Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 30, 2020 | Jul. 31, 2020 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-38506 | |
Entity Registrant Name | GreenSky, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 82-2135346 | |
Entity Address, Address Line One | 5565 Glenridge Connector | |
Entity Address, Address Line Two | Suite 700 | |
Entity Address, City or Town | Atlanta | |
Entity Address, State or Province | GA | |
Entity Address, Postal Zip Code | 30342 | |
City Area Code | (678) | |
Local Phone Number | 264-6105 | |
Title of 12(b) Security | Class A common stock, $0.01 par value | |
Trading Symbol | GSKY | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Current Fiscal Year End Date | --12-31 | |
Amendment Flag | false | |
Entity Central Index Key | 0001712923 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Class A common stock | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 75,168,848 | |
Class B common stock | ||
Entity Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 107,217,505 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Assets | ||
Cash and cash equivalents | $ 147,560 | $ 195,760 |
Restricted cash | 289,844 | 250,081 |
Loan receivables held for sale, net | 410,952 | 51,926 |
Accounts receivable, net of allowance of $218 and $238, respectively | 20,066 | 19,493 |
Property, equipment and software, net | 21,951 | 18,309 |
Deferred tax assets, net | 383,107 | 364,841 |
Other assets | 53,334 | 50,638 |
Total assets | 1,326,814 | 951,048 |
Liabilities | ||
Accounts payable | 13,356 | 11,912 |
Accrued compensation and benefits | 7,034 | 10,734 |
Other accrued expenses | 3,947 | 3,244 |
Finance charge reversal liability | 198,755 | 206,035 |
Term loan | 453,879 | 384,497 |
Term loan | 453,879 | 384,497 |
SPV facility | 299,000 | 0 |
Tax receivable agreement liability | 317,823 | 311,670 |
Financial guarantee liability | 163,301 | 16,698 |
Other liabilities | 66,587 | 61,201 |
Total liabilities | 1,523,682 | 1,005,991 |
Commitments, Contingencies and Guarantees (Note 14) | ||
Equity (Deficit) | ||
Additional paid-in capital | 112,700 | 115,782 |
Retained earnings | 24,512 | 56,109 |
Treasury stock | (147,005) | (146,234) |
Accumulated other comprehensive income (loss) | (4,756) | (756) |
Noncontrolling interests | (183,302) | (80,758) |
Total equity (deficit) | (196,868) | (54,943) |
Total liabilities and equity (deficit) | 1,326,814 | 951,048 |
Class A common stock | ||
Equity (Deficit) | ||
Permanent equity | 873 | 800 |
Class B common stock | ||
Equity (Deficit) | ||
Permanent equity | $ 110 | $ 114 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Accounts Receivable, Allowance for Credit Loss | $ 218 | $ 238 |
Class A common stock | ||
Common Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
Common Stock, Shares, Issued | 87,449,331 | 80,089,739 |
Common Stock, Shares, Outstanding | 73,350,234 | 66,424,838 |
Class B common stock | ||
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Common Stock, Shares, Issued | 108,994,392 | 113,517,198 |
Common Stock, Shares, Outstanding | 108,994,392 | 113,517,198 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Revenue | ||||
Revenue | $ 132,962 | $ 138,752 | $ 254,819 | $ 243,150 |
Interest and other | 2,704 | 69 | 3,394 | 786 |
Revenues | 132,962 | 138,752 | 254,819 | 243,150 |
Costs and expenses | ||||
Cost of revenue (exclusive of depreciation and amortization shown separately below) | 64,930 | 56,228 | 136,705 | 114,265 |
Compensation and benefits | 22,041 | 20,459 | 44,475 | 40,092 |
Property, office and technology | 4,244 | 4,512 | 8,266 | 8,926 |
Depreciation and amortization | 2,762 | 1,695 | 5,207 | 3,162 |
Sales, general and administrative | 8,590 | 7,302 | 18,678 | 14,555 |
Financial guarantee | 10,248 | 1,696 | 28,656 | 2,918 |
Related party | 477 | 589 | 954 | 1,125 |
Total costs and expenses | 113,292 | 92,481 | 242,941 | 185,043 |
Operating profit | 19,670 | 46,271 | 11,878 | 58,107 |
Other income (expense), net | ||||
Interest and dividend income | 246 | 812 | 868 | 1,710 |
Interest expense | (5,894) | (6,323) | (11,514) | (12,566) |
Other gains (losses), net | 830 | (6,033) | 1,806 | (5,718) |
Total other income (expense), net | (4,818) | (11,544) | (8,840) | (16,574) |
Income before income tax expense (benefit) | 14,852 | 34,727 | 3,038 | 41,533 |
Income tax expense (benefit) | 1,497 | (4,466) | 602 | (5,061) |
Net income | 13,355 | 39,193 | 2,436 | 46,594 |
Less: Net income attributable to noncontrolling interests | 9,222 | 26,877 | 1,637 | 31,379 |
Net income attributable to GreenSky, Inc. | $ 4,133 | $ 12,316 | $ 799 | $ 15,215 |
Earnings per share of Class A common stock | ||||
Basic (in dollars per share) | $ 0.06 | $ 0.20 | $ 0.01 | $ 0.26 |
Diluted (in dollars per share) | $ 0.06 | $ 0.19 | $ 0.01 | $ 0.23 |
Transaction fees | ||||
Revenue | ||||
Revenue | $ 101,777 | $ 108,365 | $ 191,661 | $ 192,413 |
Servicing | ||||
Revenue | ||||
Revenue | $ 28,481 | $ 30,318 | $ 59,764 | $ 49,951 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 13,355 | $ 39,193 | $ 2,436 | $ 46,594 |
Other comprehensive income (loss), net of tax | ||||
Net unrealized gains (losses) on interest rate swap arising during the period | (1,720) | (1,949) | (13,544) | (1,949) |
Reclassification of interest rate swap settlements into interest expense (income) during the period | 1,037 | 0 | 1,135 | 0 |
Other comprehensive income (loss), net of tax | (683) | (1,949) | (12,409) | (1,949) |
Comprehensive income (loss) | 12,672 | 37,244 | (9,973) | 44,645 |
Less: Comprehensive income (loss) attributable to noncontrolling interests | 9,001 | 25,486 | (6,772) | 29,988 |
Comprehensive income (loss) attributable to GreenSky, Inc. | $ 3,671 | $ 11,758 | $ (3,201) | $ 14,657 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (DEFICIT) (Unaudited) - USD ($) $ in Thousands | Total | Cumulative effect of accounting change | Common stock | Additional Paid-in Capital | Retained Earnings | Retained EarningsCumulative effect of accounting change | Treasury stock | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interest | Noncontrolling InterestCumulative effect of accounting change | Class A common stock | Class A common stockCommon stock | Class A common stockAdditional Paid-in Capital | Class A common stockTreasury stock | Class B common stock | Class B common stockCommon stock | Class B common stockAdditional Paid-in Capital | |||
Beginning balance (in shares) at Dec. 31, 2018 | 54,504,902 | 128,549,555 | ||||||||||||||||||
Beginning balance at Dec. 31, 2018 | $ (34,765) | $ (290) | [1] | $ 44,524 | $ 24,218 | $ (87) | $ (43,878) | $ 0 | $ (60,349) | $ (203) | $ 591 | $ 129 | ||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||||||||||
Net income | 46,594 | 15,215 | 31,379 | |||||||||||||||||
Issuance of unvested Class A common stock awards (in shares) | 1,873,512 | |||||||||||||||||||
Issuance of unvested Class A common stock awards | 0 | $ 19 | $ (19) | |||||||||||||||||
Class A common stock option exercises (in shares) | 851,401 | 281,292 | ||||||||||||||||||
Class A common stock option exercises | $ (1,260) | $ 3 | (1,263) | |||||||||||||||||
Class B common stock exchanges (in shares) | 14,003,645 | 14,146,255 | ||||||||||||||||||
Class B common stock exchanges | $ 140 | $ (1,805) | $ (14) | $ (1,931) | ||||||||||||||||
Issuance of stock (in shares) | 1,180,163 | |||||||||||||||||||
Issuance of stock | 0 | (1) | $ 1 | |||||||||||||||||
Forfeited share-based compensation awards (in shares) | (146,860) | (273,735) | ||||||||||||||||||
Forfeited share-based compensation awards | 0 | |||||||||||||||||||
Treasury stock purchases (in shares) | 8,744,477 | |||||||||||||||||||
Class A common stock repurchases | 102,241 | $ 102,241 | ||||||||||||||||||
Distributions | (14,124) | (183) | (13,941) | |||||||||||||||||
Share-based compensation | 5,936 | 5,936 | ||||||||||||||||||
Equity-based payments to non-employees | 7 | 7 | ||||||||||||||||||
Tax adjustments | 7,139 | 7,139 | ||||||||||||||||||
Impact of noncontrolling interest on change in ownership during period | 0 | 63,990 | (63,990) | |||||||||||||||||
Other comprehensive income (loss), net of tax | (1,949) | (558) | (1,391) | |||||||||||||||||
Ending balance (in shares) at Jun. 30, 2019 | 61,772,014 | 115,309,728 | ||||||||||||||||||
Ending balance at Jun. 30, 2019 | (96,758) | 118,382 | 39,163 | (146,119) | (558) | (108,495) | $ 753 | $ 116 | ||||||||||||
Beginning balance (in shares) at Mar. 31, 2019 | 62,151,547 | 119,187,862 | ||||||||||||||||||
Beginning balance at Mar. 31, 2019 | (73,260) | (196) | 80,543 | 27,030 | (59) | (94,828) | 0 | (86,835) | (137) | $ 711 | $ 119 | |||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||||||||||
Net income | 39,193 | 12,316 | 26,877 | |||||||||||||||||
Issuance of unvested Class A common stock awards (in shares) | 480,032 | |||||||||||||||||||
Issuance of unvested Class A common stock awards | 0 | $ 5 | (5) | |||||||||||||||||
Class A common stock option exercises (in shares) | 153,865 | |||||||||||||||||||
Class A common stock option exercises | (858) | $ 2 | (860) | |||||||||||||||||
Class B common stock exchanges (in shares) | 3,552,029 | 3,625,399 | ||||||||||||||||||
Class B common stock exchanges | $ 35 | $ (1,063) | $ (3) | (1,095) | ||||||||||||||||
Forfeited share-based compensation awards (in shares) | (102,426) | (252,735) | ||||||||||||||||||
Forfeited share-based compensation awards | 0 | |||||||||||||||||||
Treasury stock purchases (in shares) | 4,463,033 | |||||||||||||||||||
Class A common stock repurchases | $ 51,291 | $ 51,291 | ||||||||||||||||||
Distributions | (13,220) | (124) | (13,096) | |||||||||||||||||
Share-based compensation | 3,271 | 3,271 | ||||||||||||||||||
Equity-based payments to non-employees | 4 | 4 | ||||||||||||||||||
Tax adjustments | 2,611 | 2,611 | ||||||||||||||||||
Impact of noncontrolling interest on change in ownership during period | 33,913 | (33,913) | ||||||||||||||||||
Other comprehensive income (loss), net of tax | (1,949) | (558) | (1,391) | |||||||||||||||||
Ending balance (in shares) at Jun. 30, 2019 | 61,772,014 | 115,309,728 | ||||||||||||||||||
Ending balance at Jun. 30, 2019 | (96,758) | 118,382 | 39,163 | (146,119) | (558) | (108,495) | $ 753 | $ 116 | ||||||||||||
Beginning balance (in shares) at Dec. 31, 2019 | 66,424,838 | 66,424,838 | 113,517,198 | 113,517,198 | ||||||||||||||||
Beginning balance at Dec. 31, 2019 | (54,943) | $ (107,659) | [1] | 115,782 | 56,109 | $ (32,212) | [1] | (146,234) | (756) | (80,758) | $ (75,447) | [1] | $ 800 | $ 114 | ||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||||||||||
Net income | 2,436 | 799 | 1,637 | |||||||||||||||||
Issuance of unvested Class A common stock awards (in shares) | 2,821,735 | |||||||||||||||||||
Issuance of unvested Class A common stock awards | $ 28 | (28) | ||||||||||||||||||
Class A common stock option exercises (in shares) | 105,000 | 15,051 | ||||||||||||||||||
Class A common stock option exercises | $ (73) | (73) | ||||||||||||||||||
Class B common stock exchanges (in shares) | 4,522,806 | 4,522,806 | ||||||||||||||||||
Class B common stock exchanges | $ 45 | $ 0 | $ (4) | (41) | ||||||||||||||||
Forfeited share-based compensation awards (in shares) | (295,151) | |||||||||||||||||||
Forfeited share-based compensation awards | 0 | |||||||||||||||||||
Shares issued, shares, net share settlement and other (in shares) | (139,045) | (155,663) | ||||||||||||||||||
Shares withheld related to net share settlement and other | (771) | (771) | ||||||||||||||||||
Distributions | (31,515) | (184) | (31,331) | |||||||||||||||||
Share-based compensation | 6,972 | 6,972 | ||||||||||||||||||
Equity-based payments to non-employees | 8 | 8 | ||||||||||||||||||
Tax adjustments | 1,086 | 1,086 | ||||||||||||||||||
Impact of noncontrolling interest on change in ownership during period | 0 | (11,006) | 11,006 | |||||||||||||||||
Other comprehensive income (loss), net of tax | (12,409) | (4,000) | (8,409) | |||||||||||||||||
Ending balance (in shares) at Jun. 30, 2020 | 73,350,234 | 73,350,234 | 108,994,392 | 108,994,392 | ||||||||||||||||
Ending balance at Jun. 30, 2020 | (196,868) | 112,700 | 24,512 | (147,005) | (4,756) | (183,302) | $ 873 | $ 110 | ||||||||||||
Beginning balance (in shares) at Mar. 31, 2020 | 66,366,882 | 113,301,368 | ||||||||||||||||||
Beginning balance at Mar. 31, 2020 | (213,496) | 116,093 | 20,379 | (146,888) | (4,294) | (199,702) | $ 802 | $ 114 | ||||||||||||
Increase (Decrease) in Stockholders' Equity | ||||||||||||||||||||
Net income | 13,355 | 4,133 | 9,222 | |||||||||||||||||
Issuance of unvested Class A common stock awards (in shares) | 2,821,735 | |||||||||||||||||||
Issuance of unvested Class A common stock awards | $ 0 | $ 28 | $ (28) | |||||||||||||||||
Class B common stock exchanges (in shares) | 4,306,976 | 4,306,976 | ||||||||||||||||||
Class B common stock exchanges | $ 43 | $ 0 | $ (4) | $ (39) | ||||||||||||||||
Forfeited share-based compensation awards (in shares) | (113,357) | |||||||||||||||||||
Forfeited share-based compensation awards | 0 | |||||||||||||||||||
Shares issued, shares, net share settlement and other (in shares) | (32,002) | |||||||||||||||||||
Shares withheld related to net share settlement and other | (117) | (117) | ||||||||||||||||||
Distributions | (378) | 0 | (378) | |||||||||||||||||
Share-based compensation | 3,477 | 3,477 | ||||||||||||||||||
Equity-based payments to non-employees | 4 | 4 | ||||||||||||||||||
Tax adjustments | 970 | 970 | ||||||||||||||||||
Impact of noncontrolling interest on change in ownership during period | 0 | (7,777) | 7,777 | |||||||||||||||||
Other comprehensive income (loss), net of tax | (683) | (462) | (221) | |||||||||||||||||
Ending balance (in shares) at Jun. 30, 2020 | 73,350,234 | 73,350,234 | 108,994,392 | 108,994,392 | ||||||||||||||||
Ending balance at Jun. 30, 2020 | $ (196,868) | $ 112,700 | $ 24,512 | $ (147,005) | $ (4,756) | $ (183,302) | $ 873 | $ 110 | ||||||||||||
[1] | Represents the cumulative effect resulting from our adoption of the Financial Accounting Standards Board Accounting Standards Update 2016-02, Leases . |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Cash flows from operating activities | ||
Net income | $ 2,436 | $ 46,594 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 5,207 | 3,162 |
Share-based compensation expense | 6,972 | 5,936 |
Equity-based payments to non-employees | 8 | 7 |
Fair value change in servicing assets and liabilities | (1,738) | (8,635) |
Operating lease liability payments | (305) | (143) |
Financial guarantee losses | 28,656 | 284 |
Amortization of debt related costs | 968 | 840 |
Original issuance discount on term loan payment | (10) | (21) |
Income tax expense (benefit) | 602 | (5,061) |
Loss on remeasurement of tax receivable agreement liability | 0 | 6,383 |
Impairment losses | 174 | 0 |
Mark to market on loan receivables held for sale | 10,072 | 0 |
Changes in assets and liabilities: | ||
(Increase) decrease in loan receivables held for sale | (369,098) | 78 |
(Increase) decrease in accounts receivable | (573) | (7,375) |
(Increase) decrease in other assets | (3,632) | (828) |
Increase (decrease) in accounts payable | 1,444 | 9,378 |
Increase (decrease) in finance charge reversal liability | (7,280) | 26,390 |
Increase (decrease) in guarantee liability | (63) | 0 |
Increase (decrease) in other liabilities | (7,682) | 12,800 |
Net cash provided by (used in) operating activities | (333,842) | 89,789 |
Cash flows from investing activities | ||
Purchases of property, equipment and software | (8,524) | (7,123) |
Net cash used in investing activities | (8,524) | (7,123) |
Cash flows from financing activities | ||
Proceeds from term loan | 70,494 | 0 |
Repayments of term loan | (2,073) | (1,979) |
Proceeds from SPV facility | 299,000 | 0 |
Class A common stock repurchases | 0 | (104,272) |
Member distributions | (33,419) | (17,757) |
Payments under tax receivable agreement | 0 | (4,664) |
Proceeds from option exercises | 0 | 290 |
Payment of option exercise taxes | (73) | (1,550) |
Payment of taxes on Class B common stock exchanges | 0 | (1,805) |
Net cash provided by (used in) financing activities | 333,929 | (131,737) |
Net increase (decrease) in cash and cash equivalents and restricted cash | (8,437) | (49,071) |
Cash and cash equivalents and restricted cash at beginning of period | 445,841 | 458,499 |
Cash and cash equivalents and restricted cash at end of period | 437,404 | 409,428 |
Supplemental non-cash investing and financing activities | ||
Distributions accrued but not paid | 4,073 | 7,105 |
Capitalized software costs accrued but not paid | $ 317 | $ 0 |
Organization, Summary of Signif
Organization, Summary of Significant Accounting Policies and New Accounting Standards | 6 Months Ended |
Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization, Summary of Significant Accounting Policies and New Accounting Standards | Organization, Summary of Significant Accounting Policies and New Accounting Standards Organization Unless the context requires otherwise, "we," "us," "our," "GreenSky" and "the Company" refer to GreenSky, Inc. and its subsidiaries. "Bank Partners" are the federally insured banks that originate loans under the consumer financing and payments program that we administer for use by merchants on behalf of such banks in connection with which we provide point-of-sale financing and payments technology and related marketing, servicing, collection and other services (the "GreenSky program" or "program"). We are a leading technology company Powering Commerce at the Point of Sale ® . Our platform is powered by a proprietary technology infrastructure that facilitates merchant sales, while reducing the friction and improving the economics associated with a consumer making a purchase and a lender or financial institution extending financing for that purchase. It supports the full transaction lifecycle, including credit application, underwriting, real-time allocation to our Bank Partners, document distribution, funding, settlement and servicing. Merchants using our platform, which presently range from small, owner-operated home improvement contractors and healthcare providers to large national home improvement brands and retailers and healthcare service organizations, rely on us to facilitate low or deferred interest promotional point-of-sale financing and payments solutions that enable higher sales volume. Consumers on our platform, who to date primarily have super-prime or prime credit scores, find financing with promotional terms to be an attractive alternative to other forms of payment. Our Bank Partners' access to our proprietary technology solution and merchant network enables them to build a diversified portfolio of high quality consumer loans with attractive risk-adjusted yields with minimal upfront investment. GreenSky, Inc. was formed as a Delaware corporation on July 12, 2017. The Company was formed for the purpose of completing an initial public offering ("IPO") of its Class A common stock and certain Reorganization Transactions, as further described in the GreenSky, Inc. Form 10-K filed with the U.S. Securities and Exchange Commission ("SEC") on March 2, 2020 (the "2019 Form 10-K"), in order to carry on the business of GreenSky Holdings, LLC (“GS Holdings”) and its consolidated subsidiaries. GS Holdings, a holding company with no operating assets or operations, was organized in August 2017. On August 24, 2017, GS Holdings acquired a 100% interest in GreenSky, LLC ("GSLLC"), a Georgia limited liability company, which is an operating entity. Common membership interests of GS Holdings are referred to as "Holdco Units." On May 24, 2018, the Company's Class A common stock commenced trading on the Nasdaq Global Select Market in connection with its IPO. The IPO and Reorganization Transactions resulted in the Company becoming the sole managing member of GS Holdings. As the sole managing member of GS Holdings, we operate and control all of GS Holdings’ operations and, through GS Holdings and its subsidiaries, conduct GS Holdings’ business. The Company consolidates the financial results of GS Holdings and reports a noncontrolling interest in its Unaudited Condensed Consolidated Financial Statements representing the GS Holdings interests held by the Continuing LLC Members, as such term is defined in the 2019 Form 10-K. The weighted average ownership percentages for the applicable reporting periods are used to attribute net income (loss) and other comprehensive income (loss) to the Company and the noncontrolling interest. In 2020, we formed GS Investment I, LLC (the "SPV" or "GS Investment"), a special purpose vehicle and indirect wholly-owned subsidiary of the Company, to finance purchases of participation interests in loans ("SPV Participations") originated through the GreenSky program. These purchases are made through a newly created wholly-owned subsidiary, GS Depositor I, LLC ("Depositor") and then transferred to the SPV. Each of the SPV and Depositor is a separate legal entity from the Company and from each other subsidiary of the Company, and the respective assets of the SPV and Depositor are owned by the SPV or Depositor, respectively, and are solely available to satisfy the creditors of the SPV or Depositor, respectively. Summary of Significant Accounting Policies Basis of Presentation The Unaudited Condensed Consolidated Financial Statements were prepared in accordance with the rules and regulations of the SEC for interim financial statements. We condensed or omitted certain notes and other information from the interim financial statements presented in this Quarterly Report on Form 10-Q. Therefore, these interim statements should be read in conjunction with the 2019 Form 10-K. In the opinion of management, the Unaudited Condensed Consolidated Financial Statements reflect all adjustments, which are of a normal recurring nature, necessary for a fair statement of our financial condition and results of operations for the interim periods presented. The condensed consolidated balance sheet as of December 31, 2019, was derived from the audited annual consolidated financial statements, but does not contain all of the footnote disclosures from the annual consolidated financial statements required by United States generally accepted accounting principles ("GAAP"). All intercompany balances and transactions are eliminated upon consolidation. The results for the three and six months ended June 30, 2020 are not necessarily indicative of results expected for the full year. Consistent with the 2019 Form 10-K, for the three and six months ended June 30, 2020, we created distinct financial statement line items in our Unaudited Condensed Consolidated Financial Statements associated with the contingent component of our financial guarantee as follows: (i) financial guarantee expense in the Unaudited Condensed Consolidated Statements of Operations (previously presented within general and administrative expense); and (ii) financial guarantee losses as an adjustment to reconcile net income (loss) to net cash provided by operating activities in the Unaudited Condensed Consolidated Statements of Cash Flows (previously presented within the change in other liabilities). The classification of the financial guarantee expense for the three and six months ended June 30, 2019 of $1,696 thousand and $2,918 thousand, respectively, and the classification of the financial guarantee losses for the six months ended June 30, 2019 of $284 thousand were changed to conform to the current presentation. With our formation and use of the SPV, the magnitude of loan receivables held for sale has increased on our Unaudited Condensed Consolidated Balance Sheet. As a result, we have reclassified the presentation of certain items associated with the loan receivables held for sale that were previously presented as non-operating within the Unaudited Condensed Consolidated Statements of Operations; specifically, valuation allowance (inclusive of both credit and market interest rate considerations) for loan receivables held for sale, proceeds from transferring our rights to Charged-Off Receivables attributable to loan receivables held for sale, and interest income for loan receivables held for sale. The classification of such valuation allowance for the three and six months ended June 30, 2019 of $342 thousand and $783 thousand, respectively, and the classification of the proceeds from transferring our rights to Charged-Off Receivables for the three and six months ended June 30, 2019 of $50 thousand and $141 thousand, respectively, were changed from other gains (losses), net to sales, general and administrative expense within the Unaudited Condensed Consolidated Statement of Operations to conform to the current presentation. The classification of such interest income for the three and six months ended June 30, 2019 of $56 thousand and $755 thousand, respectively, was reclassified from interest and dividend income to interest and other revenue within the Unaudited Condensed Consolidated Statement of Operations to conform to the current presentation. Use of Estimates The preparation of our financial statements in conformity with GAAP requires that management make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Such estimates and assumptions include, but are not limited to, those that relate to fair value measurements, financial guarantees, share-based compensation and income taxes. In developing estimates and assumptions, management uses all available information; however, actual results could materially differ from those estimates and assumptions. Cash and Cash Equivalents and Restricted Cash Cash Equivalents We consider all highly liquid investments that mature three months or less from the date of purchase to be cash equivalents. Cash equivalents include money market mutual fund accounts, which are invested in government securities that are either guaranteed by the Federal Deposit Insurance Corporation of the U.S. government ("FDIC") or are secured by U.S. government-issued collateral for which the risk of loss from nonpayment is presumed to be zero. As such, we do not establish an allowance for credit losses on our cash equivalents. Further, the carrying amounts of our cash equivalents approximate their fair values due to their short maturities and highly liquid nature. Refer to "Recently Adopted Accounting Standards" in this Note 1 for discussion of our adoption of the provisions of Accounting Standards Update ("ASU") 2016-13, Measurement of Credit Losses on Financial Instruments ("ASU 2016-13") , effective January 1, 2020 and Note 3 for additional information on our fair value measurement. The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the Unaudited Condensed Consolidated Balance Sheets to the total included within the Unaudited Condensed Consolidated Statements of Cash Flows as of the dates indicated. June 30, 2020 2019 Cash and cash equivalents $ 147,560 $ 209,176 Restricted cash 289,844 200,252 Cash and cash equivalents and restricted cash in Unaudited Condensed Consolidated Statements of Cash Flows $ 437,404 $ 409,428 Accounts Receivable Accounts receivable are recorded at their original invoice amounts, which are reduced by any allowance for uncollectible amounts. Effective January 1, 2020, we adopted the provisions of ASU 2016-13, which requires upfront recognition of lifetime expected credit losses using a current expected credit loss model. In accordance with the standard, we pool our accounts receivable, all of which are short-term in nature and arise from contracts with customers, based on shared risk characteristics to assess their risk of loss, even when that risk is remote. We use the aging method to establish an allowance for expected credit losses on accounts receivable balances and consider whether current conditions or reasonable and supportable forecasts about future conditions warrant an adjustment to our historical loss experience. In applying such adjustments, we primarily consider changes in counterparty credit risk and changes in the underlying macroeconomic environment. Accounts receivable are written off once delinquency exceeds 90 days. Recoveries of previously written off accounts receivable are recognized on a collected basis as a reduction to the provision for credit losses, which is included within sales, general and administrative expense in the Unaudited Condensed Consolidated Statements of Operations. The allowance for uncollectible amounts for periods prior to January 1, 2020 continue to be presented and disclosed under legacy guidance in Accounting Standards Codification ("ASC") 310, Receivables . Refer to "Recently Adopted Accounting Standards" in this Note 1 for discussion of our adoption of the provisions of ASU 2016-13 and Note 5 for additional information on our accounts receivable. Fair Value of Assets and Liabilities We have financial assets and liabilities subject to fair value measurement or disclosure on either a recurring or nonrecurring basis. Such measurements or disclosures relate to our cash and cash equivalents, loan receivables held for sale, derivative instruments, servicing assets and liabilities, and term loan. ASC 820, Fair Value Measurement , defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In valuing this asset or liability, we utilize market data or reasonable assumptions that market participants would use, including assumptions about risk and the risks inherent in the inputs to the valuation technique. The guidance provides a three-level valuation hierarchy for disclosure of fair value measurements based on the transparency of inputs to the valuation of an asset or a liability as of the measurement date. