Quarterly report pursuant to Section 13 or 15(d)

Financing Receivables (Tables)

v3.23.2
Financing Receivables (Tables)
 6 Months Ended
Jun. 30, 2023
Receivables [Abstract]  
Summary of Financing Receivables and Changes ThereTo The following tables summarize Sunlight’s financing receivables and changes thereto:
Advances(a)
Other Financing Receivables(b)
Total
Loan Participations from Affiliate(c)
Balance Sheet Loans(d)
June 30, 2023
Amounts outstanding $ 8,097  $ 3,271  $ 268  $ 11,636 
Unamortized discount —  (240) (29) (269)
Allowance for credit losses (1,775) (100) (7) (1,882)
Carrying value $ 6,322  $ 2,931  $ 232  $ 9,485 
December 31, 2022
Amounts outstanding $ 52,129  $ 3,635  $ 309  $ 56,073 
Unamortized discount —  (279) (31) (310)
Allowance for credit losses (6,736) (94) (8) (6,838)
Carrying value $ 45,393  $ 3,262  $ 270  $ 48,925 
a.Represents advance payments made by Sunlight to certain contractors, generally on a short-term basis, in anticipation of a project’s substantial completion, including advances of $1.0 million and $1.5 million, net of allowances of $0.5 million and $0.1 million, to Sunlight contractors not associated with specific installation projects at June 30, 2023 and December 31, 2022, respectively.
b.No loans or loan participations were individually evaluated for impairment at June 30, 2023 or December 31, 2022.
c.Represents Sunlight’s 5.0% participation interest in a pool of residential solar loans held by Sunlight’s Bank Partner.
d.Represents Indirect Channel Loans purchased by Sunlight from its Bank Partner and other parties.

For the Three Months Ended June 30, For the Six Months Ended June 30,
2023 2022 2023 2022
Allowance for Credit Losses — Advances
Beginning Balance $ 2,319  $ 505  $ 6,736  $ 238 
Provision for credit losses(a)
(200) 2,982  (699) 3,249 
Realized losses(b)
(344) —  (4,262) — 
Ending Balance $ 1,775  $ 3,487  $ 1,775  $ 3,487 
Allowance for Credit Losses — Loan Participations
Beginning Balance $ 143  $ 31  $ 94  $ 140 
Provision for credit losses
 (38) 142  16  42 
Realized losses (5) (66) (10) (75)
Ending Balance $ 100  $ 107  $ 100  $ 107 
Allowance for Credit Losses — Balance Sheet Loans
Beginning Balance $ 8  $ 42  $ 8  $ 8 
Provision for credit losses
 7,852  918  10,007  1,389 
Realized losses (7,853) (921) (10,008) (1,358)
Ending Balance $ 7  $ 39  $ 7  $ 39 
For the Three Months Ended June 30, For the Six Months Ended June 30,
2023 2022 2023 2022
Changes in Carrying Value — Loan Participations
Beginning Balance $ 3,036  $ 3,911  $ 3,263  $ 4,059 
Proceeds from principal repayments, net (161) (206) (353) (497)
Accretion of loan discount 18  17  37  60 
Provision for credit losses 38  (142) (16) (42)
Ending Balance $ 2,931  $ 3,580  $ 2,931  $ 3,580 
Changes in Carrying Value — Balance Sheet Loans
Beginning Balance $ 233  $ 215  $ 269  $ 254 
Purchases, net(c)
7,846  990  10,007  1,438 
Proceeds from principal repayments, net 5  (73) (40) (89)
Accretion of loan discount —  —  3  — 
Provision for credit losses (7,852) (918) (10,007) (1,389)
Ending Balance $ 232  $ 214  $ 232  $ 214 
a.Includes an adjustment of $0.5 million to provision for credit losses during the six months ended June 30, 2023 upon adoption of ASC 326 effective January 1, 2023.
b.Sunlight charged-off advances totaling $4.4 million for the six months ended June 30, 2023, of which $3.6 million was attributable to one of Sunlight’s contractors during the three months ended March 31, 2023.
c.During the three and six months ended June 30, 2023 and 2022, Sunlight purchased 167, 24, 247 and 48 Indirect Channel Loans with an aggregate UPB of $6.6 million, $0.6 million, $9.1 million and $1.1 million, respectively.
