The following discussion of financial condition, results of operations, liquidity and capital resources and certain factors that may affect future results, including economic and industry-wide factors, ofEnova International, Inc. and its subsidiaries should be read in conjunction with our consolidated financial statements and accompanying notes included under Part I, Item 1 of this Quarterly Report on Form 10-Q, as well as with Management's Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year endedDecember 31, 2021 . This Management's Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements. The matters discussed in these forward-looking statements are subject to risk, uncertainties, and other factors that could cause actual results to differ materially from those made, projected or implied in the forward-looking statements. Please see "Risk Factors" and "Cautionary Statement Concerning Forward-Looking Statements" for a discussion of the uncertainties, risks and assumptions associated with these statements.
COMPANY OVERVIEW
We are a leading technology and analytics company focused on providing online financial services. In 2021, we extended approximately$3.1 billion in credit or financing to borrowers and for the three months endedMarch 31, 2022 , we extended approximately$1.0 billion in credit or financing to borrowers. As ofMarch 31, 2022 , we offered or arranged loans or draws on lines of credit to consumers in 38 states inthe United States andBrazil . We also offered financing to small businesses in all 50 states andWashington D.C. inthe United States . We use our proprietary technology, analytics and customer service capabilities to quickly evaluate, underwrite and fund loans or provide financing, allowing us to offer consumers and small businesses credit or financing when and how they want it. Our customers include the large and growing number of consumers who and small businesses which have bank accounts but use alternative financial services because of their limited access to more traditional credit from banks, credit card companies and other lenders. We were an early entrant into online lending, launching our online business in 2004, and throughMarch 31, 2022 , we have completed approximately 56.0 million customer transactions and collected more than 61 terabytes of currently accessible customer behavior data since launch, allowing us to better analyze and underwrite our specific customer base. We have significantly diversified our business over the past several years having expanded the markets we serve and the financing products we offer. These financing products include installment loans and receivables purchase agreements ("RPAs") and line of credit accounts. We believe our customers highly value our products and services as an important component of their personal or business finances because our products are convenient, quick and often less expensive than other available alternatives. We attribute the success of our business to our advanced and innovative technology systems, the proprietary analytical models we use to predict the performance of loans and finance receivables, our sophisticated customer acquisition programs, our dedication to customer service and our talented employees. We have developed proprietary underwriting systems based on data we have collected over our more than 17 years of experience. These systems employ advanced risk analytics, including machine learning and artificial intelligence, to decide whether to approve financing transactions, to structure the amount and terms of the financings we offer pursuant to jurisdiction-specific regulations and to provide customers with their funds quickly and efficiently. Our systems closely monitor collection and portfolio performance data that we use to continually refine machine learning-enabled analytical models and statistical measures used in making our credit, purchase, marketing and collection decisions. Approximately 90% of models used in our analytical environment are machine learning-enabled. Our flexible and scalable technology platform allows us to process and complete customers' transactions quickly and efficiently. In 2021, we processed approximately 2.2 million transactions, and we continue to grow our loans and finance receivable portfolios and increase the number of customers we serve through desktop, tablet and mobile platforms. Our highly customizable technology platform allows us to efficiently develop and deploy new products to adapt to evolving regulatory requirements and consumer preference, and to enter new markets quickly. In 2012, we launched a new product inthe United States designed to serve near-prime customers. InJune 2014 , we launched our business inBrazil , where we arrange financing for borrowers through a third-party lender. In addition, inJuly 2014 , we introduced a new line of credit product inthe United States to serve the needs of small businesses. InJune 2015 , we further expanded our product offering by acquiring certain assets of a company that provides financing and installment loans to small businesses by offering RPAs. InOctober 2020 , we acquired, through a merger,On Deck Capital Inc. ("OnDeck"), a small business lending company offering lending and funding solutions to small businesses in theU.S. ,Australia andCanada , to expand our small business offerings. InMarch 2021 , we acquiredPangea Universal Holdings ("Pangea"), which provides mobile international money transfer services to customers in theU.S with a focus onLatin America andAsia . These new products have allowed us to further diversify our product offerings and customer base. We have been able to consistently acquire new customers and successfully generate repeat business from returning customers when they need financing. We believe our customers are loyal to us because they are satisfied with our products and services. We acquire new customers from a variety of sources, including visits to our own websites, mobile sites or applications, and through direct marketing, 19 -------------------------------------------------------------------------------- affiliate marketing, lead providers and relationships with other lenders. We believe that the online convenience of our products and our 24/7 availability to accept applications with quick approval decisions are important to our customers. Once a potential customer submits an application, we quickly provide a credit or purchase decision. If a loan or financing is approved, we or our lending partner typically fund the loan or financing the next business day or, in some cases, the same day. During the entire process, from application through payment, we provide access to our well-trained customer service team. All of our operations, from customer acquisition through collections, are structured to build customer satisfaction and loyalty, in the event that a customer has a need for our products in the future. We have developed a series of sophisticated proprietary scoring models to support our various products. We believe that these models are an integral component of our operations and allow us to complete a high volume of customer transactions while actively managing risk and the related credit quality of our loan and finance receivable portfolios. We believe our successful application of these technological innovations differentiates our capabilities relative to competing platforms as evidenced by our history of strong growth and stable credit quality. PRODUCTS AND SERVICES Our online financing products and services provide customers with a deposit of funds to their bank account in exchange for a commitment to repay the amount deposited plus fees, interest and/or revenue on the receivables purchased. We originate, arrange, guarantee or purchase installment loans, line of credit accounts and receivables purchase agreements ("RPAs") to consumers and small businesses. We have one reportable segment that includes all of our online financial services.
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Installment loans. Installment loans include longer-term loans that require the outstanding principal balance to be paid down in multiple installments and shorter-term single payment loans. Our installment loans are either written directly by us, purchased as part of our Banking Programs as discussed below, or are those that we arrange and guarantee as part of our credit services organization and credit access business programs, which we refer to as our CSO programs. We offer, or arrange through CSO programs, multi- or single-payment unsecured consumer loan products in 38 states inthe United States and small business installment loans in 47 states and inWashington D.C. Internationally, we also offer or arrange multi-payment unsecured consumer installment loan products inBrazil and small business installment loan products through affiliates inAustralia andCanada . Terms for our installment loan products range between two and 60 months, and single-pay consumer loans generally have terms of seven to 90 days. Loans may be repaid early at any time with no additional prepayment charges.
