenue (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Receivables [Abstract] | |
Revenue from consumer loans | Revenues generated from the Company’s consumer loans for the three months ended March 31, 2021 and 2020 were as follows: Three Months Ended March 31, (Dollars in thousands) 2021 2020 Finance charges $ 53,192 $ 96,164 Lines of credit fees 35,480 58,574 CSO fees 551 7,341 Other 510 388 Total revenues $ 89,733 $ 162,467 |
Schedule of loans receivable | The following reflects the credit quality of the Company’s loans receivable as of March 31, 2021 and December 31, 2020 as delinquency status has been identified as the primary credit quality indicator. The Company classifies its loans as either current or past due. A customer in good standing may request up to a 16-day grace period when or before a payment becomes due and, if granted, the loan is considered current during the grace period. In response to the COVID-19 pandemic, the Company, along with the banks it supports, has also expanded existing payment flexibility programs to provide temporary payment relief to certain customers who meet the program’s qualifications. These programs allow for a deferral of payments for an initial period of 30 to 60 days, which the Company may extend for an additional 30 days, generally for a maximum of 180 days on a cumulative basis. A customer will return to the normal payment schedule after the end of the deferral period, with the extension of the maturity date equivalent to the deferral period, which is generally not to exceed an additional 180 days. Customers that were 30 days past due or less as of March 1, 2020 or the date the customer requested the deferral are considered current. Customers more than 30 days past due as of March 1, 2020 or the date the customer requested the deferral are considered delinquent. As of March 31, 2021, 3.4% of customers have been provided relief through a COVID-19 payment deferral program for a total of $11.8 million in loans with deferred payments . The Company believes that the allowance for loan losses is adequate to absorb the losses inherent in the portfolio as of March 31, 2021 . Installment loans, lines of credit and credit cards not impacted by COVID are considered past due if a grace period has not been requested and a scheduled payment is not paid on its due date. All impaired loans that were not accounted for as a TDR as of March 31, 2021 and December 31, 2020 have been charged off. March 31, 2021 (Dollars in thousands) Rise Elastic Today Total Current loans $ 197,952 $ 134,680 $ 13,636 $ 346,268 Past due loans 19,322 5,711 1,516 26,549 Total loans receivable 217,274 140,391 15,152 372,817 Net unamortized loan premium 248 1,257 — 1,505 Less: Allowance for loan losses (26,470) (10,749) (1,818) (39,037) Loans receivable, net $ 191,052 $ 130,899 $ 13,334 $ 335,285 December 31, 2020 (Dollars in thousands) Rise Elastic Today Total Current loans $ 222,937 $ 154,950 $ 12,954 $ 390,841 Past due loans 22,383 6,926 1,564 30,873 Total loans receivable 245,320 161,876 14,518 421,714 Net unamortized loan premium 239 1,278 — 1,517 Less: Allowance for loan losses (33,288) (13,201) (1,910) (48,399) Loans receivable, net $ 212,271 $ 149,953 $ 12,608 $ 374,832 |
Changes in the allowance for loan losses | The changes in the allowance for loan losses for the three months ended March 31, 2021 and 2020 are as follows: Three Months Ended March 31, 2021 (Dollars in thousands) Rise Elastic Today Total Balance beginning of period $ 33,968 $ 13,201 $ 1,910 $ 49,079 Provision for loan losses 15,298 5,091 581 20,970 Charge-offs (24,773) (8,383) (709) (33,865) Recoveries of prior charge-offs 2,099 840 36 2,975 Total 26,592 10,749 1,818 39,159 Accrual for CSO lender owned loans (122) — — (122) Balance end of period $ 26,470 $ 10,749 $ 1,818 $ 39,037 Three Months Ended March 31, 2020 (Dollars in thousands) Rise Elastic Today Total Balance beginning of period $ 52,099 $ 28,852 $ 1,041 $ 81,992 Provision for loan losses 54,569 23,497 509 78,575 Charge-offs (60,137) (29,648) (666) (90,451) Recoveries of prior charge-offs 5,176 2,443 24 7,643 Total 51,707 25,144 908 77,759 Accrual for CSO lender owned loans (1,571) — — (1,571) Balance end of period $ 50,136 $ 25,144 $ 908 $ 76,188 |
Troubled debt restructurings | The following table summarizes the financial effects, excluding impacts related to credit loss allowance and impairment, of TDRs for the three months ended March 31, 2021 and 2020: Three Months Ended March 31, (Dollars in thousands) 2021 2020 Outstanding recorded investment before TDR $ 5,134 $ 6,428 Outstanding recorded investment after TDR 5,039 6,110 Total principal and interest forgiveness included in charge-offs within the Allowance for loan losses $ 95 $ 318 Three Months Ended March 31, (Dollars in thousands) 2021 2020 Average outstanding recorded investment(1) $ 25,154 $ 17,199 Interest income recognized $ 2,814 $ 3,730 1. Simple average as of March 31, 2021 and 2020, respectively. The table below presents the Company's loans modified as TDRs as of March 31, 2021 and December 31, 2020: (Dollars in thousands) 2021 2020 Current outstanding investment $ 17,253 $ 21,261 Delinquent outstanding investment 6,261 5,532 Outstanding recorded investment 23,514 26,793 Less: Impairment included in Allowance for loan losses (5,975) (7,533) Outstanding recorded investment, net of impairment $ 17,539 $ 19,260 |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Summary of the assets and liabilities of the variable interest entity | The following table summarizes the assets and liabilities of the VIE that are included within the Company’s Condensed Consolidated Balance Sheets at March 31, 2021 and December 31, 2020: (Dollars in thousands) March 31, December 31, ASSETS Cash and cash equivalents $ 63,606 $ 97,345 Loans receivable, net of allowance for loan losses of $10,749 and $13,202, respectively 130,899 149,951 Prepaid expenses and other assets 7 — Receivable from payment processors 3,153 3,652 Total assets $ 197,665 $ 250,948 LIABILITIES AND SHAREHOLDER’S EQUITY Accounts payable and accrued liabilities ($10,536 and $23,337, respectively, eliminates upon consolidation) $ 14,387 $ 27,663 Deferred revenue 2,054 2,300 Reserve deposit liability ($23,150 and $23,150, respectively, eliminates upon consolidation) 23,150 23,150 Notes payable, net 158,074 197,835 Total liabilities and shareholder’s equity $ 197,665 $ 250,948 The following table summarizes the assets and liabilities of the VIE that are included within the Company’s Condensed Consolidated Balance Sheets at March 31, 2021 and December 31, 2020: (Dollars in thousands) March 31, December 31, ASSETS Cash and cash equivalents $ 20,471 $ 35,450 Loans receivable, net of allowance for loan losses of $9,816 and $14,342, respectively 78,007 83,869 Receivable from payment processors ($365 and $231, respectively, eliminates upon consolidation) 822 713 Total assets $ 99,300 $ 120,032 LIABILITIES AND SHAREHOLDER’S EQUITY Accounts payable and accrued liabilities ($14,575 and $16,459, respectively, eliminates upon consolidation) $ 15,566 $ 17,599 Reserve deposit liability ($8,950 and $8,950, respectively, eliminates upon consolidation) 8,950 8,950 Notes payable, net 74,784 93,483 Total liabilities and shareholder’s equity $ 99,300 $ 120,032 The following table summarizes the assets and liabilities of the VIE that are included within the Company’s Condensed Consolidated Balance Sheets at March 31, 2021 and December 31, 2020: (Dollars in thousands) March 31, December 31, ASSETS Cash and cash equivalents $ 9,723 $ 9,377 Restricted cash 1,000 1,000 Loans receivable, net of allowance for loan losses of $4,294 and $1,634, respectively 23,656 19,231 Receivable from payment processors ($12 and $6, respectively, eliminates upon consolidation) 321 211 Total assets $ 34,700 $ 29,819 LIABILITIES AND SHAREHOLDER’S EQUITY Accounts payable and accrued liabilities ($827 and $803, respectively, eliminates upon consolidation) $ 1,404 $ 1,541 Reserve deposit liability ($3,500 and $3,500,respectively, eliminates upon consolidation) 3,500 3,500 Notes payable, net 29,796 24,778 Total liabilities and shareholder’s equity $ 34,700 $ 29,819 |