Summary of Allocation of Advance Amount Based on Internal Risk Ratings The following table allocates the advance amount outstanding based on Sunlight’s internal risk ratings:
Total
Risk Tier(a)
Contractors Amount Outstanding % of Amount Outstanding
June 30, 2023
1 Low risk 40  $ 2,304  28.5  %
2 Low-to-medium risk 68  2,490  30.8 
3 Medium risk 26  884  10.9 
4 Medium-to-high risk 9  261  3.2 
5 Higher risk 2  2,158  26.6 
145  $ 8,097  100.0  %
December 31, 2022
1 Low risk 130  $ 14,585  28.0  %
2 Low-to-medium risk 152  23,686  45.4 
3 Medium risk 70  3,868  7.4 
4 Medium-to-high risk 28  9,793  18.8 
5 Higher risk 8  197  0.4 
388  $ 52,129  100.0  %
a.At June 30, 2023 and December 31, 2022, the average risk rating of Sunlight’s advances was 2.7 (“medium risk”) and 2.2 (“low-to-medium risk”), weighted by total advance amounts outstanding, respectively.
Summary of Payment Status The following table presents the payment status of advances held by Sunlight:
Payment Delinquency
Amount Outstanding(a)
% of Amount Outstanding
June 30, 2023
Current $ 3,008  42.3  %
Less than 30 days 143  2.0 
30 days 156  2.2 
60 days 59  0.8 
90+ days(b)
3,751  52.7 
$ 7,117  100.0  %
December 31, 2022
Current $ 27,257  53.8  %
Less than 30 days 7,456  14.7 
30 days 5,197  10.3 
60 days 3,099  6.1 
90+ days(b)
7,620  15.1 
$ 50,629  100.0  %
a.Excludes advances of $1.0 million and $1.5 million to Sunlight contractors not associated with specific installation projects and was not delinquent at June 30, 2023 and December 31, 2022, respectively.
b.As further discussed in Note 2, Sunlight generally evaluates amounts delinquent for 90 days or more for impairment. Sunlight assessed advances 90 days or more, along with other factors that included the contractor’s risk tier and historical loss experience, and established loss allowances of $1.3 million and $2.0 million at June 30, 2023 and December 31, 2022, respectively.
The following table presents the payment status of loans and loan participations held by Sunlight:
Payment Delinquency(a)
Loan Participations from Affiliate
Balance Sheet Loans(b)
Total
Loans UPB Loans UPB Loans UPB % of UPB
June 30, 2023
Current 3,181  $ 3,189  16  $ 268  3,197  $ 3,457  97.7  %
Less than 30 days 60  58  —  —  60  58  1.6 
30 days 6  7  —  —  6  7  0.2 
60 days 10  14  —  —  10  14  0.4 
90+ days 3  3  —  —  3  3  0.1 
3,260  $ 3,271  16  $ 268  3,276  $ 3,539  100.0  %
December 31, 2022
Current 3,302  $ 3,502  14  $ 240  3,316  $ 3,742  94.9  %
Less than 30 days 89  101  3  69  92  170  4.3 
30 days 15  17  —  —  15  17  0.4 
60 days 6  9  —  —  6  9  0.2 
90+ days 6  6  —  —  6  6  0.2 
3,418  $ 3,635  17  $ 309  3,435  $ 3,944  100.0  %
a.As further described in Note 2, Sunlight places loans delinquent greater than 90 days on nonaccrual status. Such loans had carrying values of $0.0 million and $0.0 million at June 30, 2023 and December 31, 2022, respectively. Sunlight does not consider the average carrying values and interest income recognized (including interest income recognized using a cash-basis method) material.
b.Excludes loans Sunlight wrote-off.
Summary of Risk Concentration The following table presents the concentration of advances, by counterparty:
June 30, 2023 December 31, 2022
Contractor Amount Outstanding % of Total Amount Outstanding % of Total
1 $ 2,146  26.5  % $ 4,326  8.3  %
2 511  6.3  554  1.1 
3 278  3.4  2,711  5.2 
4 211  2.6  241  0.5 
5 164  2.0  —  — 
6 154  1.9  —  — 
7 136  1.7  10  — 
8 134  1.7  34  0.1 
9 126  1.6  7,348  14.1 
10 122  1.5  99  0.2 
Other(a)
4,115  50.8  36,806  70.5 
$ 8,097  100.0  % $ 52,129  100.0  %
a.At June 30, 2023 and December 31, 2022, Sunlight recorded advances receivable from 135 and 378 counterparties not individually listed in the table above with average balances of $0.0 million and $0.1 million, respectively. At December 31, 2022, Sunlight recorded advances receivable from individual counterparties of $4.1 million, $3.9 million, $1.4 million and $1.0 million that represent the largest advance concentrations included in “Other,” based on the amount outstanding.