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Line of credit accounts. We directly offer, or purchase a participation interest in receivables through our Bank Programs, new consumer line of credit accounts in 30 states (and continue to service existing line of credit accounts in two additional states) inthe United States and business line of credit accounts in 47 states and inWashington D.C. inthe United States , which allow customers to draw on their unsecured line of credit in increments of their choosing up to their credit limit. Customers may pay off their account balance in full at any time or make required minimum payments in accordance with the terms of the line of credit account. We also offer small business line of credit accounts inCanada . As long as the customer's account is in good standing and has credit available, customers may continue to borrow on their line of credit.
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Receivables purchase agreements. Under RPAs, small businesses receive funds in exchange for a portion of the business's future receivables at an agreed upon discount. In contrast, lending is a commitment to repay principal and interest and/or fees. A small business customer who enters into an RPA commits to delivering a percentage of its receivables through ACH or wire debits or by splitting credit card receipts until all purchased receivables are delivered. We offer RPAs in all 50 states and inWashington D.C. inthe United States .
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CSO programs. We currently operate a CSO program inTexas . Through CSO programs, we provide services related to third-party lenders' multi- and single-pay installment consumer loan products by acting as a credit services organization or credit access business on behalf of consumers in accordance with applicable state laws. Services offered under our CSO program include credit-related services such as arranging loans with independent third-party lenders and assisting in the preparation of loan applications and loan documents ("CSO loans"). When a consumer executes an agreement with us under our CSO program, we agree, for a fee payable to us by the consumer, to provide certain services, one of which is to guarantee the consumer's obligation to repay the loan received by the consumer from the third-party lender if the consumer fails to do so. For CSO loans, each lender is responsible for providing the criteria by which the consumer's application is underwritten and, if approved, determining the amount of the consumer loan. We, in turn, are responsible for assessing whether or not we will guarantee such loan. The guarantee represents an obligation to purchase specific single-payment loans, which for our CSO program, have terms of less than 90 days, and specific installment loans, which have terms of up to six months, if they go into default.
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Bank program. We operate a program with a bank to provide marketing services and loan servicing for near-prime unsecured consumer installment loans and, beginning inJanuary 2021 , line of credit accounts. Under the program, we receive marketing and servicing fees while the bank receives an origination fee. The bank has the ability to sell and we have the option, but not the requirement, to purchase the loans the bank originates and, in the case of line of credit accounts, a participation interest in the receivables from draws on those accounts. We do not guarantee the performance of the loans and line of credit accounts originated by the bank. As part of the OnDeck business both prior and subsequent to Enova's acquisition, OnDeck operates a program with 20 -------------------------------------------------------------------------------- a separate bank to provide marketing services and loan servicing for small business installment loans and line of credit accounts. Under the OnDeck program, we receive marketing fees while the bank receives origination fees and certain program fees. The bank has the ability to sell and we have the option, but not the requirement, to purchase the installment loans the bank originates and, in the case of line of credit accounts, extensions under those line of credit accounts. We do not guarantee the performance of the loans or line of credit accounts originated by the bank.
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Money transfer business. Through the acquisition of Pangea, we operate a money transfer platform that allows customers to send money fromthe United States toMexico , other Latin American countries andAsia . The customer pays us inU.S. dollars, and we then make local currency available to the intended recipient of the transfer in one of many termination countries. Our revenue model includes a fee per transfer and an exchange rate spread. Our customers can access our proprietary platform via the website, Android app, or iOS (Apple) app.
OUR MARKETS
We currently offer our services in the following countries:
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United States . We began our online business inthe United States inMay 2004 . As ofMarch 31, 2022 , we provided services in all 50 states andWashington D.C. We market our financing products under the names CashNetUSA at www.cashnetusa.com, NetCredit at www.netcredit.com, OnDeck at www.ondeck.com,Headway Capital at www.headwaycapital.com, The Business Backer at www.businessbacker.com, and Pangea at www.pangeamoneytransfer.com.
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Australia . As part of our acquisition of OnDeck inOctober 2020 , we offer installment loans to small businesses inAustralia through an entity that was a majority-owned subsidiary until we sold a portion of our interest inDecember 2021 . Subsequent to the partial divestiture, we classify the affiliate as an equity method investment.
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through an affiliated company which we classify as an investment using the equity method.
Our internet websites and the information contained therein or connected thereto are not intended to be incorporated by reference into this Quarterly Report on Form 10-Q.
RECENT REGULATORY DEVELOPMENTS
We received a Civil Investigative Demand ("CID") from the CFPB concerning
certain loan processing issues. We have been cooperating fully with the CFPB by
providing data and information in response to the CID. We anticipate being able
to expeditiously complete the investigation as several of the issues were
selfdisclosed and we have provided, and will continue to provide, restitution
to customers who may have been negatively impacted.
On October 6, 2017 , the CFPB issued its final rule entitled "Payday, Vehicle
Title, and Certain High-Cost Installment Loans" (the "Small Dollar Rule"), which
covers certain loans that we offer. The Small Dollar Rule requires that lenders
who make short-term loans and longer-term loans with balloon payments reasonably
determine consumers' ability to repay the loans according to their terms before
issuing the loans. The Small Dollar Rule also introduces new limitations on
repayment processes for those lenders as well as lenders of other longer-term
loans with an annual percentage rate greater than 36 percent that include an ACH
authorization or similar payment provision. If a consumer has two consecutive
failed payment attempts, the lender must obtain the consumer's new and specific
authorization to make further withdrawals from the consumer's bank account. For
loans covered by the Small Dollar Rule, lenders must provide certain notices to
consumers before attempting a first payment withdrawal or an unusual withdrawal
and after two consecutive failed withdrawal attempts. On June 7, 2019 , the CFPB
issued a final rule to set the compliance date for the mandatory underwriting
provisions of the Small Dollar Rule to November 19, 2020 . On July 7, 2020 , the
CFPB issued a final rule rescinding the ability to repay ("ATR") provisions of
the Small Dollar Rule along with related provisions, such as the establishment
of registered information systems for checking ATR and reporting loan activity.
The payment provisions of the Small Dollar Rule remain in place, but remain
stayed indefinitely by the United States Court of Appeals for the Fifth Circuit ,
which is hearing an appeal from the plaintiff on a constitutional challenge to
the Small Dollar Rule. On October 14, 2021 , the Fifth Circuit ruled that the
Small Dollar Rule will not take effect until 286 days after the Fifth Circuit
rules on the appeal. If the Small Dollar Rule does become effective in its
current proposed form, we will need to make certain changes to our payment
processes and customer notifications in our U.S. consumer lending business.
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New Mexico HB 132
OnFebruary 15, 2022 , theNew Mexico Legislature passed HB 132. The bill imposes a 36% rate cap on loans up to$10,000 . Additionally, HB 132 provides for the application of a predominant economic interest test for bank service arrangements whereby a broker or servicer with a predominant economic interest in a loan is considered to be the "true lender" for purposes of applying the 36% rate cap. TheNew Mexico Governor signed the bill into law onMarch 1, 2022 . The law will take effect onJanuary 1, 2023 .