Notes Payable, Net (Tables)
Notes Payable, Net (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Outstanding balance of notes payable, net of debt issuance costs | The outstanding balances of Notes payable, net of debt issuance costs, are as follows: (Dollars in thousands) March 31, December 31, US Term Note bearing interest at the base rate + 7.0% (2021) or + 7.25% (2020) $ 78,600 $ 104,500 4 th Tranche Term Note bearing interest at the base rate + 13% — 18,050 ESPV Term Note bearing interest at the base rate + 7.0% (2021) or + 7.25% (2020) 159,600 199,500 EF SPV Term Note bearing interest at the base rate + 7.0% (2021) or + 7.25% (2020) 74,800 93,500 EC SPV Term Note bearing interest at the base rate + 7.0% (2021) or + 7.25% (2020) 30,000 25,000 Debt issuance costs (1,965) (2,147) Total $ 341,035 $ 438,403 |
Future debt maturities | Future debt maturities as of March 31, 2021 are as follows: Year (dollars in thousands) March 31, 2021 Remainder of 2021 $ — 2022 — 2023 — 2024 343,000 2025 — Thereafter — Total $ 343,000 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Carrying value of acquired finite-lived intangible assets | The carrying value of acquired intangible assets as of March 31, 2021 is presented in the table below: (Dollars in thousands) Cost Accumulated Net Assets subject to amortization: Acquired technology $ 211 $ (211) $ — Non-compete 2,461 (2,461) — Customers 126 (126) — Assets not subject to amortization: Domain names 230 — 230 Total $ 3,028 $ (2,798) $ 230 The carrying value of acquired intangible assets as of December 31, 2020 is presented in the table below: (Dollars in thousands) Cost Accumulated Amortization Net Assets subject to amortization: Acquired technology $ 211 $ (211) $ — Non-compete 2,461 (1,859) 602 Customers 126 (126) — Assets not subject to amortization: Domain names 531 — 531 Total $ 3,329 $ (2,196) $ 1,133 |
Carrying value of acquired indefinite-lived intangible assets | The carrying value of acquired intangible assets as of March 31, 2021 is presented in the table below: (Dollars in thousands) Cost Accumulated Net Assets subject to amortization: Acquired technology $ 211 $ (211) $ — Non-compete 2,461 (2,461) — Customers 126 (126) — Assets not subject to amortization: Domain names 230 — 230 Total $ 3,028 $ (2,798) $ 230 The carrying value of acquired intangible assets as of December 31, 2020 is presented in the table below: (Dollars in thousands) Cost Accumulated Amortization Net Assets subject to amortization: Acquired technology $ 211 $ (211) $ — Non-compete 2,461 (1,859) 602 Customers 126 (126) — Assets not subject to amortization: Domain names 531 — 531 Total $ 3,329 $ (2,196) $ 1,133 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Leases [Abstract] | |
Summary of total lease cost and supplemental cash flow information | Total gross lease cost for the three months ended March 31, 2021 and 2020, included in Occupancy and equipment in the Condensed Consolidated Statements of Operations, is detailed in the table below: Three Months Ended March 31, Lease cost (dollars in thousands) 2021 2020 Operating lease cost $ 768 $ 808 Short-term lease cost — — Total lease cost $ 768 $ 808 Further information related to leases is as follows: Three Months Ended March 31, Supplemental cash flows information (dollars in thousands) 2021 2020 Cash paid for amounts included in the measurement of lease liabilities $ 958 $ 924 Right-of-use assets obtained in exchange for lease obligations $ — $ — Weighted average remaining lease term 3.3 years 4.7 years Weighted average discount rate 10.23 % 10.23 % |
Summary of future lease payments | Future minimum lease payments as of March 31, 2021 are as follows: Year (dollars in thousands) Operating Leases 2021 $ 2,918 2022 3,984 2023 3,486 2024 1,438 2025 1,254 Thereafter 638 Total future minimum lease payments $ 13,718 Less: Imputed interest (2,424) Operating lease liabilities $ 11,294 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Summary of stock option activity | A summary of stock option activity as of and for the three months ended March 31, 2021 is presented below: Stock Options Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life (in years) Outstanding at December 31, 2020 886,685 $ 5.94 Granted — — Exercised (12,500) 2.13 Expired (1,250) 6.31 Forfeited — — Outstanding at March 31, 2021 872,935 6.00 3.74 Options exercisable at March 31, 2021 872,935 $ 6.00 3.74 |
Summary of restricted stock units activity | A summary of RSU activity as of and for the three months ended March 31, 2021 is presented below: RSUs Shares Weighted Average Grant-Date Fair Value Unvested at December 31, 2020 2,924,086 $ 4.17 Granted 1,489,435 4.46 Vested (1) (265,857) 3.91 Forfeited (67,720) 4.65 Unvested at March 31, 2021 4,079,944 4.28 Expected to vest at March 31, 2021 2,996,212 $ 4.35 (1) During the year ended March 31, 2021, certain RSUs were net share-settled to cover the required withholding tax and the remaining amounts were converted into an equivalent number of shares of the Company's common stock. The Company withheld 96,766 shares for applicable income and other employment taxes and remitted the cash to the appropriate taxing authorities. |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of income tax expense | Income tax expense for the three months ended March 31, 2021 and 2020 consists of the following: Three Months Ended March 31, (Dollars in thousands) 2021 2020 Current income tax expense: Federal $ — $ 1,152 State 86 487 Total current income tax expense 86 1,639 Deferred income tax expense (benefit): Federal 3,577 73 State (219) 343 Total deferred income tax expense 3,358 416 Total income tax expense $ 3,444 $ 2,055 |
Commitments, Contingencies an_2
Commitments, Contingencies and Guarantees (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Rollforward of amounts accrued | The table below presents a rollforward of the amounts accrued and paid for the three months ended March 31, 2021 and 2020. Three Months Ended March 31, (Dollars in thousands) 2021 2020 Beginning balance $ 4,424 $ — Accruals — 4,263 Payments (4,424) — Net contingent loss related to a legal matter $ — $ 4,263 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued operations, income statement disclosures | The table below presents the financial results of ECIL, which are considered Discontinued operations and are excluded from the Company's results of continuing operations: Three Months Ended March 31, (Dollars in thousands) 2021 2020 Revenues $ — $ 14,988 Cost of sales: Provision for loan losses — 4,178 Direct marketing costs — 1,102 Other cost of sales — 5,660 Total cost of sales — 10,940 Gross profit — 4,048 Operating expenses: Compensation and benefits — 2,717 Professional services — 1,281 Selling and marketing — 470 Occupancy and equipment — 1,113 Depreciation and amortization — 501 Other — 180 Total operating expenses — 6,262 Operating (loss) income — (2,214) Other expense: Net interest expense — (539) Foreign currency transaction loss — (812) Impairment loss — (9,251) Total other expense — (10,602) Gain (loss) from discontinued operations before taxes — (12,816) Income tax benefit — (17) Net income (loss) from discontinued operations $ — $ (12,833) |
