Oportun Financial Corporation (NASDAQ:OPRT) Q2 2022 Earnings Conference Call August 8, 2022 5:00 PM ET Company Participants Dorian Hare - Senior Vice President, Investor Relations Raul Vazquez - Chief Executive Officer Jonathan Coblentz - Chief Financial Officer and Chief Administrative Officer Conference Call Participants John Hecht - Jefferies Sanjay Sakhrani - KBW Mark DeVries - Barclays Rick Shane - JPMorgan Hal Goetsch - Loop Capital Operator Welcome to Oportun Financial Corporation’s Second Quarter 20 ...

OP * RTUN | --- | --- | --- | --- | --- | --- | |------------------|----------------------------------------|-----------|-------|-------|--------------| | | | | | | | | 2Q 2022 Earnings | Congratulations, Your loan is approved | | | | | | | | | | | | | Presentation | $5,000 | Alex Cruz | | | digit DEBIT | August 8, 2022 Forward-looking statements This presentation and the accompanying oral presentation contain forward-looking statements. All statements other than statements of historical fact contained in t ...

Oportun Financial Corporation (NASDAQ:OPRT) Q1 2022 Earnings Conference Call May 9, 2022 5:00 PM ET Company Participants Dorian Hare - Senior Vice President of Investor Relations Raul Vazquez - President & Chief Executive Officer Jonathan Coblentz - Chief Financial Officer & Chief Administrative Officer Conference Call Participants John Hecht - Jefferies Sanjay Sakhrani - KBW David Scharf - JMP Securities Rick Shane - J.P. Morgan Hal Goetsch - Loop Capital Operator Good day and welcome to Oportun Financial ...