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels are defined as follows: Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. Level 3: Unobservable inputs for the asset or liability. An asset’s or a liability’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. We apply the market approach, which uses observable prices and other relevant information that is generated by market transactions involving identical or comparable assets or liabilities, to value our cash and cash equivalents, purchase price discount/premium, loan receivables held for sale and term loan. We apply the income approach, which uses valuation techniques to convert future amounts to a single, discounted present value amount, to value our finance charge reversal ("FCR") liability and servicing assets and liabilities. We determine the fair value of our interest rate swap by applying a discounted cash flow model based on observable market factors and credit factors specific to us. Refer to Note 3 for additional fair value disclosures. Derivative Instruments We are exposed to interest rate risk on our variable-rate term loan, which we manage by entering into an interest rate swap that is determined to be a derivative in accordance with ASC 815, Derivatives and Hedging . Derivatives are recorded on the balance sheet at fair value and are marked-to-market on a quarterly basis. The accounting for the change in fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate the derivative as a hedge and apply hedge accounting, and whether the hedging relationship continues to satisfy the criteria required to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to variability in cash flows of a recognized asset or liability that is attributable to a particular risk are considered cash flow hedges. The primary purpose of cash flow hedge accounting is to link the income statement recognition of a hedging instrument and a hedged item whose changes in cash flows are expected to offset each other. The change in the fair value of the derivative instrument designated as a cash flow hedge is initially reported as a component of other comprehensive income (loss) and subsequently reclassified into earnings in the same period when the hedged item affects earnings. The reclassification into earnings is reported in the same income statement line item in which the hedged item is reported. The FCR component of our Bank Partner contracts, which arrangements are detailed in Note 3, qualifies as an embedded derivative. The FCR liability is not designated as a hedge for accounting purposes and, as such, changes in its fair value are recorded within cost of revenue in the Unaudited Condensed Consolidated Statements of Operations. The Purchase Price Discount/Premium component of the series of agreements (collectively, the "Facility Bank Partner Agreements") governing the participation sales with Synovus Bank, an existing Bank Partner, which is detailed in Note 3, qualifies as an embedded derivative. The Purchase Price Discount/Premium is not designated as a hedge for accounting purposes and, as such, changes in its fair value are recorded within cost of revenue in the Unaudited Condensed Consolidated Statements of Operations. Refer to Note 8 for additional derivative disclosures. Financial Guarantees Under the terms of the contracts with our Bank Partners, we provide limited protection to the Bank Partners in the event of excess Bank Partner portfolio credit losses by holding cash in restricted, interest-bearing escrow accounts in an amount equal to a contractual percentage of the Bank Partners’ monthly originations and month-end outstanding portfolio balance. Our maximum exposure to Bank Partner portfolio credit losses is contractually limited to the escrow that we establish with each Bank Partner. Cash set aside to meet this requirement is classified as restricted cash in our Unaudited Condensed Consolidated Balance Sheets. Our contracts with our Bank Partners entitle us to incentive payments when the finance charges billed to borrowers exceed the sum of an agreed-upon portfolio yield, a fixed servicing fee and realized credit losses. This incentive payment varies from month to month, primarily due to the amount of realized credit losses. If credit losses exceed an agreed-upon threshold, we are obligated to make limited payments to our Bank Partners, which obligation represents a financial guarantee in accordance with ASC 460, Guarantees . Under ASC 460, the guarantor undertakes a noncontingent obligation to stand ready to perform over the term of the guarantee and a contingent obligation to make future payments if the triggering events or conditions under the guarantee arrangements occur. Effective January 1, 2020, we adopted the provisions of ASU 2016-13, which apply only to the contingent aspect of the guarantee arrangement. Under the new standard, we are required to estimate the expected credit losses over the contractual period in which we are exposed to credit risk via a present contractual obligation to extend credit, unless that obligation is unconditionally cancellable by the issuer. As applied to our financial guarantee arrangements, we are required to estimate expected credit losses, and the impact of those estimates on our potential escrow payments, for loans within our Bank Partner portfolios that are either funded or approved for funding at the measurement date, but are precluded from including future loan originations by our Bank Partners. Consistent with the modeling of loan losses for any consumer loan portfolio assumed to go into "run-off," our recognized financial guarantee liability under this model represents a significant portion of the contractual escrow that we establish with each Bank Partner. Typically, additional financial guarantee liabilities are recorded as new Bank Partner loans are facilitated, along with a corresponding non-cash charge recorded as financial guarantee expense in the Unaudited Condensed Consolidated Statements of Operations. Historically, our actual cash payments required under the financial guarantee arrangements have been immaterial for our ongoing Bank Partners. As the terms of our guarantee arrangements are determined contractually with each Bank Partner, we measure our contingent obligation separately for each Bank Partner using a discounted cash flow method based on estimates of the outstanding loan attributes of the Bank Partner's loan servicing portfolio and our expectations of forecasted information, including macroeconomic conditions, over the period which our financial guarantee is expected to be used in a "run-off" scenario. We use our historical experience as a basis for estimating escrow usage and adjust for current conditions or forecasts of future conditions if they are determined to vary from our historical experience. Refer to "Recently Adopted Accounting Standards" in this Note 1 for discussion of our adoption of the provisions of ASU 2016-13 and Note 14 for additional information on our financial guarantees. For periods prior to January 1, 2020, the contingent aspect of the financial guarantee continues to be presented and disclosed in accordance with legacy guidance in ASC 450, Contingencies . Under this guidance, the contingent aspect of the financial guarantee represented the amount of payments to Bank Partners from the escrow accounts that we expected to be probable of occurring based on Bank Partner portfolio composition and our near-term expectation of credit losses. In estimating the obligation, we considered a variety of factors, including historical experience, management’s expectations of current customer delinquencies converting into Bank Partner portfolio credit losses and recent events and circumstances. Revenue Recognition Disaggregated revenue Revenue disaggregated by type of service was as follows for the periods presented: Three Months Ended Six Months Ended 2020 2019 2020 2019 Merchant fees $ 93,707 $ 96,127 $ 175,122 $ 170,221 Interchange fees 8,070 12,238 16,539 22,192 Transaction fees 101,777 108,365 191,661 192,413 Servicing fees (1) 28,481 30,318 59,764 49,951 Interest income (2) 2,702 57 3,389 755 Other (3) 2 12 5 31 Interest and other 2,704 69 3,394 786 Total revenue $ 132,962 $ 138,752 $ 254,819 $ 243,150 (1) For the three months ended June 30, 2020, includes a $1,048 thousand decrease in fair value of our servicing asset primarily due to the sale of participations in loans from an existing Bank Partner to the SPV. For the six months ended June 30, 2020, includes a $741 thousand increase in fair value of our servicing asset primarily associated with the growth in Bank Partner loan servicing portfolios. For the three and six months ended June 30, 2019, includes a $8,966 thousand change in fair value of our servicing assets. Refer to Note 3 for additional information. (2) Includes interest income received on loan receivables held for sale. (3) Other revenue includes miscellaneous revenue items that are individually immaterial. Other revenue is presented separately herein in order to clearly present merchant, interchange fees, servicing fees, and interest income which are more integral to our primary operations and better enable financial statement users to calculate metrics such as servicing and merchant fee yields. We have no remaining performance obligations as of June 30, 2020. No assets were recognized from the costs to obtain or fulfill a contract with a customer as of June 30, 2020 and December 31, 2019. V olume-based price concessions to merchants and Sponsors that were netted against the gross transaction price were $3,002 thousand and $3,198 thousand for the three months ended June 30, 2020 and 2019, respectively, and $8,031 thousand and $9,106 thousand for the six months ended June 30, 2020 and 2019, respectively. "Sponsors" refers to manufacturers, their captive and franchised showroom operations, and trade associations with which we partner to onboard merchants. We recognized credit losses arising from our contracts with customers of $201 thousand and $387 thousand during the three months ended June 30, 2020 and 2019, respectively, and $378 thousand and $596 thousand during the six months ended June 30, 2020 and 2019, respectively, which is recorded within sales, general and administrative expense in our Unaudited Condensed Consolidated Statements of Operations. Recently Adopted Accounting Standards Measurement of credit losses on financial instruments In June 2016, the FASB issued ASU 2016-13, which requires upfront recognition of lifetime expected credit losses on certain financial instruments (or groups of financial instruments) using a current expected credit loss ("CECL") model. The standard is intended to better align the recognition of credit losses on financial instruments with management’s expectations of the net amount of principal balance expected to be collected on such financial instruments. Under CECL, management must determine expected credit losses for certain financial instruments held at the reporting date based on relevant information about past events, including historical experience, current conditions and reasonable and supportable forecasts. We adopted the standard as of January 1, 2020. Comparative periods continue to be presented and disclosed in accordance with applicable legacy guidance. Our primary financial instruments in the scope of CECL include cash equivalents, accounts receivable and off-balance sheet credit exposures under our financial guarantee arrangements with our Bank Partners, each of which is discussed in further detail below (as it relates to our implementation of the new standard) and within the respective sub-headings under "Summary of Significant Accounting Policies" in this Note 1. Cash Equivalents As our cash equivalents are invested in government securities that are either guaranteed by the FDIC or are secured by U.S. government-issued collateral, the risk of loss from nonpayment is presumed to be zero. As such, we did not establish an allowance for credit losses on our cash equivalents upon our adoption of the standard. Accounts Receivable We pool our accounts receivable, all of which are short-term in nature and arise from contracts with customers, based on shared risk characteristics to assess their risk of loss, even when that risk is remote. Historically, the majority of our accounts receivable did not have write-offs. For accounts receivables for which we historically experienced losses, we used an aging method and the average 12-month historical loss rate as a basis for estimating credit losses on the current accounts receivable balance. In the absence of relevant historical loss experience for the other pools of accounts receivables, we also used this average 12-month loss rate to inform our estimate of credit losses on those balances. For each pool of accounts receivable, we considered the conditions at the adoption date, such as the manner in which we collect funds, our counterparty credit risk and the underlying macroeconomic environment, and determined that the current conditions were comparable to our historical conditions. Further, given that we establish an allowance for all delinquent accounts receivable (typically deemed to be 31 days or more past due), providing for a maximum 30-day term of our accounts receivable balances, we determined that the forecasts about future conditions were also comparable to our historical conditions. As such, we did not adjust our historical loss rates at the adoption date and we continue to establish an allowance for a portion of current accounts receivable and all delinquent accounts receivable. Based on this methodology, we determined that the allowance for uncollectible accounts measured under the new standard at the adoption date for our pools of accounts receivable for which no history of losses existed was immaterial to our consolidated financial statements. Additionally, we determined that there was no impact from our adoption of the standard on the allowance for uncollectible accounts for our accounts receivable for which we historically experienced losses. Therefore, our adoption of the standard on January 1, 2020 did not have any impact on our consolidated financial statements. Refer to Note 5 for additional information on our accounts receivable. Financial Guarantees We are required to estimate expected credit losses, and the impact of those estimates on our potential escrow payments, for loans within our Bank Partner portfolios that are either funded or approved for funding at the measurement date, but are precluded from including future loan originations by our Bank Partners. We used a discounted cash flow method to estimate our expected risk of loss under the contingent aspect of our financial guarantees for each Bank Partner. In determining this measure, we forecasted each Bank Partner's loan portfolio composition in a "run-off" scenario, which is primarily impacted by assumptions around prepayments and loan pay downs. Our prepayment and loan pay down assumptions were derived from historical behavior curves for each loan plan and were applied to each Bank Partner's portfolio based on its composition of loans and where such loans were in their economic life cycle. The loan portfolio composition additionally informs our forecasts of the components that determine our incentive payments or, alternatively, escrow usage. Further, we use lifetime historical credit loss experience for each loan plan as a basis for estimating future credit losses. While there have subsequently been significant changes in macroeconomic conditions, as of our January 1, 2020 adoption date, we determined that the macroeconomic conditions representing the largest potential indicators of changes in credit losses, particularly the unemployment rate, were comparable to our historical conditions. Further, as our forecast period for escrow usage in a "run-off" scenario is typically relatively short-term in nature, we determined that the forecasts about future conditions were also comparable to our historical conditions. As such, we did not adjust our historical credit loss rates at the adoption date for our financial guarantee arrangements. As a result of adopting this standard, we recorded an additional financial guarantee liability of $118.0 million and a corresponding cumulative-effect adjustment to equity at the adoption date, including $32.2 million to retained earnings, net of the impact of a $10.4 million increase in deferred tax assets, and $75.4 million to noncontrolling interest. Our recognized financial guarantee liability subsequent to our adoption of the new standard of $134.7 million represented a significant portion of our $150.4 million contractual escrow that was included in our restricted cash balance as of December 31, 2019. Historically, our actual cash payments required under the financial guarantee arrangements have been immaterial for our ongoing Bank Partners. Refer to Note 14 for additional information on our financial guarantees. Customer's accounting for implementation costs incurred in a cloud computing arrangement that is a service contract In August 2018, the FASB issued ASU 2018-15, which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). Accordingly, costs for implementation activities in the application development stage are capitalized depending on the nature of the costs, while costs incurred during the preliminary project and post-implementation stages are expensed as the activities are performed. This standard also requires entities to amortize the capitalized implementation costs of a hosting arrangement that is a service contract over the term of the hosting arrangement and to apply the existing impairment guidance in ASC 350-40, Internal-Use Software , to the capitalized implementation costs as if the costs were long-lived assets. The standard clarifies that such capitalized implementation costs are also subject to the guidance on abandonment in ASC 360, Property, Plant, and Equipment . In addition, this standard requires alignment in presentation between: (i) the expense related to the capitalized implementation costs and the fees associated with the hosting element (service) of the arrangement on the statement of operations, (ii) the capitalized implementation costs and any prepayment for the fees of the associated hosting arrangement on the balance sheet, and (iii) the payments for capitalized implementation costs and the payments made for fees associated with the hosting element in the statement of cash flows. We elected to apply the standard prospect |
Earnings per Share
Earnings per Share | 6 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Earnings per ShareBasic earnings per share of Class A common stock is computed by dividing net income attributable to GreenSky, Inc. by the weighted average number of shares of Class A common stock outstanding during the period. Diluted earnings per share of Class A common stock is computed by dividing net income attributable to GreenSky, Inc., adjusted for the assumed exchange of all potentially dilutive Holdco Units for Class A common stock, by the weighted average number of shares of Class A common stock outstanding adjusted to give effect to potentially dilutive elements. The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted earnings per share of Class A common stock for the periods indicated. Three Months Ended Six Months Ended 2020 2019 2020 2019 Numerator: Income before income tax expense (benefit) $ 14,852 $ 34,727 $ 3,038 $ 41,533 Less: Net income attributable to noncontrolling interests 9,222 26,877 1,637 31,379 Less: Income tax expense (benefit) 1,497 (4,466) 602 (5,061) Net income attributable to GreenSky, Inc. – basic $ 4,133 $ 12,316 $ 799 $ 15,215 Add: Reallocation of net income attributable to noncontrolling interests from the assumed exchange of Holdco Units for Class A common stock 9,222 26,877 1,637 31,379 Less: Income tax expense on reallocation of net income attributable to noncontrolling interests (1) 2,160 5,928 578 4,561 Net income attributable to GreenSky, Inc. – diluted $ 11,195 $ 33,265 $ 1,858 $ 42,033 Denominator: Weighted average shares of Class A common stock outstanding – basic 65,150,317 61,081,834 64,400,507 59,523,049 Add: Dilutive effects, as shown separately below Holdco Units exchangeable for Class A common stock 111,429,933 115,939,261 112,075,383 119,405,831 Class A common stock options 341,485 2,435,080 404,874 2,677,026 Holdco warrants exchangeable for Class A common stock — — — 164,016 Unvested Class A common stock (2) 263,970 243,746 375,402 185,371 Weighted average shares of Class A common stock outstanding – diluted 177,185,705 179,699,921 177,256,166 181,955,293 Earnings per share of Class A common stock outstanding – basic $ 0.06 $ 0.20 $ 0.01 $ 0.26 Earnings per share of Class A common stock outstanding – diluted $ 0.06 $ 0.19 $ 0.01 $ 0.23 Excluded from diluted earnings per share, as their inclusion would have been anti-dilutive (3) Holdco Units 580,429 — 580,429 — Class A common stock options 4,202,378 2,806,641 4,202,378 2,806,641 Class A common stock awards 2,330,863 360,847 2,330,863 360,847 (1) We assumed effective tax rates of 24.6% and 4.2% for the three months ended June 30, 2020 and 2019, respectively, and 38.8% and (1.2)% for the six months ended June 30, 2020 and 2019, respectively, which represents the effective tax rates on the consolidated GreenSky, Inc. entity inclusive of the income taxes on the portion of GS Holdings' earnings that are attributable to noncontrolling interests. (2) Includes both unvested Class A common stock issued as part of the Reorganization Transactions and unvested Class A common stock awards issued subsequent to the Reorganization Transactions. (3) These amounts represent the number of instruments outstanding at the end of the period. Application of the treasury stock method would reduce these amounts if they had a dilutive effect and were included in the computation of diluted earnings per share. Shares of the Company’s Class B common stock do not participate in the earnings or losses of the Company and, therefore, are not participating securities. As such, separate presentation of basic and diluted earnings (loss) per share of Class B common stock under the two-class method has not been included. |
Fair Value of Assets and Liabil
Fair Value of Assets and Liabilities | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Assets and Liabilities | Fair Value of Assets and Liabilities The following table summarizes, by level within the fair value hierarchy, the carrying amounts and estimated fair values of our assets and liabilities measured at fair value on a recurring or nonrecurring basis or disclosed, but not carried, at fair value in the Unaudited Condensed Consolidated Balance Sheets as of the dates presented. There were no transfers into, out of, or between levels within the fair value hierarchy during any of the periods presented. Refer to Note 4, Note 7, Note 8 and Note 9 for additional information on these assets and liabilities. Level June 30, 2020 December 31, 2019 Carrying Fair Carrying Fair Assets: Cash and cash equivalents (1) 1 $ 147,560 $ 147,560 $ 195,760 $ 195,760 Loan receivables held for sale, net (2) 2 410,952 414,040 51,926 55,958 Servicing assets (3) 3 31,200 31,200 30,459 30,459 Liabilities: Finance charge reversal liability (3) 3 $ 198,755 $ 198,755 $ 206,035 $ 206,035 Term loan (1) 1 453,879 446,800 384,497 392,201 Interest rate swap (3) 2 16,450 16,450 2,763 2,763 Servicing liabilities (3) 3 2,799 2,799 3,796 3,796 (1) Disclosed, but not carried, at fair value. The increase in fair value of the term loan at June 30, 2020 compared to December 31, 2019 is primarily a result of the incremental term loan of $75.0 million entered into in June 2020, offset by a decrease related to COVID-19 impacts on the U.S. corporate debt market. Refer to Note 7 for additional details. (2) Measured at fair value on a nonrecurring basis. Loan receivables held for sale are recorded net of provision for credit losses. (3) Measured and carried at fair value on a recurring basis. Cash and cash equivalents Cash and cash equivalents are classified within Level 1 of the fair value hierarchy, as the primary component of the price is obtained from quoted market prices in an active market. The carrying amounts of our cash and cash equivalents approximate their fair values due to the short maturities and highly liquid nature of these accounts. Loan receivables held for sale, net Loan receivables held for sale are recorded in the Unaudited Condensed Consolidated Balance Sheets at the lower of cost or fair value and, therefore, are measured at fair value on a nonrecurring basis. For our loan receivables held for sale, fair value has historically approximated par value, as we have consistently sold loans for the full current balance in historical and current period transactions with our Bank Partners. For loan receivables held for sale outside of the Facility Bank Partner Agreements, fair value will continue to approximate par as they are intended for future sale to Bank Partners. However, the loan receivables held for sale pursuant to the Facility Bank Partner Agreements are expected to be sold to institutional investors, financial institutions and other capital markets investors. During the second quarter, sales to these institutional markets experienced price declines driven by the volatility and illiquidity of the asset backed market during the second quarter, the market's uncertainty about future credit performance of consumer loans due to uncertainty about future economic conditions as a result of the COVID-19 Pandemic, as well as the promotional nature of certain loan participations owned by the SPV. Loan receivables held for sale are classified within Level 2 of the fair value hierarchy, as the primary component of the price is obtained from observable values of loan receivables with similar terms and characteristics. Interest rate swap In June 2019, we entered into a $350.0 million notional, four-year interest rate swap agreement to hedge changes in our cash flows attributable to interest rate risk on $350.0 million of our variable-rate term loan to a fixed-rate basis, thus reducing the impact of interest rate changes on future interest expense. This swap involves the receipt of variable-rate amounts in exchange for fixed interest rate payments over the life of the agreement without an exchange of the underlying notional amount and was designated for accounting purposes as a cash flow hedge. The interest rate swap is carried at fair value on a recurring basis in the Unaudited Condensed Consolidated Balance Sheets and is classified within Level 2 of the fair value hierarchy, as the inputs to the derivative pricing model are generally observable and do not contain a high level of subjectivity. The fair value was determined based on the present value of the estimated future net cash flows using implied rates in the applicable yield curve as of the valuation date. Finance charge reversal liability Our Bank Partners offer certain loan products that have a feature whereby the account holder is provided a promotional period to repay the loan principal balance in full without incurring a finance charge. For these loan products, we bill interest each month throughout the promotional period and, under the terms of the contracts with our Bank Partners, we are obligated to pay this billed interest to the Bank Partners if an account holder repays the loan balance in full within the promotional period. Therefore, the monthly process of billing interest on deferred loan products triggers a potential future finance charge reversal ("FCR") liability for the Company. The FCR component of our Bank Partner contracts qualifies as an embedded derivative. The FCR liability is not designated as a hedge for accounting purposes and, as such, changes in its fair value are recorded within cost of revenue in the Unaudited Condensed Consolidated Statements of Operations. The FCR liability is carried at fair value on a recurring basis in the Unaudited Condensed Consolidated Balance Sheets and is estimated based on historical experience and management’s expectation of future FCR. The FCR liability is classified within Level 3 of the fair value hierarchy, as the primary component of the fair value is obtained from unobservable inputs based on the Company’s data, reasonably adjusted for assumptions that would be used by market participants. The following table reconciles the beginning and ending fair value measurements of our FCR liability during the periods indicated. Three Months Ended Six Months Ended 2020 2019 2020 2019 Beginning balance $ 213,158 $ 149,598 $ 206,035 $ 138,589 Receipts (1) 59,600 38,931 104,308 71,054 Settlements (2) (110,053) (62,332) (200,142) (122,211) Fair value changes recognized in cost of revenue (3) 36,050 38,782 88,554 77,547 Ending balance $ 198,755 $ 164,979 $ 198,755 $ 164,979 (1) Includes: (i) incentive payments from Bank Partners, which is the surplus of finance charges billed to borrowers over an agreed-upon portfolio yield, a fixed servicing fee and realized net credit losses, (ii) cash received from recoveries on previously charged-off Bank Partner loans, and (iii) the proceeds received from transferring our rights to Charged-Off Receivables attributable to previously charged-off Bank Partner loans. We consider all monthly incentive payments from Bank Partners during the period to be related to billed finance charges on deferred interest products until monthly incentive payments exceed total billed finance charges on deferred products, which did not occur during the periods presented. (2) Represents the reversal of previously billed finance charges associated with deferred payment loan principal balances that were repaid within the promotional period. Amount also includes $20.0 million of billed finance charges not yet collected on participations in loans held by the SPV, which were paid to the Bank Partner in full as of the participation purchase dates. (3) A fair value adjustment is made based on the expected reversal percentage of billed finance charges (expected settlements), which is estimated at each reporting date. The fair value adjustment is recognized in cost of revenue in the Unaudited Condensed Consolidated Statements of Operations. Significant assumptions used in valuing our FCR liability include the following: Reversal rate : The reversal rate represents our estimate of the percentage of previously billed interest on deferred loan products that we expect we will be obligated to remit to the Bank Partners due to the account holder paying off the loan balance in full within the promotional period. Management has developed more specific reversal rates for categories of deferred loan products based on the length of the interest-free promotional period (ranging from six Discount rate : The discount rate reflects the time value of money adjusted for a risk premium and decreased from December 31, 2019 primarily due to the decreased interest rate environment in response to the COVID-19 pandemic. The following table presents quantitative information about the significant unobservable inputs used to value the Level 3 FCR liability as of the dates presented. June 30, 2020 December 31, 2019 Range Weighted Average Range Weighted Average Reversal rate 62.0% – 95.5% 87.0 % 60.0 – 96.8% 87.5 % Discount rate 3.6 % 3.6 % 5.2 % 5.2 % The reversal rate weighted averages were calculated by first determining the percentage of the reporting date FCR liability attributable to each category of deferred loan products for which a reversal rate assumption was determined. We then multiplied these weights by the unique reversal rate for each category and summed the resulting products. A significant increase or decrease in the estimated reversal rates could result in a significantly higher or lower, respectively, calculation of our expected future payments to our Bank Partners, resulting in a higher or lower, respectively, fair value measurement of our FCR liability. A significant increase or decrease in the discount rate could result in a lower or higher, respectively, fair value measurement of our FCR liability. Charged-Off Receivables Historically, we have periodically transferred our rights to previously charged-off loan receivables ("Charged-Off Receivables") in exchange for a cash payment based on the expected recovery rate of such loan receivables, which consist primarily of previously charged-off Bank Partner loans. We have no continuing involvement with these Charged-Off Receivables other than performing reasonable servicing and collection efforts on behalf of the third parties and Bank Partners that purchased the Charged-Off Receivables. The proceeds from transfers of Charged-Off Receivables attributable to Bank Partner loans are recognized on a collected basis as reductions to cost of revenue, which reduces the fair value adjustment to the FCR liability in the period of transfer. The proceeds from transfers of Charged-Off Receivables attributable to loan receivables held for sale are recognized on a collected basis as reductions to sales, general and administrative expense, which reduces the valuation allowance for loan receivables held for sale. There were no transfers of Charged-Off Receivables during the six months ended June 30, 2020. As such, we retain the rights to Charged-Off Receivables and recognize recoveries on a collected basis each period. The following table presents details of Charged-Off Receivables transfers during the three and six months ended June 30, 2019. Aggregate Unpaid Balance Proceeds Bank Partner Loan Total Bank Partner Loan Total Three Months Ended June 30, 2019 $ 53,585 $ 360 $ 53,945 $ 7,427 $ 50 $ 7,477 Six Months Ended June 30, 2019 107,237 1,027 108,264 14,782 141 14,923 During the three months ended June 30, 2020 and 2019, $5,350 thousand and $5,495 thousand, respectively, of the aggregate unpaid balance on cumulative transferred Charged-Off Receivables was recovered through our servicing efforts on behalf of our Charged-Off Receivables investors. During the six months ended June 30, 2020 and 2019, such recoveries on behalf of our Charged-Off Receivables investors were $11,212 thousand and $10,655 thousand, respectively. Term loan The carrying value of our term loan is net of unamortized debt discount and debt issuance costs. The fair value of our term loan is classified within Level 1 of the fair value hierarchy, as the primary component of the price is obtained from quoted market prices in an active market. Servicing assets and liabilities We previously elected the fair value method to account for our servicing assets and liabilities to more appropriately reflect the value of the servicing rights in our Unaudited Condensed Consolidated Financial Statements. As a result of this election, our servicing assets and liabilities are carried at fair value on a recurring basis