RESULTS OF OPERATIONS
COVID-19[feminine]
The COVID-19 pandemic has severely impacted global economic conditions, resulting in substantial volatility in the financial markets, increased unemployment, and operational challenges resulting from measures that governments have imposed to control its spread. We have implemented a number of procedures in response to the pandemic to support the safety and well-being of our employees, customers and stockholders that continue through the date of this report:
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As shelter-in-place orders and general distancing guidelines were released, we moved quickly to transition virtually all of our employees to a remote work environment. As COVID-19 cases declined, we reopened our offices to allow eligible employees to return to work in an office environment on a voluntary basis. We plan to transition to a hybrid work model where employees work a portion of the week in the office and have the option to work remotely for the remaining days. Certain eligible positions may work partially or fully remote. Appropriate safety measures continue to be followed to protect employees working on site. We will continue to follow government mandates and adjust when appropriate to prioritize employee safety.
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We have actively worked with our customers to understand their financial situation, waive late fees, offer a variety of repayment options to increase flexibility, and reduce or defer payments for affected customers.
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We took measures to adjust our underwriting procedures, which reduced exposure to more heavily impacted consumers and businesses. We adjusted loan and draw sizes as well as shortened duration in an effort to reduce risk in this volatile environment. Certain of these measures have eased since the height of the pandemic, with improvement of economic conditions and our outlook. From a loan valuation perspective, at the onset of the COVID-19 pandemic, we deemed it appropriate to increase the discount rates used in our internally-developed valuation models, thereby lowering loan fair values, to capture the increase in potential volatility in expected cash flows due to the unprecedented nature of the pandemic and governmental response. These rates remained consistent for the remainder of 2020. Over the course of 2021, we noted a tightening of credit spreads in observable pricing in the market; as such, we reduced the discount rates used in our valuations. As ofDecember 31, 2021 , our discount rates had generally returned to the levels utilized immediately prior to the pandemic. As ofMarch 31, 2022 , we increased our discount rates based primarily on movements in the market during the quarter. We believe the adjustments to our discount rates to be responsive to changes in the market and representative of what a market participant would use. After seeing increases in delinquency and charge-offs early in the pandemic, we experienced significant improvements to these metrics over the remainder of 2020 and into 2021. TheU.S. government provided multiple rounds of stimulus assistance to taxpayers and businesses. Positive COVID-19 test counts in theU.S. generally decreased across the first half of 2021 although rose again in the second half of 2021 with the spread of the Delta and Omicron variants. In certain situations, management concluded that the probability of future charge-offs was higher than what we had experienced in the past and, therefore, increased anticipated charge-offs in our fair value models. As ofMarch 31, 2022 , we continue to utilize this approach and have adjusted charge-off expectations where appropriate. We deemed the resulting fair value to be an appropriate market-based exit price that considers current market conditions atMarch 31, 2022 .
We continue to monitor this pandemic closely and plan to make future changes to respond to the situation as it continues to evolve.
STRONG POINTS
Our financial results for the three-month period ended
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Consolidated total revenue increased$126.3 million , or 48.7%, to$385.7 million in the current quarter compared to$259.4 million for the three months endedMarch 31, 2021 , or the prior year quarter.
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Consolidated net sales were
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Consolidated income from operations decreased$32.7 million , or 26.5%, to$90.8 million in the current quarter, compared to$123.5 million in the prior year quarter.
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Consolidated net income was$52.4 million in the current quarter compared to$75.9 million in the prior year quarter. Consolidated diluted income per share was$1.50 in the current quarter compared to$2.03 in the prior year quarter. 22 --------------------------------------------------------------------------------
PREVIEW
The following tables reflect our results of operations for the periods indicated, both in dollars and as a percentage of total revenue (in thousands of dollars, except per share data):
Three Months Ended March 31,
2022 2021
Revenue
Loans and finance receivables revenue $ 381,141 $ 257,297
Other 4,590 2,147
Total Revenue 385,731 259,444
Change in Fair Value (117,042 ) (21,078 )
Net Revenue 268,689 238,366
Operating Expenses
Marketing 93,171 28,568
Operations and technology 40,730 35,627
General and administrative 34,528 44,089
Depreciation and amortization 9,514 6,627
Total Operating Expenses 177,943 114,911
Income from Operations 90,746 123,455
Interest expense, net (22,483 ) (19,914 )
Foreign currency transaction loss (314 ) (34 )
Equity method investment income 328 558
Other nonoperating expenses - (378 )
Income before Income Taxes 68,277 103,687
Provision for income taxes 15,834 27,716
Net income before noncontrolling interest 52,443 75,971
Less: Net income attributable to noncontrolling interest - 51
Net income attributable to
$ 75,920 Earnings per common share - diluted $ 1.50
$2.03
Revenue
Loans and finance receivables revenue 98.8 % 99.2 %
Other 1.2 0.8
Total Revenue 100.0 100.0
Change in Fair Value (30.3 ) (8.1 )
Net Revenue 69.7 91.9
Expenses
Marketing 24.2 11.0
Operations and technology 10.6 13.7
General and administrative 8.9 17.0
Depreciation and amortization 2.5 2.6
Total Expenses 46.2 44.3
Income from Operations 23.5 47.6
Interest expense, net (5.8 ) (7.7 )
Foreign currency transaction loss (0.1 ) -
Equity method investment income 0.1 0.2
Other nonoperating expenses - (0.1 )
Income before Income Taxes 17.7 40.0
Provision for income taxes 4.1 10.7
Net income before noncontrolling interest 13.6 29.3
Less: Net income attributable to noncontrolling interest - -
Net income attributable to Enova International, Inc. 13.6 % 29.3 %
NON-GAAP FINANCIAL MEASURES
In addition to the financial information prepared in conformity with generally
accepted accounting principles ("GAAP"), we provide historical non-GAAP
financial information. We believe that presentation of non-GAAP financial
information is meaningful and useful in understanding the activities and
business metrics of our operations. We believe that these non-GAAP financial
measures reflect an additional way of viewing aspects of our business that, when
viewed with our GAAP results, provide a more complete understanding of factors
and trends affecting our business. Readers should consider the information in
addition to, but not instead of or superior to, our consolidated financial
statements prepared in accordance with GAAP. This non-GAAP financial information
may be determined or calculated differently by other companies, limiting the
usefulness of those measures for comparative purposes.
