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Finance Assets and Lessor Operating Leases
 9 Months Ended
Sep. 30, 2023
Receivables [Abstract]  
Finance Assets and Lessor Operating Leases Finance Assets and Lessor Operating Leases
Finance Assets
Finance receivables are comprised of sales-type lease receivables, secured loans and unsecured loans. Sales-type leases and secured loans are from financing options for the purchase or lease of Pitney Bowes equipment or other manufacturers' equipment and are generally due in installments over periods ranging from three to five years. Unsecured loans comprise revolving credit lines offered to our clients for postage, supplies and working capital purposes. These revolving credit lines are generally due monthly; however, clients may rollover outstanding balances. Interest is recognized on finance receivables using the effective interest method. Annual fees are recognized ratably over the period covered and client acquisition costs are expensed as incurred. All finance receivables are in our SendTech Solutions segment and we segregate finance receivables into a North America portfolio and an International portfolio.
Finance receivables consisted of the following:
September 30, 2023December 31, 2022
North AmericaInternationalTotalNorth AmericaInternationalTotal
Sales-type lease receivables      
Gross finance receivables$989,069 $135,913 $1,124,982 $967,298 $158,167 $1,125,465 
Unguaranteed residual values38,570 7,555 46,125 38,832 8,798 47,630 
Unearned income(249,639)(42,059)(291,698)(239,238)(48,334)(287,572)
Allowance for credit losses(14,352)(2,454)(16,806)(14,131)(2,893)(17,024)
Net investment in sales-type lease receivables763,648 98,955 862,603 752,761 115,738 868,499 
Loan receivables     
Loan receivables317,269 17,424 334,693 311,887 16,636 328,523 
Allowance for credit losses(5,747)(146)(5,893)(4,787)(139)(4,926)
Net investment in loan receivables311,522 17,278 328,800 307,100 16,497 323,597 
Net investment in finance receivables$1,075,170 $116,233 $1,191,403 $1,059,861 $132,235 $1,192,096 


Maturities of gross finance receivables at September 30, 2023 were as follows:

Sales-type Lease ReceivablesLoan Receivables
North AmericaInternationalTotalNorth AmericaInternationalTotal
Remainder 2023$103,877 $38,932 $142,809 $214,865 $17,424 $232,289 
2024343,412 44,439 387,851 35,617 — 35,617 
2025255,720 27,813 283,533 29,217 — 29,217 
2026170,704 15,739 186,443 20,025 — 20,025 
202791,804 6,777 98,581 13,163 — 13,163 
Thereafter23,552 2,213 25,765 4,382 — 4,382 
Total$989,069 $135,913 $1,124,982 $317,269 $17,424 $334,693 
Aging of Receivables
The aging of gross finance receivables was as follows:
September 30, 2023
Sales-type Lease ReceivablesLoan Receivables
North
America		InternationalNorth
America		InternationalTotal
Past due amounts 0 - 90 days$980,673 $134,330 $314,832 $17,113 $1,446,948 
Past due amounts > 90 days8,396 1,583 2,437 311 12,727 
Total$989,069 $135,913 $317,269 $17,424 $1,459,675 

December 31, 2022
Sales-type Lease ReceivablesLoan Receivables
North
America		InternationalNorth
America		InternationalTotal
Past due amounts 0 - 90 days$959,203 $155,596 $308,872 $16,503 $1,440,174 
Past due amounts > 90 days8,095 2,571 3,015 133 13,814 
Total$967,298 $158,167 $311,887 $16,636 $1,453,988 

Allowance for Credit Losses
We provide an allowance for credit losses based on historical loss experience, the nature of our portfolios, adverse situations that may affect a client's ability to pay and current economic conditions and outlook based on reasonable and supportable forecasts. We continually evaluate the adequacy of the allowance for credit losses and adjust as necessary. The assumptions used in determining an estimate of credit losses are inherently subjective and actual results may differ significantly from estimated reserves.
We established credit approval limits based on the credit quality of the client and the type of equipment financed. We cease financing revenue recognition for lease receivables and for unsecured loan receivables that are more than 90 days past due. Revenue recognition is resumed when the client's payments reduce the account aging to less than 60 days past due. Finance receivables are written off against the allowance after all collection efforts have been exhausted and management deems the account to be uncollectible. We believe that our credit risk is low because of the geographic and industry diversification of our clients and small account balances for most of our clients.
Activity in the allowance for credit losses for finance receivables was as follows:
Sales-type Lease ReceivablesLoan Receivables
North
America		InternationalNorth
America		InternationalTotal
Balance at January 1, 2023$14,131 $2,893 $4,787 $139 $21,950 
Amounts charged to expense1,339 800 3,246 305 5,690 
Write-offs(3,227)(1,209)(3,722)(292)(8,450)
Recoveries2,058 151 1,488 — 3,697 
Other51 (181)(52)(6)(188)
Balance at September 30, 2023$14,352 $2,454 $5,747 $146 $22,699 
Sales-type Lease ReceivablesLoan Receivables
North
America		InternationalNorth
America		InternationalTotal
Balance at January 1, 2022$19,546 $3,246 $3,259 $167 $26,218 
Amounts charged to expense(1,913)189 2,459 259 994 
Write-offs (4,625)(587)(3,684)(212)(9,108)
Recoveries2,273 35 1,916 1 4,225 
Other(103)(589)(10)(62)(764)
Balance at September 30, 2022$15,178 $2,294 $3,940 $153 $21,565 