within other assets and other liabilities, respectively, in the Unaudited Condensed Consolidated Balance Sheets and are estimated using a discounted cash flow model. Servicing assets and liabilities are classified within Level 3 of the fair value hierarchy, as the primary components of the fair values are obtained from unobservable inputs based on peer market data, reasonably adjusted for assumptions that would be used by market participants to service our Bank Partner loans and transferred Charged-Off Receivables portfolios, for which market data is not available. Changes in the fair value of our servicing assets are recorded within servicing and other revenue and changes in the fair value of our servicing liabilities are recorded within other gains (losses), net in the Unaudited Condensed Consolidated Statements of Operations. Contractually specified servicing fees recorded within servicing revenue in the Unaudited Condensed Consolidated Statements of Operations totaled $29,529 thousand and $21,352 thousand for the three months ended June 30, 2020 and 2019, respectively, and $59,023 thousand and $40,985 thousand for the six months ended June 30, 2020 and 2019, respectively. The cash flow impacts of our assets and liabilities that are measured at fair value on a recurring basis are included within net cash provided by operating activities in the Unaudited Condensed Consolidated Statements of Cash Flows. In the second half of 2019, we renegotiated certain Bank Partner agreements where the Company agreed to post additional escrow and increase the agreed-upon Bank Partner portfolio yield. In exchange for these considerations, we received an increase in our loan servicing fees from the Bank Partners. We determined that the increase in servicing fees resulted in an increase to the fair value of our servicing assets for these Bank Partners. We also anticipate that, all other factors remaining constant, these increased servicing fees will contribute to lower incentive payments received in future periods from the Bank Partners. The following table reconciles the beginning and ending fair value measurements of our servicing assets associated with Bank Partner loans during the period presented. Three Months Ended Six Months Ended 2020 2019 2020 2019 Beginning balance $ 32,248 $ — $ 30,459 $ — Additions, net (1) (114) — 1,984 — Fair value changes recognized in servicing revenue (2) (934) 8,966 (1,243) 8,966 Ending balance $ 31,200 $ 8,966 $ 31,200 $ 8,966 (1) For the three and six months ended June 30, 2020, includes additions through assumptions of servicing obligations each time a loan is originated on our platform by a Bank Partner, as well as through transfers of loan receivables between Bank Partners or of loan receivables between GreenSky and Bank Partners and is net of the impact of loan principal pay downs in the Bank Partner portfolios. Additions are recognized in servicing revenue in the Unaudited Condensed Consolidated Statements of Operations. (2) For the three and six months ended June 30, 2020, primarily reflects the reduction of our servicing assets due to the passage of time and impact of purchases of participations in loans by the SPV. For the three and six months ended June 30, 2019, primarily reflective of an increase to the contractually specified fixed servicing fee for one of our Bank Partners. The following table reconciles the beginning and ending fair value measurements of our servicing liabilities associated with transferring our rights to Charged-Off Receivables during the periods presented. Three Months Ended Six Months Ended 2020 2019 2020 2019 Beginning balance $ 3,279 $ 3,197 $ 3,796 $ 3,016 Initial obligation from transfer of Charged-Off Receivables (1) — 647 — 1,298 Fair value changes recognized in other gains (losses), net (2) (480) (497) (997) (967) Ending balance $ 2,799 $ 3,347 $ 2,799 $ 3,347 (1) Recognized in other gains (losses), net in the Unaudited Condensed Consolidated Statements of Operations. (2) Represents the reduction of our servicing liabilities due to the passage of time and collection of loan payments. Significant assumptions used in valuing our servicing assets and liabilities include the following: Cost of servicing: The cost of servicing represents the servicing rate a willing market participant would require to service loans with similar characteristics as the Bank Partner loans or Charged-Off Receivables. The cost of servicing is weighted based on the outstanding balance of the loans. Discount rate: The discount rate reflects the time value of money adjusted for a risk premium and is within an observable range based on peer market data. Weighted average remaining life: For Bank Partner loans, the weighted average remaining life is determined using the aggregate curves for each loan product type based on expected cumulative annualized rates of prepayments and defaults. Recovery period: For Charged-Off Receivables, our recovery period is determined based on a reasonable recovery period for loans of these sizes and characteristics based on historical experience. We assume that collection efforts for these loans will cease after five years, and the run-off of the portfolio will follow a straight-line methodology, adjusted for actual cash recoveries over time. The following table presents quantitative information about the significant unobservable inputs used to value the Level 3 servicing assets and liabilities as of the dates presented. Input June 30, 2020 December 31, 2019 Range Weighted Average Range Weighted Average Cost of servicing (basis points) 57.5 – 108.0 106.4 57.5 – 108.0 106.2 Discount rate 18.0 % 18.0 % 18.0 % 18.0 % Weighted average remaining life (years) 2.4 – 5.9 2.4 2.3 – 5.9 2.4 Recovery period (years) 2.1 - 4.4 3.6 2.6 – 4.9 4.1 A significant increase or decrease in the market cost of servicing could have resulted in significantly lower or higher, respectively, servicing assets and higher or lower, respectively, servicing liabilities as of the measurement date. A significant increase or decrease in the discount rate could have resulted in lower or higher, respectively, servicing assets and liabilities as of the measurement date. However, as our weighted average remaining life of loans is relatively short, we would not expect significant changes in the discount rate to materially impact the fair value measure. The average remaining life is weighted by the unpaid balance of the Bank Partner loans as of the measurement date. The weighted average remaining life represents the period over which we expect to collect servicing fees on the Bank Partner loans and primarily changes based on expectations of loan prepayments and defaults. The change in expected prepayments and defaults has an inverse correlation with the weighted average remaining life. A significant increase or decrease in the expected weighted average remaining life could have resulted in significantly higher or lower servicing assets as of the measurement date. The recovery period is weighted by the unpaid balance of previously transferred Charged-Off Receivables as of the measurement date. The recovery period reflects the length of time over which we expect to perform servicing activities and has an inverse correlation with the amount by which the servicing liability is reduced each reporting period. As such, a significant increase or decrease in the expected recovery period could have resulted in higher or lower, respectively, servicing liabilities. Purchase Price Discount/Premium The Company has agreed to facilitate sales of loan participations by Synovus Bank to third parties (including sales to the Company or its affiliates, including the SPV) by funding a shortfall in purchase price commitment below par (purchase price discount) at the time of origination or receiving any purchase price in excess of par (purchase price premium) associated with a sale by a release of excess escrow funds, if any. Any purchase price discount will be funded through an escrow account established and maintained by the Company and will net settle with any contemporaneous purchase price premiums upon sale of the loan participations. The Company expects to issue to Synovus commitments to purchase loan participations from time to time, which commitments will be made at par and valued based on the fair value of the loans subject to the purchase commitment. The purchase price discount/premium and the purchase commitments qualify as embedded derivatives. The purchase price discount/premium and the purchase commitments are not designated as hedges for accounting purposes and, as such, changes in their respective fair value are recorded within cost of revenue in the Unaudited Condensed Consolidated Statements of Operations. There were no loans subject to a purchase commitment as of June 30, 2020. |
Loan Receivables Held for Sale
Loan Receivables Held for Sale | 6 Months Ended |
Jun. 30, 2020 | |
Receivables [Abstract] | |
Loan Receivables Held for Sale | Loan Receivables Held for Sale The following table summarizes the activity in the balance of loan receivables held for sale, net at lower of cost or fair value during the periods indicated. Six Months Ended 2020 2019 Beginning balance $ 51,926 $ 2,876 Additions (1) 441,558 65,804 Proceeds from sales and borrower payments (2) (67,238) (66,714) Decrease (increase) in valuation allowance (3) (11,194) 175 Transfers (4) (93) 1,590 Write offs and other (5) (4,007) (933) Ending balance $ 410,952 $ 2,798 (1) Includes purchase of $431.0 million participations in loans by the SPV. (2) Includes accrued interest and fees, recoveries of previously charged-off loan receivables held for sale, as well as proceeds from transferring our rights to Charged-Off Receivables attributable to loan receivables held for sale. We retain servicing arrangements on sold loan receivables with the same terms and conditions as loans that are originated by our Bank Partners. Income from loan receivables held for sale activities is recorded within interest and other revenue in the Unaudited Condensed Consolidated Statements of Operations. We sold loan receivables held for sale to certain Bank Partners at par on the following dates during the six months ended June 30, 2020 and 2019: 2020 2019 Date Amount Date Amount January 28 $ 24,071 March 27 $ 63,673 May 27 15,945 Total $ 40,016 $ 63,673 (3) Valuation allowance includes an increase in lower of cost or market fair value adjustments on our SPV Participations of $10,072 thousand and $0 during the six months ended June 30, 2020 and 2019, respectively, and an increase in provision for credit losses of $1,122 thousand during the six months ended June 30, 2020 and a decrease in provision for credit losses of $175 thousand during the six months ended June 30, 2019. (4) We temporarily hold certain loan receivables, which are originated by a Bank Partner, while non-originating Bank Partner eligibility is being determined. Once we determine that a loan receivable meets the investment requirements of an eligible Bank Partner, we transfer the loan receivable to the Bank Partner at cost plus any accrued interest. The reported amount also includes loan receivables that have been placed on non-accrual and non-payment status while we investigate consumer inquiries. (5) We received recovery payments of $159 thousand and $25 thousand during the six months ended June 30, 2020 and 2019, respectively. Recoveries of principal and finance charges and fees on previously written off loan receivables held for sale are recognized on a collected basis. Separately, during the six months ended June 30, 2020 and 2019, write offs and other were reduced by $0 and $141 thousand, respectively, related to cash proceeds received from transferring our rights to Charged-Off Receivables attributable to loan receivables held for sale. The cash proceeds received were recorded within sales, general and administrative expense in the Unaudited Condensed Consolidated Statements of Operations. The following table presents activities associated with our loan receivable sales and servicing activities during the periods indicated. There were no gains or losses on sold loan receivables held for sale during the periods presented. Three Months Ended Six Months Ended 2020 2019 2020 2019 Cash Flows Sales of loans $ 15,945 $ — $ 40,016 $ 63,673 Servicing fees 3,571 1,050 4,811 1,736 The following tables present information about sold loan receivables held for sale that are not recorded in our Unaudited Condensed Consolidated Balance Sheets, but with which we have a continuing involvement through our servicing arrangements with our Bank Partners. The sold loan receivables held for sale are pooled with other loans originated by the Bank Partners for purposes of determining escrow balances and incentive payments. The escrow balances represent our only direct exposure to potential losses associated with these sold loan receivables. June 30, 2020 December 31, 2019 Total principal balance $ 303,079 $ 326,556 Delinquent loans (unpaid principal balance) 10,078 18,033 Three Months Ended Six Months Ended 2020 2019 2020 2019 Net charge-offs (unpaid principal balance) $ 2,294 $ 4,407 $ 6,250 $ 8,207 As of June 30, 2020, our allowance for losses on accounts receivable was measured under ASC 326. Historically, the majority of our pools of accounts receivable did not have write-offs. For the pool of accounts receivable for which we had historical write-offs, we used an aging method and the average 12-month historical loss rate as a basis for estimating credit losses on the current accounts receivable balance. In the absence of relevant historical loss experience for the other pools of accounts receivables, we also used this average 12-month loss rate to inform our estimate of credit losses on those balances. For each pool of accounts receivable, we considered the conditions at the measurement date and reasonable and supportable forecasts about future conditions to consider if adjustments to the historical loss rate were warranted. Given our methods of collecting funds on merchant and servicing receivables, that we have not observed meaningful changes in our counterparties' abilities to pay, and that we establish an allowance for all delinquent accounts receivable (typically deemed to be 31 days or more past due), providing for a maximum 30-day term of our accounts receivable balances, we determined that our historical loss rates remain most indicative of our lifetime expected losses. Accounts receivable consisted of the following as of the dates indicated. Accounts Allowance for Accounts June 30, 2020 Transaction related $ 13,903 $ (218) $ 13,685 Servicing related 6,381 — 6,381 Total $ 20,284 $ (218) $ 20,066 December 31, 2019 Transaction related $ 12,863 $ (238) $ 12,625 Servicing related 6,868 — 6,868 Total $ 19,731 $ (238) $ 19,493 The following table summarizes the activity in the balance of allowance for uncollectible amounts during the periods indicated. Three Months Ended Six Months Ended Beginning balance $ (262) $ (238) Provision for expected losses (201) (378) Write-offs 245 398 Ending balance $ (218) $ (218) |
Accounts Receivable
Accounts Receivable | 6 Months Ended |
Jun. 30, 2020 | |
Receivables [Abstract] | |
Accounts Receivable | Loan Receivables Held for Sale The following table summarizes the activity in the balance of loan receivables held for sale, net at lower of cost or fair value during the periods indicated. Six Months Ended 2020 2019 Beginning balance $ 51,926 $ 2,876 Additions (1) 441,558 65,804 Proceeds from sales and borrower payments (2) (67,238) (66,714) Decrease (increase) in valuation allowance (3) (11,194) 175 Transfers (4) (93) 1,590 Write offs and other (5) (4,007) (933) Ending balance $ 410,952 $ 2,798 (1) Includes purchase of $431.0 million participations in loans by the SPV. (2) Includes accrued interest and fees, recoveries of previously charged-off loan receivables held for sale, as well as proceeds from transferring our rights to Charged-Off Receivables attributable to loan receivables held for sale. We retain servicing arrangements on sold loan receivables with the same terms and conditions as loans that are originated by our Bank Partners. Income from loan receivables held for sale activities is recorded within interest and other revenue in the Unaudited Condensed Consolidated Statements of Operations. We sold loan receivables held for sale to certain Bank Partners at par on the following dates during the six months ended June 30, 2020 and 2019: 2020 2019 Date Amount Date Amount January 28 $ 24,071 March 27 $ 63,673 May 27 15,945 Total $ 40,016 $ 63,673 (3) Valuation allowance includes an increase in lower of cost or market fair value adjustments on our SPV Participations of $10,072 thousand and $0 during the six months ended June 30, 2020 and 2019, respectively, and an increase in provision for credit losses of $1,122 thousand during the six months ended June 30, 2020 and a decrease in provision for credit losses of $175 thousand during the six months ended June 30, 2019. (4) We temporarily hold certain loan receivables, which are originated by a Bank Partner, while non-originating Bank Partner eligibility is being determined. Once we determine that a loan receivable meets the investment requirements of an eligible Bank Partner, we transfer the loan receivable to the Bank Partner at cost plus any accrued interest. The reported amount also includes loan receivables that have been placed on non-accrual and non-payment status while we investigate consumer inquiries. (5) We received recovery payments of $159 thousand and $25 thousand during the six months ended June 30, 2020 and 2019, respectively. Recoveries of principal and finance charges and fees on previously written off loan receivables held for sale are recognized on a collected basis. Separately, during the six months ended June 30, 2020 and 2019, write offs and other were reduced by $0 and $141 thousand, respectively, related to cash proceeds received from transferring our rights to Charged-Off Receivables attributable to loan receivables held for sale. The cash proceeds received were recorded within sales, general and administrative expense in the Unaudited Condensed Consolidated Statements of Operations. The following table presents activities associated with our loan receivable sales and servicing activities during the periods indicated. There were no gains or losses on sold loan receivables held for sale during the periods presented. Three Months Ended Six Months Ended 2020 2019 2020 2019 Cash Flows Sales of loans $ 15,945 $ — $ 40,016 $ 63,673 Servicing fees 3,571 1,050 4,811 1,736 The following tables present information about sold loan receivables held for sale that are not recorded in our Unaudited Condensed Consolidated Balance Sheets, but with which we have a continuing involvement through our servicing arrangements with our Bank Partners. The sold loan receivables held for sale are pooled with other loans originated by the Bank Partners for purposes of determining escrow balances and incentive payments. The escrow balances represent our only direct exposure to potential losses associated with these sold loan receivables. June 30, 2020 December 31, 2019 Total principal balance $ 303,079 $ 326,556 Delinquent loans (unpaid principal balance) 10,078 18,033 Three Months Ended Six Months Ended 2020 2019 2020 2019 Net charge-offs (unpaid principal balance) $ 2,294 $ 4,407 $ 6,250 $ 8,207 As of June 30, 2020, our allowance for losses on accounts receivable was measured under ASC 326. Historically, the majority of our pools of accounts receivable did not have write-offs. For the pool of accounts receivable for which we had historical write-offs, we used an aging method and the average 12-month historical loss rate as a basis for estimating credit losses on the current accounts receivable balance. In the absence of relevant historical loss experience for the other pools of accounts receivables, we also used this average 12-month loss rate to inform our estimate of credit losses on those balances. For each pool of accounts receivable, we considered the conditions at the measurement date and reasonable and supportable forecasts about future conditions to consider if adjustments to the historical loss rate were warranted. Given our methods of collecting funds on merchant and servicing receivables, that we have not observed meaningful changes in our counterparties' abilities to pay, and that we establish an allowance for all delinquent accounts receivable (typically deemed to be 31 days or more past due), providing for a maximum 30-day term of our accounts receivable balances, we determined that our historical loss rates remain most indicative of our lifetime expected losses. Accounts receivable consisted of the following as of the dates indicated. Accounts Allowance for Accounts June 30, 2020 Transaction related $ 13,903 $ (218) $ 13,685 Servicing related 6,381 — 6,381 Total $ 20,284 $ (218) $ 20,066 December 31, 2019 Transaction related $ 12,863 $ (238) $ 12,625 Servicing related 6,868 — 6,868 Total $ 19,731 $ (238) $ 19,493 The following table summarizes the activity in the balance of allowance for uncollectible amounts during the periods indicated. Three Months Ended Six Months Ended Beginning balance $ (262) $ (238) Provision for expected losses (201) (378) Write-offs 245 398 Ending balance $ (218) $ (218) |
Property, Equipment and Softwar
Property, Equipment and Software | 6 Months Ended |
Jun. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property, Equipment and Software | Property, Equipment and Software Property, equipment and software were as follows as of the dates indicated. June 30, 2020 December 31, 2019 Furniture $ 2,806 $ 2,907 Leasehold improvements 4,714 4,902 Computer hardware 2,443 2,494 Software 26,167 20,126 Total property, equipment and software, at cost 36,130 30,429 Less: accumulated depreciation (5,858) (5,701) Less: accumulated amortization (8,321) (6,419) Total property, equipment and software, net $ 21,951 $ 18,309 |
Borrowings
Borrowings | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Borrowings | Borrowings Credit Agreement In August 2017, we entered into a $450.0 million credit agreement ("Credit Agreement"), which provided for a $350.0 million term loan ("original term loan") maturing on August 25, 2024 and a $100.0 million revolving loan facility maturing on August 25, 2022. The net proceeds from the term loan of $338.6 million, along with $7.9 million of cash, were set aside for a subsequent $346.5 million payment (which is occurring in stages) to certain equity holders and a related party. With the exception of the payments to the related party, which were related party expenses, the payments were accounted for as distributions. The distribution to GS Holdings unit holders and GS Holdings holders of profits interests was made on a basis generally proportionate to their equity interests in GS Holdings. GS Holdings' members approved the Credit Agreement and the distribution of the proceeds of the original term loan to the GS Holdings unit holders, holders of profits interests and a related party. The purpose of the distribution was to provide a cash return on investment to the GS Holdings members and former profits interests holders. See Note 11 for distribution and payment details. 2018 Amended Credit Agreement In March 2018, we amended certain terms of our Credit Agreement ("2018 Amended Credit Agreement"). The 2018 Amended Credit Agreement replaced the original term loan with a $400.0 million term loan (“modified term loan”) and extended the maturity date to March 29, 2025. The modified term loan incurs interest, due monthly in arrears, at an adjusted LIBOR rate, which represents the one-month LIBOR rate multiplied by the statutory reserve rate, as defined in the Credit Agreement, plus a margin of 3.25% per annum. If not otherwise indicated, references to "term loan" prior to the date of the 2018 Amended Credit Agreement indicate the original term loan and references subsequent to the date of the 2018 Amended Credit Agreement but prior to the Second Amendment to our Credit Agreement ("2020 Amended Credit Agreement") indicate the modified term loan. We contemporaneously settled the outstanding principal balance on the original term loan of $349.1 million with the issuance of the $400.0 million modified term loan. An original issuance discount of $1.0 million was reported as a direct deduction from the face amount of the modified term loan. Therefore, the gross proceeds of the modified term loan were $399.0 million. The proceeds from the modified term loan were primarily used to repay the outstanding principal balance on the original term loan and to pay $1.2 million of third party costs, including legal and debt arrangement costs, which were immediately expensed on the modification date. The remaining $48.8 million of proceeds were used to provide for distributions to certain equity holders and a related party prior to the Company's IPO. With the exception of the payments to the related party, which were related party expenses, the payments were accounted for as distributions. See Note 11 for distribution and payment details. As of June 30, 2020 and December 31, 2019, we had no borrowings under the revolving loan facility. 2020 Amended Credit Agreement In June 2020, we entered into the 2020 Amended Credit Agreement, which provided for an additional $75.0 million term loan ("incremental term loan"). The term loan and revolving loan facility under the 2018 Amended Credit Agreement and incremental term loan under the 2020 Amended Credit Agreement are collectively referred to as the "Credit Facility," and the 2018 Amended Credit Agreement and the 2020 Amended Credit Agreement are collectively referred to as the "Amended Credit Agreement." The modified term loan and the incremental term loan are collectively referred to as the "term loan." The incremental term loan incurs interest, due monthly in arrears, at an adjusted LIBOR rate, which represents the one-month LIBOR rate multiplied by the statutory reserve rate, as defined in the 2020 Amended Credit Agreement, with a 1% LIBOR floor, plus 450 basis points. The incremental term loan has the same security, maturity, principal amortization, prepayment, and covenant terms as the 2018 Amended Credit Agreement, maturing on March 29, 2025. An original issuance discount of $3.0 million was reported as a direct deduction from the face amount of the incremental term loan. Fees paid to the lender of $1.5 million were deferred over the remaining life of the term loan on the modification date. Therefore, the initial gross proceeds of the incremental term loan were $70.5 million. The proceeds from the incremental term loan were used to pay third party costs, including legal fees, which were immediately expensed on the modification date. The remaining proceeds were used for general corporate purposes and to enhance the Company's overall liquidity position. Key details of the term loan are as follows: June 30, 2020 December 31, 2019 Term loan, face value (1) $ 466,000 $ 393,000 Unamortized debt discount (2) (5,771) (3,115) Unamortized debt issuance costs (2) (6,350) (5,388) Term loan $ 453,879 $ 384,497 (1) The principal balance of the term loan is scheduled to be repaid on a quarterly basis at an amortization rate of 0.25% per quarter through December 31, 2024, with the balance due at maturity. (2) For the three months ended June 30, 2020 and 2019, debt discount of $187 thousand and $154 thousand, respectively, and debt issuance costs of $282 thousand and $266 thousand, respectively, were amortized into interest expense in the Unaudited Condensed Consolidated Statements of Operations. For the six months ended June 30, 2020 and 2019, debt discount of $340 thousand and $308 thousand, respectively, and debt issuance costs of $545 thousand and $532 thousand, respectively, were amortized into interest expense in the Unaudited Condensed Consolidated Statements of Operations. Revolving loan facility. Under the 2018 Amended Credit Agreement, the maturity date of the $100.0 million revolving loan facility was extended to March 29, 2023. Further, the interest margin applied to revolving loans that incur interest at a base rate was modified to 2.00% per annum and the margin applied to revolving loans that incur interest at an adjusted LIBOR rate was modified to 3.00% per annum. However, if our first lien net leverage ratio is equal to or above 1.50 to 1.00, these interest margins are raised to 2.25% and 3.25%, respectively. Lastly, the 2018 Amended Credit Agreement provided for a $10.0 million letter of credit, which, to the extent drawn upon, would reduce the amount of availability under the revolving loan facility by the same amount. We had not drawn on our available letter of credit as of June 30, 2020. We are subject to a quarterly commitment fee based on the daily unused amount of the revolving loan facility, inclusive of the aggregate amount available to be drawn under letters of credit. The quarterly commitment fee rate is 0.50% per annum when our first lien net leverage ratio is above 1.50 to 1.00, but is reduced to 0.375% for any quarterly period in which our first lien net leverage ratio is equal to or below 1.50 to 1.00. For the three months ended June 30, 2020 and 2019, we recognized $20 thousand and $95 thousand, respectively, of commitment fees within interest expense in the Unaudited Condensed Consolidated Statements of Operations. Commitment fees were $126 thousand and $189 thousand for the six months ended June 30, 2020 and 2019, respectively. Covenants. The Amended Credit Agreement contains certain financial and non-financial covenants with which we must comply. The financial covenant requires a first lien net leverage ratio equal to or below 3.50 to 1.00 for any measurement date at which the principal amounts of outstanding revolving loans and letters of credit exceed 25% of the aggregate principal amount of the revolving loan facility. The first lien net leverage ratio is calculated as the ratio of (i) the aggregate principal amount of indebtedness, minus the aggregate amount of consolidated cash (exclusive of restricted cash) as of the measurement date to (ii) consolidated EBITDA, as defined in the Amended Credit Agreement, for the four prior quarters. The non-financial covenants include, among other things, restrictions on indebtedness, liens and fundamental changes to the business (such as acquisitions, mergers, liquidations or changes in the nature of the business, asset dispositions, restricted payments, transactions with affiliates and other customary matters). The Amended Credit Agreement also includes various negative covenants, including one that restricts GS Holdings from making non-tax distributions unless certain financial tests are met. In general, GS Holdings is restricted from making distributions unless (a) after giving effect to the distribution it would have, as of a measurement date, a total net leverage ratio of no more than 3.00 to 1.00, and (b) the source of such distributions is retained excess cash flow, certain equity issuance proceeds and certain other sources. We were in compliance with all covenants, both financial and non-financial, as of June 30, 2020 and December 31, 2019. The Amended Credit Agreement defines events of default, the breach of which could require early payment of all borrowings under, and termination of, the Amended Credit Agreement or similar actions. Any borrowings under the Amended Credit Agreement are unconditionally guaranteed by our subsidiaries. Further, the lenders have a security interest in substantially all of the assets of GS Holdings and the other guarantors thereunder. Interest Rate Swap In June 2019, we entered into an interest rate swap agreement to hedge changes in cash flows attributable to interest rate risk on $350.0 million of our variable-rate term loan. This interest rate swap was designated for accounting purposes as a cash flow hedge. See Note 8 for additional derivative disclosures. Asset-backed Revolving Credit Facility In May 2020, the SPV entered into a Warehouse Credit Agreement with JPMorgan Chase Bank, N.A. ("JPMorgan") to establish an asset-backed revolving credit facility to finance purchases by the SPV of participation interests in loans originated through the GreenSky program (the "SPV Facility"). The SPV Facility provides a revolving committed financing of $300.0 million, with an additional $200.0 million uncommitted accordion that was accessed in July 2020. The interest rate on the SPV Facility is the applicable commercial paper conduit funding rate (or, if the lenders do not fund their advances under the SPV Facility through commercial paper markets, 3-month LIBOR plus 0.50%) plus 2.50%. The revolving funding period is one year and the maturity date is May 10, 2022. Upon obtaining the financing commitment, the SPV was required to pay to JPMorgan an upfront, nonrefundable fee ("upfront fees") equal to 0.15% of loan commitments. The SPV paid upfront fees of $0.5 million in conjunction with the closing of the SPV Facility in May. As of June 30, 2020, the outstanding balance on the SPV Facility was $299.0 million. Following the third month anniversary of the closing date, the Company is subject to a daily unused fee based on a percentage of the total $300.0 million of financing that remains unused. The unused fee rate is 0.50% per annum when the aggregate loan principal balance is greater than or equal to 50% of the commitments, and 1.00% if the aggregate loan principal balance is less than 50% of the commitments. The SPV paid various other legal and banking fees associated with obtaining the financing, including upfront fees, of $1.0 million which were deferred over the life of the SPV Facility. During the three and six months ended June 30, 2020, we amortized $0.1 million of these fees into cost of revenue in the Unaudited Condensed Consolidated Statements of Operations. |