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Adjusted earnings measures
In addition to reporting financial results in accordance with GAAP, we have provided adjusted earnings and adjusted earnings per share, or, collectively, the Adjusted Earnings Measures, which are non-GAAP measures. We believe that the presentation of these measures provides investors with greater transparency and facilitates comparison of operating results across a broad spectrum of companies with varying capital structures, compensation strategies, derivative instruments and amortization methods, which provides a more complete understanding of our financial performance, competitive position and prospects for the future. We also believe that investors regularly rely on non-GAAP financial measures, such as the Adjusted Earnings Measures, to assess operating performance and that such measures may highlight trends in our business that may not otherwise be apparent when relying on financial measures calculated in accordance with GAAP. In addition, we believe that the adjustments shown below are useful to investors in order to allow them to compare our financial results during the periods shown without the effect of each of these income or expense items.
The following table provides reconciliations of net earnings and diluted earnings per share calculated in accordance with GAAP to adjusted earnings measures (in thousands, except per share data):
Three Months Ended
March 31,
2022 2021
Net income $ 52,443 $ 75,920
Adjustments:
Transaction-related costs(a) - 1,412
Other nonoperating expenses(b) - 378
Intangible asset amortization 2,013 1,151
Stock-based compensation expense 5,367 5,804
Foreign currency transaction loss 314 34
Cumulative tax effect of adjustments (1,927 ) (2,209 )
Adjusted earnings $ 58,210 $ 82,490
Diluted earnings per share $ 1.50 $ 2.03
Adjustments:
Transaction-related costs - 0.04
Other nonoperating expenses - 0.01
Intangible asset amortization 0.06 0.03
Stock-based compensation expense 0.15 0.15
Foreign currency transaction loss 0.01 -
Cumulative tax effect of adjustments (0.05 ) (0.06 ) Adjusted earnings per share
$ 1.67 $ 2.20 (a) In the first quarter of 2021, we incurred expenses totaling$1.4 million ($1.1 million net of tax) related to acquisitions and a divestiture of a subsidiary. (b) In the first quarter of 2021, we recorded other nonoperating expenses of$0.4 million ($0.3 million net of tax) related to early extinguishment of debt.
Adjusted EBITDA
The table below shows Adjusted EBITDA, which is a non-GAAP measure that we
define as earnings excluding depreciation, amortization, interest, foreign
currency transaction gains or losses, taxes and stock-based compensation
expense. We believe Adjusted EBITDA is used by investors to analyze operating
performance and evaluate our ability to incur and service debt and our capacity
for making capital expenditures. Adjusted EBITDA is also useful to investors to
help assess our estimated enterprise value. In addition, we believe that the
adjustments for transaction-related costs, lease termination and cease-use loss
(gain), other nonoperating expenses and equity method investment income shown
below are useful to investors in order to allow them to compare our financial
results during
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the periods shown without the effect of the income or expense items. The
computation of Adjusted EBITDA, as presented below, may differ from the
computation of similarly-titled measures provided by other companies (in
thousands):
Three Months Ended
March 31,
2022 2021
Net income $ 52,443 $ 75,920
Depreciation and amortization expenses(c) 9,514 6,621
Interest expense, net(c) 22,483 19,755
Foreign currency transaction loss 314 34
Provision for income taxes 15,834 27,716
Stock-based compensation expense 5,367 5,804
Adjustment:
Transaction-related costs(a) - 1,412 Other nonoperating expenses(b) - 378 Equity method investment income (328 ) (558 ) Adjusted EBITDA$ 105,627 $ 137,082 Adjusted EBITDA margin calculated as follows: Total Revenue$ 385,731 $ 259,444 Adjusted EBITDA 105,627 137,082
Adjusted EBITDA as a percentage of total revenue 27.4% 52.8%
(a) In the first quarter of 2021, we incurred expenses totaling$1.4 million related to acquisitions and a divestiture of a subsidiary. (b) In the first quarter of 2021, we recorded other nonoperating expenses of$0.4 million related to early extinguishment of debt. (c) Excludes amounts attributable to noncontrolling interests.
Combined measures of loans and financial claims
In addition to reporting loans and finance receivables balance information in accordance with GAAP (see Note 3 in the Notes to Consolidated Financial Statements included in this report), we have provided metrics on a combined basis. The Combined Loans and Finance Receivables Measures are non-GAAP measures that include both loans and RPAs we own or have purchased and loans we guarantee, which are either GAAP items or disclosures required by GAAP. See "-Loan and Finance Receivable Balances" and "-Credit Performance of Loans and Finance Receivables" below for reconciliations between Company owned and purchased loans and finance receivables, gross, change in fair value and charge-offs (net of recoveries) calculated in accordance with GAAP to the Combined Loans and Finance Receivables Measures. We believe these non-GAAP measures provide investors with important information needed to evaluate the magnitude of potential receivable losses and the opportunity for revenue performance of the loans and finance receivable portfolio on an aggregate basis. We also believe that the comparison of the aggregate amounts from period to period is more meaningful than comparing only the amounts reflected on our consolidated balance sheet since both revenue and cost of revenue are impacted by the aggregate amount of receivables we own and those we guarantee as reflected in our consolidated financial statements.
THREE MONTHS ENDED
Turnover and net turnover
Revenue increased$126.3 million , or 48.7%, to$385.7 million for the current quarter as compared to$259.4 million for the prior year quarter. The increase was driven by a 75.5% increase in revenue from our small business portfolio and a 36.8% increase in revenue from our consumer portfolio as higher levels of originations in 2021 and into 2022 have led to higher loan balances for both portfolios. Net revenue for the current quarter was$268.7 million compared to$238.4 million for the prior year quarter. Our consolidated net revenue margin was 69.7% for the current quarter compared to 91.9% for the prior year quarter. The net revenue margin in the prior year quarter was elevated due primarily to lower delinquency rates and lower than expected charge-offs as a result of portfolio seasoning and lower originations. With originations having increased across the second half of 2021 and throughMarch 31, 2022 , the net revenue margin in the current quarter was in a more normalized range. 25 -------------------------------------------------------------------------------- The following table sets forth the components of revenue and net revenue, separated by product for the current quarter and the prior year quarter (in thousands): Three Months Ended March 31, 2022 2021 $ Change % Change Revenue by product: Consumer loans and finance receivables revenue$ 248,547 $ 181,737 $ 66,810 36.8 % Small business loans and finance receivables revenue 132,594 75,560 57,034 75.5 Total loans and finance receivables revenue 381,141 257,297 123,844 48.1 Other 4,590 2,147 2,443 113.8 Total revenue 385,731 259,444 126,287 48.7 Change in fair value (117,042 ) (21,078 ) (95,964 ) 455.3 Net revenue$ 268,689 $ 238,366 $ 30,323 12.7 % Revenue by product (% to total): Consumer loans and finance receivables revenue 64.4 % 70.1 % Small business loans and finance receivables revenue 34.4
29.1
Total loans and finance receivables revenue 98.8 99.2 Other 1.2 0.8 Total revenue 100.0 100.0 Change in fair value (30.3 ) (8.1 ) Net revenue 69.7 % 91.9 %
Loan and financing balances receivable
The fair value of our loan and finance receivable portfolio in our consolidated financial statements was$2,231.9 million and$1,230.7 million as ofMarch 31, 2022 and 2021, respectively. The outstanding principal balance of our loan and finance receivables portfolio was$2,099.0 million and$1,219.8 million as ofMarch 31, 2022 and 2021, respectively. The fair value of the combined loan and finance receivables portfolio includes$14.4 million and$7.2 million with an outstanding principal balance of$10.0 million and$5.7 million of consumer loan balances that are guaranteed by us but not owned by us, which are not included in our consolidated financial statements as ofMarch 31, 2022 and 2021, respectively. Our small business portfolio of loans and finance receivables increased to 57.8% of our combined loan and finance receivable portfolio at fair value as ofMarch 31, 2022 , compared to 52.5% as ofMarch 31, 2021 due primarily to more accelerated growth in the small business portfolio. The consumer portfolio balance decreased to 42.2% of our combined loan and finance receivable portfolio balance at fair value as ofMarch 31, 2022 , compared to 47.5% as ofMarch 31, 2021 . See "-Non-GAAP Disclosure-Combined Loans and Finance Receivables Measures" above for additional information related to combined loans and finance receivables.