Related Parties (Tables)
Related Parties (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Related Party Transactions [Abstract] | |
Expenses related to board of directors | Expenses related to the Company's board of directors, including board fees, travel reimbursements, share-based compensation and a consulting arrangement with a related party for the three months ended March 31, 2021 and 2020 are included in Professional services within the Condensed Consolidated Statements of Operations and were as follows: Three Months Ended March 31, (Dollars in thousands) 2021 2020 Fees and travel expenses $ 122 $ 133 Stock compensation (1) 79 979 Consulting — 100 Total board related expenses $ 201 $ 1,212 (1) Includes Elevate's former CEO from January 1, 2020 through July 17, 2020. |
Basis of Presentation and Acc_4
Basis of Presentation and Accounting Changes - Narrative (Details) | Oct. 01, 2020USD ($) | Mar. 31, 2021USD ($)segmentstatecountry | Mar. 31, 2020USD ($) | Mar. 31, 2021USD ($)statecountry | Dec. 31, 2020USD ($) |
Class of Stock [Line Items] | |||||
Loans, grace period before past due | 16 days | ||||
Number of reportable segments | segment | 1 | ||||
Number of countries in which entity operates in | country | 1 | 1 | |||
Impairment of goodwill | $ 0 | $ 0 | |||
Impairment of indefinite lived intangible assets (excluding goodwill) | $ 0 | ||||
Goodwill, net | $ 6,776,000 | $ 6,776,000 | $ 6,776,000 | ||
Impairment loss of subleased right of use assets and related leasehold improvements | 742,000 | ||||
Accounting Standards Update 2018-15 | |||||
Class of Stock [Line Items] | |||||
Capitalized implementation costs associated with cloud computing arrangements | $ 1,000,000 | $ 1,000,000 | |||
Installment Loans and Lines of Credit | |||||
Class of Stock [Line Items] | |||||
Minimum period past due for nonaccrual of finance charges and other fees | 60 days | ||||
Period past due for loans to be classified as troubled debt restructuring (greater than) | 60 days | ||||
Loan modifications not recognized as troubled debt restructuring, deferral period | 6 months | ||||
Today | |||||
Class of Stock [Line Items] | |||||
Minimum period past due for nonaccrual of finance charges and other fees | 90 days | ||||
Loans, grace period before past due | 25 days | ||||
Period past dues for nonaccrual | 120 days | ||||
Minimum | |||||
Class of Stock [Line Items] | |||||
Loans, initial deferral period | 30 days | 30 days | |||
Projection period of financial performance used in income approach for fair value of reporting unit | 6 years | ||||
Maximum | |||||
Class of Stock [Line Items] | |||||
Loans, initial deferral period | 60 days | 60 days | |||
Loans, deferral period | 180 days | 180 days | |||
Projection period of financial performance used in income approach for fair value of reporting unit | 9 years | ||||
Elastic Reporting Unit | |||||
Class of Stock [Line Items] | |||||
Impairment of goodwill | 0 | ||||
Rise Product, Lines of Credit | |||||
Class of Stock [Line Items] | |||||
Number of states, rise product, lines of credit offered | state | 2 | 2 | |||
Discontinued Operations, Disposed of by Means Other than Sale | Elevate Credit International Limited | |||||
Class of Stock [Line Items] | |||||
Impairment of goodwill | $ 0 | $ 9,251,000 |
Basis of Presentation and Acc_5
Basis of Presentation and Accounting Changes - Schedule of Property, Plant, and Equipment (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Property and equipment, gross | $ 119,483 | $ 116,748 |
Accumulated depreciation and amortization | (86,936) | (82,748) |
Property and equipment, net | $ 32,547 | $ 34,000 |
Earnings Per Share - Computatio
Earnings Per Share - Computation of Earnings (Loss) Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Numerator (basic and diluted): | ||
Net income from continuing operations | $ 12,716 | $ 7,922 |
Net loss from discontinued operations | 0 | (12,833) |
Net income (loss) | $ 12,716 | $ (4,911) |
Denominator (basic): | ||
Basic weighted average number of shares outstanding (in shares) | 36,582,502 | 43,161,716 |
Denominator (diluted): | ||
Basic weighted average number of shares outstanding (in shares) | 36,582,502 | 43,161,716 |
Effect of potentially dilutive securities: | ||
Employee share plans (options, RSUs and ESPP) (in shares) | 996,548 | 470,021 |
Diluted weighted average number of shares outstanding (in shares) | 37,579,050 | 43,631,737 |
Basic and diluted earnings (loss) per share: | ||
Continuing operations (in usd per share) | $ 0.35 | $ 0.18 |
Discontinued operations (in usd per share) | 0 | (0.29) |
Basic earnings per share (in usd per share) | 0.35 | (0.11) |
Continuing operations (in usd per share) | 0.34 | 0.18 |
Discontinued operations (in usd per share) | 0 | (0.29) |
Diluted earnings (loss) per share (in usd per share) | $ 0.34 | $ (0.11) |
Earnings Per Share - Narrative
Earnings Per Share - Narrative (Details) - shares | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Stock options | ||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||
Antidilutive shares | 1,008,359 | 1,862,170 |
RSUs | ||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||
Antidilutive shares | 615,439 | 3,584,019 |
Loans Receivable and Revenue -
Loans Receivable and Revenue - Revenue from Consumer Loans (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total revenues | $ 89,733 | $ 162,467 |
Finance charges | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Revenues | 53,192 | 96,164 |
Lines of credit fees | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Revenues | 35,480 | 58,574 |
CSO fees | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Revenues | 551 | 7,341 |
Other | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Total revenues | $ 510 | $ 388 |
Loans Receivable and Revenue _2
Loans Receivable and Revenue - Schedule of Receivables (Details) $ in Thousands | 3 Months Ended | 13 Months Ended | ||||||
Mar. 31, 2021USD ($)state | Mar. 31, 2021USD ($)state | Dec. 31, 2020USD ($) | Mar. 31, 2020USD ($) | |||||
Financing Receivable, Past Due [Line Items] | ||||||||
Loans, grace period before past due | 16 days | |||||||
Loans, deferral period, additional extension period | 30 days | |||||||
Loans, deferral period, additional extension period | 30 days | |||||||
Loans, threshold period past due (more than) | 30 days | 30 days | ||||||
Percentage of customers provided relief through payment deferral program | 3.40% | |||||||
Loans on deferred payment | $ 11,800 | $ 11,800 | ||||||
Current loans | 346,268 | 346,268 | $ 390,841 | |||||
Past due loans | 26,549 | 26,549 | 30,873 | |||||
Total loans receivable | 372,817 | 372,817 | 421,714 | |||||
Net unamortized loan premium | 1,505 | 1,505 | 1,517 | |||||
Less: Allowance for loan losses | (39,037) | [1] | (39,037) | [1] | (48,399) | [1] | $ (76,188) | |
Loans receivable, net | [1] | 335,285 | 335,285 | 374,832 | ||||
Loans in a non-accrual status | 13,300 | 13,300 | 19,200 | |||||
Interest receivable | 21,400 | 21,400 | 25,300 | |||||
Rise | ||||||||
Financing Receivable, Past Due [Line Items] | ||||||||
Current loans | 197,952 | 197,952 | 222,937 | |||||