Derivative Instruments
Derivative Instruments | 6 Months Ended |
Jun. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | Derivative Instruments The Company does not hold or use derivative instruments for trading purposes. Derivative Instruments Designated as Hedges Interest rate fluctuations expose our variable-rate term loan to changes in interest expense and cash flows. As part of our risk management strategy, we may use interest rate derivatives, such as interest rate swaps, to manage our exposure to interest rate movements. In June 2019, we entered into a $350.0 million notional, four-year interest rate swap agreement to hedge changes in cash flows attributable to interest rate risk on $350.0 million of our variable-rate term loan, which matures on March 29, 2025. This agreement involves the receipt of variable-rate amounts in exchange for fixed interest rate payments over the life of the agreement without an exchange of the underlying notional amount. This interest rate swap was designated for accounting purposes as a cash flow hedge. As such, changes in the interest rate swap’s fair value are deferred in accumulated other comprehensive income (loss) in the Unaudited Condensed Consolidated Balance Sheets and are subsequently reclassified into interest expense in each period that a hedged interest payment is made on our variable-rate term loan. As of June 30, 2020, we had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk. Notional Amount Fixed Interest Rate Termination Date Interest rate swap $ 350,000 1.80% June 30, 2023 Derivative Instruments Not Designated as Hedges The FCR component of our Bank Partner contracts qualifies as an embedded derivative. The FCR liability is not designated as a hedge for accounting purposes and, as such, changes in its fair value are recorded within cost of revenue in the Unaudited Condensed Consolidated Statements of Operations. See Note 3 for additional information on finance charge reversals. The purchase price discount/premium component of our Facility Bank Partner Agreements qualifies as a bifurcated embedded derivative. The purchase price discount/premium is not designated as a hedge for accounting purposes and, as such, changes in its fair value are recorded within cost of revenue in the Unaudited Condensed Consolidated Statements of Operations. See Note 3 for additional information on the purchase price discount/premium. Derivative Instruments on our Unaudited Condensed Consolidated Financial Statements The following table presents the fair values and Unaudited Condensed Consolidated Balance Sheets locations of our derivative instruments as of the dates indicated. Balance Sheet Location June 30, 2020 December 31, 2019 Designated as cash flow hedges Interest rate swap Other liabilities $ 16,450 $ 2,763 Not designated as hedges FCR liability Finance charge reversal liability $ 198,755 $ 206,035 Purchase price discount/premium Other liabilities — — The following table presents the impacts of our derivative instruments on our Unaudited Condensed Consolidated Statements of Operations for the periods indicated. Three Months Ended Six Months Ended 2020 2019 2020 2019 Designated as cash flow hedges Interest rate swap – gain (loss) reclassified into interest expense $ (1,140) $ — $ (1,247) $ — Interest rate swap – gain (loss) reclassified into income tax expense 103 — 112 — Not designated as hedges FCR liability – change in fair value recorded in cost of revenue $ 36,050 $ 38,782 $ 88,554 $ 77,547 Our derivative instrument activities are included within operating cash flows in our Unaudited Condensed Consolidated Statements of Cash Flows. Accumulated Other Comprehensive Income (Loss) The following table summarizes the changes in the components of accumulated other comprehensive income (loss) associated with our cash flow hedge, which exclude amounts pertaining to noncontrolling interests, for the period presented. There was no accumulated other comprehensive income (loss) activity during the three and six months ended June 30, 2019. Cash Flow Hedge Three Months Ended Six Months Ended Accumulated other comprehensive income (loss), beginning balance $ (4,294) $ (756) Other comprehensive income (loss) before reclassifications and tax (1,034) (5,740) Tax (expense) benefit 251 1,390 Other comprehensive income (loss) before reclassifications, net of tax (783) (4,350) Reclassifications out of accumulated other comprehensive income (loss), net of tax (1) 321 350 Net (increase) decrease in other comprehensive loss (462) (4,000) Accumulated other comprehensive income (loss), ending balance $ (4,756) $ (4,756) (1) Net of tax benefit of $103 thousand and $112 thousand during the three and six months ended June 30, 2020, respectively. Based on the current interest rate environment, the Company estimates that approximately $5.8 million of net unrealized gains (losses) reported in accumulated other comprehensive income (loss) will be reclassified into earnings within the next twelve months. |
Other Liabilities
Other Liabilities | 6 Months Ended |
Jun. 30, 2020 | |
Other Liabilities Disclosure [Abstract] | |
Other Liabilities | Other Liabilities The following table details the components of other liabilities in the Unaudited Condensed Consolidated Balance Sheets as of the dates indicated. June 30, 2020 December 31, 2019 Transaction processing liabilities $ 21,277 $ 24,465 Servicing liabilities (1) 2,799 3,796 Distributions payable 4,073 5,978 Interest rate swap (2) 16,450 2,763 Tax related liabilities (3) 873 873 Operating lease liabilities 12,104 13,884 Accruals and other liabilities 9,011 9,442 Other liabilities $ 66,587 $ 61,201 (1) We elected the fair value method to account for our servicing liabilities. Refer to Note 3 for additional information. (2) Refer to Note 3 and Note 8 for additional information on our interest rate swap, which was in a liability position as of June 30, 2020 and December 31, 2019. (3) Tax related liabilities primarily include certain taxes payable related to the Reorganization Transactions. |
Noncontrolling Interests
Noncontrolling Interests | 6 Months Ended |
Jun. 30, 2020 | |
Noncontrolling Interest [Abstract] | |
Noncontrolling Interests | Noncontrolling InterestsGreenSky, Inc. is the sole managing member of GS Holdings and consolidates the financial results of GS Holdings. Therefore, the Company reports a noncontrolling interest based on the Holdco Units held by the Continuing LLC Members. Changes in GreenSky, Inc.’s ownership interest in GS Holdings, while GreenSky, Inc. retains its controlling interest in GS Holdings, are accounted for as equity transactions. As such, future redemptions or direct exchanges of Holdco Units by the Continuing LLC Members (with automatic cancellation of an equal number of shares of Class B common stock) for shares of our Class A common stock on a one-for-one basis will result in a change in ownership and reduce or increase the amount recorded as noncontrolling interest and increase or decrease additional paid-in capital. The Company consolidates the financial results of GS Holdings and reports a noncontrolling interest in its Unaudited Condensed Consolidated Financial Statements representing the GS Holdings interests held by Continuing LLC Members. The weighted average ownership percentages for the applicable reporting periods are used to attribute net income (loss) and other comprehensive income (loss) to the Company and the noncontrolling interests. During the three months ended June 30, 2020 and 2019, GreenSky, Inc. had a weighted average ownership interest in GS Holdings of 36.9% and 34.7%, respectively. During the six months ended June 30, 2020 and 2019, GreenSky, Inc. had a weighted average ownership interest in GS Holdings of 36.5% and 33.4%, respectively.As of June 30, 2020 and December 31, 2019, GreenSky, Inc. had 73,350,234 and 66,424,838 shares, respectively, of Class A common stock outstanding, which resulted in an equivalent amount of ownership of Holdco Units. During the six months ended June 30, 2020, an aggregate of 4.5 million Holdco Units were exchanged by the Continuing LLC Members (with automatic cancellation of Class B common stock) for 4.5 million newly-issued shares of Class A common stock, and 2.8 million shares of Class A restricted stock were issued, which increased our total ownership interest in GS Holdings to 40.2% as of June 30, 2020 from 36.9% as of December 31, 2019. |
Stockholders Equity (Deficit)
Stockholders Equity (Deficit) | 6 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
Stockholders Equity (Deficit) | Stockholders Equity (Deficit) Treasury Stock As of June 30, 2020, there were 14,099,097 shares of Class A common stock held in treasury, including: (i) purchases of 13,425,688 shares at a cost of $146.1 million, (ii) 517,746 shares associated with forfeited restricted stock awards, and (iii) 155,663 shares associated with tax withholdings upon vesting of restricted stock awards. There were no reissuances of treasury shares during the six months ended June 30, 2020. Warrants In January 2019, a warrant issued in January 2014 to an affiliate of one of the members of the former GSLLC board of managers was fully exercised on a cashless basis, which resulted in the issuance of 1,180,163 Holdco Units and an equal number of shares of Class B common stock. Distributions The following table summarizes activity associated with our non-tax and tax distributions during the periods indicated. Three Months Ended Six Months Ended Remaining Reserved Payment (1) (in millions) 2020 2019 2020 2019 Non-tax distributions previously declared and paid upon vesting Credit Agreement Distributions (2) Distributions $ 0.1 $ 0.8 $ 1.2 $ 2.0 $ 2.7 Related party payments — 0.6 — 0.6 — Special Operating Distributions (3) Distributions 0.1 0.4 0.7 1.0 1.4 Related party payments — 0.2 — 0.2 — Tax distributions 0.4 13.1 31.5 14.0 N/A Total $ 0.6 $ 15.1 $ 33.4 $ 17.8 $ 4.1 (1) As of June 30, 2020, all remaining portions of the non-tax distributions were recorded within other liabilities in the Unaudited Condensed Consolidated Balance Sheets. (2) See Note 7 for discussion of distributions using the proceeds from our borrowings, a portion of which were declared to related parties, for which no payments were made during the three and six months ended June 30, 2020 and for which all payments were satisfied as of June 30, 2019. (3) In May 2018, we declared a special operating distribution of $26.2 million, a portion of which was declared to a related party, for which no payments were made during the three and six months ended June 30, 2020 and for which all payments were satisfied as of June 30, 2019. In December 2017, we declared a $160.0 million special cash distribution to Holdco Unit holders and holders of profits interests. |
Share-Based Compensation
Share-Based Compensation | 6 Months Ended |
Jun. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Share-Based Compensation | Share-Based Compensation The Company has the following types of share-based compensation awards outstanding as of June 30, 2020: Class A common stock options, unvested Holdco Units and unvested Class A common stock awards. We recorded share-based compensation expense of $3,477 thousand and $3,271 thousand for the three months ended June 30, 2020 and 2019, respectively, and $6,972 thousand and $5,936 thousand for the six months ended June 30, 2020 and 2019, respectively, which is included within compensation and benefits expense in the Unaudited Condensed Consolidated Statements of Operations. Class A Common Stock Options Class A common stock option ("Options") activity was as follows during the periods indicated: Six Months Ended Six Months Ended Number of Weighted Number of Outstanding at beginning of period 4,181,909 $ 11.36 8,053,292 Granted (1) 1,100,456 3.73 1,290,012 Exercised (2)(3) (105,000) 5.65 (851,401) Forfeited (406,615) 19.16 (148,819) Expired (4) (111,704) 18.45 (1,500) Outstanding at end of period (5) 4,659,046 $ 8.84 8,341,584 Exercisable at end of period (5)(6) 1,682,264 $ 8.11 5,242,936 (1) Weighted average grant date fair value of Options granted during the six months ended June 30, 2020 and 2019 was $1.72 and $3.80, respectively. (2) The total intrinsic value of Options exercised, which is defined as the amount by which the market value of the stock on the date of exercise exceeds the exercise price, during the six months ended June 30, 2020 and 2019 was $0.2 million and $4.6 million, respectively. (3) During the six months ended June 30, 2020, Options exercisable for 105,000 shares of Class A common stock were exercised by means of a cashless net exercise procedure, which resulted in the issuance of 15,051 shares of Class A common stock and for which the Company paid withholding taxes of $0.1 million. Employees paid $0.3 million to the Company during the six months ended June 30, 2019 to exercise Options, which resulted in the issuance of 34,897 shares of Class A common stock. In addition, during this period, Options exercisable for 816,500 shares of Class A common stock were exercised by means of a cashless net exercise procedure, which resulted in the issuance of 246,396 shares of Class A common stock and for which the Company paid withholding taxes of $1.6 million. (4) Expired Options represent vested, underwater Options that were not exercised by terminated employees within 30 days from the employment termination date, as stipulated in the Option award agreements. (5) The aggregate intrinsic value and weighted average remaining contractual terms of Options outstanding and Options exercisable were as follows as of the date indicated: June 30, 2020 Aggregate intrinsic value (in millions) Options outstanding $ 3.0 Options exercisable $ 1.7 Weighted average remaining term (in years) Options outstanding 7.8 Options exercisable 5.8 (6) The total fair value, based on grant date fair value, of Options that vested during the six months ended June 30, 2020 and 2019 was $2.4 million and $1.4 million, respectively. Unvested Holdco Units As part of the Reorganization Transactions and IPO, certain profits interests in GS Holdings were converted to vested and unvested Holdco Units based on the prevailing profits interests thresholds and the IPO price. The converted Holdco Units remain subject to the same service vesting requirements as the original profits interests and are not subject to post-vesting restrictions. Unvested Holdco Units activity was as follows during the periods indicated: Six Months Ended Six Months Ended Number of Weighted Average Grant Date Number of Unvested at beginning of period 1,112,607 $ 23.00 2,514,856 Forfeited — N/A (273,734) Vested (1) (258,524) 23.00 (659,527) Unvested at end of period 854,083 $ 23.00 1,581,595 (1) The total fair value, based on grant date fair value, of previously unvested Holdco Units that vested during the six months ended June 30, 2020 and 2019 was $5.9 million and $15.2 million, respectively. Restricted Stock Awards As part of the Reorganization Transactions and IPO, certain outstanding profits interests in GS Holdings were converted into vested and unvested Class A common stock awards based on the prevailing profits interests thresholds and the IPO price. The converted unvested Class A common stock awards remain subject to the same service vesting requirements as the original profits interests and are not subject to post-vesting restrictions. Subsequent to the Reorganization Transactions and IPO, we granted restricted stock awards in the form of unvested Class A common stock to certain employees that vest ratably over a three or four-year period based on continued employment at the Company and to certain non-employee directors that vest one year from grant date based on continued service on the Board of Directors ("Board"). For these awards, compensation expense is measured based on the closing stock price of the Company's Class A common stock on the date of grant, and the total value of the awards is expensed ratably over the requisite service period. Unvested Class A common stock activity was as follows during the periods indicated: Six Months Ended Six Months Ended Class A Weighted Average Grant Date Class A Unvested at beginning of period 2,999,343 $ 11.53 454,561 Granted 2,821,735 3.79 1,873,512 Forfeited (1) (295,151) 12.87 (146,859) Vested (2) (548,882) 13.42 (66,789) Unvested at end of period 4,977,045 $ 6.85 2,114,425 (1) Forfeited shares of unvested Class A common stock associated with restricted stock awards are held in our treasury stock account. Refer to Note 11 for additional information on our treasury stock. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes GreenSky, Inc. is taxed as a corporation and pays corporate federal, state and local taxes on income allocated to it from GS Holdings based upon GreenSky, Inc.’s economic interest held in GS Holdings. GS Holdings is treated as a pass-through partnership for income tax reporting purposes and not subject to federal income tax. Accordingly, the Company is not liable for income taxes on the portion of GS Holdings' earnings not allocated to it. The Company’s effective tax rate for the three and six months ended June 30, 2020 was 10.1% and 19.8%, respectively, and the Company recorded $1.5 million and $0.6 million of income tax expense for the three and six months ended June 30, 2020, respectively. The Company’s effective tax rate for the three and six months ended June 30, 2020 was less than our combined federal and state statutory tax rate of 24.3%, primarily because the Company is not liable for income taxes on the portion of GS Holdings’ earnings that are attributable to noncontrolling interests. The effective tax rate for the three and six months ended June 30, 2020 included the effects of stock-based compensation deductions, which are required to be recorded discretely in the interim period in which those items occur. The effective tax rate is dependent on many factors, including the estimated amount of income subject to income tax; therefore, the effective tax rate can vary from period to period. The Company's effective tax rate for the three and six months ended June 30, 2019 was (12.9)% and (12.2)%, respectively, and the Company recorded $4.5 million and $5.1 million of income tax benefit for the three and six months ended June 30, 2019, respectively. The Company's effective tax rate for the three and six months ended June 30, 2019 was less than our combined federal and state statutory tax rate of 24.1%, primarily because the Company is not liable for income taxes on the portion of GS Holdings’ earnings that are attributable to noncontrolling interests. Further, the effective tax rate for the three and six months ended June 30, 2019 included the effects of remeasuring net deferred tax assets due to a change in state tax rates and warrant and stock-based compensation deductions, which are required to be recorded discretely in the interim period in which those items occur. As of June 30, 2020 and December 31, 2019, the total liability related to uncertain tax positions was $0.1 million and $0.1 million, respectively. The Company recognizes interest and penalties, if applicable, related to uncertain tax positions as a component of income tax expense. Accrued interest and penalties were immaterial as of June 30, 2020, and therefore did not impact the effective income tax rate. Deferred tax assets, net of $383.1 million and $364.8 million as of June 30, 2020 and December 31, 2019, respectively, relate primarily to the basis difference in our investment in GS Holdings. This basis difference arose primarily as a result of the Reorganization Transactions, the IPO and subsequent exchanges of Class B common stock for Class A common stock. As of June 30, 2020, we concluded based on the weight of all available positive and negative evidence that all of our deferred tax assets are more likely than not to be realized. As such, no additional valuation allowance was recognized. Tax Receivable Agreement Pursuant to our election under Section 754 of the Internal Revenue Code (the "Code"), we expect to obtain an increase in our share of the tax basis in the net assets of GS Holdings when Holdco Units are redeemed or exchanged by the Continuing LLC Members of GS Holdings. We intend to treat any redemptions and exchanges of Holdco Units as direct purchases of Holdco Units for United States federal income tax purposes. These increases in tax basis may reduce the amounts that we would otherwise pay in the future to various tax authorities. They may also decrease gains (or increase losses) on future dispositions of certain capital assets to the extent tax basis is allocated to those capital assets. On May 23, 2018, we entered into a tax receivable agreement ("TRA") that provides for the payment by us of 85% of the amount of any tax benefits that we actually realize, or in some cases are deemed to realize, as a result of (i) increases in our share of the tax basis in the net assets of GS Holdings resulting from any redemptions or exchanges of Holdco Units and from our acquisition of the equity of certain of the Former Corporate Investors, (ii) tax basis increases attributable to payments made under the TRA, and (iii) deductions attributable to imputed interest pursuant to the TRA (the "TRA Payments"). We expect to benefit from the remaining 15% of any tax benefits that we may actually realize. The TRA Payments are not conditioned upon any continued ownership interest in GS Holdings or us. The rights of each member of GS Holdings that is a party to the TRA are assignable to transferees of their respective Holdco Units. The timing and amount of aggregate payments due under the TRA may vary based on a number of factors, including the timing and amount of taxable income generated by the Company each year, as well as the tax rate then applicable. As of June 30, 2020 and December 31, 2019, the Company had a liability of $317.8 million and $311.7 million, respectively, related to its projected obligations under the TRA, which is captioned as tax receivable agreement liability in our Unaudited Condensed Consolidated Balance Sheets. During the three and six months ended June 30, 2020, we did not make any payments to members of GS Holdings pursuant to the TRA. During the three and six months ended June 30, 2019, we made a payment, inclusive of interest, of $4.7 million to members of GS Holdings pursuant to the TRA. |
Commitments, Contingencies and
Commitments, Contingencies and Guarantees | 6 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments, Contingencies and Guarantees | Commitments, Contingencies and Guarantees Commitments Leases In accordance with ASC 842, Leases , we determine if an arrangement is or contains a lease at inception of the contract. A contract is or contains a lease if the contract conveys the right to control the use of identified property, plant or equipment for a period of time in exchange for consideration. We primarily lease our premises under multi-year, non-cancelable operating leases. Operating leases are included in Other assets and Other liabilities in our Unaudited Condensed Consolidated Balance Sheets. As of June 30, 2020 and December 31, 2019, we did not have any finance leases. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at lease commencement date based on the present value of lease payments over the lease term. As our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at lease commencement date in determining the present value of lease payments. The operating lease ROU assets are increased by any prepaid lease payments and are reduced by any unamortized lease incentives. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Base rent is typically subject to rent escalations on each annual anniversary from the lease commencement dates. Lease expense for lease payments, including any step rent provisions specified in the lease agreements, is recognized on a straight-line basis over the lease term and is included within property, office and technology and related party expenses in the Unaudited Condensed Consolidated Statements of Operations. Operating lease cost associated with our ROU assets and lease liabilities was $1,031 thousand and $973 thousand for the three months ended June 30, 2020 and 2019, respectively, and $2,061 thousand and $1,784 thousand for the six months ended June 30, 2020 and 2019, respectively. See Note 15 for additional information regarding office space leased from a related party. Our operating leases have terms expiring from 2021 through 2024, exclusive of renewal option periods. Our leases contain renewal option periods ranging from five As of June 30, 2020, we did not have any operating leases that had not yet commenced. Supplemental cash flow and noncash information related to our operating leases were as follows for the period indicated. Six Months Ended 2020 2019 Cash paid for amounts included in the measurement of operating lease liabilities Operating cash flows from operating leases $ 2,366 $ 1,927 Noncash operating lease ROU assets obtained in exchange for operating lease liabilities Resulting from our adoption of ASU 2016-02 $ — $ 11,279 Resulting from new or modified leases 9 2,975 Supplemental balance sheet information related to our operating leases was as follows as of the dates indicated. June 30, 2020 December 31, 2019 Operating lease ROU assets $ 9,590 $ 11,268 Operating lease liabilities $ 12,104 $ 13,884 Weighted average remaining lease term (in years) 2.8 3.3 Weighted average discount rate 5.7 % 5.7 % For the periods presented, maturities of operating lease liabilities as of the date indicated and a reconciliation of the total undiscounted cash flows to the operating lease liabilities in the Unaudited Condensed Consolidated Balance Sheets, were as follows: June 30, 2020 Remainder of 2020 $ 2,322 2021 4,897 2022 3,706 2023 1,501 2024 810 Thereafter — Total lease payments $ 13,236 Less: imputed interest (1,132) Operating lease liabilities $ 12,104 Covenants The agreements with our transaction processor and some Bank Partners impose financial covenants upon our wholly owned subsidiary, GSLLC. As of June 30, 2020 and December 31, 2019, GSLLC was in compliance with the financial covenant provisions in these agreements. See Note 7 for discussion of financial and non-financial covenants associated with our borrowings. Other Commitments As of June 30, 2020 and December 31, 2019, the outstanding open and unused line of credit on approved loan receivables held for sale was $33.8 million and $4.9 million, respectively. We did not record a provision for these unfunded commitments, but believe we have adequate cash on hand to fund these commitments. For certain Bank Partners, we maintain a restricted cash balance based on a contractual percentage of the total interest billed on outstanding deferred interest loans that are within the promotional period less previous FCR on such outstanding loans. As of June 30, 2020 and December 31, 2019, restricted cash in the Unaudited Condensed Consolidated Balance Sheets included $94.7 million and $75.0 million, respectively, associated with these arrangements. Contingencies In limited instances, the Company may be subject to operating losses if we make certain errors in managing credit programs and we determine that a customer is not liable for a loan originated by a Bank Partner. We evaluated this contingency in accordance with ASC 450, Contingencies , and determined that it is reasonably possible that losses could result from errors in underwriting. However, in management’s opinion, it is not possible to estimate the likelihood or range of reasonably possible future losses related to errors in underwriting based on currently available information. Therefore, we have not established a liability for this loss contingency. Further, from time to time, we place Bank Partner loans on non-accrual and non-payment status (“Pended Status”) while we investigate consumer loan balance inquiries, which may arise from disputed charges related to work performed by third-party merchants. As of June 30, 2020, Bank Partner loan balances in Pended Status were $11.1 million. While it is management’s expectation that most of these loan balance inquiries will be resolved without incident, in certain instances we may determine that it is appropriate for the Company to permanently reverse the loan balance and assume the economic responsibility for the loan balance itself. We record a liability for these instances. As of June 30, 2020, our liability for potential Pended Status future losses was $3.6 million. Legal Proceedings The Company, together with certain of its officers and directors and one of its former directors (the “Individual Defendants”) and certain underwriters of the Company’s IPO (the "IPO"), were named in six putative class actions filed in the Supreme Court of the State of New York, all of which actions have been consolidated (In Re GreenSky, Inc. Securities Litigation (Consolidated Action), Index No. 655626/2018 (N.Y. Sup. Ct.) (the “State Case”)), and in two putative class actions filed in the United States District Court for the Southern District of New York (the "District Court"), both of which actions also have been consolidated (In Re GreenSky, Inc. Securities Litigation (Consolidated Action), Case No. 1:2018-cv-11071-PAE (S.D.N.Y.) (the “Federal Case” and, together with the State Case, the “Consolidated Cases”)). The plaintiffs in the Consolidated Cases generally assert on behalf of certain purchasers in the IPO claims under Sections 11, 12(a)(2) and 15 of the Securities Act of 1933. The Company and Individual Defendants (together with the other defendants) filed motions to dismiss in each of the Consolidated Cases. The District Court denied the motion to dismiss the Federal Case, and discovery in the Federal Case is ongoing. On June 1, 2020, the District Court certified a class of shareholders who purchased GreenSky Class A common stock pursuant and/or traceable to the Registration Statement and Prospectus issued in connection with the IPO. For more information regarding this action, class members may view and download the Class Action Notice at www.GreenSkySecuritiesLitigation.com. On April 22, 2020, the Supreme Court of the State of New York dismissed the State Case in its entirety and without leave to amend. The Company does not know whether the plaintiffs in the State Case will appeal such dismissal. The Company (as a nominal defendant) and the Individual Defendants have also been named in a putative stockholder derivative action alleging certain violations of state and federal law filed in the United States District Court for the District of Delaware, Pileggi v Zalik et al., Case No. 1:20-cv-00456 (D. Del.) (the "Derivative Case"). The Plaintiffs in the Derivative Case have indicated they will be amending their complaint on or before August 12, 2020. The Company and the Individual Defendants intend to defend themselves vigorously in all respects in connection with the Consolidated Cases and the Derivative Case. Under certain circumstances, the Company may be obligated to indemnify some or all of the other defendants in the Consolidated Cases and the Derivative Case. The Company is unable to estimate the amount of reasonably possible losses it may incur with respect to the Consolidated Cases or the Derivative Case. Moreover, the Company has not determined that the likelihood of loss is probable. Therefore, the Company has not recorded any liability as of June 30, 2020 with respect to the Federal Case, the State Case or the Derivative Case. We are also involved in a number of other proceedings concerning matters arising in connection with the conduct of our business. While the ultimate outcome of such proceedings cannot be determined, we do not believe that the resolution of these other proceedings, individually or in the aggregate, will have a material adverse effect on our financial condition, results of operations or cash flows. With respect to all legal proceedings, it is our policy to recognize legal fees as they are incurred as a sales, general and administrative expense in our Consolidated Statements of Operations. Financial Guarantees As of June 30, 2020, the contingent aspect of our financial guarantee was measured under ASC 326, Financial Instruments – Credit Losses , which requires us to estimate expected credit losses, and the impact of those estimates on our required payments under the financial guarantee arrangement, for loans within our Bank Partner portfolios that are either funded or approved for funding at the measurement date, but precludes us from including future loan originations by our Bank Partners. Consistent with the modeling of loan losses for any consumer loan portfolio assumed to go into "run-off," our recognized financial guarantee liability under this model represents a significant portion of the contractual escrow that we establish with each Bank Partner. Typically, changes in the estimated financial guarantee liability as measured under ASC 326 are driven primarily by new Bank Partner loans that are facilitated on our platform during the period and thereby increase the contractual escrow balance and, to a lesser degree, by changes in underlying assumptions. We use a discounted cash flow method to estimate our expected risk of loss under the contingent aspect of our financial guarantees for each Bank Partner. Significant assumptions for each Bank Partner portfolio used in valuing our financial guarantee liability include the following: Loan portfolio composition: We forecasted each Bank Partner's loan portfolio composition in a "run-off" scenario, which is primarily impacted by expected loan prepayments and paydowns derived from historical behavior curves for each loan plan and were applied to each Bank Partner's portfolio based on its composition of loans and where such loans were in their economic life cycle at the measurement date. The loan portfolio composition additionally informs our forecasts of the components that determine our incentive payments or, alternatively, escrow usage. All other factors remaining constant, generally the higher the expected prepayments and pay down rates, the lower the measurement of our financial guarantee liability, as our contractual escrow balance is calculated based on the month-end outstanding portfolio balance. Credit losses : We use lifetime historical credit loss experience for each loan plan comprising a Bank Partner's loan portfolio as a basis for estimating future credit losses. In assessing the current conditions and forecasts of future conditions as of June 30, 2020, we primarily considered the current and expected economic impacts of the COVID-19 pandemic on the macroeconomic environment, including the increase in unemployment and the mandatory stay-at-home orders, as well as initiatives undertaken by the Company to mitigate credit losses, such as the emphasis on our super-prime promotional loan programs with our merchants and offering loan deferral options to GreenSky program borrowers. Based on this assessment, we adjusted for an increase to our historical credit loss experience beginning in the second half of 2020 through mid-2021. All other factors remaining constant, higher credit losses reduce our incentive payments and thereby increase our risk of loss for escrow usage. Generally, higher credit losses earlier in the forecast period expose us to greater risk of loss under our financial guarantee arrangements, as the contractual escrow balance is highest early in the forecast period in conjunction with the outstanding portfolio balance in a "run-off" scenario. As of June 30, 2020, the estimated value of the financial guarantee was $163.3 million relative to our $169.5 million contractual escrow that was included in our restricted cash balance as of June 30, 2020. Subsequent to our adoption of ASU 2016-13 |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions Lease We lease office space from a related party under common management control for which lease expense is recognized within related party expenses in the Unaudited Condensed Consolidated Statements of Operations and for which operating lease ROU assets and operating lease liabilities are recognized within those respective line items in the Unaudited Condensed Consolidated Balance Sheets. Total operating lease cost related to this office space was $434 thousand and $432 thousand for the three months ended June 30, 2020 and 2019, respectively, and $869 thousand and $869 thousand for the six months ended June 30, 2020 and 2019, respectively. Operating lease ROU assets and operating lease liabilities related to this office space were $4.5 million and $5.4 million, respectively, as of June 30, 2020, and $5.2 million and $6.2 million, respectively, as of December 31, 2019. Contractual and Other Arrangements In August 2018, we entered into an agreement in which an unrelated third party acted as a placement agent in connection with certain Charged-Off Receivables transfers and received a fee from us based on the proceeds received from such transfers. In performing these services, the third party agreed to use an affiliate of a member of the Board and, as such, we determined this arrangement to be related party in nature. In December 2018, the unrelated third party assigned its role in the agreement to the affiliate entity itself; therefore, the arrangement remained a related party transaction. We incurred expenses related to this arrangement of $150 thousand and $249 thousand during the three and six months ended June 30, 2019, respectively, which are presented within related party expenses in the Unaudited Condensed Consolidated Statements of Operations. We did not incur any expenses related to this arrangement during the three and six months ended June 30, 2020. There was no payable related to this arrangement as of June 30, 2020 and December 31, 2019. We entered into non-interest bearing loan agreements with certain non-executive employees for which the remaining outstanding balances are forgiven ratably over designated periods based on continued employment with the Company. As of June 30, 2020 and December 31, 2019, the remaining outstanding balances on these loan agreements were $70 thousand and $155 thousand, respectively, which are presented within related party receivables in the Unaudited Condensed Consolidated Balance Sheets. |
Segment Reporting
Segment Reporting | 6 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment ReportingWe conduct our operations through a single operating segment and, therefore, one reportable segment. There are no significant concentrations by state or geographical location, nor are there any significant individual customer concentrations by balance. |
Variable Interest Entities
Variable Interest Entities | 6 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Variable Interest Entities | Variable Interest Entities Upon completion of our IPO, GreenSky, Inc. became the managing member of GS Holdings with 100% of the management and voting power in GS Holdings. In its capacity as managing member, GreenSky, Inc. has the sole authority to make decisions on behalf of GS Holdings and bind GS Holdings to agreements. Further, GS Holdings maintains separate capital accounts for its investors as a mechanism for tracking earnings and subsequent distribution rights. Accordingly, management concluded that GS Holdings is a limited partnership or similar legal entity as contemplated in ASC 810, Consolidation . Further, management concluded that GreenSky, Inc. is GS Holdings' primary beneficiary based on two conditions. First, GreenSky, Inc., in its capacity as managing member with sole voting rights, has the power to direct the activities of GS Holdings that most significantly impact its economic performance, including selecting, terminating and setting the compensation of management responsible for implementing GS Holdings' policies and procedures, as well as establishing the strategic, operating and capital decisions of GS Holdings in the ordinary course of business. Second, GreenSky, Inc. has an obligation to absorb potential losses of GS Holdings or the right to receive potential benefits from GS Holdings in proportion to its weighted average ownership interest, which was 36.9% and 34.7% for the three months ended June 30, 2020 and 2019, respectively, and 36.5% and 33.4% for the six months ended June 30, 2020 and 2019, respectively. Management considers this exposure to be significant to GS Holdings. As the primary beneficiary, GreenSky, Inc. consolidates the results of GS Holdings for financial reporting purposes under the variable interest consolidation model guidance in ASC 810. GreenSky, Inc.’s relationship with GS Holdings results in no recourse to the general credit of GreenSky, Inc. GS Holdings and its consolidated subsidiaries represent GreenSky, Inc.’s sole investment. GreenSky, Inc. shares in the income and losses of GS Holdings in direct proportion to GreenSky, Inc.’s ownership percentage. Further, GreenSky, Inc. has no contractual requirement to provide financial support to GS Holdings. GSLLC is a wholly-owned subsidiary of GS Holdings and is consolidated with GS Holdings. In May 2020, GSLLC formed Depositor as a wholly-owned subsidiary, which in turn formed the SPV as a wholly-owned subsidiary, for the purposes of establishing the SPV Facility to fund purchases of loan participations. GSLLC, on behalf of the Bank Partner that owns the loans underlying the loan participations, serves as the designated servicer of the SPV’s future loan receivables held for sale. Management concluded that the SPV is a variable-interest entity. In doing so, management determined that the activity that most significantly affects the performance of the SPV is the management by the servicer (GSLLC) of the credit losses, delinquencies and defaults that may occur in the underlying loan receivables held by the SPV. These activities are contractually determined through the servicing arrangement, rather than through the 100% equity holding of the Depositor. Further, because GSLLC, as agent for the Bank Partner that owns the loans underlying the loan participations, has the power to direct these activities through a servicing arrangement, GSLLC is the primary beneficiary and should consolidate the SPV under the variable interest consolidation model guidance in ASC 810 . The SPV's relationship with GSLLC results in no recourse to the general credit of the Company. Further, the Company has no contractual requirement to provide financial support to the SPV. In addition, each of the SPV and Depositor is a separate legal entity from the Company and from each other subsidiary of the Company, the respective assets of the SPV and Depositor are owned by the SPV or Depositor, respectively, and are solely available to satisfy their respective creditors. As such, neither the SPV’s assets nor Depositor’s assets are available to satisfy obligations of GreenSky, Inc., GS Holdings, GSLLC or other subsidiaries of the Company. Below are tabular disclosures that provide insight into how GS Holdings, inclusive of the SPV, affects GreenSky, Inc.’s financial position, performance and cash flows. Prior to the IPO and Reorganization Transactions, GreenSky, Inc. did not have any variable interest in GS Holdings. The following table presents the balances related to GS Holdings, inclusive of the SPV, that are included in the Unaudited Condensed Consolidated Balance Sheets as of the dates indicated, inclusive of GreenSky, Inc.'s interest in the variable interest entity. June 30, 2020 December 31, 2019 Assets Cash and cash equivalents $ 113,560 $ 177,730 Restricted cash 289,844 250,081 Loan receivables held for sale, net 410,952 51,926 Accounts receivable, net 20,066 19,493 Property, equipment and software, net 21,951 18,309 Other assets 50,827 49,648 Total assets (1) $ 907,200 $ 567,187 Liabilities and Members Equity (Deficit) Liabilities Accounts payable $ 13,356 $ 11,912 Accrued compensation and benefits 7,034 10,734 Other accrued expenses 3,947 3,244 Finance charge reversal liability 198,755 206,035 Term loan 453,879 384,497 SPV facility 299,000 — Financial guarantee liability 163,301 16,698 Other liabilities 64,199 60,328 Total liabilities (2) 1,203,471 693,448 Members Equity (Deficit) Equity (deficit) attributable to Continuing LLC Members (183,302) (80,758) Equity (deficit) attributable to GreenSky, Inc. (112,969) (45,503) Total members equity (deficit) (296,271) (126,261) Total liabilities and members equity (deficit) $ 907,200 $ 567,187 (1) Includes $408.7 million and $0 million of assets held by the SPV as of June 30, 2020 and December 31, 2019, respectively. (2) Includes $299.6 million and $0 million of liabilities held by the SPV as of June 30, 2020 and December 31, 2019, respectively. The following table reflects the impact of consolidation of GS Holdings, inclusive of the SPV, into the Unaudited Condensed Consolidated Statements of Operations for the periods indicated. Three Months Ended Six Months Ended 2020 2019 2020 2019 Total revenue $ 133,649 $ 138,695 $ 254,819 $ 242,395 Total costs and expenses 115,880 92,189 242,941 184,401 Operating profit 17,769 46,506 11,878 57,994 Total other income (expense), net (2,937) (5,377) (8,944) (10,059) Net income $ 14,832 $ 41,129 $ 2,934 $ 47,935 The following table reflects the cash flow impact of GS Holdings, inclusive of the SPV, on the Unaudited Condensed Consolidated Statements of Cash Flows for the periods indicated. Six Months Ended 2020 2019 Net cash provided by (used in) operating activities $ (333,842) $ 89,789 Net cash used in investing activities (8,524) (7,123) Net cash provided by (used in) financing activities 317,959 (128,597) Net increase (decrease) in cash and cash equivalents and restricted cash (24,407) (45,931) Cash and cash equivalents and restricted cash at beginning of period 427,811 449,473 Cash and cash equivalents and restricted cash at end of period $ 403,404 $ 403,542 |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Strategic Alternatives Review Process On August 10, 2020, the Company announced that the Company’s Board of Directors, working together with its senior management team and legal and financial advisors, completed the process, announced in August 2019, to explore, review and evaluate a range of potential strategic alternatives focused on maximizing stockholder value. The Company’s Board of Directors has determined that the Company can best drive future value creation by executing on a growth plan that leverages a renewed focus on the Company’s home improvement vertical, the cross marketing of complementary products to its consumer program borrowers, enhanced merchant productivity, scalability of operations, termination of the programmatic sale of charged-off receivables, and funding diversification to support its continued profitable growth. SPV Facility On July 24, 2020, the Company accessed an additional $200.0 million uncommitted accordion within the SPV Facility. The uncommitted accordion has the same characteristics and maturity date of the original $300.0 million SPV Facility. The proceeds were used by the SPV to purchase $284.0 million loan participations with the remaining funds contributed by GSLLC. Distributions In July 2020, GS Holdings finalized and paid tax distributions of $17.1 million to its members and paid previously declared but unpaid non-tax distributions of $0.6 million to certain of its members upon vesting of their equity in GS Holdings. TRA Payment In July 2020, GreenSky, Inc. finalized and made a payment, inclusive of interest, of $12.8 million to members of GS Holdings pursuant to the TRA. |
Organization, Summary of Sign_2
Organization, Summary of Significant Accounting Policies and New Accounting Standards (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | Organization Unless the context requires otherwise, "we," "us," "our," "GreenSky" and "the Company" refer to GreenSky, Inc. and its subsidiaries. "Bank Partners" are the federally insured banks that originate loans under the consumer financing and payments program that we administer for use by merchants on behalf of such banks in connection with which we provide point-of-sale financing and payments technology and related marketing, servicing, collection and other services (the "GreenSky program" or "program"). We are a leading technology company Powering Commerce at the Point of Sale ® . Our platform is powered by a proprietary technology infrastructure that facilitates merchant sales, while reducing the friction and improving the economics associated with a consumer making a purchase and a lender or financial institution extending financing for that purchase. It supports the full transaction lifecycle, including credit application, underwriting, real-time allocation to our Bank Partners, document distribution, funding, settlement and servicing. Merchants using our platform, which presently range from small, owner-operated home improvement contractors and healthcare providers to large national home improvement brands and retailers and healthcare service organizations, rely on us to facilitate low or deferred interest promotional point-of-sale financing and payments solutions that enable higher sales volume. Consumers on our platform, who to date primarily have super-prime or prime credit scores, find financing with promotional terms to be an attractive alternative to other forms of payment. Our Bank Partners' access to our proprietary technology solution and merchant network enables them to build a diversified portfolio of high quality consumer loans with attractive risk-adjusted yields with minimal upfront investment. GreenSky, Inc. was formed as a Delaware corporation on July 12, 2017. The Company was formed for the purpose of completing an initial public offering ("IPO") of its Class A common stock and certain Reorganization Transactions, as further described in the GreenSky, Inc. Form 10-K filed with the U.S. Securities and Exchange Commission ("SEC") on March 2, 2020 (the "2019 Form 10-K"), in order to carry on the business of GreenSky Holdings, LLC (“GS Holdings”) and its consolidated subsidiaries. GS Holdings, a holding company with no operating assets or operations, was organized in August 2017. On August 24, 2017, GS Holdings acquired a 100% interest in GreenSky, LLC ("GSLLC"), a Georgia limited liability company, which is an operating entity. Common membership interests of GS Holdings are referred to as "Holdco Units." On May 24, 2018, the Company's Class A common stock commenced trading on the Nasdaq Global Select Market in connection with its IPO. The IPO and Reorganization Transactions resulted in the Company becoming the sole managing member of GS Holdings. As the sole managing member of GS Holdings, we operate and control all of GS Holdings’ operations and, through GS Holdings and its subsidiaries, conduct GS Holdings’ business. The Company consolidates the financial results of GS Holdings and reports a noncontrolling interest in its Unaudited Condensed Consolidated Financial Statements representing the GS Holdings interests held by the Continuing LLC Members, as such term is defined in the 2019 Form 10-K. The weighted average ownership percentages for the applicable reporting periods are used to attribute net income (loss) and other comprehensive income (loss) to the Company and the noncontrolling interest. In 2020, we formed GS Investment I, LLC (the "SPV" or "GS Investment"), a special purpose vehicle and indirect wholly-owned subsidiary of the Company, to finance purchases of participation interests in loans ("SPV Participations") originated through the GreenSky program. These purchases are made through a newly created wholly-owned subsidiary, GS Depositor I, LLC ("Depositor") and then transferred to the SPV. Each of the SPV and Depositor is a separate legal entity from the Company and from each other subsidiary of the Company, and the respective assets of the SPV and Depositor are owned by the SPV or Depositor, respectively, and are solely available to satisfy the creditors of the SPV or Depositor, respectively. |
Basis of Presentation | Basis of PresentationThe Unaudited Condensed Consolidated Financial Statements were prepared in accordance with the rules and regulations of the SEC for interim financial statements. We condensed or omitted certain notes and other information from the interim financial statements presented in this Quarterly Report on Form 10-Q. Therefore, these interim statements should be read in conjunction with the 2019 Form 10-K. In the opinion of management, the Unaudited Condensed Consolidated Financial Statements reflect all adjustments, which are of a normal recurring nature, necessary for a fair statement of our financial condition and results of operations for the interim periods presented. The condensed consolidated balance sheet as of December 31, 2019, was derived from the audited annual consolidated financial statements, but does not contain all of the footnote disclosures from the annual consolidated financial statements required by United States generally accepted accounting principles ("GAAP"). All intercompany balances and transactions are eliminated upon consolidation. The results for the three and six months ended June 30, 2020 are not necessarily indicative of results expected for the full year. |
Use of Estimates | Use of Estimates The preparation of our financial statements in conformity with GAAP requires that management make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Such estimates and assumptions include, but are not limited to, those that relate to fair value measurements, financial guarantees, share-based compensation and income taxes. In developing estimates and assumptions, management uses all available information; however, actual results could materially differ from those estimates and assumptions. |
Cash and Cash Equivalents and Restricted Cash | Cash and Cash Equivalents and Restricted Cash Cash Equivalents We consider all highly liquid investments that mature three months or less from the date of purchase to be cash equivalents. Cash equivalents include money market mutual fund accounts, which are invested in government securities that are either guaranteed by the Federal Deposit Insurance Corporation of the U.S. government ("FDIC") or are secured by U.S. government-issued collateral for which the risk of loss from nonpayment is presumed to be zero. As such, we do not establish an allowance for credit losses on our cash equivalents. Further, the carrying amounts of our cash equivalents approximate their fair values due to their short maturities and highly liquid nature. Refer to "Recently Adopted Accounting Standards" in this Note 1 for discussion of our adoption of the provisions of Accounting Standards Update ("ASU") 2016-13, Measurement of Credit Losses on Financial Instruments ("ASU 2016-13") , effective January 1, 2020 and Note 3 for additional information on our fair value measurement. |
Accounts Receivable | Accounts Receivable Accounts receivable are recorded at their original invoice amounts, which are reduced by any allowance for uncollectible amounts. Effective January 1, 2020, we adopted the provisions of ASU 2016-13, which requires upfront recognition of lifetime expected credit losses using a current expected credit loss model. In accordance with the standard, we pool our accounts receivable, all of which are short-term in nature and arise from contracts with customers, based on shared risk characteristics to assess their risk of loss, even when that risk is remote. We use the aging method to establish an allowance for expected credit losses on accounts receivable balances and consider whether current conditions or reasonable and supportable forecasts about future conditions warrant an adjustment to our historical loss experience. In applying such adjustments, we primarily consider changes in counterparty credit risk and changes in the underlying macroeconomic environment. Accounts receivable are written off once delinquency exceeds 90 days. Recoveries of previously written off accounts receivable are recognized on a collected basis as a reduction to the provision for credit losses, which is included within sales, general and administrative expense in the Unaudited Condensed Consolidated Statements of Operations. The allowance for uncollectible amounts for periods prior to January 1, 2020 continue to be presented and disclosed under legacy guidance in Accounting Standards Codification ("ASC") 310, Receivables . Refer to "Recently Adopted Accounting Standards" in this Note 1 for discussion of our adoption of the provisions of ASU 2016-13 and Note 5 for additional information on our accounts receivable. |
Fair Value of Assets and Liabilities | Fair Value of Assets and Liabilities We have financial assets and liabilities subject to fair value measurement or disclosure on either a recurring or nonrecurring basis. Such measurements or disclosures relate to our cash and cash equivalents, loan receivables held for sale, derivative instruments, servicing assets and liabilities, and term loan. ASC 820, Fair Value Measurement , defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In valuing this asset or liability, we utilize market data or reasonable assumptions that market participants would use, including assumptions about risk and the risks inherent in the inputs to the valuation technique. The guidance provides a three-level valuation hierarchy for disclosure of fair value measurements based on the transparency of inputs to the valuation of an asset or a liability as of the measurement date. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels are defined as follows: Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. Level 3: Unobservable inputs for the asset or liability. An asset’s or a liability’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. |
Derivative Instruments | Derivative Instruments We are exposed to interest rate risk on our variable-rate term loan, which we manage by entering into an interest rate swap that is determined to be a derivative in accordance with ASC 815, Derivatives and Hedging . Derivatives are recorded on the balance sheet at fair value and are marked-to-market on a quarterly basis. The accounting for the change in fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate the derivative as a hedge and apply hedge accounting, and whether the hedging relationship continues to satisfy the criteria required to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to variability in cash flows of a recognized asset or liability that is attributable to a particular risk are considered cash flow hedges. The primary purpose of cash flow hedge accounting is to link the income statement recognition of a hedging instrument and a hedged item whose changes in cash flows are expected to offset each other. The change in the fair value of the derivative instrument designated as a cash flow hedge is initially reported as a component of other comprehensive income (loss) and subsequently reclassified into earnings in the same period when the hedged item affects earnings. The reclassification into earnings is reported in the same income statement line item in which the hedged item is reported. The FCR component of our Bank Partner contracts, which arrangements are detailed in Note 3, qualifies as an embedded derivative. The FCR liability is not designated as a hedge for accounting purposes and, as such, changes in its fair value are recorded within cost of revenue in the Unaudited Condensed Consolidated Statements of Operations. |
Financial Guarantees | Financial Guarantees Under the terms of the contracts with our Bank Partners, we provide limited protection to the Bank Partners in the event of excess Bank Partner portfolio credit losses by holding cash in restricted, interest-bearing escrow accounts in an amount equal to a contractual percentage of the Bank Partners’ monthly originations and month-end outstanding portfolio balance. Our maximum exposure to Bank Partner portfolio credit losses is contractually limited to the escrow that we establish with each Bank Partner. Cash set aside to meet this requirement is classified as restricted cash in our Unaudited Condensed Consolidated Balance Sheets. Our contracts with our Bank Partners entitle us to incentive payments when the finance charges billed to borrowers exceed the sum of an agreed-upon portfolio yield, a fixed servicing fee and realized credit losses. This incentive payment varies from month to month, primarily due to the amount of realized credit losses. If credit losses exceed an agreed-upon threshold, we are obligated to make limited payments to our Bank Partners, which obligation represents a financial guarantee in accordance with ASC 460, Guarantees . Under ASC 460, the guarantor undertakes a noncontingent obligation to stand ready to perform over the term of the guarantee and a contingent obligation to make future payments if the triggering events or conditions under the guarantee arrangements occur. Effective January 1, 2020, we adopted the provisions of ASU 2016-13, which apply only to the contingent aspect of the guarantee arrangement. Under the new standard, we are required to estimate the expected credit losses over the contractual period in which we are exposed to credit risk via a present contractual obligation to extend credit, unless that obligation is unconditionally cancellable by the issuer. As applied to our financial guarantee arrangements, we are required to estimate expected credit losses, and the impact of those estimates on our potential escrow payments, for loans within our Bank Partner portfolios that are either funded or approved for funding at the measurement date, but are precluded from including future loan originations by our Bank Partners. Consistent with the modeling of loan losses for any consumer loan portfolio assumed to go into "run-off," our recognized financial guarantee liability under this model represents a significant portion of the contractual escrow that we establish with each Bank Partner. Typically, additional financial guarantee liabilities are recorded as new Bank Partner loans are facilitated, along with a corresponding non-cash charge recorded as financial guarantee expense in the Unaudited Condensed Consolidated Statements of Operations. Historically, our actual cash payments required under the financial guarantee arrangements have been immaterial for our ongoing Bank Partners. As the terms of our guarantee arrangements are determined contractually with each Bank Partner, we measure our contingent obligation separately for each Bank Partner using a discounted cash flow method based on estimates of the outstanding loan attributes of the Bank Partner's loan servicing portfolio and our expectations of forecasted information, including macroeconomic conditions, over the period which our financial guarantee is expected to be used in a "run-off" scenario. We use our historical experience as a basis for estimating escrow usage and adjust for current conditions or forecasts of future conditions if they are determined to vary from our historical experience. Refer to "Recently Adopted Accounting Standards" in this Note 1 for discussion of our adoption of the provisions of ASU 2016-13 and Note 14 for additional information on our financial guarantees. For periods prior to January 1, 2020, the contingent aspect of the financial guarantee continues to be presented and disclosed in accordance with legacy guidance in ASC 450, Contingencies . Under this guidance, the contingent aspect of the financial guarantee represented the amount of payments to Bank Partners from the escrow accounts that we expected to be probable of occurring based on Bank Partner portfolio composition and our near-term expectation of credit losses. In estimating the obligation, we considered a variety of factors, including |