The following tables summarize the outstanding balances of loans and financial receivables as of
As of March 31, 2022 As of March 31, 2021
Guaranteed Guaranteed
Company by the Company by the
Owned(a) Company(a) Combined Owned(a) Company(a) Combined(b)
Consumer loans and finance
receivables
Principal $ 888,657 $ 10,027 $ 898,684 $ 523,170 $ 5,691 $ 528,861
Fair value 934,351 14,433 948,784 581,398 7,246 588,644
Fair value as a % of principal 105.1 % 143.9 % 105.6 % 111.1 % 127.3 % 111.3 %
Small business loans and finance
receivables
Principal $ 1,210,389 $ - $ 1,210,389 $ 696,678 $ - $ 696,678
Fair value 1,297,533 - 1,297,533 649,313 - 649,313
Fair value as a % of principal 107.2 % - % 107.2 % 93.2 % - % 93.2 %
Total loans and finance
receivables
Principal $ 2,099,046 $ 10,027 $ 2,109,073 $ 1,219,848 $ 5,691 $ 1,225,539
Fair value 2,231,884 14,433 2,246,317 1,230,711 7,246 1,237,957
Fair value as a % of principal 106.3 % 143.9 % 106.5 % 100.9 % 127.3 % 101.0 %
(a) GAAP measure. The loans and finance receivables balances guaranteed by us
relate to loans originated by third-party lenders through the CSO programs that
we have not yet purchased and, therefore, are not included in our consolidated
financial statements.
At March 31, 2022 and 2021, the ratio of fair value as a percentage of principal
was 106.3% and 100.9%, respectively, on company owned loans and finance
receivables and 106.5% and 101.0%, respectively, on combined loans and finance
receivables. These ratios increased compared to the prior year due primarily to
lower delinquency rates and lower than expected charge-offs in the small
business
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portfolio, partially offset by the impact of the acceleration of originations in
the consumer portfolio, particularly to new customers, which carry a higher risk
of charge-off.
Average amount outstanding per loan and financing receivable
The average amount outstanding per loan and finance receivable is calculated as the total combined loans and finance receivables, gross balance at the end of the period divided by the total number of combined loans and finance receivables outstanding at the end of the period. The following table shows the average amount outstanding per loan and finance receivable by product atMarch 31, 2022 and 2021: As ofMarch 31, 2022 2021
Average outstanding amount per loan and financial receivable(a) Consumer loans and financial receivables(b)
$ 2,037 $ 1,843 Small business loans and finance receivables 37,411
29,433
Total loans and finance receivables(b)$ 4,315 $ 3,809 (a) The disclosure regarding the average amount per loan and finance receivable is statistical data that is not included in our consolidated financial statements. (b) Includes loans guaranteed by us, which represent loans originated by third-party lenders through the CSO programs that we have not yet purchased and, therefore, are not included in our consolidated financial statements.
The average outstanding amount per loan and financial receivable rose to
Average amount of loans and financing receivable
The average loan and finance receivable origination amount is calculated as the
total amount of combined loans and finance receivables originated, renewed and
purchased for the period divided by the total number of combined loans and
finance receivables originated, renewed and purchased for the period. The
following table shows the average loan and finance receivable origination amount
by product for the current quarter compared to the prior year quarter:
Three Months Ended
March 31,
2022 2021
Average amount at origin of loans and financial receivables(a) Consumer loans and financial receivables(b)(c)
$ 660 $ 491 Small business loans and finance receivables(c) 17,257
14,186
Total loans and finance receivables(b)$ 1,686 $ 1,273 (a) The disclosure regarding the average loan origination amount is statistical data that is not included in our consolidated financial statements. (b) Includes loans guaranteed by us, which represent loans originated by third-party lenders through the CSO programs that we have not yet purchased and, therefore, are not included in our consolidated financial statements. (c) For line of credit accounts the average represents the average amount of each incremental draw. The average loan and finance receivable origination amount increased to$1,686 from$1,273 during the current quarter compared to the prior year quarter, due primarily to an increase in the mix of higher dollar amount loans and finance receivables to small businesses.
Credit performance of financial loans and receivables
We monitor the performance of our loans and finance receivables. Internal factors such as portfolio composition (e.g., interest rate, loan term, geography information, customer mix, credit quality) and performance (e.g., delinquency, loss trends, prepayment rates) are reviewed on a regular basis at various levels (e.g., product, vintage). We also weigh the impact of relevant, internal business decisions on the portfolio. External factors such as macroeconomic trends, financial market liquidity expectations, competitive landscape and legal/regulatory requirements are also reviewed on a regular basis. The payment status of a customer, including the degree of any delinquency, is a significant factor in determining estimated charge-offs in the cash flow models that we use to determine fair value. The following table shows payment status on outstanding principal, interest and fees as of the end of each of the last five quarters (in thousands): 27 --------------------------------------------------------------------------------
2021 2022
First Second Third Fourth First
Quarter Quarter Quarter Quarter Quarter
Ending combined loans and finance
receivables, including principal
and accrued fees/interest
outstanding:
Company owned $ 1,265,987 $ 1,416,533 $ 1,650,771 $ 1,944,263 $ 2,169,140
Guaranteed by the Company(a) 6,792 9,655 13,239 13,750 11,858
Ending combined loan and finance
receivables balance(b) $ 1,272,779 $ 1,426,188 $ 1,664,010 $ 1,958,013 $ 2,180,998
> 30 days delinquent 96,228 81,883 90,782 103,213 113,798
> 30 days delinquency rate 7.6 % 5.7 % 5.5 % 5.3 % 5.2 %
(a) Represents loans originated by third-party lenders through the CSO programs
that we have not yet purchased, which are not included in our consolidated
balance sheets.