Vintage — The following table presents the amortized cost basis by year of origination and credit quality indicators of advances held by Sunlight at June 30, 2023:

Year of Origination(a)
2023 2022 2021 Prior Total
Risk Tier
1 Low risk $ 1,512  $ 293  $ —  $ —  $ 1,805 
2 Low-to-medium risk 1,663  764  35  28  2,490 
3 Medium risk 754  130  —  —  884 
4 Medium-to-high risk 21  49  74  117  261 
5 Higher risk —  1,677  —  —  1,677 
$ 3,950  $ 2,913  $ 109  $ 145  $ 7,117 
Payment Delinquency
Current $ 3,008  $ —  $ —  $ —  $ 3,008 
Less than 30 days 143  —  —  —  143 
30 days 156  —  —  —  156 
60 days 59  —  —  —  59 
90+ days(b)
584  2,913  109  145  3,751 
$ 3,950  $ 2,913  $ 109  $ 145  $ 7,117 
Current-period gross write-offs(c):
For the Three Months Ended June 30, 2023 $ 54  $ 354  $ —  $ —  $ 408 
For the Six Months Ended June 30, 2023 427  4,244  —  182  4,853 
a.Excludes advances of $1.0 million and $1.5 million to Sunlight contractors not associated with specific installation projects and was not delinquent at June 30, 2023 and December 31, 2022, respectively.
b.As discussed in Note 2, Sunlight generally evaluates amounts 90 days or more past due for impairment. Sunlight assessed advances 90 days or more past due, along with other factors that included the contractor’s risk tier and historical loss experience, and established loss allowances of $1.3 million and $2.0 million at June 30, 2023 and December 31, 2022, respectively.
c.Excludes $0.0 million and $0.5 million of recoveries during the three and six months ended June 30, 2023, respectively.
The following table presents the UPB of Balance Sheet Loans, including Sunlight’s relevant participation percentage of the Indirect Channel Loans underlying the participation interests held by Sunlight, based upon the state in which the borrower lived at the time of loan origination:
June 30, 2023 December 31, 2022
State UPB % of Total UPB % of Total
Texas $ 654  18.5  % $ 732  18.6  %
California 636  18.0  698  17.7 
Florida 295  8.3  371  9.4 
New York 246  7.0  269  6.8 
New Jersey 235  6.6  256  6.5 
Massachusetts 167  4.7  174  4.4 
Arizona 164  4.6  178  4.5 
Pennsylvania 141  4.0  159  4.0 
South Carolina 122  3.4  137  3.5 
Missouri 101  2.9  111  2.8 
Other(a)
778  22.0  859  21.8 
$ 3,539  100.0  % $ 3,944  100.0  %
a.Sunlight only participates in residential solar loans originated within the United States, including 31 and 31 states not individually listed in the table above, none of which individually amount to more than 2.7% and 2.6% of the UPB at June 30, 2023 and December 31, 2022, respectively.
The following table presents the amortized cost basis by year of origination and credit quality indicators of loans and loan participations held by Sunlight at June 30, 2023:
Year of Origination
2023 2022 2021 Prior Total
FICO
780 and greater $ —  $ —  $ 13  $ 860  $ 873 
720-779 —  —  3  1,236  1,239 
660-719(a)
—  —  6  1,084  1,090 
600-659 —  —  —  68  68 
Less than 600 —  —  —  —  — 
$ —  $ —  $ 22  $ 3,248  $ 3,270 
Current-period gross write-offs(b)(c):
For the Three Months Ended June 30, 2023 $ 189  $ 6,155  $ 1,421  $ 65  $ 7,830 
For the Six Months Ended June 30, 2023 189  8,038  1,645  118  9,990 
a.This bucket includes all Balance Sheet Loans (originated prior to 2021).
b.Includes gross write-offs of $0.0 million related to Sunlight’s 5.0% participation interest in a pool of residential solar loans and $7.7 million related to Indirect Channel Loans during the three months ended June 30, 2023.
c.Includes gross write-offs of $0.0 million related to Sunlight’s 5.0% participation interest in a pool of residential solar loans and $9.9 million related to Indirect Channel Loans during the six months ended June 30, 2023.