Recently Adopted Accounting Standards and Accounting Standards Issued but Not Yet Adopted | Recently Adopted Accounting Standards Measurement of credit losses on financial instruments In June 2016, the FASB issued ASU 2016-13, which requires upfront recognition of lifetime expected credit losses on certain financial instruments (or groups of financial instruments) using a current expected credit loss ("CECL") model. The standard is intended to better align the recognition of credit losses on financial instruments with management’s expectations of the net amount of principal balance expected to be collected on such financial instruments. Under CECL, management must determine expected credit losses for certain financial instruments held at the reporting date based on relevant information about past events, including historical experience, current conditions and reasonable and supportable forecasts. We adopted the standard as of January 1, 2020. Comparative periods continue to be presented and disclosed in accordance with applicable legacy guidance. Our primary financial instruments in the scope of CECL include cash equivalents, accounts receivable and off-balance sheet credit exposures under our financial guarantee arrangements with our Bank Partners, each of which is discussed in further detail below (as it relates to our implementation of the new standard) and within the respective sub-headings under "Summary of Significant Accounting Policies" in this Note 1. Cash Equivalents As our cash equivalents are invested in government securities that are either guaranteed by the FDIC or are secured by U.S. government-issued collateral, the risk of loss from nonpayment is presumed to be zero. As such, we did not establish an allowance for credit losses on our cash equivalents upon our adoption of the standard. Accounts Receivable We pool our accounts receivable, all of which are short-term in nature and arise from contracts with customers, based on shared risk characteristics to assess their risk of loss, even when that risk is remote. Historically, the majority of our accounts receivable did not have write-offs. For accounts receivables for which we historically experienced losses, we used an aging method and the average 12-month historical loss rate as a basis for estimating credit losses on the current accounts receivable balance. In the absence of relevant historical loss experience for the other pools of accounts receivables, we also used this average 12-month loss rate to inform our estimate of credit losses on those balances. For each pool of accounts receivable, we considered the conditions at the adoption date, such as the manner in which we collect funds, our counterparty credit risk and the underlying macroeconomic environment, and determined that the current conditions were comparable to our historical conditions. Further, given that we establish an allowance for all delinquent accounts receivable (typically deemed to be 31 days or more past due), providing for a maximum 30-day term of our accounts receivable balances, we determined that the forecasts about future conditions were also comparable to our historical conditions. As such, we did not adjust our historical loss rates at the adoption date and we continue to establish an allowance for a portion of current accounts receivable and all delinquent accounts receivable. Based on this methodology, we determined that the allowance for uncollectible accounts measured under the new standard at the adoption date for our pools of accounts receivable for which no history of losses existed was immaterial to our consolidated financial statements. Additionally, we determined that there was no impact from our adoption of the standard on the allowance for uncollectible accounts for our accounts receivable for which we historically experienced losses. Therefore, our adoption of the standard on January 1, 2020 did not have any impact on our consolidated financial statements. Refer to Note 5 for additional information on our accounts receivable. Financial Guarantees We are required to estimate expected credit losses, and the impact of those estimates on our potential escrow payments, for loans within our Bank Partner portfolios that are either funded or approved for funding at the measurement date, but are precluded from including future loan originations by our Bank Partners. We used a discounted cash flow method to estimate our expected risk of loss under the contingent aspect of our financial guarantees for each Bank Partner. In determining this measure, we forecasted each Bank Partner's loan portfolio composition in a "run-off" scenario, which is primarily impacted by assumptions around prepayments and loan pay downs. Our prepayment and loan pay down assumptions were derived from historical behavior curves for each loan plan and were applied to each Bank Partner's portfolio based on its composition of loans and where such loans were in their economic life cycle. The loan portfolio composition additionally informs our forecasts of the components that determine our incentive payments or, alternatively, escrow usage. Further, we use lifetime historical credit loss experience for each loan plan as a basis for estimating future credit losses. While there have subsequently been significant changes in macroeconomic conditions, as of our January 1, 2020 adoption date, we determined that the macroeconomic conditions representing the largest potential indicators of changes in credit losses, particularly the unemployment rate, were comparable to our historical conditions. Further, as our forecast period for escrow usage in a "run-off" scenario is typically relatively short-term in nature, we determined that the forecasts about future conditions were also comparable to our historical conditions. As such, we did not adjust our historical credit loss rates at the adoption date for our financial guarantee arrangements. As a result of adopting this standard, we recorded an additional financial guarantee liability of $118.0 million and a corresponding cumulative-effect adjustment to equity at the adoption date, including $32.2 million to retained earnings, net of the impact of a $10.4 million increase in deferred tax assets, and $75.4 million to noncontrolling interest. Our recognized financial guarantee liability subsequent to our adoption of the new standard of $134.7 million represented a significant portion of our $150.4 million contractual escrow that was included in our restricted cash balance as of December 31, 2019. Historically, our actual cash payments required under the financial guarantee arrangements have been immaterial for our ongoing Bank Partners. Refer to Note 14 for additional information on our financial guarantees. Customer's accounting for implementation costs incurred in a cloud computing arrangement that is a service contract In August 2018, the FASB issued ASU 2018-15, which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). Accordingly, costs for implementation activities in the application development stage are capitalized depending on the nature of the costs, while costs incurred during the preliminary project and post-implementation stages are expensed as the activities are performed. This standard also requires entities to amortize the capitalized implementation costs of a hosting arrangement that is a service contract over the term of the hosting arrangement and to apply the existing impairment guidance in ASC 350-40, Internal-Use Software , to the capitalized implementation costs as if the costs were long-lived assets. The standard clarifies that such capitalized implementation costs are also subject to the guidance on abandonment in ASC 360, Property, Plant, and Equipment . In addition, this standard requires alignment in presentation between: (i) the expense related to the capitalized implementation costs and the fees associated with the hosting element (service) of the arrangement on the statement of operations, (ii) the capitalized implementation costs and any prepayment for the fees of the associated hosting arrangement on the balance sheet, and (iii) the payments for capitalized implementation costs and the payments made for fees associated with the hosting element in the statement of cash flows. We elected to apply the standard prospectively to implementation costs incurred after the date of adoption. Therefore, our adoption of this standard on January 1, 2020 did not have any impact on our Unaudited Condensed Consolidated Financial Statements. Accounting Standards Issued, But Not Yet Adopted Facilitation of the Effects of Reference Rate Reform on Financial Reporting In March 2020, the FASB issued ASU 2020-04, which provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions that reference the London Interbank Offered Rate ("LIBOR") or another reference rate expected to be discontinued because of reference rate reform, if certain criteria are met. The standard applies to contract modifications that replace a reference rate affected by reference rate reform and contemporaneous modifications of other contract terms related to the replacement of the reference rate. Further, the standard provides exceptions to certain guidance in ASC 815, Derivatives and Hedging , related to changes to the critical terms of a hedging relationship due to reference rate reform and provides optional expedients for fair value, cash flow and net investment hedging relationships for which the component excluded from the assessment of hedge effectiveness is affected by reference rate reform. The standard is effective for us as of March 12, 2020 through December 31, 2022, and we may elect to apply the provisions of the standard as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020 up to the date that the financial statements are available to be issued. Once elected, the provisions of the standard must be applied prospectively for all similar eligible contract modifications. We are currently identifying arrangements referenced to rates that are expected to be discontinued and are evaluating our options for modifying such arrangements in accordance with the standard. Simplifying the Accounting for Income Taxes In December 2019, the FASB issued ASU 2019-12, which modifies ASC 740, Income Taxes , to simplify the accounting for income taxes by removing certain exceptions associated with (i) intraperiod tax allocations, (ii) recognition of deferred tax liability for equity method investments of foreign subsidiaries, and (iii) the calculation of income taxes in an interim period when in a loss position. Additionally, the standard simplifies accounting for (i) income taxes associated with franchise taxes, (ii) tax basis of goodwill in a business combination, (iii) the allocation of tax expense to a legal entity that is not subject to tax in standalone financial statements, (iv) enacted changes in tax laws, and (v) income taxes related to employee stock ownership plans and investments in qualified affordable housing projects accounted for under the equity method. The standard is effective for us on January 1, 2021. We are currently evaluating the potential impact of adopting this standard. |
Organization, Summary of Sign_3
Organization, Summary of Significant Accounting Policies and New Accounting Standards (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of cash and cash equivalents | The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the Unaudited Condensed Consolidated Balance Sheets to the total included within the Unaudited Condensed Consolidated Statements of Cash Flows as of the dates indicated. June 30, 2020 2019 Cash and cash equivalents $ 147,560 $ 209,176 Restricted cash 289,844 200,252 Cash and cash equivalents and restricted cash in Unaudited Condensed Consolidated Statements of Cash Flows $ 437,404 $ 409,428 |
Schedule of restricted cash | The following table provides a reconciliation of cash and cash equivalents and restricted cash reported within the Unaudited Condensed Consolidated Balance Sheets to the total included within the Unaudited Condensed Consolidated Statements of Cash Flows as of the dates indicated. June 30, 2020 2019 Cash and cash equivalents $ 147,560 $ 209,176 Restricted cash 289,844 200,252 Cash and cash equivalents and restricted cash in Unaudited Condensed Consolidated Statements of Cash Flows $ 437,404 $ 409,428 |
Revenue disaggregated by type of service | Revenue disaggregated by type of service was as follows for the periods presented: Three Months Ended Six Months Ended 2020 2019 2020 2019 Merchant fees $ 93,707 $ 96,127 $ 175,122 $ 170,221 Interchange fees 8,070 12,238 16,539 22,192 Transaction fees 101,777 108,365 191,661 192,413 Servicing fees (1) 28,481 30,318 59,764 49,951 Interest income (2) 2,702 57 3,389 755 Other (3) 2 12 5 31 Interest and other 2,704 69 3,394 786 Total revenue $ 132,962 $ 138,752 $ 254,819 $ 243,150 (1) For the three months ended June 30, 2020, includes a $1,048 thousand decrease in fair value of our servicing asset primarily due to the sale of participations in loans from an existing Bank Partner to the SPV. For the six months ended June 30, 2020, includes a $741 thousand increase in fair value of our servicing asset primarily associated with the growth in Bank Partner loan servicing portfolios. For the three and six months ended June 30, 2019, includes a $8,966 thousand change in fair value of our servicing assets. Refer to Note 3 for additional information. (2) Includes interest income received on loan receivables held for sale. |
Earnings per Share (Tables)
Earnings per Share (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
Basic and diluted earnings per share | The following table sets forth reconciliations of the numerators and denominators used to compute basic and diluted earnings per share of Class A common stock for the periods indicated. Three Months Ended Six Months Ended 2020 2019 2020 2019 Numerator: Income before income tax expense (benefit) $ 14,852 $ 34,727 $ 3,038 $ 41,533 Less: Net income attributable to noncontrolling interests 9,222 26,877 1,637 31,379 Less: Income tax expense (benefit) 1,497 (4,466) 602 (5,061) Net income attributable to GreenSky, Inc. – basic $ 4,133 $ 12,316 $ 799 $ 15,215 Add: Reallocation of net income attributable to noncontrolling interests from the assumed exchange of Holdco Units for Class A common stock 9,222 26,877 1,637 31,379 Less: Income tax expense on reallocation of net income attributable to noncontrolling interests (1) 2,160 5,928 578 4,561 Net income attributable to GreenSky, Inc. – diluted $ 11,195 $ 33,265 $ 1,858 $ 42,033 Denominator: Weighted average shares of Class A common stock outstanding – basic 65,150,317 61,081,834 64,400,507 59,523,049 Add: Dilutive effects, as shown separately below Holdco Units exchangeable for Class A common stock 111,429,933 115,939,261 112,075,383 119,405,831 Class A common stock options 341,485 2,435,080 404,874 2,677,026 Holdco warrants exchangeable for Class A common stock — — — 164,016 Unvested Class A common stock (2) 263,970 243,746 375,402 185,371 Weighted average shares of Class A common stock outstanding – diluted 177,185,705 179,699,921 177,256,166 181,955,293 Earnings per share of Class A common stock outstanding – basic $ 0.06 $ 0.20 $ 0.01 $ 0.26 Earnings per share of Class A common stock outstanding – diluted $ 0.06 $ 0.19 $ 0.01 $ 0.23 Excluded from diluted earnings per share, as their inclusion would have been anti-dilutive (3) Holdco Units 580,429 — 580,429 — Class A common stock options 4,202,378 2,806,641 4,202,378 2,806,641 Class A common stock awards 2,330,863 360,847 2,330,863 360,847 (1) We assumed effective tax rates of 24.6% and 4.2% for the three months ended June 30, 2020 and 2019, respectively, and 38.8% and (1.2)% for the six months ended June 30, 2020 and 2019, respectively, which represents the effective tax rates on the consolidated GreenSky, Inc. entity inclusive of the income taxes on the portion of GS Holdings' earnings that are attributable to noncontrolling interests. (2) Includes both unvested Class A common stock issued as part of the Reorganization Transactions and unvested Class A common stock awards issued subsequent to the Reorganization Transactions. (3) These amounts represent the number of instruments outstanding at the end of the period. Application of the treasury stock method would reduce these amounts if they had a dilutive effect and were included in the computation of diluted earnings per share. |
Fair Value of Assets and Liab_2
Fair Value of Assets and Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Carrying amounts and estimated fair values of assets and liabilities measured at fair value on a recurring or nonrecurring basis | The following table summarizes, by level within the fair value hierarchy, the carrying amounts and estimated fair values of our assets and liabilities measured at fair value on a recurring or nonrecurring basis or disclosed, but not carried, at fair value in the Unaudited Condensed Consolidated Balance Sheets as of the dates presented. There were no transfers into, out of, or between levels within the fair value hierarchy during any of the periods presented. Refer to Note 4, Note 7, Note 8 and Note 9 for additional information on these assets and liabilities. Level June 30, 2020 December 31, 2019 Carrying Fair Carrying Fair Assets: Cash and cash equivalents (1) 1 $ 147,560 $ 147,560 $ 195,760 $ 195,760 Loan receivables held for sale, net (2) 2 410,952 414,040 51,926 55,958 Servicing assets (3) 3 31,200 31,200 30,459 30,459 Liabilities: Finance charge reversal liability (3) 3 $ 198,755 $ 198,755 $ 206,035 $ 206,035 Term loan (1) 1 453,879 446,800 384,497 392,201 Interest rate swap (3) 2 16,450 16,450 2,763 2,763 Servicing liabilities (3) 3 2,799 2,799 3,796 3,796 (1) Disclosed, but not carried, at fair value. The increase in fair value of the term loan at June 30, 2020 compared to December 31, 2019 is primarily a result of the incremental term loan of $75.0 million entered into in June 2020, offset by a decrease related to COVID-19 impacts on the U.S. corporate debt market. Refer to Note 7 for additional details. (2) Measured at fair value on a nonrecurring basis. Loan receivables held for sale are recorded net of provision for credit losses. (3) Measured and carried at fair value on a recurring basis. |
Reconciliation of the beginning and ending fair value measurements of FCR Liability | The following table reconciles the beginning and ending fair value measurements of our FCR liability during the periods indicated. Three Months Ended Six Months Ended 2020 2019 2020 2019 Beginning balance $ 213,158 $ 149,598 $ 206,035 $ 138,589 Receipts (1) 59,600 38,931 104,308 71,054 Settlements (2) (110,053) (62,332) (200,142) (122,211) Fair value changes recognized in cost of revenue (3) 36,050 38,782 88,554 77,547 Ending balance $ 198,755 $ 164,979 $ 198,755 $ 164,979 (1) Includes: (i) incentive payments from Bank Partners, which is the surplus of finance charges billed to borrowers over an agreed-upon portfolio yield, a fixed servicing fee and realized net credit losses, (ii) cash received from recoveries on previously charged-off Bank Partner loans, and (iii) the proceeds received from transferring our rights to Charged-Off Receivables attributable to previously charged-off Bank Partner loans. We consider all monthly incentive payments from Bank Partners during the period to be related to billed finance charges on deferred interest products until monthly incentive payments exceed total billed finance charges on deferred products, which did not occur during the periods presented. (2) Represents the reversal of previously billed finance charges associated with deferred payment loan principal balances that were repaid within the promotional period. Amount also includes $20.0 million of billed finance charges not yet collected on participations in loans held by the SPV, which were paid to the Bank Partner in full as of the participation purchase dates. (3) A fair value adjustment is made based on the expected reversal percentage of billed finance charges (expected settlements), which is estimated at each reporting date. The fair value adjustment is recognized in cost of revenue in the Unaudited Condensed Consolidated Statements of Operations. |
Significant unobservable inputs used to value Level 3 FCR liability | The following table presents quantitative information about the significant unobservable inputs used to value the Level 3 FCR liability as of the dates presented. June 30, 2020 December 31, 2019 Range Weighted Average Range Weighted Average Reversal rate 62.0% – 95.5% 87.0 % 60.0 – 96.8% 87.5 % Discount rate 3.6 % 3.6 % 5.2 % 5.2 % |
Charged-off receivable transfers | The following table presents details of Charged-Off Receivables transfers during the three and six months ended June 30, 2019. Aggregate Unpaid Balance Proceeds Bank Partner Loan Total Bank Partner Loan Total Three Months Ended June 30, 2019 $ 53,585 $ 360 $ 53,945 $ 7,427 $ 50 $ 7,477 Six Months Ended June 30, 2019 107,237 1,027 108,264 14,782 141 14,923 |
Schedule of servicing assets at fair value | The following table reconciles the beginning and ending fair value measurements of our servicing assets associated with Bank Partner loans during the period presented. Three Months Ended Six Months Ended 2020 2019 2020 2019 Beginning balance $ 32,248 $ — $ 30,459 $ — Additions, net (1) (114) — 1,984 — Fair value changes recognized in servicing revenue (2) (934) 8,966 (1,243) 8,966 Ending balance $ 31,200 $ 8,966 $ 31,200 $ 8,966 (1) For the three and six months ended June 30, 2020, includes additions through assumptions of servicing obligations each time a loan is originated on our platform by a Bank Partner, as well as through transfers of loan receivables between Bank Partners or of loan receivables between GreenSky and Bank Partners and is net of the impact of loan principal pay downs in the Bank Partner portfolios. Additions are recognized in servicing revenue in the Unaudited Condensed Consolidated Statements of Operations. (2) For the three and six months ended June 30, 2020, primarily reflects the reduction of our servicing assets due to the passage of time and impact of purchases of participations in loans by the SPV. For the three and six months ended June 30, 2019, primarily reflective of an increase to the contractually specified fixed servicing fee for one of our Bank Partners. |
Servicing liabilities and unobservable inputs | The following table reconciles the beginning and ending fair value measurements of our servicing liabilities associated with transferring our rights to Charged-Off Receivables during the periods presented. Three Months Ended Six Months Ended 2020 2019 2020 2019 Beginning balance $ 3,279 $ 3,197 $ 3,796 $ 3,016 Initial obligation from transfer of Charged-Off Receivables (1) — 647 — 1,298 Fair value changes recognized in other gains (losses), net (2) (480) (497) (997) (967) Ending balance $ 2,799 $ 3,347 $ 2,799 $ 3,347 (1) Recognized in other gains (losses), net in the Unaudited Condensed Consolidated Statements of Operations. (2) Represents the reduction of our servicing liabilities due to the passage of time and collection of loan payments. |
Schedule of fair value assumption, servicing assets or liabilities | The following table presents quantitative information about the significant unobservable inputs used to value the Level 3 servicing assets and liabilities as of the dates presented. Input June 30, 2020 December 31, 2019 Range Weighted Average Range Weighted Average Cost of servicing (basis points) 57.5 – 108.0 106.4 57.5 – 108.0 106.2 Discount rate 18.0 % 18.0 % 18.0 % 18.0 % Weighted average remaining life (years) 2.4 – 5.9 2.4 2.3 – 5.9 2.4 Recovery period (years) 2.1 - 4.4 3.6 2.6 – 4.9 4.1 |
Loan Receivables Held for Sale
Loan Receivables Held for Sale (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Receivables [Abstract] | |
Activity in the balance of loan receivables held for sale | The following table summarizes the activity in the balance of loan receivables held for sale, net at lower of cost or fair value during the periods indicated. Six Months Ended 2020 2019 Beginning balance $ 51,926 $ 2,876 Additions (1) 441,558 65,804 Proceeds from sales and borrower payments (2) (67,238) (66,714) Decrease (increase) in valuation allowance (3) (11,194) 175 Transfers (4) (93) 1,590 Write offs and other (5) (4,007) (933) Ending balance $ 410,952 $ 2,798 (1) Includes purchase of $431.0 million participations in loans by the SPV. (2) Includes accrued interest and fees, recoveries of previously charged-off loan receivables held for sale, as well as proceeds from transferring our rights to Charged-Off Receivables attributable to loan receivables held for sale. We retain servicing arrangements on sold loan receivables with the same terms and conditions as loans that are originated by our Bank Partners. Income from loan receivables held for sale activities is recorded within interest and other revenue in the Unaudited Condensed Consolidated Statements of Operations. We sold loan receivables held for sale to certain Bank Partners at par on the following dates during the six months ended June 30, 2020 and 2019: 2020 2019 Date Amount Date Amount January 28 $ 24,071 March 27 $ 63,673 May 27 15,945 Total $ 40,016 $ 63,673 (3) Valuation allowance includes an increase in lower of cost or market fair value adjustments on our SPV Participations of $10,072 thousand and $0 during the six months ended June 30, 2020 and 2019, respectively, and an increase in provision for credit losses of $1,122 thousand during the six months ended June 30, 2020 and a decrease in provision for credit losses of $175 thousand during the six months ended June 30, 2019. (4) We temporarily hold certain loan receivables, which are originated by a Bank Partner, while non-originating Bank Partner eligibility is being determined. Once we determine that a loan receivable meets the investment requirements of an eligible Bank Partner, we transfer the loan receivable to the Bank Partner at cost plus any accrued interest. The reported amount also includes loan receivables that have been placed on non-accrual and non-payment status while we investigate consumer inquiries. (5) We received recovery payments of $159 thousand and $25 thousand during the six months ended June 30, 2020 and 2019, respectively. Recoveries of principal and finance charges and fees on previously written off loan receivables held for sale are recognized on a collected basis. Separately, during the six months ended June 30, 2020 and 2019, write offs and other were reduced by $0 and $141 thousand, respectively, related to cash proceeds received from transferring our rights to Charged-Off Receivables attributable to loan receivables held for sale. The cash proceeds received were recorded within sales, general and administrative expense in the Unaudited Condensed Consolidated Statements of Operations. Accounts receivable consisted of the following as of the dates indicated. Accounts Allowance for Accounts June 30, 2020 Transaction related $ 13,903 $ (218) $ 13,685 Servicing related 6,381 — 6,381 Total $ 20,284 $ (218) $ 20,066 December 31, 2019 Transaction related $ 12,863 $ (238) $ 12,625 Servicing related 6,868 — 6,868 Total $ 19,731 $ (238) $ 19,493 |
Activities associated with loan receivable sales and servicing activities | The following table presents activities associated with our loan receivable sales and servicing activities during the periods indicated. There were no gains or losses on sold loan receivables held for sale during the periods presented. Three Months Ended Six Months Ended 2020 2019 2020 2019 Cash Flows Sales of loans $ 15,945 $ — $ 40,016 $ 63,673 Servicing fees 3,571 1,050 4,811 1,736 |
Principal balances of sold loan receivables | The following tables present information about sold loan receivables held for sale that are not recorded in our Unaudited Condensed Consolidated Balance Sheets, but with which we have a continuing involvement through our servicing arrangements with our Bank Partners. The sold loan receivables held for sale are pooled with other loans originated by the Bank Partners for purposes of determining escrow balances and incentive payments. The escrow balances represent our only direct exposure to potential losses associated with these sold loan receivables. June 30, 2020 December 31, 2019 Total principal balance $ 303,079 $ 326,556 Delinquent loans (unpaid principal balance) 10,078 18,033 Three Months Ended Six Months Ended 2020 2019 2020 2019 Net charge-offs (unpaid principal balance) $ 2,294 $ 4,407 $ 6,250 $ 8,207 |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Receivables [Abstract] | |
Activity in the balance of loan receivables held for sale | The following table summarizes the activity in the balance of loan receivables held for sale, net at lower of cost or fair value during the periods indicated. Six Months Ended 2020 2019 Beginning balance $ 51,926 $ 2,876 Additions (1) 441,558 65,804 Proceeds from sales and borrower payments (2) (67,238) (66,714) Decrease (increase) in valuation allowance (3) (11,194) 175 Transfers (4) (93) 1,590 Write offs and other (5) (4,007) (933) Ending balance $ 410,952 $ 2,798 (1) Includes purchase of $431.0 million participations in loans by the SPV. (2) Includes accrued interest and fees, recoveries of previously charged-off loan receivables held for sale, as well as proceeds from transferring our rights to Charged-Off Receivables attributable to loan receivables held for sale. We retain servicing arrangements on sold loan receivables with the same terms and conditions as loans that are originated by our Bank Partners. Income from loan receivables held for sale activities is recorded within interest and other revenue in the Unaudited Condensed Consolidated Statements of Operations. We sold loan receivables held for sale to certain Bank Partners at par on the following dates during the six months ended June 30, 2020 and 2019: 2020 2019 Date Amount Date Amount January 28 $ 24,071 March 27 $ 63,673 May 27 15,945 Total $ 40,016 $ 63,673 (3) Valuation allowance includes an increase in lower of cost or market fair value adjustments on our SPV Participations of $10,072 thousand and $0 during the six months ended June 30, 2020 and 2019, respectively, and an increase in provision for credit losses of $1,122 thousand during the six months ended June 30, 2020 and a decrease in provision for credit losses of $175 thousand during the six months ended June 30, 2019. (4) We temporarily hold certain loan receivables, which are originated by a Bank Partner, while non-originating Bank Partner eligibility is being determined. Once we determine that a loan receivable meets the investment requirements of an eligible Bank Partner, we transfer the loan receivable to the Bank Partner at cost plus any accrued interest. The reported amount also includes loan receivables that have been placed on non-accrual and non-payment status while we investigate consumer inquiries. (5) We received recovery payments of $159 thousand and $25 thousand during the six months ended June 30, 2020 and 2019, respectively. Recoveries of principal and finance charges and fees on previously written off loan receivables held for sale are recognized on a collected basis. Separately, during the six months ended June 30, 2020 and 2019, write offs and other were reduced by $0 and $141 thousand, respectively, related to cash proceeds received from transferring our rights to Charged-Off Receivables attributable to loan receivables held for sale. The cash proceeds received were recorded within sales, general and administrative expense in the Unaudited Condensed Consolidated Statements of Operations. Accounts receivable consisted of the following as of the dates indicated. Accounts Allowance for Accounts June 30, 2020 Transaction related $ 13,903 $ (218) $ 13,685 Servicing related 6,381 — 6,381 Total $ 20,284 $ (218) $ 20,066 December 31, 2019 Transaction related $ 12,863 $ (238) $ 12,625 Servicing related 6,868 — 6,868 Total $ 19,731 $ (238) $ 19,493 |