PART I - FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Presents the unaudited condensed consolidated financial statements for the three months ended March 31, 2022 [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets grew to $2.99 billion, driven by an increase in loans receivable Condensed Consolidated Balance Sheet Summary (in thousands) | Account | March 31, 2022 | December 31, 2021 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $109,864 | $130,959 | | Loans receivable at fair value | $2,450,987 | $2,386,807 | | Goodwill | $104,162 | $104,014 | | **Total assets** | **$2,992,551** | **$2,946,625** | | **Liabilities** | | | | Secured financing | $473,311 | $393,889 | | Asset-backed notes at fair value | $1,593,435 | $1,651,706 | | **Total liabilities** | **$2,342,615** | **$2,342,744** | | **Total stockholders' equity** | **$649,936** | **$603,881** | [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Total revenue grew to $214.7 million, leading to a net income of $45.7 million for Q1 2022 Condensed Consolidated Statements of Operations (in thousands) | Metric | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | Total revenue | $214,720 | $135,313 | | Net revenue | $205,014 | $110,241 | | Total operating expenses | $147,344 | $106,266 | | Income before taxes | $57,670 | $3,975 | | **Net income** | **$45,663** | **$3,019** | | **Diluted EPS** | **$1.37** | **$0.10** | [Condensed Consolidated Statements of Cash Flow](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flow) Net cash from operations was $38.6 million, while investing activities used $122.5 million in Q1 2022 Summary of Cash Flows (in thousands) | Cash Flow Activity | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | Net cash provided by operating activities | $38,565 | $18,156 | | Net cash provided by (used in) investing activities | $(122,496) | $8,987 | | Net cash provided by (used in) financing activities | $61,529 | $(12,552) | | **Net increase (decrease) in cash** | **$(22,402)** | **$14,591** | [Notes to the Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) Details significant events including the Digit acquisition, a structured loan sale, and CFPB investigations - On December 22, 2021, the company completed its acquisition of Hello Digit, Inc ("Digit"), a digital banking platform, for a total consideration of approximately **$205.3 million**[21](index=21&type=chunk)[37](index=37&type=chunk) - On March 31, 2022, the company participated in a securitization, selling loans with an aggregate unpaid principal balance of approximately **$227.6 million** and receiving **$245.0 million** in net proceeds[34](index=34&type=chunk) - The company's whole loan sale agreement, which required selling at least **10% of unsecured loan originations**, was not renewed and expired on March 4, 2022[35](index=35&type=chunk)[71](index=71&type=chunk) - The company and its subsidiary Digit are cooperating with separate Civil Investigative Demands (CIDs) from the **Consumer Financial Protection Bureau (CFPB)** regarding lending/debt-collection practices and product representations, respectively[74](index=74&type=chunk)[75](index=75&type=chunk)[76](index=76&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=18&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Discusses Q1 2022 financial performance, highlighting growth driven by the Digit acquisition [Key Financial and Operating Metrics](index=21&type=section&id=Key%20Financial%20and%20Operating%20Metrics) Aggregate Originations surged 138.7% to $800.1 million, while the 30+ Day Delinquency Rate rose to 4.5% Key Financial and Operating Metrics | Metric | Q1 2022 | Q1 2021 | | :--- | :--- | :--- | | Members | 1,676,754 | 643,967 | | Aggregate Originations | $800,115 thousand | $335,239 thousand | | 30+ Day Delinquency Rate | 4.5% | 3.0% | | Annualized Net Charge-Off Rate | 8.6% | 8.6% | | Return on Equity | 29.5% | 2.6% | | Adjusted Return on Equity | 34.1% | 10.6% | - Aggregate Originations increased by **138.7% year-over-year**, driven by a higher number of applications and increased demand as Q1 2021 was suppressed by tighter pandemic-related underwriting[105](index=105&type=chunk) [Historical Credit Performance](index=23&type=section&id=Historical%20Credit%20Performance) The Annualized Net Charge-off Rate has historically ranged between 7% and 9% Net Lifetime Loan Losses by Vintage (as of March 31, 2022) | Year of Origination | Net Lifetime Loan Losses (% of Original Principal) | | :--- | :--- | | 2015 | 7.1% | | 2016 | 8.0% | | 2017 | 8.2% | | 2018 | 10.0% | | 2019 | 10.3%* | | 2020 | 5.4%* | | 2021 | 0.0%* | *Vintage is not yet fully mature. - The Annualized Net Charge-off Rate historically ranged between **7% and 9%** from 2011 to 2019, rising to 9.8% in 2020 during the pandemic before decreasing to 6.8% in 2021 due to credit tightening and government stimulus[110](index=110&type=chunk) [Results of Operations](index=25&type=section&id=Results%20of%20Operations) Q1 2022 revenue grew 58.7% to $214.7 million, driven by higher interest and non-interest income - Total revenue grew **58.7% YoY**, with interest income up **51.1%** due to a **48.5% increase** in Average Daily Principal Balance; Non-interest income surged **176.8%**, mainly due to **$9.3 million** from Digit subscription income[120](index=120&type=chunk)[121](index=121&type=chunk) - Sales and marketing expenses increased **44.6% to $34.5 million** to support origination growth, but Customer Acquisition Cost (CAC) decreased by **27.4% to $151** from $208 in the prior year period[132](index=132&type=chunk) - General, administrative