(b) Non-GAAP measure.
Consumer loans and financial receivables
The following table includes financial information for our consumer loans and
finance receivables. Delinquency metrics include principal, interest and fees,
and only amounts that are past due (in thousands):
2021 2022
First Second Third Fourth First
Quarter Quarter Quarter Quarter Quarter
Consumer loans and finance
receivables:
Consumer combined loan and finance
receivable principal balance:
Company owned $ 523,170 $ 585,087 $ 709,781 $ 867,751 $ 888,657
Guaranteed by the Company(a) 5,691 8,284 11,354 11,790 10,027
Total combined loan and finance
receivable principal balance(b) $ 528,861 $ 593,371 $ 721,135 $ 879,541 $ 898,684
Consumer combined loan and finance
receivable fair value balance:
Company owned $ 581,398 $ 623,975 $ 723,553 $ 890,144 $ 934,351
Guaranteed by the Company(a) 7,246 10,824 16,921 18,813 14,433
Ending combined loan and finance
receivable fair value balance(b) $ 588,644 $ 634,799 $ 740,474 $ 908,957 $ 948,784
Fair value as a % of
principal(b)(c) 111.3 % 107.0 % 102.7 % 103.3 % 105.6 %
Consumer combined loan and finance
receivable balance, including
principal and accrued fees/interest
outstanding:
Company owned $ 564,934 $ 630,203 $ 768,964 $ 927,673 $ 951,560
Guaranteed by the Company(a) 6,792 9,655 13,239 13,750 11,858
Ending combined loan and finance
receivable balance(b) $ 571,726 $ 639,858 $ 782,203 $ 941,423 $ 963,418
Average consumer combined loan and
finance receivable balance,
including principal and accrued
fees/interest outstanding:
Company owned(d) $ 598,900 $ 580,704 $ 702,818 $ 836,147 $ 953,108
Guaranteed by the Company(a)(d) 8,670 7,585 11,366 13,212 12,960
Average combined loan and finance
receivable balance(b)(d) $ 607,570 $ 588,289 $ 714,184
Revenue$ 181,737 $ 174,512 $ 215,432 $ 243,570 $ 248,547 Change in fair value (26,073 ) (49,708 ) (97,061 ) (104,715 ) (116,767 ) Net revenue 155,664 124,804 118,371 138,855 131,780 Net revenue margin 85.7 % 71.5 % 54.9 % 57.0 % 53.0 % Delinquencies: > 30 days delinquent$ 24,589 $ 26,201 $ 45,804 $ 59,312 $ 70,480 > 30 days delinquent as a % of combined loan and finance receivable balance(b)(c) 4.3 % 4.1 % 5.9
% 6.3% 7.3%
Dump :
Charges (net of recoveries)
$ 112,582 $ 137,224 Charge-offs (net of recoveries) as a % of average combined loan and finance receivable balance(b)(d) 6.0 % 4.6 % 8.1 % 13.3 % 14.2 % (a) Represents loans originated by third-party lenders through the CSO programs that we have not yet purchased, which are not included in our consolidated balance sheets. (b) Non-GAAP measure. (c) Determined using period-end balances. (d) The average combined loan and finance receivable balance is the average of the month-end balances during the period. The ending balance, including principal and accrued fees/interest outstanding, of combined consumer loans and finance receivables atMarch 31, 2022 increased 68.5% to$963.4 million compared to$571.7 million atMarch 31, 2021 , due primarily to increased originations in 2021 and continuing into 2022 following the strategic reduction in originations at the onset of the COVID-19 pandemic to mitigate risks associated with the pandemic. 28 -------------------------------------------------------------------------------- The percentage of loans greater than 30 days delinquent increased to 7.3% atMarch 31, 2022 , compared to 4.3% atMarch 31, 2021 . The increase was driven primarily by growth in originations in the current year, particularly to new customers, which typically default at a higher percentage than returning customers. Charge-offs (net of recoveries) as a percentage of average combined loan balance increased to 14.2% for the current quarter, compared to 6.0% for the prior year quarter, driven primarily by growth in originations, particularly to new customers, which typically default at a higher percentage than returning customers. In the prior year quarter, this charge-off rate was lower due primarily to our having a more seasoned and lower risk portfolio remaining as originations since the onset of the COVID-19 pandemic had been significantly lower and the majority of higher risk loans to new customers originated in prior quarters had been charged off. The ratio of fair value as a percentage of principal on consumer loans and finance receivables was 105.6% atMarch 31, 2022 , compared to 111.3% atMarch 31, 2021 and 103.3% atDecember 31, 2021 . The increase fromDecember 31, 2021 was primarily driven by normal seasonality of the consumer portfolio, as loan demand typically declines in the first quarter, which leads to a more seasoned portfolio that carries a higher fair value as a percentage of principal. Refer also to "Results of Operations-COVID-19" in "Management's Discussion and Analysis of Financial Condition and Results of Operations" for additional discussion on loan valuation.
Small Business Loans and Financial Claims
The following table includes financial information for our small business loans
and finance receivables. Delinquency metrics include principal, interest, and
fees, and only amounts that are past due (in thousands):
2021 2022
First Second Third Fourth First
Quarter Quarter Quarter Quarter Quarter
Small business loans and finance
receivables:
Total loan and finance receivable
principal balance $ 696,678 $ 781,793 $ 876,668 $ 1,010,675 $ 1,210,389
Ending loan and finance receivable
fair value balance 649,313 784,728 911,729
1,074,546 1,297,533 Fair value as % of principal(a) 93.2% 100.4% 104.0% 106.3% 107.2%
Ending loan and finance receivable balance, including principal and accrued fees/interest outstanding$ 701,053 $ 786,330 $ 881,807
Average loan and finance receivable balance(b)$ 700,348 $ 739,378 $ 837,606 $ 956,110 $ 1,122,609 Revenue$ 75,560 $ 85,561 $ 100,610 $ 115,063 $ 132,594 Change in fair value 4,995 45,078 24,515 22,804 1,138 Net revenue 80,555 130,639 125,125 137,867 133,732 Net revenue margin 106.6 % 152.7 % 124.4 % 119.8 % 100.9 % Delinquencies: > 30 days delinquent$ 71,639 $ 55,682 $ 44,978 $ 43,901 $ 43,318 > 30 days delinquent as a % of loan balance(a) 10.2 % 7.1 % 5.1 % 4.3 % 3.6 %
Dump :
Charges (net of recoveries)
$ 7,677 $ 20,860 Charge-offs (net of recoveries) as a % of average loan and finance receivable balance(b) 2.6 % 0.7 % 0.8 % 0.8 % 1.9 %
(a) Determined from end of period balances. (b) The average balance of loans and financial receivables corresponds to the average of month-end balances during the period.