Summary of balance of allowance for uncollectible amounts | The following table summarizes the activity in the balance of allowance for uncollectible amounts during the periods indicated. Three Months Ended Six Months Ended Beginning balance $ (262) $ (238) Provision for expected losses (201) (378) Write-offs 245 398 Ending balance $ (218) $ (218) |
Property, Equipment and Softw_2
Property, Equipment and Software (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property, equipment and software | Property, equipment and software were as follows as of the dates indicated. June 30, 2020 December 31, 2019 Furniture $ 2,806 $ 2,907 Leasehold improvements 4,714 4,902 Computer hardware 2,443 2,494 Software 26,167 20,126 Total property, equipment and software, at cost 36,130 30,429 Less: accumulated depreciation (5,858) (5,701) Less: accumulated amortization (8,321) (6,419) Total property, equipment and software, net $ 21,951 $ 18,309 |
Borrowings (Tables)
Borrowings (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Key details of the term loans | Key details of the term loan are as follows: June 30, 2020 December 31, 2019 Term loan, face value (1) $ 466,000 $ 393,000 Unamortized debt discount (2) (5,771) (3,115) Unamortized debt issuance costs (2) (6,350) (5,388) Term loan $ 453,879 $ 384,497 (1) The principal balance of the term loan is scheduled to be repaid on a quarterly basis at an amortization rate of 0.25% per quarter through December 31, 2024, with the balance due at maturity. (2) For the three months ended June 30, 2020 and 2019, debt discount of $187 thousand and $154 thousand, respectively, and debt issuance costs of $282 thousand and $266 thousand, respectively, were amortized into interest expense in the Unaudited Condensed Consolidated Statements of Operations. For the six months ended June 30, 2020 and 2019, debt discount of $340 thousand and $308 thousand, respectively, and debt issuance costs of $545 thousand and $532 thousand, respectively, were amortized into interest expense in the Unaudited Condensed Consolidated Statements of Operations. |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of notional amounts of outstanding derivative positions | As of June 30, 2020, we had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk. Notional Amount Fixed Interest Rate Termination Date Interest rate swap $ 350,000 1.80% June 30, 2023 |
Schedule of derivative instruments in statement of financial position, fair value | The following table presents the fair values and Unaudited Condensed Consolidated Balance Sheets locations of our derivative instruments as of the dates indicated. Balance Sheet Location June 30, 2020 December 31, 2019 Designated as cash flow hedges Interest rate swap Other liabilities $ 16,450 $ 2,763 Not designated as hedges FCR liability Finance charge reversal liability $ 198,755 $ 206,035 Purchase price discount/premium Other liabilities — — |
Derivative instruments, gain (loss) | The following table presents the impacts of our derivative instruments on our Unaudited Condensed Consolidated Statements of Operations for the periods indicated. Three Months Ended Six Months Ended 2020 2019 2020 2019 Designated as cash flow hedges Interest rate swap – gain (loss) reclassified into interest expense $ (1,140) $ — $ (1,247) $ — Interest rate swap – gain (loss) reclassified into income tax expense 103 — 112 — Not designated as hedges FCR liability – change in fair value recorded in cost of revenue $ 36,050 $ 38,782 $ 88,554 $ 77,547 |
Schedule of accumulated other comprehensive income (loss) | The following table summarizes the changes in the components of accumulated other comprehensive income (loss) associated with our cash flow hedge, which exclude amounts pertaining to noncontrolling interests, for the period presented. There was no accumulated other comprehensive income (loss) activity during the three and six months ended June 30, 2019. Cash Flow Hedge Three Months Ended Six Months Ended Accumulated other comprehensive income (loss), beginning balance $ (4,294) $ (756) Other comprehensive income (loss) before reclassifications and tax (1,034) (5,740) Tax (expense) benefit 251 1,390 Other comprehensive income (loss) before reclassifications, net of tax (783) (4,350) Reclassifications out of accumulated other comprehensive income (loss), net of tax (1) 321 350 Net (increase) decrease in other comprehensive loss (462) (4,000) Accumulated other comprehensive income (loss), ending balance $ (4,756) $ (4,756) |
Other Liabilities (Tables)
Other Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Other Liabilities Disclosure [Abstract] | |
Other liabilities | The following table details the components of other liabilities in the Unaudited Condensed Consolidated Balance Sheets as of the dates indicated. June 30, 2020 December 31, 2019 Transaction processing liabilities $ 21,277 $ 24,465 Servicing liabilities (1) 2,799 3,796 Distributions payable 4,073 5,978 Interest rate swap (2) 16,450 2,763 Tax related liabilities (3) 873 873 Operating lease liabilities 12,104 13,884 Accruals and other liabilities 9,011 9,442 Other liabilities $ 66,587 $ 61,201 (1) We elected the fair value method to account for our servicing liabilities. Refer to Note 3 for additional information. (2) Refer to Note 3 and Note 8 for additional information on our interest rate swap, which was in a liability position as of June 30, 2020 and December 31, 2019. (3) Tax related liabilities primarily include certain taxes payable related to the Reorganization Transactions. |
Stockholders Equity (Deficit) (
Stockholders Equity (Deficit) (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
Schedule of dividends declared | The following table summarizes activity associated with our non-tax and tax distributions during the periods indicated. Three Months Ended Six Months Ended Remaining Reserved Payment (1) (in millions) 2020 2019 2020 2019 Non-tax distributions previously declared and paid upon vesting Credit Agreement Distributions (2) Distributions $ 0.1 $ 0.8 $ 1.2 $ 2.0 $ 2.7 Related party payments — 0.6 — 0.6 — Special Operating Distributions (3) Distributions 0.1 0.4 0.7 1.0 1.4 Related party payments — 0.2 — 0.2 — Tax distributions 0.4 13.1 31.5 14.0 N/A Total $ 0.6 $ 15.1 $ 33.4 $ 17.8 $ 4.1 (1) As of June 30, 2020, all remaining portions of the non-tax distributions were recorded within other liabilities in the Unaudited Condensed Consolidated Balance Sheets. (2) See Note 7 for discussion of distributions using the proceeds from our borrowings, a portion of which were declared to related parties, for which no payments were made during the three and six months ended June 30, 2020 and for which all payments were satisfied as of June 30, 2019. (3) In May 2018, we declared a special operating distribution of $26.2 million, a portion of which was declared to a related party, for which no payments were made during the three and six months ended June 30, 2020 and for which all payments were satisfied as of June 30, 2019. In December 2017, we declared a $160.0 million special cash distribution to Holdco Unit holders and holders of profits interests. |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Share-based compensation, stock options, activity | Class A common stock option ("Options") activity was as follows during the periods indicated: Six Months Ended Six Months Ended Number of Weighted Number of Outstanding at beginning of period 4,181,909 $ 11.36 8,053,292 Granted (1) 1,100,456 3.73 1,290,012 Exercised (2)(3) (105,000) 5.65 (851,401) Forfeited (406,615) 19.16 (148,819) Expired (4) (111,704) 18.45 (1,500) Outstanding at end of period (5) 4,659,046 $ 8.84 8,341,584 Exercisable at end of period (5)(6) 1,682,264 $ 8.11 5,242,936 (1) Weighted average grant date fair value of Options granted during the six months ended June 30, 2020 and 2019 was $1.72 and $3.80, respectively. (2) The total intrinsic value of Options exercised, which is defined as the amount by which the market value of the stock on the date of exercise exceeds the exercise price, during the six months ended June 30, 2020 and 2019 was $0.2 million and $4.6 million, respectively. (3) During the six months ended June 30, 2020, Options exercisable for 105,000 shares of Class A common stock were exercised by means of a cashless net exercise procedure, which resulted in the issuance of 15,051 shares of Class A common stock and for which the Company paid withholding taxes of $0.1 million. Employees paid $0.3 million to the Company during the six months ended June 30, 2019 to exercise Options, which resulted in the issuance of 34,897 shares of Class A common stock. In addition, during this period, Options exercisable for 816,500 shares of Class A common stock were exercised by means of a cashless net exercise procedure, which resulted in the issuance of 246,396 shares of Class A common stock and for which the Company paid withholding taxes of $1.6 million. (4) Expired Options represent vested, underwater Options that were not exercised by terminated employees within 30 days from the employment termination date, as stipulated in the Option award agreements. (5) The aggregate intrinsic value and weighted average remaining contractual terms of Options outstanding and Options exercisable were as follows as of the date indicated: June 30, 2020 Aggregate intrinsic value (in millions) Options outstanding $ 3.0 Options exercisable $ 1.7 Weighted average remaining term (in years) Options outstanding 7.8 Options exercisable 5.8 (6) The total fair value, based on grant date fair value, of Options that vested during the six months ended June 30, 2020 and 2019 was $2.4 million and $1.4 million, respectively. |
Schedule of share-based compensation, options, grants in period, grant date intrinsic value | The aggregate intrinsic value and weighted average remaining contractual terms of Options outstanding and Options exercisable were as follows as of the date indicated: June 30, 2020 Aggregate intrinsic value (in millions) Options outstanding $ 3.0 Options exercisable $ 1.7 Weighted average remaining term (in years) Options outstanding 7.8 Options exercisable 5.8 |
Schedule of nonvested share activity | Unvested Holdco Units activity was as follows during the periods indicated: Six Months Ended Six Months Ended Number of Weighted Average Grant Date Number of Unvested at beginning of period 1,112,607 $ 23.00 2,514,856 Forfeited — N/A (273,734) Vested (1) (258,524) 23.00 (659,527) Unvested at end of period 854,083 $ 23.00 1,581,595 (1) The total fair value, based on grant date fair value, of previously unvested Holdco Units that vested during the six months ended June 30, 2020 and 2019 was $5.9 million and $15.2 million, respectively. Unvested Class A common stock activity was as follows during the periods indicated: Six Months Ended Six Months Ended Class A Weighted Average Grant Date Class A Unvested at beginning of period 2,999,343 $ 11.53 454,561 Granted 2,821,735 3.79 1,873,512 Forfeited (1) (295,151) 12.87 (146,859) Vested (2) (548,882) 13.42 (66,789) Unvested at end of period 4,977,045 $ 6.85 2,114,425 (1) Forfeited shares of unvested Class A common stock associated with restricted stock awards are held in our treasury stock account. Refer to Note 11 for additional information on our treasury stock. |
Commitments, Contingencies an_2
Commitments, Contingencies and Guarantees (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Lease, cost | Supplemental cash flow and noncash information related to our operating leases were as follows for the period indicated. Six Months Ended 2020 2019 Cash paid for amounts included in the measurement of operating lease liabilities Operating cash flows from operating leases $ 2,366 $ 1,927 Noncash operating lease ROU assets obtained in exchange for operating lease liabilities Resulting from our adoption of ASU 2016-02 $ — $ 11,279 Resulting from new or modified leases 9 2,975 Supplemental balance sheet information related to our operating leases was as follows as of the dates indicated. June 30, 2020 December 31, 2019 Operating lease ROU assets $ 9,590 $ 11,268 Operating lease liabilities $ 12,104 $ 13,884 Weighted average remaining lease term (in years) 2.8 3.3 Weighted average discount rate 5.7 % 5.7 % |
Schedule of operating lease liability, maturity | For the periods presented, maturities of operating lease liabilities as of the date indicated and a reconciliation of the total undiscounted cash flows to the operating lease liabilities in the Unaudited Condensed Consolidated Balance Sheets, were as follows: June 30, 2020 Remainder of 2020 $ 2,322 2021 4,897 2022 3,706 2023 1,501 2024 810 Thereafter — Total lease payments $ 13,236 Less: imputed interest (1,132) Operating lease liabilities $ 12,104 |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Variable Interest Entities | The following table presents the balances related to GS Holdings, inclusive of the SPV, that are included in the Unaudited Condensed Consolidated Balance Sheets as of the dates indicated, inclusive of GreenSky, Inc.'s interest in the variable interest entity. June 30, 2020 December 31, 2019 Assets Cash and cash equivalents $ 113,560 $ 177,730 Restricted cash 289,844 250,081 Loan receivables held for sale, net 410,952 51,926 Accounts receivable, net 20,066 19,493 Property, equipment and software, net 21,951 18,309 Other assets 50,827 49,648 Total assets (1) $ 907,200 $ 567,187 Liabilities and Members Equity (Deficit) Liabilities Accounts payable $ 13,356 $ 11,912 Accrued compensation and benefits 7,034 10,734 Other accrued expenses 3,947 3,244 Finance charge reversal liability 198,755 206,035 Term loan 453,879 384,497 SPV facility 299,000 — Financial guarantee liability 163,301 16,698 Other liabilities 64,199 60,328 Total liabilities (2) 1,203,471 693,448 Members Equity (Deficit) Equity (deficit) attributable to Continuing LLC Members (183,302) (80,758) Equity (deficit) attributable to GreenSky, Inc. (112,969) (45,503) Total members equity (deficit) (296,271) (126,261) Total liabilities and members equity (deficit) $ 907,200 $ 567,187 (1) Includes $408.7 million and $0 million of assets held by the SPV as of June 30, 2020 and December 31, 2019, respectively. (2) Includes $299.6 million and $0 million of liabilities held by the SPV as of June 30, 2020 and December 31, 2019, respectively. The following table reflects the impact of consolidation of GS Holdings, inclusive of the SPV, into the Unaudited Condensed Consolidated Statements of Operations for the periods indicated. Three Months Ended Six Months Ended 2020 2019 2020 2019 Total revenue $ 133,649 $ 138,695 $ 254,819 $ 242,395 Total costs and expenses 115,880 92,189 242,941 184,401 Operating profit 17,769 46,506 11,878 57,994 Total other income (expense), net (2,937) (5,377) (8,944) (10,059) Net income $ 14,832 $ 41,129 $ 2,934 $ 47,935 The following table reflects the cash flow impact of GS Holdings, inclusive of the SPV, on the Unaudited Condensed Consolidated Statements of Cash Flows for the periods indicated. Six Months Ended 2020 2019 Net cash provided by (used in) operating activities $ (333,842) $ 89,789 Net cash used in investing activities (8,524) (7,123) Net cash provided by (used in) financing activities 317,959 (128,597) Net increase (decrease) in cash and cash equivalents and restricted cash (24,407) (45,931) Cash and cash equivalents and restricted cash at beginning of period 427,811 449,473 Cash and cash equivalents and restricted cash at end of period $ 403,404 $ 403,542 |
Organization, Summary of Sign_4
Organization, Summary of Significant Accounting Policies and New Accounting Standards - Narrative (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Jan. 01, 2020 | Dec. 31, 2019 | Aug. 24, 2017 | |
Subsidiary, Sale of Stock [Line Items] | |||||||
Financial guarantee | $ 10,248,000 | $ 1,696,000 | $ 28,656,000 | $ 2,918,000 | |||
Financial guarantee losses | 28,656,000 | 284,000 | |||||
Other gains (losses), net | 830,000 | (6,033,000) | 1,806,000 | (5,718,000) | |||
Sales, general and administrative | 8,590,000 | 7,302,000 | 18,678,000 | 14,555,000 | |||
Interest and dividend income | (246,000) | (812,000) | (868,000) | (1,710,000) | |||
Interest and other | 2,704,000 | 69,000 | 3,394,000 | 786,000 | |||
Remaining performance obligations | 0 | 0 | |||||
Capitalized contract cost | 0 | 0 | $ 0 | ||||
Volume-based price concessions for merchants and sponsors | 3,002,000 | 3,198,000 | 8,031,000 | 9,106,000 | |||
Provision for doubtful accounts | 201,000 | 387,000 | 378,000 | 596,000 | |||
Financial guarantee liability | 163,301,000 | 163,301,000 | 16,698,000 | ||||
Retained earnings | 24,512,000 | 24,512,000 | 56,109,000 | ||||
Deferred tax assets, net | 383,107,000 | 383,107,000 | 364,841,000 | ||||
Reclassification adjustment | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Interest and dividend income | 56,000 | 755,000 | |||||
Interest and other | 56,000 | 755,000 | |||||
Reclassification adjustment | Valuation allowance for loan receivables held for sale | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Other gains (losses), net | 342,000 | 783,000 | |||||
Sales, general and administrative | 342,000 | 783,000 | |||||
Reclassification adjustment | Proceeds from transferring rights to charged-off receivables attributable to loan receivables held for sale | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Other gains (losses), net | 50,000 | 141,000 | |||||
Sales, general and administrative | $ 50,000 | $ 141,000 | |||||
Financial Guarantee | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Financial guarantee liability | 163,300,000 | 163,300,000 | 16,700,000 | ||||
Contractual escrow | $ 169,500,000 | 169,500,000 | $ 150,400,000 | ||||
Cumulative effect of accounting change | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Financial guarantee liability | $ 118,000,000 | ||||||
Retained earnings | 32,200,000 | ||||||
Deferred tax assets, net | 10,400,000 | ||||||
Noncontrolling Interest in Variable Interest Entity | 75,400,000 | ||||||
Cumulative effect of accounting change | Financial Guarantee | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Financial guarantee losses | $ (28,700,000) | ||||||
Adjusted balance | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Financial guarantee liability | $ 134,700,000 | ||||||
GreenSky, LLC | GS Holdings | |||||||
Subsidiary, Sale of Stock [Line Items] | |||||||
Economic interest (as a percent) | 100.00% |
Organization, Summary of Sign_5
Organization, Summary of Significant Accounting Policies and New Accounting Standards - Cash and restricted cash (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2018 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Cash and cash equivalents | $ 147,560 | $ 209,176 | ||
Restricted cash | 289,844 | $ 250,081 | 200,252 | |
Cash and cash equivalents and restricted cash in Unaudited Condensed Consolidated Statements of Cash Flows | $ 437,404 | $ 445,841 | $ 409,428 | $ 458,499 |
Organization, Summary of Sign_6
Organization, Summary of Significant Accounting Policies and New Accounting Standards - Revenue disaggregated by type of service (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 132,962 | $ 138,752 | $ 254,819 | $ 243,150 |
Decrease in servicing assets | (1,048) | |||
Changes in fair value of servicing assets | (934) | 8,966 | (1,243) | 8,966 |
Transaction fees | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 101,777 | 108,365 | 191,661 | 192,413 |
Merchant fees | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 93,707 | 96,127 | 175,122 | 170,221 |
Interchange fees | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 8,070 | 12,238 | 16,539 | 22,192 |
Servicing fees | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 28,481 | 30,318 | 59,764 | 49,951 |
Changes in fair value of servicing assets | 741 | |||
Interest and Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 2,704 | 69 | 3,394 | 786 |
Interest | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | 2,702 | 57 | 3,389 | 755 |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenue | $ 2 | $ 12 | $ 5 | $ 31 |
Earnings per Share (Details)
Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Numerator: | ||||
Income before income tax expense (benefit) | $ 14,852 | $ 34,727 | $ 3,038 | $ 41,533 |
Less: Net income attributable to noncontrolling interests | 9,222 | 26,877 | 1,637 | 31,379 |
Less: Income tax expense (benefit) | 1,497 | (4,466) | 602 | (5,061) |
Net income attributable to GreenSky, Inc. – basic | 4,133 | 12,316 | 799 | 15,215 |
Add: Reallocation of net income attributable to noncontrolling interests from the assumed exchange of Holdco Units for Class A common stock | 9,222 | 26,877 | 1,637 | 31,379 |
Less: Income tax expense (benefit) on reallocation of net income (loss) attributable to noncontrolling interests | 2,160 | 5,928 | 578 | 4,561 |
Net income attributable to GreenSky, Inc. – diluted | $ 11,195 | $ 33,265 | $ 1,858 | $ 42,033 |
Denominator: | ||||
Weighted average shares of Class A common stock outstanding - basic (in shares) | 65,150,317 | 61,081,834 | 64,400,507 | 59,523,049 |
Add: Dilutive effects, as shown separately below | ||||
Holdco warrants exchangeable for Class A common stock (in shares) | 0 | 0 | 0 | 164,016 |
Weighted average shares of Class A common stock outstanding - diluted (in shares) | 177,185,705 | 179,699,921 | 177,256,166 | 181,955,293 |
Earnings per share of Class A common stock outstanding - basic (in dollars per share) | $ 0.06 | $ 0.20 | $ 0.01 | $ 0.26 |
Earnings per share of Class A common stock outstanding - diluted (in dollars per share) | $ 0.06 | $ 0.19 | $ 0.01 | $ 0.23 |
Effective income tax rate (as a percent) | 10.10% | (12.90%) | 19.80% | (12.20%) |
Noncontrolling Interest | ||||
Add: Dilutive effects, as shown separately below | ||||
Effective income tax rate (as a percent) | 24.60% | 4.20% | 38.80% | (1.20%) |
HoldCo Units | ||||
Add: Dilutive effects, as shown separately below | ||||
Holdco Units that are exchangeable for Class A common stock (in shares) | 111,429,933 | 115,939,261 | 112,075,383 | 119,405,831 |
Class A common stock | ||||
Add: Dilutive effects, as shown separately below | ||||
Dilutive effect of share based compensation awards (in shares) | 341,485 | 2,435,080 | 404,874 | 2,677,026 |
Excluded from diluted earnings per share, as their inclusion would have been anti-dilutive (in shares) | 4,202,378 | 2,806,641 | 4,202,378 | 2,806,641 |
Unvested Class A stock awards | ||||
Add: Dilutive effects, as shown separately below | ||||
Dilutive effect of share based compensation awards (in shares) | 263,970 | 243,746 | 375,402 | 185,371 |
Excluded from diluted earnings per share, as their inclusion would have been anti-dilutive (in shares) | 2,330,863 | 360,847 | 2,330,863 | 360,847 |
Holdco Units | ||||
Add: Dilutive effects, as shown separately below | ||||
Excluded from diluted earnings per share, as their inclusion would have been anti-dilutive (in shares) | 580,429 | 0 | 580,429 | 0 |
Fair Value of Assets and Liab_3
Fair Value of Assets and Liabilities - Carrying amounts and estimated fair values of assets and liabilities measured at fair value on a recurring or nonrecurring basis (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Assets: | ||
Cash and cash equivalents | $ 147,560 | $ 195,760 |
Liabilities: | ||
Finance charge reversal liability | 198,755 | 206,035 |
Interest rate swap | 16,450 | 2,763 |
Carrying Value | Measured at fair value on a nonrecurring basis | Level 1 | ||
Assets: | ||
Cash and cash equivalents | 147,560 | 195,760 |
Liabilities: | ||
Term loan | 453,879 | 384,497 |
Carrying Value | Measured at fair value on a nonrecurring basis | Level 2 | ||
Assets: | ||
Loan receivables held for sale, net | 410,952 | 51,926 |
Carrying Value | Measured at fair value on a recurring basis | Level 2 | ||
Liabilities: | ||
Interest rate swap | 16,450 | 2,763 |
Carrying Value | Measured at fair value on a recurring basis | Level 3 | ||
Assets: | ||
Servicing assets | 31,200 | 30,459 |
Liabilities: | ||
Finance charge reversal liability | 198,755 | 206,035 |
Servicing liability | 2,799 | 3,796 |
Fair Value | Measured at fair value on a nonrecurring basis | Level 1 | ||
Assets: | ||
Cash and cash equivalents | 147,560 | 195,760 |
Liabilities: | ||
Term loan | 446,800 | 392,201 |
Fair Value | Measured at fair value on a nonrecurring basis | Level 1 | Incremental term loan | ||
Liabilities: | ||
Term loan | 75,000 | |
Fair Value | Measured at fair value on a nonrecurring basis | Level 2 | ||
Assets: | ||
Loan receivables held for sale, net | 414,040 | 55,958 |
Fair Value | Measured at fair value on a recurring basis | Level 2 | ||
Liabilities: | ||
Interest rate swap | 16,450 | 2,763 |
Fair Value | Measured at fair value on a recurring basis | Level 3 | ||
Assets: | ||
Servicing assets | 31,200 | 30,459 |
Liabilities: | ||
Finance charge reversal liability | 198,755 | 206,035 |
Servicing liability | $ 2,799 | $ 3,796 |
Fair Value of Assets and Liab_4
Fair Value of Assets and Liabilities - Additional information (Narrative) (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||||
Reversal rate assumption | 24 months | ||||
Amount recovered on transferred Charged-Off Receivables | $ 5,350,000 | $ 5,495,000 | $ 11,212,000 | $ 10,655,000 | |
Servicing fees | 29,529,000 | 21,352,000 | $ 59,023,000 | 40,985,000 | |
Period after which collection efforts will cease | 5 years | ||||
Minimum | |||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||||
Interest-free promotional period | 6 months | ||||
Maximum | |||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||||
Interest-free promotional period | 24 months | ||||
Cash Flow Hedging | Interest rate swap | |||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||||
Derivative, notional amount | $ 350,000,000 | $ 350,000,000 | $ 350,000,000 | $ 350,000,000 | $ 350,000,000 |
Derivative, term of contract | 4 years |
Fair Value of Assets and Liab_5
Fair Value of Assets and Liabilities - Reconciliation of the beginning and ending fair value measurements of FCR Liability (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
SPV | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation | ||||
Billed finance charges not yet collected | $ 20,000 | $ 20,000 | ||
Finance charge reversals | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation | ||||
Beginning balance | 213,158 | $ 149,598 | 206,035 | $ 138,589 |
Receipts | 59,600 | 38,931 | 104,308 | 71,054 |
Settlements | (110,053) | (62,332) | (200,142) | (122,211) |
Fair value changes recognized in cost of revenue | 36,050 | 38,782 | 88,554 | 77,547 |
Ending balance | $ 198,755 | $ 164,979 | $ 198,755 | $ 164,979 |
Fair Value of Assets and Liab_6
Fair Value of Assets and Liabilities - Significant unobservable inputs used to value Level 3 FCR liability (Details) | Jun. 30, 2020 | Dec. 31, 2019 |
Discount rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Reversal rate | 0.036 | 0.052 |
Minimum | Reversal rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Reversal rate | 0.620 | 0.600 |
Maximum | Reversal rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Reversal rate | 0.955 | 0.968 |
Weighted average | Reversal rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Reversal rate | 0.870 | 0.875 |
Weighted average | Discount rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Reversal rate | 0.036 | 0.052 |
Fair Value of Assets and Liab_7
Fair Value of Assets and Liabilities - Charged-off receivable transfers (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Transfer of Financial Assets Accounted for as Sales [Line Items] | |||
Aggregate Unpaid Balance | $ 53,945,000 | $ 108,264,000 | |
Proceeds | 7,477,000 | 14,923,000 | |
Bank Partner loans | |||
Transfer of Financial Assets Accounted for as Sales [Line Items] | |||
Aggregate Unpaid Balance | 53,585,000 | 107,237,000 | |
Proceeds | 7,427,000 | 14,782,000 | |
Loan receivables held for sale | |||
Transfer of Financial Assets Accounted for as Sales [Line Items] | |||
Aggregate Unpaid Balance | 360,000 | 1,027,000 | |
Proceeds | $ 50,000 | $ 0 | $ 141,000 |
Fair Value of Assets and Liab_8
Fair Value of Assets and Liabilities - Servicing assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Servicing Asset at Fair Value, Amount [Roll Forward] | ||||
Beginning balance | $ 32,248 | $ 0 | $ 30,459 | $ 0 |
Additions, net | (114) | 0 | 1,984 | 0 |
Fair value changes recognized in servicing and other revenue | (934) | 8,966 | (1,243) | 8,966 |
Ending balance | $ 31,200 | $ 8,966 | $ 31,200 | $ 8,966 |
Fair Value of Assets and Liab_9
Fair Value of Assets and Liabilities - Servicing liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Servicing Liability at Fair Value, Amount | ||||
Beginning balance | $ 3,279 | $ 3,197 | $ 3,796 | $ 3,016 |
Initial obligation from transfer of Charged-Off Receivables | 0 | 647 | 0 | 1,298 |
Other changes in fair value | (480) | (497) | (997) | (967) |
Ending balance | $ 2,799 | $ 3,347 | $ 2,799 | $ 3,347 |
Fair Value of Assets and Lia_10
Fair Value of Assets and Liabilities - Unobservable inputs (Details) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Servicing Assets at Fair Value [Line Items] | ||
Discount rate | 18.00% | 18.00% |
Minimum | ||
Servicing Assets at Fair Value [Line Items] | ||
Cost of servicing (basis points) | 5750.00% | 5750.00% |
Weighted average remaining life (years) | 2 years 4 months 24 days | 2 years 3 months 18 days |
Recovery period (years) | 2 years 1 month 6 days | 2 years 7 months 6 days |
Maximum | ||
Servicing Assets at Fair Value [Line Items] | ||
Cost of servicing (basis points) | 10800.00% | 10800.00% |
Weighted average remaining life (years) | 5 years 10 months 24 days | 5 years 10 months 24 days |
Recovery period (years) | 4 years 4 months 24 days | 4 years 10 months 24 days |
Weighted Average | ||
Servicing Assets at Fair Value [Line Items] | ||
Cost of servicing (basis points) | 10640.00% | 10620.00% |
Discount rate | 18.00% | 18.00% |
Weighted average remaining life (years) | 2 years 4 months 24 days | 2 years 4 months 24 days |
Recovery period (years) | 3 years 7 months 6 days | 4 years 1 month 6 days |
Loan Receivables Held for Sal_2
Loan Receivables Held for Sale - Activity in the balance of loan receivables held for sale (Details) - USD ($) | May 27, 2020 | Jan. 28, 2020 | Mar. 27, 2019 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 |
Loans Receivable Held-for-sale, Net, Reconciliation to Cash Flow | ||||||
Beginning balance | $ 51,926,000 | $ 2,876,000 | ||||
Additions | 441,558,000 | 65,804,000 | ||||
Proceeds from sales and borrower payments | (67,238,000) | (66,714,000) | ||||
Decrease (increase) in valuation allowance | (11,194,000) | 175,000 | ||||
Transfers | (93,000) | 1,590,000 | ||||
Write offs and other | (4,007,000) | (933,000) | ||||
Ending balance | $ 2,798,000 | 410,952,000 | 2,798,000 | |||
Loans receivable, held for sale, amount sold | $ 15,945,000 | $ 24,071,000 | $ 63,673,000 | 40,016,000 | 63,673,000 | |
Mark to market on loan receivables held for sale | 10,072,000 | 0 | ||||
Valuation allowance | (1,122,000) | 175,000 | ||||
Recovery payments received | 159,000 | 25,000 | ||||
Proceeds | 7,477,000 | 14,923,000 | ||||
SPV | ||||||
Loans Receivable Held-for-sale, Net, Reconciliation to Cash Flow | ||||||
Additions | 431,000,000 | |||||
Mark to market on loan receivables held for sale | 10,072,000 | 0 | ||||
Loan receivables held for sale | ||||||
Loans Receivable Held-for-sale, Net, Reconciliation to Cash Flow | ||||||
Proceeds | $ 50,000 | $ 0 | $ 141,000 |
Loan Receivables Held for Sal_3
Loan Receivables Held for Sale - Activities associated with loan receivable sales and servicing activities (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Receivables [Abstract] | ||||