Past due loans | 19,322 | 19,322 | 22,383 | |||||
Total loans receivable | 217,274 | 217,274 | 245,320 | |||||
Net unamortized loan premium | 248 | 248 | 239 | |||||
Less: Allowance for loan losses | (26,470) | (26,470) | (33,288) | |||||
Loans receivable, net | 191,052 | 191,052 | 212,271 | |||||
Elastic | ||||||||
Financing Receivable, Past Due [Line Items] | ||||||||
Current loans | 134,680 | 134,680 | 154,950 | |||||
Past due loans | 5,711 | 5,711 | 6,926 | |||||
Total loans receivable | 140,391 | 140,391 | 161,876 | |||||
Net unamortized loan premium | 1,257 | 1,257 | 1,278 | |||||
Less: Allowance for loan losses | (10,749) | (10,749) | (13,201) | (25,144) | ||||
Loans receivable, net | $ 130,899 | 130,899 | 149,953 | |||||
Today | ||||||||
Financing Receivable, Past Due [Line Items] | ||||||||
Loans, grace period before past due | 25 days | |||||||
Current loans | $ 13,636 | 13,636 | 12,954 | |||||
Past due loans | 1,516 | 1,516 | 1,564 | |||||
Total loans receivable | 15,152 | 15,152 | 14,518 | |||||
Net unamortized loan premium | 0 | 0 | 0 | |||||
Less: Allowance for loan losses | (1,818) | (1,818) | (1,910) | $ (908) | ||||
Loans receivable, net | $ 13,334 | $ 13,334 | $ 12,608 | |||||
Rise Product, Lines of Credit | ||||||||
Financing Receivable, Past Due [Line Items] | ||||||||
Number of states, rise product, lines of credit offered | state | 2 | 2 | ||||||
Minimum | ||||||||
Financing Receivable, Past Due [Line Items] | ||||||||
Loans, initial deferral period | 30 days | 30 days | ||||||
Maximum | ||||||||
Financing Receivable, Past Due [Line Items] | ||||||||
Loans, initial deferral period | 60 days | 60 days | ||||||
Loans, deferral period | 180 days | 180 days | ||||||
[1] | These balances include certain assets and liabilities of variable interest entities (“VIEs”) that can only be used to settle the liabilities of that respective VIE. All assets of the Company are pledged as security for the Company’s outstanding debt, including debt held by the VIEs. For further information regarding the assets and liabilities included in the Company's consolidated accounts, see Note 4—Variable Interest Entities. |
Loans Receivable and Revenue _3
Loans Receivable and Revenue - Changes in Allowance for Loan Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | |||||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | ||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||||
Balance beginning of period | $ 49,079 | $ 81,992 | ||||
Provision for loan losses | 20,970 | 78,575 | ||||
Charge-offs | (33,865) | (90,451) | ||||
Recoveries of prior charge-offs | 2,975 | 7,643 | ||||
Total | 39,159 | 77,759 | ||||
Accrual for CSO lender owned loans | (122) | (1,571) | ||||
Loans receivable, allowance for credit loss | 39,037 | [1] | 76,188 | $ 48,399 | [1] | |
Loans receivable, net of allowance for loan losses | [1] | 335,285 | 374,832 | |||
Rise | ||||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||||
Balance beginning of period | 33,968 | 52,099 | ||||
Provision for loan losses | 15,298 | 54,569 | ||||
Charge-offs | (24,773) | (60,137) | ||||
Recoveries of prior charge-offs | 2,099 | 5,176 | ||||
Total | 26,592 | 51,707 | ||||
Accrual for CSO lender owned loans | (122) | (1,571) | ||||
Loans receivable, allowance for credit loss | 26,470 | 50,136 | ||||
Elastic | ||||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||||
Balance beginning of period | 13,201 | 28,852 | ||||
Provision for loan losses | 5,091 | 23,497 | ||||
Charge-offs | (8,383) | (29,648) | ||||
Recoveries of prior charge-offs | 840 | 2,443 | ||||
Total | 10,749 | 25,144 | ||||
Accrual for CSO lender owned loans | 0 | 0 | ||||
Loans receivable, allowance for credit loss | 10,749 | 25,144 | 13,201 | |||
Loans receivable, net of allowance for loan losses | 130,899 | 149,953 | ||||
Today | ||||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||||
Balance beginning of period | 1,910 | 1,041 | ||||
Provision for loan losses | 581 | 509 | ||||
Charge-offs | (709) | (666) | ||||
Recoveries of prior charge-offs | 36 | 24 | ||||
Total | 1,818 | 908 | ||||
Accrual for CSO lender owned loans | 0 | 0 | ||||
Loans receivable, allowance for credit loss | 1,818 | $ 908 | 1,910 | |||
Loans receivable, net of allowance for loan losses | 13,334 | 12,608 | ||||
CSO fees | ||||||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||||||
Loans receivable, allowance for credit loss | 100 | 700 | ||||
Loans receivable, net of allowance for loan losses | $ 200 | $ 2,200 | ||||
[1] | These balances include certain assets and liabilities of variable interest entities (“VIEs”) that can only be used to settle the liabilities of that respective VIE. All assets of the Company are pledged as security for the Company’s outstanding debt, including debt held by the VIEs. For further information regarding the assets and liabilities included in the Company's consolidated accounts, see Note 4—Variable Interest Entities. |
Loans Receivable and Revenue _4
Loans Receivable and Revenue - Troubled Debt Restructurings (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Financing Receivable, Impaired [Line Items] | |||
Outstanding recorded investment before TDR | $ 5,134 | $ 6,428 | |
Outstanding recorded investment after TDR | 5,039 | 6,110 | |
Total principal and interest forgiveness included in charge-offs within the Allowance for loan losses | 95 | 318 | |
Average outstanding recorded investment | 25,154 | 17,199 | |
Interest income recognized | 2,814 | 3,730 | |
Recorded investment | 23,514 | $ 26,793 | |
Less: Impairment included in Allowance for loan losses | (5,975) | (7,533) | |
Outstanding recorded investment, net of impairment | $ 17,539 | 19,260 | |
Threshold period past due for write-off | 60 days | ||
Troubled debt restructurings, subsequently defaulted | $ 5,900 | $ 5,800 | |
Troubled debt restructurings, commitments to lend funds | 5,200 | ||
Current outstanding investment | |||
Financing Receivable, Impaired [Line Items] | |||
Recorded investment | 17,253 | 21,261 | |
Delinquent outstanding investment | |||
Financing Receivable, Impaired [Line Items] | |||
Recorded investment | $ 6,261 | $ 5,532 |
Variable Interest Entities - Na
Variable Interest Entities - Narrative (Details) | 3 Months Ended |
Mar. 31, 2021entity | |
Variable Interest Entity [Line Items] | |
Variable interest entity, number of entities | 5 |
Third-Party Lender | |
Variable Interest Entity [Line Items] | |
Loan purchase right percentage | 5.00% |
Credit Services Organization Lenders | |
Variable Interest Entity [Line Items] | |
Variable interest entity, number of entities | 2 |
Variable Interest Entity, Primary Beneficiary | Elastic SPV, Ltd. | |
Variable Interest Entity [Line Items] | |
Loan purchase right percentage | 90.00% |
Variable Interest Entity, Primary Beneficiary | EF SPV, Ltd. | |
Variable Interest Entity [Line Items] | |
Loan purchase right percentage | 96.00% |
Variable Interest Entity, Primary Beneficiary | EC SPV, Ltd. | |
Variable Interest Entity [Line Items] | |
Loan purchase right percentage | 95.00% |
Variable Interest Entities - Su
Variable Interest Entities - Summary of Assets and Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | |||
ASSETS | |||||||
Cash and cash equivalents | $ 140,300 | [1] | $ 197,983 | [1] | $ 91,139 | $ 71,215 | |
Restricted cash | 3,035 | 3,135 | 2,135 | $ 2,235 | |||
Loans receivable, net of allowance for loan losses | [1] | 335,285 | 374,832 | ||||
Loans receivable, allowance for credit loss | 39,037 | [1] | 48,399 | [1] | $ 76,188 | ||