The ending balance, including principal and accrued fees/interest outstanding, of small business loans and finance receivables atMarch 31, 2022 increased 73.7% to$1,218 million compared to$701.1 million atMarch 31, 2021 , due primarily to an acceleration in originations as credit risks stemming from the COVID-19 pandemic decreased over the period. The percentage of loans greater than 30 days delinquent was 3.6% atMarch 31, 2022 , compared to 10.2% atMarch 31, 2021 . Delinquency has improved in all of our small business portfolios, as we have actively worked with our customers to understand their financial situations, offering a variety of repayment options to increase flexibility and reducing or deferring payments for impacted customers. Charge-offs (net of recoveries) as a percentage of average loan balance decreased to 1.9% for the current quarter, compared to 2.6% in the prior year quarter, due primarily to the recovery of the broader economy along with our efforts to assist customers. The ratio of fair value as a percentage of principal on small business loans and finance receivables was 107.2% atMarch 31, 2022 , compared to 93.2% atMarch 31, 2021 and 106.3% atDecember 31, 2021 . The increase fromDecember 31, 2021 was due primarily to strong cash collections and improvements in anticipated cash flow in our valuation models due to reduced risk. The ratio of fair value 29 --------------------------------------------------------------------------------
as a percentage of principal has improved for the legacy Enova wallet since Q2 2020 and for the OnDeck wallet since the acquisition.
Total operating expenses
Total expenses increased
Marketing expense increased to$93.2 million in the current quarter compared to$28.6 million in the prior year quarter due primarily to our efforts to capture increasing market demand for loan products in the current quarter. The prior year quarter was abnormally low due to our strategic actions to mitigate risks associated with the COVID-19 pandemic.
Operating and technology expenses increased to
General and administrative expense decreased to$34.5 million in the current quarter compared to$44.1 million in the prior year quarter, due primarily to synergies achieved following theOctober 2020 acquisition of OnDeck. Depreciation and amortization expense increased$2.9 million or 43.6% compared to the prior year quarter driven primarily by additional internally-developed software placed into service as well as intangible assets acquired with Pangea.
Interest expense, net
Interest expense, net increased$2.6 million , or 12.9%, to$22.5 million in the current quarter compared to$19.9 million in the prior year quarter. The increase was due primarily to an increase in the average amount of debt outstanding, which increased$617.6 million to$1,564.0 million during the current quarter from$946.4 million during the prior year quarter, partially offset by a decrease in the weighted average interest rate on our outstanding debt to 5.92% during the current quarter from 8.61% during the prior year quarter.
Provision for income taxes
The effective tax rate of 23.2% in the current quarter was lower than the rate of 26.7% recorded in the prior year quarter, primarily due to stock-based compensation deductions are produced at favorable fair market values.
As ofMarch 31, 2022 , the balance of unrecognized tax benefits was$57.1 million which is included in "Accounts payable and accrued expenses" on the consolidated balance sheet,$10.9 million of which, if recognized, would favorably affect the effective tax rate in the period of recognition. We had$38.6 million and$44.1 million of unrecognized tax benefits as ofMarch 31, 2021 andDecember 31, 2021 , respectively. We believe that we have adequately accounted for any material tax uncertainties in our existing reserves for all open tax years. OurU.S. tax returns are subject to examination by federal and state taxing authorities. The statute of limitations related to our consolidated Federal income tax returns is closed for all tax years up to and including 2017. However, the 2014 tax year is still open to the extent of the net operating loss that was carried back from the 2019 tax return. The years open to examination by state, local and foreign government authorities vary by jurisdiction, but the statute of limitation is generally three years from the date the tax return is filed. For jurisdictions that have generated net operating losses, carryovers may be subject to the statute of limitations applicable for the year those carryovers are utilized. In these cases, the period for which the losses may be adjusted will extend to conform with the statute of limitations for the year in which the losses are utilized. In most circumstances, this is expected to increase the length of time that the applicable taxing authority may examine the carryovers by one year or longer, in limited cases.
Net revenue
Net income decreased$23.5 million , or 30.9%, to$52.4 million during the current quarter compared to$75.9 million during the prior year quarter. The decrease was due primarily to increased marketing efforts in the current quarter and improvements in the credit outlook of our loan portfolio in the prior year quarter.
CASH AND CAPITAL RESOURCES
Capital funding strategy
Through the COVID-19 pandemic, we have taken various actions to maintain a stable and flexible balance sheet that ensures liquidity and funding available to meet our business obligations. Despite higher than normal cash balances, we have drawn funds on our revolving credit agreement at various times to meet the minimum utilization requirements. As ofMarch 31, 2022 , we had cash, cash equivalents, and restricted cash of$227.8 million , of which$96.2 million was restricted, compared to$225.9 million , of which$60.4 million was 30 -------------------------------------------------------------------------------- restricted, as ofDecember 31, 2021 . During the three months endedMarch 31, 2022 , we increased the borrowing capacity on four of our loan securitization facilities without having to increase any of the respective borrowing rates. As ofMarch 31, 2022 , we had committed and undrawn funding capacity of$402.5 million . Based on numerous stressed-case modeling scenarios, we believe we have sufficient liquidity to run our operations for the foreseeable future. Further, we have no recourse debt obligations due untilSeptember 2024 . Historically, we have generated significant cash flow through normal operating activities for funding both long-term and short-term needs. Our near-term liquidity is managed to ensure that adequate resources are available to fund our seasonal working capital growth, which is driven by demand for our loan and financing products. OnMay 30, 2014 , we issued and sold$500.0 million in aggregate principal amount of 9.75% senior notes due 2021 (the "2021 Senior Notes"). OnSeptember 1, 2017 , we issued and sold$250.0 million in aggregate principal amount of 8.50% Senior Notes due 2024 (the "2024 Senior Notes") and used the net proceeds, in part, to retire$155.0 million in 2021 Senior Notes. OnJanuary 21, 2018 , we redeemed an additional$50.0 million in principal amount of the outstanding 2021 Senior Notes. OnSeptember 19, 2018 , we issued and sold$375.0 million in aggregate principal amount of 8.50% Senior Notes due 2025 (the "2025 Senior Notes") and used the net proceeds, in part, to retire the remaining$295.0 million in principal amount of the outstanding 2021 Senior Notes. OnJune 30, 2017 , we entered into a secured revolving credit agreement (as amended, the "Credit Agreement"). OnApril 13, 2018 ,October 5, 2018 ,July 1, 2019 andMay 10, 2021 , we and certain of our operating subsidiaries entered into amendments to our Credit Agreement. As ofApril 29, 2022 , our available borrowings under the Credit Agreement were$80.3 million . Since 2016, we have entered into several loan securitization facilities and offered asset-backed notes to fund our growth, primarily in our near-prime consumer installment loan and small business loan businesses. As ofApril 29, 2022 , we had committed and undrawn funding capacity of$272.2 million . We expect that our operating needs, including satisfying our obligations under our debt agreements and funding our working capital growth, will be satisfied by a combination of cash flows from operations, borrowings under the Credit Agreement, or any refinancing, replacement thereof or increase in borrowings thereunder, and securitization or sale of loans and finance receivables under our consumer and small business loan securitization facilities. As ofMarch 31, 2022 , we were in compliance with all financial ratios, covenants and other requirements set forth in our debt agreements. Unexpected changes in our financial condition or other unforeseen factors may result in our inability to obtain third-party financing or could increase our borrowing costs in the future. To the extent we experience short-term or long-term funding disruptions, we have the ability to adjust our volume of lending and financing to consumers and small businesses that would reduce cash outflow requirements while increasing cash inflows through repayments. Additional alternatives may include the securitization or sale of assets, increased borrowings under the Credit Agreement, or any refinancing or replacement thereof, and reductions in capital spending, which could be expected to generate additional liquidity.