The table below shows write-offs of gross finance receivables by year of origination.

September 30, 2023
Sales Type Lease ReceivablesLoan ReceivablesTotal
20232022202120202019Prior
Write-offs$833 $912 $1,141 $748 $447 $355 $4,014 $8,450 
Credit Quality
The extension of credit and management of credit lines to new and existing clients uses a combination of a client's credit score, where available, a detailed manual review of their financial condition and payment history, or an automated process. Once credit is granted, the payment performance of the client is managed through automated collections processes and is supplemented with direct follow up should an account become delinquent. We have robust automated collections and extensive portfolio management processes to ensure that our global strategy is executed, collection resources are allocated and enhanced tools and processes are implemented as needed.
Over 85% of our finance receivables are within the North American portfolio. We use a third-party to score the majority of this portfolio on a quarterly basis using a proprietary commercial credit score. The relative scores are determined based on a number of factors, including financial information, payment history, company type and ownership structure. We stratify the third party's credit scores of our clients into low, medium and high-risk accounts. Due to timing and other issues, our entire portfolio may not be scored at period end. We report these amounts as "Not Scored"; however, absence of a score is not indicative of the credit quality of the account. The third-party credit score is used to predict the payment behaviors of our clients and the probability that an account will become greater than 90 days past due during the subsequent 12-month period.
•Low risk accounts are companies with very good credit scores and a predicted delinquency rate of less than 5%.
•Medium risk accounts are companies with average to good credit scores and a predicted delinquency rate between 5% and 10%.
•High risk accounts are companies with poor credit scores, are delinquent or are at risk of becoming delinquent. The predicted delinquency rate would be greater than 10%.

We do not use a third-party to score our International portfolio because the cost to do so is prohibitive as there is no single credit score model that covers all countries. Accordingly, the entire International portfolio is reported in the Not Scored category. This portfolio comprises less than 15% of total finance receivables. Most of the International credit applications are small dollar applications (i.e. below $50 thousand) and are subjected to an automated review process. Larger credit applications are manually reviewed, which includes obtaining client financial information, credit reports and other available financial information.

The table below shows gross finance receivables by relative risk class and year of origination based on the relative scores of the accounts within each class.

September 30, 2023
Sales Type Lease ReceivablesLoan ReceivablesTotal
20232022202120202019Prior
Low$214,237 $241,101 $172,532 $108,325 $55,651 $16,531 $239,612 $1,047,989 
Medium37,123 40,116 29,949 20,506 12,288 4,007 62,663 206,652 
High3,426 4,495 2,909 2,231 824 801 7,632 22,318 
Not Scored56,364 46,715 32,930 14,264 6,319 1,338 24,786 182,716 
Total$311,150 $332,427 $238,320 $145,326 $75,082 $22,677 $334,693 $1,459,675 
December 31, 2022
Sales Type Lease ReceivablesLoan ReceivablesTotal
20222021202020192018Prior
Low$286,297 $206,511 $140,800 $95,485 $34,721 $12,674 $239,635 $1,016,123 
Medium53,419 40,669 27,013 19,668 6,751 3,441 56,048 207,009 
High6,492 3,840 3,119 1,942 750 508 6,800 23,451 
Not Scored71,435 53,831 29,957 19,232 5,889 1,021 26,040 207,405 
Total$417,643 $304,851 $200,889 $136,327 $48,111 $17,644 $328,523 $1,453,988 
Lease Income
Lease income from sales-type leases, excluding variable lease payments, was as follows:
Three Months Ended September 30,Nine Months Ended September 30,
2023202220232022
Profit recognized at commencement$29,476 $31,576 $92,138 $100,951 
Interest income38,588 40,480 116,700 123,783 
Total lease income from sales-type leases$68,064 $72,056 $208,838 $224,734 

Lessor Operating Leases
We also lease mailing equipment under operating leases with terms of one to five years. Maturities of these operating leases are as follows:
Remainder 2023$7,096 
202417,430 
202519,044 
202614,827 
20273,449 
Thereafter1,048 
Total$62,894