Prepaid expenses and other assets | [1] | 10,806 | 10,060 | ||||
Receivable from payment processors | [1] | 5,263 | 6,147 | ||||
Total assets | 564,344 | 669,599 | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Accounts payable and accrued liabilities | [1] | 42,816 | 52,252 | ||||
Deferred revenue | [1] | 2,226 | 3,134 | ||||
Notes payable, net | [1] | 341,035 | 438,403 | ||||
Total liabilities and stockholders’ equity | 564,344 | 669,599 | |||||
Variable Interest Entity, Primary Beneficiary | Elastic SPV, Ltd. | |||||||
ASSETS | |||||||
Cash and cash equivalents | 63,606 | 97,345 | |||||
Loans receivable, net of allowance for loan losses | 130,899 | 149,951 | |||||
Loans receivable, allowance for credit loss | 10,749 | 13,202 | |||||
Prepaid expenses and other assets | 7 | 0 | |||||
Receivable from payment processors | 3,153 | 3,652 | |||||
Total assets | 197,665 | 250,948 | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Accounts payable and accrued liabilities | 14,387 | 27,663 | |||||
Deferred revenue | 2,054 | 2,300 | |||||
Reserve deposit liability | 23,150 | 23,150 | |||||
Notes payable, net | 158,074 | 197,835 | |||||
Total liabilities and stockholders’ equity | 197,665 | 250,948 | |||||
Variable Interest Entity, Primary Beneficiary | Elastic SPV, Ltd. | Consolidation, Eliminations | |||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Accounts payable and accrued liabilities | 10,536 | 23,337 | |||||
Reserve deposit liability | 23,150 | 23,150 | |||||
Variable Interest Entity, Primary Beneficiary | EF SPV, Ltd. | |||||||
ASSETS | |||||||
Cash and cash equivalents | 20,471 | 35,450 | |||||
Loans receivable, net of allowance for loan losses | 78,007 | 83,869 | |||||
Loans receivable, allowance for credit loss | 9,816 | 14,342 | |||||
Receivable from payment processors | 822 | 713 | |||||
Total assets | 99,300 | 120,032 | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Accounts payable and accrued liabilities | 15,566 | 17,599 | |||||
Reserve deposit liability | 8,950 | 8,950 | |||||
Notes payable, net | 74,784 | 93,483 | |||||
Total liabilities and stockholders’ equity | 99,300 | 120,032 | |||||
Variable Interest Entity, Primary Beneficiary | EF SPV, Ltd. | Consolidation, Eliminations | |||||||
ASSETS | |||||||
Receivable from payment processors | 365 | 231 | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Accounts payable and accrued liabilities | 14,575 | 16,459 | |||||
Reserve deposit liability | 8,950 | 8,950 | |||||
Variable Interest Entity, Primary Beneficiary | EC SPV, Ltd. | |||||||
ASSETS | |||||||
Cash and cash equivalents | 9,723 | 9,377 | |||||
Restricted cash | 1,000 | 1,000 | |||||
Loans receivable, net of allowance for loan losses | 23,656 | 19,231 | |||||
Loans receivable, allowance for credit loss | 4,294 | 1,634 | |||||
Receivable from payment processors | 321 | 211 | |||||
Total assets | 34,700 | 29,819 | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Accounts payable and accrued liabilities | 1,404 | 1,541 | |||||
Reserve deposit liability | 3,500 | 3,500 | |||||
Notes payable, net | 29,796 | 24,778 | |||||
Total liabilities and stockholders’ equity | 34,700 | 29,819 | |||||
Variable Interest Entity, Primary Beneficiary | EC SPV, Ltd. | Consolidation, Eliminations | |||||||
ASSETS | |||||||
Receivable from payment processors | 12 | 6 | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Accounts payable and accrued liabilities | 827 | 803 | |||||
Reserve deposit liability | $ 3,500 | $ 3,500 | |||||
[1] | These balances include certain assets and liabilities of variable interest entities (“VIEs”) that can only be used to settle the liabilities of that respective VIE. All assets of the Company are pledged as security for the Company’s outstanding debt, including debt held by the VIEs. For further information regarding the assets and liabilities included in the Company's consolidated accounts, see Note 4—Variable Interest Entities. |
Notes Payable, Net - Narrative
Notes Payable, Net - Narrative (Details) | 3 Months Ended |
Mar. 31, 2021debt_facility | |
VPC | |
Debt Instrument [Line Items] | |
Number of debt facilities | 4 |
Notes Payable, Net - VPC Facili
Notes Payable, Net - VPC Facility Narrative (Details) - Term Notes - Line of Credit - USD ($) | Jan. 01, 2021 | Jan. 01, 2020 | Feb. 01, 2019 | Mar. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2018 | Jul. 31, 2020 |
US Term Note | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing amount | $ 200,000,000 | ||||||
Blended interest rate | 10.23% | 9.73% | 9.98% | ||||
Option to pay down amount outstanding, percentage (up to) | 20.00% | ||||||
US Term Note | 3-month London Interbank Offered Rate (LIBOR) | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 11.00% | ||||||
Basis rate, floor | 1.00% | ||||||
US Term Note | Base Rate | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 2.73% | ||||||
US Term Note | Greater of 3-month London Interbank Offered Rate (LIBOR) or Five-Year LIBOR Swap Rate | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 7.00% | 7.25% | 7.50% | 7.00% | 7.25% | ||
Basis rate, floor | 1.00% | ||||||
4th Tranche Term Note | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing amount | $ 18,000,000 | ||||||
Blended interest rate | 15.73% | ||||||
4th Tranche Term Note | 3-month London Interbank Offered Rate (LIBOR) | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 13.00% | ||||||
4th Tranche Term Note | Base Rate | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 2.73% | ||||||
Weighted Average | US Term Note | Base Rate | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 2.73% | 2.73% |
Notes Payable, Net - ESPV Facil
Notes Payable, Net - ESPV Facility Narrative (Details) - Line of Credit - ESPV Term Note - USD ($) | Jan. 01, 2021 | Jan. 01, 2020 | Jul. 01, 2019 | Feb. 01, 2019 | Mar. 31, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||||||
Maximum borrowing amount | $ 350,000,000 | |||||
Blended interest rate | 10.23% | 15.48% | 9.72% | 9.97% | ||
Option to pay down amount outstanding, percentage (up to) | 20.00% | |||||
Base Rate | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 2.73% | 2.73% | ||||
Greater of 3-month London Interbank Offered Rate (LIBOR) or Five-Year LIBOR Swap Rate | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 7.00% | 7.25% | 7.50% | 12.75% | 7.00% | 7.25% |
Basis rate, floor | 1.00% | |||||
Weighted Average | Base Rate | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 2.72% | 2.72% |
Notes Payable, Net - EF SPV Fac
Notes Payable, Net - EF SPV Facility Narrative (Details) - Line of Credit - USD ($) | Jan. 01, 2021 | Jan. 01, 2020 | Feb. 01, 2019 | Mar. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2018 | Jul. 31, 2020 |
EF SPV Facility | |||||||
Line of Credit Facility [Line Items] | |||||||
Maximum borrowing amount | $ 250,000,000 | ||||||
Amount outstanding, re-allocated | $ 43,000,000 | ||||||
Stated interest rate | 10.23% | ||||||
Blended interest rate | 9.45% | 9.70% | |||||
Option to pay down amount outstanding, percentage (up to) | 20.00% | ||||||
Base Rate | EF SPV Facility | |||||||
Line of Credit Facility [Line Items] | |||||||
Basis spread on variable rate | 2.73% | ||||||
Greater of 3-month London Interbank Offered Rate (LIBOR) or Five-Year LIBOR Swap Rate | EF SPV Facility | |||||||
Line of Credit Facility [Line Items] | |||||||
Basis rate, floor | 1.00% | ||||||
Basis spread on variable rate | 7.00% | 7.25% | 7.50% | 7.00% | 7.25% | ||
Term Notes | US Term Note | |||||||