and other expenses increased by **33.7%**, primarily due to **$7.3 million** in transaction and integration costs related to the Digit acquisition, partially offset by a **$7.6 million** decrease in retail network optimization expenses[138](index=138&type=chunk) [Non-GAAP Financial Measures](index=31&type=section&id=Non-GAAP%20Financial%20Measures) Adjusted Net Income for Q1 2022 was $52.7 million, with an Adjusted EPS of $1.58 Reconciliation of Net Income to Adjusted Net Income (in thousands) | Metric | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | Net income | $45,663 | $3,019 | | Adjustments (Tax, Stock Comp, etc.) | $26,577 | $13,843 | | **Adjusted income before taxes** | **$72,240** | **$16,862** | | Normalized income tax expense | $19,505 | $4,620 | | **Adjusted Net Income** | **$52,735** | **$12,242** | Adjusted Earnings Per Share (Adjusted EPS) | Metric | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | Adjusted Net Income | $52,735 thousand | $12,242 thousand | | Diluted adjusted weighted-average shares | 33,323,134 | 29,620,034 | | **Adjusted EPS** | **$1.58** | **$0.41** | [Liquidity and Capital Resources](index=34&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains sufficient liquidity through securitizations and secured financing facilities - Primary sources of funds include **asset-backed securitizations, secured financing, and loan sales**[171](index=171&type=chunk) - As of March 31, 2022, the company had **$1.59 billion** of outstanding asset-backed notes[177](index=177&type=chunk) - The company maintains secured financing facilities with an aggregate of **$750.0 million** in warehouse lines, with **$273.0 million** of undrawn capacity as of March 31, 2022[179](index=179&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=37&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes to market risk were reported, though macroeconomic factors are noted - There have been **no material changes** to market risk since the 2021 Form 10-K, but the company notes that inflation, rising interest rates, and credit trends could impact financial results[192](index=192&type=chunk) [Item 4. Controls and Procedures](index=37&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were deemed effective with no material changes in internal controls - Management concluded that as of March 31, 2022, the company's disclosure controls and procedures were **effective** at a reasonable assurance level[193](index=193&type=chunk) - **No changes** in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[195](index=195&type=chunk) PART II - OTHER INFORMATION [Item 1. Legal Proceedings](index=38&type=section&id=Item%201.%20Legal%20Proceedings) Refers to Note 16 for details on legal proceedings, with no other material litigation reported - For a description of legal proceedings, the report refers to Note 16 in the financial statements; The company is not presently a party to any other legal proceedings expected to have a **material adverse effect**[197](index=197&type=chunk) [Item 1A. Risk Factors](index=38&type=section&id=Item%201A.%20Risk%20Factors) Details significant risks including credit modeling, fair value accounting, and regulatory scrutiny - The business relies extensively on **proprietary credit risk models** using A.I. and third-party data; Errors in these models could lead to higher than forecasted loan losses[216](index=216&type=chunk) - The company has elected the **fair value option** for its loans and asset-backed notes; Estimates used in determining fair value are subject to judgment and could be incorrect, potentially requiring write-downs that would adversely affect results[222](index=222&type=chunk) - The company faces regulatory risk from ongoing **CFPB investigations** into both Oportun's collection practices and Digit's product representations, the outcomes of which are currently unpredictable[313](index=313&type=chunk)[314](index=314&type=chunk)[315](index=315&type=chunk) - There is a risk that the company may **fail to realize all anticipated benefits** of the Digit acquisition, or that realizing them may take longer than expected, which could adversely affect results of operations[244](index=244&type=chunk) [Item 2, 3, 4, 5: Other Disclosures](index=62&type=section&id=Item%202%2C%203%2C%204%2C%205%3A%20Other%20Disclosures) Confirms no unregistered equity sales, defaults, or other information to report for the period - The company reported **no unregistered sales of equity securities**, defaults upon senior securities, mine safety disclosures, or other information for the quarter[359](index=359&type=chunk)[361](index=361&type=chunk)[362](index=362&type=chunk)[363](index=363&type=chunk) [Item 6. Exhibit Index](index=65&type=section&id=Item%206.%20Exhibit%20Index) Provides an index of all exhibits filed as part of the quarterly report - Lists exhibits filed with the report, including **CEO/CFO certifications** (Exhibits 31.1, 31.2), Section 1350 certifications (Exhibit 32.1), and new indenture agreements (Exhibits 10.2.1, 10.2.2)[369](index=369&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to ___________ Commission File Number 001-39050 OPORTUN FINANCIAL CORPORATION (Exact Name of Registrant as Specified in its Charter) Delaware 45-336198 ...

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2021 or Washington, D.C. 20549 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to ___________ Commission File Number 001-39050 OPORTUN FINANCIAL CORPORATION (Exact Name of Registrant as Specified in its Charter) Delaware ...

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