Capital
Our Total stockholders' equity decreased by$15.1 million to$1,078.0 million atMarch 31, 2022 from$1,093.1 million atDecember 31, 2021 . The decrease of stockholders' equity was driven primarily by repurchases of our outstanding common stock during the current quarter, partially offset by net income for the three months endedMarch 31, 2022 . Our book value per share outstanding increased to$32.83 atMarch 31, 2022 from$32.01 atDecember 31, 2021 , which was primarily driven by the decrease in shares outstanding as a result of share repurchases, which is discussed in more detail below. OnNovember 5, 2020 , we announced the Board of Directors had authorized a share repurchase program for up to$50.0 million of our outstanding common stock throughDecember 31, 2021 (the "2020 Authorization"). OnNovember 4, 2021 , we announced the Board of Directors authorized a new share repurchase program totaling$150.0 million throughDecember 31, 2022 (the "2021 Authorization"). The 2021 Authorization replaced the 2020 Authorization. OnFebruary 9, 2022 , we announced the Board of Directors authorized a new share repurchase program totaling$100.0 million throughJune 30, 2023 (the "2022 Authorization"). The 2022 Authorization replaced the 2021 Authorization. Repurchases under our share repurchase programs are made in accordance with applicable securities laws from time to time in the open market, through privately negotiated transactions or otherwise. Our share repurchase programs do not obligate us to purchase any shares of our common stock. Similar to our previous share repurchase programs, the 2022 Authorization may be terminated, increased or decreased by the Board of Directors in its discretion at any time. During the three months endedMarch 31, 2022 , we had$74.0 million repurchases of common stock under our share repurchase programs.
Species
Our cash and cash equivalents are held primarily for working capital purposes
and are used to fund a portion of our lending activities. We do not enter into
investments for trading or speculative purposes. Our policy is to invest cash in
excess of our immediate working capital requirements in short-term investments,
deposit accounts or other arrangements designed to preserve the principal
balance and maintain adequate liquidity. Our excess cash may be invested
primarily in overnight sweep accounts, money market instruments or similar
arrangements that provide competitive returns consistent with our polices and
market conditions.
31
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Our restricted cash represents funds held in accounts as reserves on certain
debt facilities and as collateral for issuing bank partner transactions. We have
no ability to draw on such funds as long as they remain restricted under the
applicable arrangements but have the ability to use these funds to finance loan
originations, subject to meeting borrowing base requirements. Our policy is to
invest restricted cash held in debt facility related accounts, to the extent
permitted by such debt facility, in investments designed to preserve the
principal balance and provide liquidity. Accordingly, such cash is invested
primarily in money market instruments that offer daily purchase and redemption
and provide competitive returns consistent with our policies and market
conditions.
Current borrowing facilities
The following table summarizes our debt facilities as ofMarch 31, 2022 (dollars in thousands). Weighted average interest Borrowing Principal Maturity date rate(a) capacity outstanding Funding Debt: 2018-1 Securitization Facility March 2027 (b) 4.34% 200,000 (g) 150,000 2018-2 Securitization Facility July 2025 (c) 4.35% 225,000 (h) 175,000 2019-A Securitization Notes June 2026 7.62% 11,534 11,534 ODR 2021-1 Securitization Facility November 2024 (d) 2.35% 200,000 (i) 62,000 RAOD Securitization Facility December 2023 (e) 2.63% 236,842 (j) 177,631 ODAST III Securitization Notes May 2027 (f) 2.07% 300,000 300,000 Total funding debt 3.12%$ 1,173,376 $ 876,165 Corporate Debt: 8.50% Senior Notes Due 2024 September 2024 8.50% 250,000 250,000 8.50% Senior Notes Due 2025 September 2025 8.50% 375,000 375,000 Revolving line of credit June 2025 4.25% 310,000 (k) 204,000 Total corporate debt 7.45%$ 935,000 $ 829,000 (a) The weighted average interest rate is determined based on the rates and principal balances onMarch 31, 2022 . It does not include the impact of the amortization of deferred loan origination costs or debt discounts. (b) The period during which new borrowings may be made under this facility expires inMarch 2025 . (c) The period during which new borrowings may be made under this facility expires inJuly 2023 . (d) The period during which new borrowings may be made under this facility expires inNovember 2023 . (e) The period during which new borrowings may be made under this facility expires inDecember 2022 . (f) The period during which new borrowings may be made under this facility expires inApril 2024 . (g) During the current quarter we amended this facility to increase the maximum borrowing capacity from$150.0 million to$200.0 million . (h) During the current quarter we amended this facility to increase the maximum borrowing capacity from$150.0 million to$225.0 million . (i) During the current quarter we amended this facility to increase the maximum borrowing capacity from$150.0 million to$200.0 million . (j) During the current quarter we amended this facility to increase the maximum borrowing capacity from$177.6 million to$236.8 million . (k) We had an outstanding letter of credit under the Revolving line of credit of$0.8 million as ofMarch 31, 2022 .
Our ability to fully utilize the available capacity of our credit facilities may also be affected by provisions that limit concentration risk and eligibility.
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