Line of Credit Facility [Line Items] | |||||||
Maximum borrowing amount | $ 200,000,000 | ||||||
Blended interest rate | 10.23% | 9.73% | 9.98% | ||||
Option to pay down amount outstanding, percentage (up to) | 20.00% | ||||||
Term Notes | 3-month London Interbank Offered Rate (LIBOR) | US Term Note | |||||||
Line of Credit Facility [Line Items] | |||||||
Basis rate, floor | 1.00% | ||||||
Basis spread on variable rate | 11.00% | ||||||
Term Notes | Base Rate | US Term Note | |||||||
Line of Credit Facility [Line Items] | |||||||
Basis spread on variable rate | 2.73% | ||||||
Term Notes | Greater of 3-month London Interbank Offered Rate (LIBOR) or Five-Year LIBOR Swap Rate | US Term Note | |||||||
Line of Credit Facility [Line Items] | |||||||
Basis rate, floor | 1.00% | ||||||
Basis spread on variable rate | 7.00% | 7.25% | 7.50% | 7.00% | 7.25% | ||
Weighted Average | Base Rate | EF SPV Facility | |||||||
Line of Credit Facility [Line Items] | |||||||
Basis spread on variable rate | 2.45% | 2.45% | |||||
Weighted Average | Term Notes | Base Rate | US Term Note | |||||||
Line of Credit Facility [Line Items] | |||||||
Basis spread on variable rate | 2.73% | 2.73% |
Notes Payable, Net - EC SPV Fac
Notes Payable, Net - EC SPV Facility Narrative (Details) - EC SPV Facility - Line of Credit - USD ($) | Jul. 31, 2020 | Mar. 31, 2021 | Dec. 31, 2020 |
Line of Credit Facility [Line Items] | |||
Blended interest rate | 9.73% | 9.98% | |
Base Rate | Weighted Average | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | 2.73% | 0.0273% | |
Revolving Credit Facility | |||
Line of Credit Facility [Line Items] | |||
Maximum borrowing amount | $ 100,000,000 | ||
Basis rate, floor | 1.00% | ||
Revolving Credit Facility | Base Rate | |||
Line of Credit Facility [Line Items] | |||
Basis spread on variable rate | 7.00% | 7.00% | 7.25% |
Medium-term Notes | |||
Line of Credit Facility [Line Items] | |||
Option to pay down amount outstanding, percentage (up to) | 20.00% |
Notes Payable, Net - Schedule o
Notes Payable, Net - Schedule of Outstanding Balances of Notes Payable, Net of Debt Issuance Costs (Details) - USD ($) $ in Thousands | Jan. 01, 2021 | Jul. 31, 2020 | Jan. 01, 2020 | Jul. 01, 2019 | Feb. 01, 2019 | Mar. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2018 | |
Debt Instrument [Line Items] | |||||||||
Long term debt | $ 343,000 | ||||||||
Debt issuance costs | (1,965) | $ (2,147) | |||||||
Total | [1] | 341,035 | 438,403 | ||||||
Line of Credit | US Term Note bearing interest at the base rate + 7.0% (2021) or + 7.25% (2020) | |||||||||
Debt Instrument [Line Items] | |||||||||
Long term debt | $ 78,600 | $ 104,500 | |||||||
Line of Credit | US Term Note bearing interest at the base rate + 7.0% (2021) or + 7.25% (2020) | Greater of 3-month London Interbank Offered Rate (LIBOR) or Five-Year LIBOR Swap Rate | Term Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate | 7.00% | 7.25% | 7.50% | 7.00% | 7.25% | ||||
Line of Credit | US Term Note bearing interest at the base rate + 7.0% (2021) or + 7.25% (2020) | 3-month London Interbank Offered Rate (LIBOR) | Term Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate | 11.00% | ||||||||
Line of Credit | US Term Note bearing interest at the base rate + 7.0% (2021) or + 7.25% (2020) | Base Rate | Term Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate | 2.73% | ||||||||
Line of Credit | 4th Tranche Term Note bearing interest at the base rate + 13% | |||||||||
Debt Instrument [Line Items] | |||||||||
Long term debt | $ 0 | $ 18,050 | |||||||
Line of Credit | 4th Tranche Term Note bearing interest at the base rate + 13% | 3-month London Interbank Offered Rate (LIBOR) | Term Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate | 13.00% | ||||||||
Line of Credit | 4th Tranche Term Note bearing interest at the base rate + 13% | Base Rate | Term Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate | 2.73% | ||||||||
Line of Credit | ESPV Term Note bearing interest at the base rate + 7.0% (2021) or + 7.25% (2020) | |||||||||
Debt Instrument [Line Items] | |||||||||
Long term debt | $ 159,600 | $ 199,500 | |||||||
Line of Credit | ESPV Term Note bearing interest at the base rate + 7.0% (2021) or + 7.25% (2020) | Greater of 3-month London Interbank Offered Rate (LIBOR) or Five-Year LIBOR Swap Rate | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate | 7.00% | 7.25% | 7.50% | 12.75% | 7.00% | 7.25% | |||
Line of Credit | ESPV Term Note bearing interest at the base rate + 7.0% (2021) or + 7.25% (2020) | Base Rate | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate | 2.73% | 2.73% | |||||||
Line of Credit | EF SPV Term Note bearing interest at the base rate + 7.0% (2021) or + 7.25% (2020) | |||||||||
Debt Instrument [Line Items] | |||||||||
Long term debt | $ 74,800 | $ 93,500 | |||||||
Line of Credit | EF SPV Term Note bearing interest at the base rate + 7.0% (2021) or + 7.25% (2020) | Greater of 3-month London Interbank Offered Rate (LIBOR) or Five-Year LIBOR Swap Rate | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate | 7.00% | 7.25% | 7.50% | 7.00% | 7.25% | ||||
Line of Credit | EF SPV Term Note bearing interest at the base rate + 7.0% (2021) or + 7.25% (2020) | Base Rate | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate | 2.73% | ||||||||
Line of Credit | EC SPV Term Note bearing interest at the base rate + 7.0% (2021) or + 7.25% (2020) | |||||||||
Debt Instrument [Line Items] | |||||||||
Long term debt | $ 30,000 | $ 25,000 | |||||||
Line of Credit | EC SPV Term Note bearing interest at the base rate + 7.0% (2021) or + 7.25% (2020) | Base Rate | Revolving Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate | 7.00% | 7.00% | 7.25% | ||||||
[1] | These balances include certain assets and liabilities of variable interest entities (“VIEs”) that can only be used to settle the liabilities of that respective VIE. All assets of the Company are pledged as security for the Company’s outstanding debt, including debt held by the VIEs. For further information regarding the assets and liabilities included in the Company's consolidated accounts, see Note 4—Variable Interest Entities. |
Notes Payable, Net - VPC, ESPV
Notes Payable, Net - VPC, ESPV SPV, EF SPV and EC SPV Facilities Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Debt Instrument [Line Items] | ||
Repayments of debt | $ 102,550 | $ 34,000 |
Proceeds from notes payable | 5,000 | $ 6,500 |
US Term Note | Line of Credit | ||
Debt Instrument [Line Items] | ||
Repayments of debt | 25,900 | |
4th Tranche Term Note | Line of Credit | ||
Debt Instrument [Line Items] | ||
Repayments of debt | 18,100 | |
ESPV Term Note | Line of Credit | ||
Debt Instrument [Line Items] | ||
Repayments of debt | 39,900 | |
EF SPV Facility | Line of Credit | ||
Debt Instrument [Line Items] | ||
Repayments of debt | 18,700 | |
EC SPV Facility | Line of Credit | ||
Debt Instrument [Line Items] | ||
Proceeds from notes payable | $ 5,000 | |
VPC, ESPV, EF SPV and EC SPV Facilities | Line of Credit | ||
Debt Instrument [Line Items] | ||
Reduction on basis spread of variable rate | 0.25% |
Notes Payable, Net - Future Deb
Notes Payable, Net - Future Debt Maturities (Details) $ in Thousands | Mar. 31, 2021USD ($) |
Maturities of Long-term Debt [Abstract] | |
Remainder of 2021 | $ 0 |
2022 | 0 |
2023 | 0 |
2024 | 343,000 |
2025 | 0 |
Thereafter | 0 |
Total | $ 343,000 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Narrative (Details) - USD ($) | Oct. 01, 2020 | Jan. 31, 2021 | Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 |