Gain/(loss) on sold loan receivables held for sale | $ 0 | $ 0 | ||
Cash Flows | ||||
Sales of loans | $ 15,945,000 | $ 0 | 40,016,000 | 63,673,000 |
Servicing fees | $ 3,571,000 | $ 1,050,000 | $ 4,811,000 | $ 1,736,000 |
Loan Receivables Held for Sal_4
Loan Receivables Held for Sale - Principal balances of sold loan receivables (Details) - Bank Partners - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Qualitative and Quantitative Information, Transferor's Continuing Involvement [Line Items] | |||||
Total principal balance | $ 303,079 | $ 303,079 | $ 326,556 | ||
Delinquent loans (unpaid principal balance) | 10,078 | 10,078 | $ 18,033 | ||
Net charge-offs (unpaid principal balance) | $ 2,294 | $ 4,407 | $ 6,250 | $ 8,207 |
Accounts Receivable -Activity i
Accounts Receivable -Activity in Balance of Loan Receivables Held for Sale (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accounts Receivable, Gross | $ 20,284 | $ 19,731 | |
Allowance for Uncollectible Amounts | (218) | $ (262) | (238) |
Accounts Receivable, Net | 20,066 | 19,493 | |
Transaction related | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accounts Receivable, Gross | 13,903 | 12,863 | |
Allowance for Uncollectible Amounts | (218) | (238) | |
Accounts Receivable, Net | 13,685 | 12,625 | |
Servicing related | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Accounts Receivable, Gross | 6,381 | 6,868 | |
Allowance for Uncollectible Amounts | 0 | 0 | |
Accounts Receivable, Net | $ 6,381 | $ 6,868 |
Accounts Receivable - Summary o
Accounts Receivable - Summary of Balance of Allowance for Uncollectible Amounts (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Contract with Customer, Asset, Allowance for Credit Loss [Roll Forward] | ||||
Beginning balance | $ (262) | $ (238) | ||
Provision for expected losses | (201) | $ (387) | (378) | $ (596) |
Write-offs | 245 | 398 | ||
Ending balance | $ (218) | $ (218) |
Property, Equipment and Softw_3
Property, Equipment and Software (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Line Items] | ||
Total property, equipment and software, at cost | $ 36,130 | $ 30,429 |
Less: accumulated depreciation | (5,858) | (5,701) |
Less: accumulated amortization | (8,321) | (6,419) |
Total property, equipment and software, net | 21,951 | 18,309 |
Furniture | ||
Property, Plant and Equipment [Line Items] | ||
Total property, equipment and software, at cost | 2,806 | 2,907 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total property, equipment and software, at cost | 4,714 | 4,902 |
Computer hardware | ||
Property, Plant and Equipment [Line Items] | ||
Total property, equipment and software, at cost | 2,443 | 2,494 |
Software | ||
Property, Plant and Equipment [Line Items] | ||
Total property, equipment and software, at cost | $ 26,167 | $ 20,126 |
Borrowings - Credit Agreement (
Borrowings - Credit Agreement (Details) - USD ($) | May 23, 2018 | Jun. 30, 2020 | May 31, 2020 | Mar. 31, 2018 | Aug. 31, 2017 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 |
Debt Instrument [Line Items] | ||||||||||||
Borrowings under the credit facility | $ 299,000,000 | $ 299,000,000 | $ 299,000,000 | $ 0 | ||||||||
Amortization of debt related costs | 968,000 | $ 840,000 | ||||||||||
Interest rate swap | Cash Flow Hedging | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Derivative, notional amount | 350,000,000 | 350,000,000 | $ 350,000,000 | 350,000,000 | 350,000,000 | |||||||
Term loan | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Distributions to certain equity holders | $ 48,800,000 | |||||||||||
Amortization of debt related costs | 282,000 | 266,000 | 545,000 | 532,000 | ||||||||
Revolving credit facility | SPV | Warehouse Credit Agreement | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Line of credit facility, maximum borrowing capacity | $ 300,000,000 | |||||||||||
Borrowings under the credit facility | 299,000,000 | 299,000,000 | 299,000,000 | |||||||||
Third party costs | 1,000,000 | |||||||||||
Additional financing | $ 200,000,000 | |||||||||||
Funding period | 1 year | |||||||||||
Upfront fee percent | 0.15% | |||||||||||
Upfront fees | $ 500,000 | |||||||||||
Amortization of debt related costs | 100,000 | 100,000 | ||||||||||
Debt covenant, hedging requirement, LIBOR rate | 3.00% | |||||||||||
Revolving credit facility | 3 month LIBOR | SPV | Warehouse Credit Agreement | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Margin (as a percent) | 0.50% | |||||||||||
Revolving credit facility | Commercial paper conduit funding rate | SPV | Warehouse Credit Agreement | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Margin (as a percent) | 2.50% | |||||||||||
Revolving credit facility | Aggregate loan principal balance greater than or equal to 50% | SPV | Warehouse Credit Agreement | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Unused fee rate | 0.50% | |||||||||||
Revolving credit facility | Aggregate loan principal balance less than 50% | SPV | Warehouse Credit Agreement | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Unused fee rate | 1.00% | |||||||||||
Credit Agreement | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Line of credit facility, maximum borrowing capacity | $ 450,000,000 | |||||||||||
Original term loan | Term loan | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument, face amount | 350,000,000 | |||||||||||
Proceeds from the term loan | 338,600,000 | |||||||||||
Cash reserved for repayment to equity holders and related party | 7,900,000 | |||||||||||
Cash and debt reserved for repayment to equity holders and related part | 346,500,000 | |||||||||||
Repayments of debt | $ 349,100,000 | |||||||||||
Original revolving credit facility | Revolving credit facility | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Line of credit facility, maximum borrowing capacity | $ 100,000,000 | |||||||||||
Borrowings under the credit facility | 0 | 0 | $ 0 | |||||||||
Threshold first lien net leverage ratio | 1.50 | |||||||||||
Reduced interest margin (percent) | 0.375% | |||||||||||
Commitment fees within interest expense | 20,000 | $ 95,000 | $ 126,000 | $ 189,000 | ||||||||
Original revolving credit facility | Letter of credit | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Line of credit facility, maximum borrowing capacity | 10,000,000 | 10,000,000 | $ 10,000,000 | |||||||||
Commitment fee percentage | 0.50% | |||||||||||
Modified term loan | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
First lien net leverage ratio for any measurement date at which the principal amounts of outstanding revolving loans and letters of credit exceed 25% of the aggregate principal amount of the revolving loan facility | 0.0350 | |||||||||||
Maximum first lien net leverage ratio to make distributions | 0.0300 | |||||||||||
Modified term loan | Term loan | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument, face amount | $ 400,000,000 | |||||||||||
Proceeds from the term loan | $ 399,000,000 | |||||||||||
Unamortized discount | $ 1,000,000 | |||||||||||
Payments of Financing Costs | $ 1,200,000 | |||||||||||
Modified term loan | Term loan | LIBOR | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Margin (as a percent) | 3.25% | |||||||||||
2020 Amended Credit Agreement | Term loan | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument, face amount | 75,000,000 | 75,000,000 | $ 75,000,000 | |||||||||
Unamortized discount | 3,000,000 | 3,000,000 | 3,000,000 | |||||||||
Third party costs | 1,500,000 | $ 1,500,000 | $ 1,500,000 | |||||||||
Proceeds issuance | $ 70,500,000 | |||||||||||
2020 Amended Credit Agreement | Term loan | LIBOR | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Margin (as a percent) | 4.50% | |||||||||||
2020 Amended Credit Agreement | Term loan | LIBOR floor | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Margin (as a percent) | 1.00% | |||||||||||
Modified revolving credit facility | Revolving credit facility | LIBOR | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Margin (as a percent) | 3.00% | |||||||||||
Reduced interest margin (percent) | 3.25% | |||||||||||
Modified revolving credit facility | Revolving credit facility | Base rate loans | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Margin (as a percent) | 2.00% | |||||||||||
Reduced interest margin (percent) | 2.25% |
Borrowings - Schedule of term l
Borrowings - Schedule of term loans (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Debt Instrument [Line Items] | |||||
Term loan, face value | $ 466,000 | $ 466,000 | $ 393,000 | ||
Unamortized debt discount | (5,771) | (5,771) | (3,115) | ||
Unamortized debt issuance costs | (6,350) | (6,350) | (5,388) | ||
Term loan | 453,879 | 453,879 | $ 384,497 | ||
Amortization of debt related costs | 968 | $ 840 | |||
Term loan | |||||
Debt Instrument [Line Items] | |||||
Amortization of debt discount | 187 | $ 154 | 340 | 308 | |
Amortization of debt related costs | $ 282 | $ 266 | $ 545 | $ 532 | |
Term loan | Modified term loan | |||||
Debt Instrument [Line Items] | |||||
Quarterly amortization rate | 0.25% |
Derivative Instruments - Narrat
Derivative Instruments - Narrative (Details) - USD ($) | 1 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2020 | |
Derivative [Line Items] | ||
Cash flow hedge gain (loss) to be reclassified within twelve months | $ 5,800,000 | |
Cash Flow Hedging | Interest rate swap | ||
Derivative [Line Items] | ||
Derivative, notional amount | $ 350,000,000 | $ 350,000,000 |
Derivative, term of contract | 4 years |
Derivative Instruments - Schedu
Derivative Instruments - Schedule of notional amounts of outstanding derivative positions (Details) - Interest rate swap - Cash Flow Hedging - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 |
Derivative [Line Items] | ||
Derivative, notional amount | $ 350,000,000 | $ 350,000,000 |
Derivative, fixed interest rate | 1.80% |
Derivative Instruments - Deriva
Derivative Instruments - Derivative Instruments on our Unaudited Condensed Consolidated Financial Statements (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Derivative liability | $ 16,450 | $ 16,450 | $ 2,763 | ||
Interest rate swap | Designated as cash flow hedges | Interest Expense | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Interest rate swap – gain (loss) reclassified into interest expense | (1,140) | $ 0 | (1,247) | $ 0 | |
Interest rate swap | Designated as cash flow hedges | Income Tax Expense | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Interest rate swap – gain (loss) reclassified into income tax expense | 103 | 0 | 112 | 0 | |
Interest rate swap | Other liabilities | Designated as cash flow hedges | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Derivative liability | 16,450 | 16,450 | 2,763 | ||
FCR liability | Not designated as hedges | Cost of Goods | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Change in fair value recorded in cost of revenue | 36,050 | $ 38,782 | 88,554 | $ 77,547 | |
FCR liability | Other liabilities | Not designated as hedges | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Derivative liability | 0 | 0 | 0 | ||
FCR liability | Finance charge reversal liability | Not designated as hedges | |||||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||||
Derivative liability | $ 198,755 | $ 198,755 | $ 206,035 |
Derivative Instruments - Change
Derivative Instruments - Changes in Other Comprehensive Income (Loss) (Details) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2020USD ($) | Jun. 30, 2020USD ($) | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Net tax benefit | $ 103 | $ 112 |
Cash flow hedge gain (loss) to be reclassified within twelve months | 5,800 | 5,800 |
Accumulated Other Comprehensive Income (Loss) | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Accumulated other comprehensive income (loss), beginning balance | (4,294) | (756) |
Accumulated other comprehensive income (loss), ending balance | (4,756) | (4,756) |
Cash Flow Hedge | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Other comprehensive income (loss) before reclassifications and tax | (1,034) | (5,740) |
Tax (expense) benefit | 251 | 1,390 |
Other comprehensive income (loss) before reclassifications and tax | (783) | (4,350) |
Reclassifications out of accumulated other comprehensive income (loss), net of tax | 321 | 350 |
Net (increase) decrease in other comprehensive loss | $ (462) | $ (4,000) |
Other Liabilities (Details)
Other Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Other Liabilities Disclosure [Abstract] | ||||||
Transaction processing liabilities | $ 21,277 | $ 24,465 | ||||
Servicing liabilities | 2,799 | $ 3,279 | 3,796 | $ 3,347 | $ 3,197 | $ 3,016 |
Distributions payable | 4,073 | 5,978 | ||||
Interest rate swap | 16,450 | 2,763 | ||||
Tax related liabilities | 873 | 873 | ||||
Operating lease liabilities | 12,104 | 13,884 | ||||
Accruals and other liabilities | 9,011 | 9,442 | ||||
Other liabilities | $ 66,587 | $ 61,201 |
Noncontrolling Interests (Detai
Noncontrolling Interests (Details) - shares | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Noncontrolling Interest [Line Items] | |||||
Weight average ownership percentage by parent | 36.90% | 34.70% | 36.50% | 33.40% | |
GS Holdings | |||||
Noncontrolling Interest [Line Items] | |||||
Weight average ownership percentage by parent | 36.90% | 34.70% | 36.50% | 33.40% | |
Economic interest (as a percent) | 40.20% | 40.20% | 36.90% | ||
Exchange of Holdco Units for Class A common stock pursuant to the Exchange Agreement | |||||
Noncontrolling Interest [Line Items] | |||||
Units converted (in shares) | (4,500,000) | ||||
Class A common stock | |||||
Noncontrolling Interest [Line Items] | |||||
Common stock, outstanding (in shares) | 73,350,234 | 73,350,234 | 66,424,838 | ||
Class A common stock | Exchange of Holdco Units for Class A common stock pursuant to the Exchange Agreement | |||||
Noncontrolling Interest [Line Items] | |||||
Effect of Reorganization Transactions (in shares) | 4,500,000 | ||||
Class A restricted stock awards | Exchange of Holdco Units for Class A common stock pursuant to the Exchange Agreement | |||||
Noncontrolling Interest [Line Items] | |||||
Issuance of unvested Class A common stock awards (in shares) | 2,800,000 |
Stockholders Equity (Deficit) -
Stockholders Equity (Deficit) - Narrative (Details) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended |
Jan. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2020 | |
Class of Stock [Line Items] | |||
Treasury stock (in shares) | 14,099,097 | 14,099,097 | |
Treasury stock, shares acquired (in shares) | 13,425,688 | ||
Treasury stock, acquired | $ 146.1 | ||
Treasury stock reissued (in shares) | 0 | ||
Warrants exercised (in shares) | 1,180,163 | ||
Treasury stock | |||
Class of Stock [Line Items] | |||
Unvested stock forfeited and held in treasury (in shares) | 517,746 | ||
Common stock | |||
Class of Stock [Line Items] | |||
Restricted Stock, shares issued net of shares for tax withholdings (in shares) | 32,002 | 139,045 | |
Common stock | Class A common stock | |||
Class of Stock [Line Items] | |||
Restricted Stock, shares issued net of shares for tax withholdings (in shares) | 155,663 |
Stockholders Equity (Deficit)_2
Stockholders Equity (Deficit) - Distributions (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
May 31, 2018 | Dec. 31, 2017 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Dividends Payable [Line Items] | ||||||
Payment of tax distributions | $ 400 | $ 13,100 | $ 31,500 | $ 14,000 | ||
Remaining reserved payment | 4,073 | 7,105 | 4,073 | 7,105 | ||
Credit Agreement Distribution | ||||||
Dividends Payable [Line Items] | ||||||
Payments of distributions | 100 | 800 | 1,200 | 2,000 | ||
Remaining reserved payment | 2,700 | 2,700 | ||||
Credit Agreement Distribution | Related party | ||||||
Dividends Payable [Line Items] | ||||||
Payments of distributions | 0 | 600 | 0 | 600 | ||
Remaining reserved payment | 0 | 0 | ||||
Special Operating Distribution | ||||||
Dividends Payable [Line Items] | ||||||
Payments of distributions | 100 | 400 | 700 | 1,000 | ||
Remaining reserved payment | 1,400 | 1,400 | ||||
Distributions | $ 26,200 | $ 160,000 | ||||
Special Operating Distribution | Related party | ||||||
Dividends Payable [Line Items] | ||||||
Payments of distributions | 0 | 200 | 0 | 200 | ||
Remaining reserved payment | 0 | 0 | ||||
Tax and Non-Tax Distributions Gross | ||||||
Dividends Payable [Line Items] | ||||||
Payments of distributions | 600 | $ 15,100 | 33,400 | $ 17,800 | ||
Remaining reserved payment | $ 4,100 | $ 4,100 |
Share-Based Compensation - Narr
Share-Based Compensation - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Allocated share-based compensation expense | $ 3,477 | $ 3,271 | $ 6,972 | $ 5,936 |
Unvested Class A stock awards | Director | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 1 year | |||
Unvested Class A stock awards | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 3 years | |||
Unvested Class A stock awards | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 4 years |
Share-Based Compensation - Clas
Share-Based Compensation - Class A Common Stock Options (Details) $ / shares in Units, $ in Thousands | 6 Months Ended | |
Jun. 30, 2020USD ($)$ / sharesshares | Jun. 30, 2019USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ||
Payment of option taxes | $ | $ 73 | $ 1,550 |
Unvested HoldCo Units | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ||
Payment of option taxes | $ | 1,600 | |
Employees | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ||
Proceeds from issuance of shares under share-based compensation plans | $ | $ 300 | |
Class A common stock | ||
Number of Options | ||
Outstanding at beginning of period (in shares) | 4,181,909 | 8,053,292 |
Granted (in shares) | 1,100,456 | 1,290,012 |
Exercised (in shares) | (105,000) | (851,401) |
Forfeited (in shares) | (406,615) | (148,819) |
Expired (in shares) | (111,704) | (1,500) |
Outstanding at end of period (in shares) | 4,659,046 | 8,341,584 |
Exercisable at end of period (in shares) | 1,682,264 | 5,242,936 |
Weighted Average Exercise Price | ||
Outstanding at beginning of period (in dollars per share) | $ / shares | $ 11.36 | |
Granted (in dollars per share) | $ / shares | 3.73 | |
Exercised (in dollars per share) | $ / shares | 5.65 | |
Forfeited (in dollars per share) | $ / shares | 19.16 | |
Expired (in dollars per share) | $ / shares | 18.45 | |
Outstanding at end of period (in dollars per share) | $ / shares | 8.84 | |
Exercisable at end of period (in dollars per share) | $ / shares | 8.11 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ||
Weighted average grant date fair value, grants in period (in dollars per share) | $ / shares | $ 1.72 | $ 3.80 |
Exercises in period, intrinsic value | $ | $ 200 | $ 4,600 |
Shares exercised by means of cashless net exercise procedure (in shares) | 105,000 | 816,500 |
Issuance of shares related to cashless option exercises (in shares) | 15,051 | |
Payment of option taxes | $ | $ 100 | |
Shares exercised by means of cashless net exercise procedure (in shares) | 246,396 | |
Class A common stock | Employees | Unvested HoldCo Units | ||
Number of Options | ||
Exercised (in shares) | (34,897) |
Share-Based Compensation - Intr
Share-Based Compensation - Intrinsic Value (Details) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Aggregate intrinsic value (in millions) | ||
Options outstanding | $ 3 | |
Options exercisable | $ 1.7 | |
Weighted average remaining term (in years) | ||
Options outstanding | 7 years 9 months 18 days | |
Options exercisable | 5 years 9 months 18 days | |
Options, vested in period, fair value | $ 2.4 | $ 1.4 |
Share-Based Compensation - Unve
Share-Based Compensation - Unvested HoldCo Units, Class A Common Stock Awards, and RSAs (Details) - USD ($) $ / shares in Units, $ in Millions | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Unvested HoldCo Units | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||
Unvested at beginning of period (in shares) | 1,112,607 | 2,514,856 |
Forfeited (in shares) | 0 | (273,734) |
Vested (in shares) | (258,524) | (659,527) |
Unvested at period end (in shares) | 854,083 | 1,581,595 |
Weighted Average Grant Date Fair Value | ||
Unvested at beginning of period (in dollars per share) | $ 23 | |
Vested (in dollars per share) | 23 | |
Unvested at period end (in dollars per share) | $ 23 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract] | ||
Vested in period, fair value | $ 5.9 | $ 15.2 |
Unvested Class A stock awards | ||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||
Unvested at beginning of period (in shares) | 2,999,343 | 454,561 |
Granted (in shares) | 2,821,735 | 1,873,512 |
Forfeited (in shares) | (295,151) | (146,859) |
Vested (in shares) | (548,882) | (66,789) |
Unvested at period end (in shares) | 4,977,045 | 2,114,425 |
Weighted Average Grant Date Fair Value | ||
Unvested at beginning of period (in dollars per share) | $ 11.53 | |
Forfeited (in dollars per share) | 12.87 | |
Granted (in dollars per share) | 3.79 | |
Vested (in dollars per share) | 13.42 | |
Unvested at period end (in dollars per share) | $ 6.85 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract] | ||
Vested in period, fair value | $ 7.4 | $ 1.5 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |||||
Effective tax rate (as a percent) | 10.10% | (12.90%) | 19.80% | (12.20%) | |
Income tax expense (benefit) | $ 1,497 | $ (4,466) | $ 602 | $ (5,061) | |
Federal and state statutory rate | 24.30% | 24.30% | 24.10% | ||
Unrecognized tax benefits | $ 100 | $ 100 | $ 100 | ||
Deferred tax assets, net | 383,107 | 383,107 | 364,841 | ||
Tax receivable agreement liability | $ 317,823 | 317,823 | $ 311,670 | ||
Payments For Tax Receivable Agreement | $ 4,700 | $ 0 | $ 4,664 |
Commitments, Contingencies an_3
Commitments, Contingencies and Guarantees - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Jan. 01, 2020 | Dec. 31, 2019 | |
Loss Contingencies [Line Items] | ||||||
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | us-gaap:OtherAssets | us-gaap:OtherAssets | us-gaap:OtherAssets | |||
Operating Lease, Liability, Statement of Financial Position [Extensible List] | us-gaap:OtherLiabilities | us-gaap:OtherLiabilities | us-gaap:OtherLiabilities | |||
Operating lease, expense | $ 1,031 | $ 973 | $ 2,061 | $ 1,784 | ||
Unused commitments to extend credit | 33,800 | 33,800 | $ 4,900 | |||
Restricted cash | 289,844 | $ 200,252 | 289,844 | 200,252 | 250,081 | |
Financial guarantee liability | 163,301 | $ 163,301 | 16,698 | |||
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201613Member | |||||
Financial guarantee losses | $ (28,656) | $ (284) | ||||
Cumulative effect of accounting change | ||||||
Loss Contingencies [Line Items] | ||||||
Financial guarantee liability | $ 118,000 | |||||
Collectibility of Receivables | ||||||
Loss Contingencies [Line Items] | ||||||
Loss contingency accrual | 3,600 | 3,600 | ||||
Financial Guarantee | ||||||
Loss Contingencies [Line Items] | ||||||
Financial guarantee liability | 163,300 | 163,300 | 16,700 | |||
Possible losses as guarantor, maximum | 169,500 | 169,500 | 150,400 | |||
Financial Guarantee | Cumulative effect of accounting change | ||||||
Loss Contingencies [Line Items] | ||||||
Financial guarantee losses | 28,700 | |||||
Contractual Restricted Cash Under Arrangement | ||||||
Loss Contingencies [Line Items] | ||||||
Restricted cash | 94,700 | 94,700 | $ 75,000 | |||
Bank Partners | ||||||
Loss Contingencies [Line Items] | ||||||
Financing receivable, nonaccrual status | $ 11,100 | $ 11,100 | ||||
Minimum | ||||||
Loss Contingencies [Line Items] | ||||||
Renewal term (in years) | 5 years | 5 years | ||||
Maximum | ||||||
Loss Contingencies [Line Items] | ||||||
Renewal term (in years) | 15 years | 15 years |
Commitments, Contingencies an_4
Commitments, Contingencies and Guarantees - Lease Costs (Details) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Operating cash flows from operating leases | $ 2,366 | $ 1,927 | |
Resulting from our adoption of ASU 2016-02 | 0 | 11,279 | |
Resulting from new or modified leases | 9 | $ 2,975 | |
Operating lease ROU assets | 9,590 | $ 11,268 | |
Operating lease liabilities | $ 12,104 | $ 13,884 | |
Weighted average remaining lease term (in years) | 2 years 9 months 18 days | 3 years 3 months 18 days | |
Weighted average discount rate | 5.70% | 5.70% |
Commitments, Contingencies an_5
Commitments, Contingencies and Guarantees - Future Minimum Lease Payments (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Commitments and Contingencies Disclosure [Abstract] | ||
Remainder of 2020 | $ 2,322 | |
2021 | 4,897 | |
2022 | 3,706 | |
2023 | 1,501 | |
2024 | 810 | |
Thereafter | 0 | |
Total lease payments | 13,236 | |
Less: imputed interest | (1,132) | |
Operating lease liabilities | $ 12,104 | $ 13,884 |
Related Party Transactions - Na
Related Party Transactions - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Related Party Transaction [Line Items] | |||||
ROU Asset | $ 9,590 | $ 9,590 | $ 11,268 | ||
Operating lease liabilities | 12,104 | 12,104 | 13,884 | ||
Common Management | |||||
Related Party Transaction [Line Items] | |||||
ROU Asset | 4,500 | 4,500 | 5,200 | ||
Operating lease liabilities | 5,400 | 5,400 | 6,200 | ||
Common Management | Rent expense | |||||
Related Party Transaction [Line Items] | |||||
Related party expenses | 434 | $ 432 | 869 | $ 869 | |
Director | Charged-off receivables | |||||
Related Party Transaction [Line Items] | |||||
Related party expenses | $ 150 | $ 249 | |||
Non-Executive Employees | Loans receivable | |||||
Related Party Transaction [Line Items] | |||||
Related party receivables | $ 70 | $ 70 | $ 155 |
Segment Reporting (Details)
Segment Reporting (Details) | 6 Months Ended |
Jun. 30, 2020segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 1 |
Variable Interest Entities - Na
Variable Interest Entities - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Variable Interest Entity [Line Items] | |||||
Weight average ownership percentage by parent | 36.90% | 34.70% | 36.50% | 33.40% | |
Assets | $ 1,326,814 | $ 1,326,814 | $ 951,048 | ||
GS Holdings | |||||
Variable Interest Entity [Line Items] | |||||
Weight average ownership percentage by parent | 36.90% | 34.70% | 36.50% | 33.40% | |
Variable Interest Entity, Primary Beneficiary | |||||
Variable Interest Entity [Line Items] | |||||
Ownership percentage | 100.00% | ||||
Variable Interest Entity, Primary Beneficiary | GS Holdings | |||||
Variable Interest Entity [Line Items] | |||||
Assets | $ 907,200 | $ 907,200 | 567,187 | ||
SPV | |||||
Variable Interest Entity [Line Items] | |||||
Ownership percentage | 100.00% | ||||
SPV | GS Holdings | |||||
Variable Interest Entity [Line Items] | |||||
Assets | $ 408,700 | $ 408,700 | $ 0 |
Variable Interest Entities - Ba
Variable Interest Entities - Balance Sheet (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Assets | ||||||
Cash and cash equivalents | $ 147,560 | $ 195,760 | ||||
Restricted cash | 289,844 | 250,081 | $ 200,252 | |||
Loan receivables held for sale, net | 410,952 | 51,926 | 2,798 | $ 2,876 | ||
Accounts receivable, net | 20,066 | 19,493 | ||||
Property, equipment and software, net | 21,951 | 18,309 | ||||
Other assets | 53,334 | 50,638 | ||||
Total assets | 1,326,814 | 951,048 | ||||
Liabilities | ||||||
Accounts payable | 13,356 | 11,912 | ||||
Accrued compensation and benefits | 7,034 | 10,734 | ||||
Other accrued expenses | 3,947 | 3,244 | ||||
Finance charge reversal liability | 198,755 | 206,035 | ||||
Term loan | 453,879 | 384,497 | ||||
SPV facility | 299,000 | 0 | ||||
Financial guarantee liability | 163,301 | 16,698 | ||||
Other liabilities | 66,587 | 61,201 | ||||
Total liabilities | 1,523,682 | 1,005,991 | ||||
Equity (Deficit) | ||||||
Noncontrolling interests | (183,302) | (80,758) | ||||
Total equity (deficit) | (196,868) | $ (213,496) | (54,943) | $ (96,758) | $ (73,260) | $ (34,765) |
Total liabilities and equity (deficit) | 1,326,814 | 951,048 | ||||
Variable Interest Entity, Primary Beneficiary | GS Holdings | ||||||
Assets | ||||||
Cash and cash equivalents | 113,560 | 177,730 | ||||
Restricted cash | 289,844 | 250,081 | ||||
Loan receivables held for sale, net | 410,952 | 51,926 | ||||
Accounts receivable, net | 20,066 | 19,493 | ||||
Property, equipment and software, net | 21,951 | 18,309 | ||||
Other assets | 50,827 | 49,648 | ||||
Total assets | 907,200 | 567,187 | ||||
Liabilities | ||||||
Accounts payable | 13,356 | 11,912 | ||||
Accrued compensation and benefits | 7,034 | 10,734 | ||||
Other accrued expenses | 3,947 | 3,244 | ||||
Finance charge reversal liability | 198,755 | 206,035 | ||||
Term loan | 453,879 | 384,497 | ||||
SPV facility | 299,000 | 0 | ||||
Financial guarantee liability | 163,301 | 16,698 | ||||
Other liabilities | 64,199 | 60,328 | ||||
Total liabilities | 1,203,471 | 693,448 | ||||
Equity (Deficit) | ||||||
Noncontrolling interests | (183,302) | (80,758) | ||||
Total permanent equity (deficit) | (112,969) | (45,503) | ||||
Total equity (deficit) | (296,271) | (126,261) | ||||
Total liabilities and equity (deficit) | 907,200 | 567,187 | ||||
SPV | GS Holdings | ||||||
Assets | ||||||
Total assets | 408,700 | 0 | ||||
Liabilities | ||||||
Total liabilities | $ 299,600 | $ 0 |
Variable Interest Entities - St
Variable Interest Entities - Statement of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Variable Interest Entity [Line Items] | ||||
Total revenue | $ 132,962 | $ 138,752 | $ 254,819 | $ 243,150 |
Total costs and expenses | 113,292 | 92,481 | 242,941 | 185,043 |
Operating profit | 19,670 | 46,271 | 11,878 | 58,107 |
Total other income (expense), net | (4,818) | (11,544) | (8,840) | (16,574) |
Income before income tax expense (benefit) | 14,852 | 34,727 | 3,038 | 41,533 |
Variable Interest Entity, Primary Beneficiary | GS Holdings | ||||
Variable Interest Entity [Line Items] | ||||
Total revenue | 133,649 | 138,695 | 254,819 | 242,395 |
Total costs and expenses | 115,880 | 92,189 | 242,941 | 184,401 |
Operating profit | 17,769 | 46,506 | 11,878 | 57,994 |
Total other income (expense), net | (2,937) | (5,377) | (8,944) | (10,059) |
Income before income tax expense (benefit) | $ 14,832 | $ 41,129 | $ 2,934 | $ 47,935 |
Variable Interest Entities - _2
Variable Interest Entities - Statement of Cash Flow (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Cash flows from operating activities | ||
Net cash provided by (used in) operating activities | $ (333,842) | $ 89,789 |
Net cash used in investing activities | (8,524) | (7,123) |
Net cash provided by (used in) financing activities | 333,929 | (131,737) |
Net increase (decrease) in cash and cash equivalents and restricted cash | (8,437) | (49,071) |
Cash and cash equivalents and restricted cash at beginning of period | 445,841 | 458,499 |
Cash and cash equivalents and restricted cash at end of period | 437,404 | 409,428 |
Variable Interest Entity, Primary Beneficiary | GS Holdings | ||
Cash flows from operating activities | ||
Net cash provided by (used in) operating activities | (333,842) | 89,789 |
Net cash used in investing activities | (8,524) | (7,123) |
Net cash provided by (used in) financing activities | 317,959 | (128,597) |
Net increase (decrease) in cash and cash equivalents and restricted cash | (24,407) | (45,931) |
Cash and cash equivalents and restricted cash at beginning of period | 427,811 | 449,473 |
Cash and cash equivalents and restricted cash at end of period | $ 403,404 | $ 403,542 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | Jul. 24, 2020 | Jul. 31, 2020 | May 31, 2020 |
Revolving credit facility | SPV | Warehouse Credit Agreement | |||
Subsequent Event [Line Items] | |||
Additional financing capacity | $ 200,000,000 | ||
Line of credit facility, maximum borrowing capacity | $ 300,000,000 | ||
Subsequent Event | |||
Subsequent Event [Line Items] | |||
TRA payment | $ 12,800,000 | ||
Subsequent Event | Tax distributions | |||
Subsequent Event [Line Items] | |||
Payments of distributions | 17,100,000 | ||
Subsequent Event | Non-tax distributions | |||
Subsequent Event [Line Items] | |||
Payments of distributions | $ 600,000 | ||
Subsequent Event | SPV | |||
Subsequent Event [Line Items] | |||
Payments to Acquire Loans Receivable | $ 284,000,000 |