Goodwill [Line Items] | |||||
Impairment of goodwill | $ 0 | $ 0 | |||
Goodwill, net | $ 6,776,000 | $ 6,776,000 | |||
Goodwill deductible for tax purposes | 270,000 | $ 270,000 | |||
Amortization expense | $ 602,000 | 30,000 | |||
Domain names | |||||
Goodwill [Line Items] | |||||
Domain name sold for gain | $ 949,000 | ||||
Minimum | Valuation, Income Approach | |||||
Goodwill [Line Items] | |||||
Goodwill, fair value, period | 6 years | ||||
Maximum | Valuation, Income Approach | |||||
Goodwill [Line Items] | |||||
Goodwill, fair value, period | 9 years | ||||
Elevate Credit International Limited | Discontinued Operations, Disposed of by Means Other than Sale | |||||
Goodwill [Line Items] | |||||
Impairment of goodwill | $ 0 | $ 9,251,000 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, accumulated amortization | $ (2,798) | $ (2,196) |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Intangible assets, cost | 3,028 | 3,329 |
Intangible assets, net | 230 | 1,133 |
Domain names | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets | 230 | 531 |
Acquired technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, cost | 211 | 211 |
Finite-lived intangible assets, accumulated amortization | (211) | (211) |
Finite-lived intangible assets, net | 0 | 0 |
Non-compete | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, cost | 2,461 | 2,461 |
Finite-lived intangible assets, accumulated amortization | (2,461) | (1,859) |
Finite-lived intangible assets, net | 0 | 602 |
Customers | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, cost | 126 | 126 |
Finite-lived intangible assets, accumulated amortization | (126) | (126) |
Finite-lived intangible assets, net | $ 0 | $ 0 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
Lessee, Lease, Description [Line Items] | ||
Term of option to extend (up to) | 10 years | |
Operating lease right of use assets | $ 7,304 | $ 8,320 |
Operating lease liabilities | 11,294 | $ 11,952 |
Impairment loss of subleased right of use assets | $ 549 | |
Minimum | ||
Lessee, Lease, Description [Line Items] | ||
Remaining lease term | 2 years | |
Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Remaining lease term | 6 years |
Leases - Summary of Total Lease
Leases - Summary of Total Lease Cost and Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Leases [Abstract] | ||
Operating lease cost | $ 768 | $ 808 |
Short-term lease cost | 0 | 0 |
Total lease cost | 768 | 808 |
Cash paid for amounts included in the measurement of lease liabilities | 958 | 924 |
Right-of-use assets obtained in exchange for lease obligations | $ 0 | $ 0 |
Weighted average remaining lease term | 3 years 3 months 18 days | 4 years 8 months 12 days |
Weighted average discount rate | 10.23% | 10.23% |
Leases - Summary of Future Leas
Leases - Summary of Future Lease Payments (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Leases [Abstract] | ||
2021 | $ 2,918 | |
2022 | 3,984 | |
2023 | 3,486 | |
2024 | 1,438 | |
2025 | 1,254 | |
Thereafter | 638 | |
Total future minimum lease payments | 13,718 | |
Less: Imputed interest | (2,424) | |
Operating lease liabilities | $ 11,294 | $ 11,952 |
Share-Based Compensation - 2016
Share-Based Compensation - 2016 Omnibus Incentive Plan and 2014 Equity Incentive Plan Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock based compensation expense | $ 1.6 | $ 2.7 |
2016 Omnibus Incentive Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares reserved for issuance (in shares) | 8,523,799 | |
Plan expiration period | 10 years | |
Shares available for grant (in shares) | 3,570,917 |
Share-Based Compensation - Stoc
Share-Based Compensation - Stock Options (Details) - Stock Option | 3 Months Ended |
Mar. 31, 2021USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Plan expiration period | 10 years |
Vesting period | 4 years |
Stock Option Activity | |
Outstanding, beginning balance (in shares) | shares | 886,685 |
Granted (in shares) | shares | 0 |
Exercised (in shares) | shares | (12,500) |
Expired (in shares) | shares | (1,250) |
Forfeited (in shares) | shares | 0 |
Outstanding, ending balance (in shares) | shares | 872,935 |
Weighted Average Exercise Price | |
Outstanding, Weighted Average Exercise Price, beginning balance (in usd per share) | $ / shares | $ 5.94 |
Granted, Weighted Average Exercise Price (in usd per share) | $ / shares | 0 |
Exercised, Weighted Average Exercise Price (in usd per share) | $ / shares | 2.13 |
Expired, Weighted Average Expired Price (in usd per share) | $ / shares | 6.31 |
Forfeited, Weighted Average Exercise Price (in usd per share) | $ / shares | 0 |
Outstanding, Weighted Average Exercise Price, ending balance (in usd per share) | $ / shares | $ 6 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | |
Options exercisable (in shares) | shares | 872,935 |
Options exercisable, Weighted Average Exercise Price (in usd per share) | $ / shares | $ 6 |
Options Outstanding, Weighted Average Remaining Contractual Life | 3 years 8 months 26 days |
Options exercisable, Weighted Average Remaining Contractual Life | 3 years 8 months 26 days |
Unrecognized compensation cost related to non-vested stock | $ | $ 0 |
Total intrinsic value of options exercised | $ | $ 30,000 |
Share-Based Compensation - Rest
Share-Based Compensation - Restricted Stock Units (Details) - RSUs $ / shares in Units, $ in Millions | 3 Months Ended |
Mar. 31, 2021USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Weighted-average grant-date fair value (in usd per share) | $ / shares | $ 4.46 |
Nonvested Restricted Stock Unit Activity | |
Unvested, beginning balance (in shares) | shares | 2,924,086 |
Granted (in shares) | shares | 1,489,435 |
Vested (in shares) | shares | (265,857) |
Forfeited (in shares) | shares | (67,720) |
Unvested, ending balance (in shares) | shares | 4,079,944 |
Weighted Average Grant-Date Fair Value | |
Unvested, Weighted Average Grant Date Fair Value, beginning balance (in usd per share) | $ / shares | $ 4.17 |
Granted, Weighted Average Grant Date Fair Value (in usd per share) | $ / shares | 4.46 |
Vested, Weighted Average Grant Date Fair Value (in usd per share) | $ / shares | 3.91 |
Forfeited, Weighted Average Grant Date Fair Value (in usd per share) | $ / shares | 4.65 |
Unvested, Weighted Average Grant Date Fair Value, ending balance (in usd per share) | $ / shares | $ 4.28 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract] | |
Expected to vest (in shares) | shares | 2,996,212 |
Expected to vest (in usd per share) | $ / shares | $ 4.35 |
Number of shares withheld for applicable income and other employment taxes | shares | 96,766 |
Unrecognized compensation | $ | $ 9.3 |
Unrecognized compensation, weighted average period for recognition | 2 years 9 months 18 days |
Total intrinsic value of vested RSUs | $ | $ 1.1 |
Aggregate intrinsic value of the vested and expected to vest RSUs | $ | $ 8.7 |
2016 Omnibus Incentive Plan | Vesting as of first anniversary | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting percentage | 25.00% |
2016 Omnibus Incentive Plan | Vesting each year after first anniversary date | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting percentage | 25.00% |
Share-Based Compensation - Empl
Share-Based Compensation - Employee Stock Purchase Plan Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock based compensation expense | $ 1,600 | $ 2,700 |
Employee Stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares authorized for the Employee Stock Purchase Plan (in shares) | 2,196,257 | |
Number of shares reserved for the Employee Stock Purchase Plan (in shares) | 1,083,949 | |
Number of shares purchased under the Employee Stock Purchase Plan (in shares) | 0 | |
Stock based compensation expense | $ 171 | $ 141 |
Income Taxes - Schedule of Inco
Income Taxes - Schedule of Income Tax Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Current income tax expense: | ||
Federal | $ 0 | $ 1,152 |
State | 86 | 487 |
Total current income tax expense | 86 | 1,639 |
Deferred income tax expense (benefit): | ||
Federal | 3,577 | 73 |
State | (219) | 343 |
Total deferred income tax expense | 3,358 | 416 |
Total income tax expense | $ 3,444 | $ 2,055 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Operating Loss Carryforwards [Line Items] | |||
Effective tax rate | 21.30% | 20.60% | |
Cash effective tax rate | 1.00% | ||
Period of cumulative pre-tax income position | 3 years | ||
Minimum | |||
Operating Loss Carryforwards [Line Items] | |||
Look forward period | 1 year | ||
Look forward period for majority of deferred tax assets | 1 year | ||
Maximum | |||
Operating Loss Carryforwards [Line Items] | |||
Look forward period | 3 years | ||
Look forward period for majority of deferred tax assets | 3 years | ||
Domestic Tax Authority | |||
Operating Loss Carryforwards [Line Items] | |||
Operating loss carryforwards | $ 64.8 |
Commitments, Contingencies an_3
Commitments, Contingencies and Guarantees - Narrative (Details) | Aug. 14, 2020USD ($) | Mar. 31, 2021USD ($)lawsuit | Dec. 31, 2020USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Jun. 30, 2017USD ($) | |
Loans and Leases Receivable Disclosure [Line Items] | |||||||
Lines of credit to customers | [1] | $ 335,285,000 | $ 374,832,000 | ||||
Lease agreement term | 7 years | ||||||
Lease, letter of credit | $ 500,000 | ||||||
Lease, annual reduction of letter credit | 100,000 | ||||||
Lessee, letter of credit, minimum balance | $ 100,000 | ||||||
Cash balance securing lease letter of credit | 3,035,000 | 3,135,000 | $ 2,135,000 | $ 2,235,000 | |||
Letter of Credit | |||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||
Cash balance securing lease letter of credit | 200,000 | 300,000 | |||||
Indemnification Agreement | |||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||
Loss contingency accrual | 0 | 4,424,000 | $ 4,263,000 | $ 0 | |||
Elastic Product | Unfunded Credit Lines | |||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||
Lines of credit to customers | 287,600,000 | 275,900,000 | |||||
Today Card | Unfunded Credit Lines | |||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||
Lines of credit to customers | 9,000,000 | 5,400,000 | |||||
Rise Product | Unfunded Credit Lines | |||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||
Lines of credit to customers | 0 | 0 | |||||
Think Finance Litigation Trust | |||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||
Damages sought | $ 246,000,000 | ||||||
Think Finance Litigation Trust | Unasserted Claim | |||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||
Loss contingency accrual | $ 17,000,000 | $ 17,000,000 | |||||
California Rise Loans | |||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||
Number of lawsuits filed | lawsuit | 2 | ||||||
California Rise Loans | Judicial Ruling | |||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||
Number of lawsuits filed | lawsuit | 1 | ||||||
California Rise Loans | Pending Litigation | |||||||
Loans and Leases Receivable Disclosure [Line Items] | |||||||
Number of lawsuits filed | lawsuit | 1 | ||||||
[1] | These balances include certain assets and liabilities of variable interest entities (“VIEs”) that can only be used to settle the liabilities of that respective VIE. All assets of the Company are pledged as security for the Company’s outstanding debt, including debt held by the VIEs. For further information regarding the assets and liabilities included in the Company's consolidated accounts, see Note 4—Variable Interest Entities. |
Commitments, Contingencies an_4
Commitments, Contingencies and Guarantees - Amounts Accrued for Contingent Loss under Indemnification Agreement (Details) - Indemnification Agreement - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Loss Contingency Accrual [Roll Forward] | ||
Beginning balance | $ 4,424,000 | $ 0 |
Accruals | 0 | 4,263,000 |
Payments | (4,424,000) | 0 |
Ending balance | $ 0 | $ 4,263,000 |
Discontinued Operations - Incom
Discontinued Operations - Income Statement Disclosures (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Other expense: | ||
Net income (loss) from discontinued operations | $ 0 | $ (12,833) |
Elevate Credit International Limited | Discontinued Operations, Disposed of by Means Other than Sale | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Revenues | 0 | 14,988 |
Cost of sales: | ||
Provision for loan losses | 0 | 4,178 |
Direct marketing costs | 0 | 1,102 |
Other cost of sales | 0 | 5,660 |
Total cost of sales | 0 | 10,940 |
Gross profit | 0 | 4,048 |
Operating expenses: | ||
Compensation and benefits | 0 | 2,717 |
Professional services | 0 | 1,281 |
Selling and marketing | 0 | 470 |
Occupancy and equipment | 0 | 1,113 |
Depreciation and amortization | 0 | 501 |
Other | 0 | 180 |
Total operating expenses | 0 | 6,262 |
Operating (loss) income | 0 | (2,214) |
Other expense: | ||
Net interest expense | 0 | (539) |
Foreign currency transaction loss | 0 | (812) |
Impairment loss | 0 | (9,251) |
Total other expense | 0 | (10,602) |
Gain (loss) from discontinued operations before taxes | 0 | (12,816) |
Income tax benefit | 0 | (17) |
Net income (loss) from discontinued operations | $ 0 | $ (12,833) |
Discontinued Operations - Narra
Discontinued Operations - Narrative (Details) - Elevate Credit International Limited - Discontinued Operations, Disposed of by Means Other than Sale - USD ($) | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Impairment of goodwill | $ 0 | $ 9,251,000 | |
Assets from discontinued operations | 0 | $ 0 | |
Liabilities from discontinued operations | $ 0 | $ 0 |
Related Parties - Expenses Rela
Related Parties - Expenses Related to Board of Directors (Details) - Affiliated Entity - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Related Party Transaction [Line Items] | ||
Total board related expenses | $ 201 | $ 1,212 |
Fees and travel expenses | ||
Related Party Transaction [Line Items] | ||
Total board related expenses | 122 | 133 |
Stock compensation | ||
Related Party Transaction [Line Items] | ||
Total board related expenses | 79 | 979 |
Consulting | ||
Related Party Transaction [Line Items] | ||
Total board related expenses | $ 0 | $ 100 |
Related Parties - Narrative (De
Related Parties - Narrative (Details) - USD ($) | 3 Months Ended | |||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2017 | |
Related Party Transaction [Line Items] | ||||
Accounts payable to related parties | $ 122,000 | $ 110,000 | ||
Line of Credit | VPC Facility | Affiliated Entity | ||||
Related Party Transaction [Line Items] | ||||
Direct investments in VPC Facility | $ 800,000 | |||
Interest payments on loan | $ 19,600 | $ 20,200 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | |
May 04, 2021 | Mar. 31, 2021 | Mar. 31, 2020 | |
Subsequent Event [Line Items] | |||
Common stock repurchased | $ 10,813 | $ 4,203 | |
Subsequent Event | |||
Subsequent Event [Line Items] | |||
Common stock repurchased (in shares) | 1,159,502 | ||
Common stock repurchased | $ 3,600 |