OppFi (OPFI) - 2024 Q4 - Annual Report

Financial Performance - For the year ended December 31, 2024, total revenue was approximately $526 million, representing a period-over-period growth of approximately 3.3% from$ 509 million in 2023[34]. - Net revenue for the year ended December 31, 2024, was $321,478,000, up from$ 273,182,000 in 2023, representing a year-over-year increase of about 17.7%[494]. - Net income attributable to OppFi Inc. was $7,258,000 for 2024, a significant recovery from a net loss of$ 1,005,000 in 2023[494]. - Earnings per share (EPS) for 2024 was $0.36, compared to a loss of$ 0.06 per share in 2023, indicating a turnaround in profitability[494]. - Cash and restricted cash totaled $88,288,000 as of December 31, 2024, an increase from$ 73,943,000 in 2023, reflecting enhanced liquidity[488]. - Total assets increased to $641,171,000 as of December 31, 2024, compared to$ 601,543,000 in 2023, reflecting a growth of approximately 6.5%[488]. - The company reported a provision for credit losses on finance receivables of $42,000 in 2024, a significant decrease from$ 4,348,000 in 2023, suggesting improved credit quality[494]. - The company reported a net cash provided by operating activities of $323,806,000 for 2024, compared to$ 296,146,000 in 2023 and $243,297,000 in 2022[503]. - The total stockholders' equity increased to$ 234,213,000 by December 31, 2024, from $194,029,000 in 2023[500]. Loan Operations - OppFi facilitated more than$ 7.2 billion in gross loan issuance covering over 4.0 million loans since inception through December 31, 2024[26]. - The average installment loan facilitated by OppFi is approximately $1,750, with an average contractual term of 11 months[24]. - The average APR for a loan facilitated on the OppLoans platform in 2024 was 163%, with a three-year average of approximately 157%[38]. - OppFi served more than 1.4 million unique customers since its inception as of December 31, 2024[33]. - Approximately 20.9% of loans originated were generated through search engine optimization, email marketing, and customer referrals[54]. - Finance receivables originated and acquired amounted to$ 732,045,000 in 2024, slightly up from $721,287,000 in 2023[503]. - The total unpaid principal balance of installment finance receivables was$ 425.240 million, an increase from $416.463 million in 2023, representing a growth of 1.86%[568]. - The fair value of finance receivables at the end of 2024 was$ 473.696 million, up from $463.320 million in 2023, indicating a year-over-year increase of 1.99%[571]. - The company originated$ 732.012 million in finance receivables in 2024, compared to $719.503 million in 2023, reflecting a growth of 1.76%[571]. Customer Experience and Satisfaction - OppFi's net promoter score (NPS) was 78 for the year ended December 31, 2024, indicating strong customer satisfaction[33]. - The company maintains an A+ rating from the Better Business Bureau (BBB) and a 4.5/5.0 star rating on Trustpilot as of December 31, 2024[33]. - OppFi's platform offers a highly automated, transparent, and fully digital experience for consumers[26]. - OppFi's platform provides simple interest installment loans with no balloon payments or ancillary fees, targeting approximately 60 million U.S. consumers facing credit insecurity[41]. Regulatory Compliance - OppFi is subject to extensive regulations from various federal, state, and local authorities, which may impact its operations and compliance efforts[63]. - The Consumer Financial Protection Bureau (CFPB) has significant regulatory authority over OppFi, including the ability to conduct examinations and enforce consumer protection laws[64]. - OppFi assists its bank partners in complying with the Truth in Lending Act (TILA), which mandates clear disclosures regarding loan terms, including annual percentage rates and finance charges[66]. - The Equal Credit Opportunity Act (ECOA) prohibits discrimination in lending, and OppFi ensures compliance by providing adverse action notices to denied applicants[67]. - Under the Fair Credit Reporting Act (FCRA), OppFi must accurately report loan payment information and provide timely adverse action notices when credit applications are declined[68]. - OppFi's operations are governed by the Fair Debt Collection Practices Act (FDCPA), which sets guidelines for debt collection practices to prevent abusive conduct[70]. - The Gramm-Leach-Bliley Act (GLBA) requires OppFi to protect consumer information and provide privacy policies detailing data collection and sharing practices[71]. - The Dodd-Frank Act established the CFPB, which oversees OppFi's compliance with federal consumer financial laws and can impose restrictions on lending practices[72]. - OppFi must comply with the Electronic Fund Transfer Act (EFTA), ensuring consumer consent for electronic fund transfers and adherence to NACHA guidelines[76]. - OppFi's email communications comply with the CAN-SPAM Act, which regulates commercial email practices and requires opt-out mechanisms for recipients[79]. - OppFi's loans to servicemembers under the Servicemembers Civil Relief Act (SCRA) are capped at an interest rate of 6% during active duty, impacting the revenue from these loans[80]. - The Military Lending Act limits the Military Annual Percentage Rate to 36% for certain active duty members and their dependents, ensuring compliance with these regulations is a priority for OppFi[81]. - OppFi's anti-money laundering (AML) program is designed to prevent illicit activities and includes customer due diligence and record-keeping policies, which are essential for maintaining compliance with federal laws[82]. - The company is subject to various state usury laws that could affect the interest rates and fees charged on loans, which may impact its growth if compliance is not maintained[87]. Operational Efficiency - Approximately 92.5% of underwriting decisions on the OppFi platform were automated during the year ended December 31, 2024[30]. - Approximately 92.5% of credit decisions were automated in the year ended December 31, 2024, enhancing efficiency in the loan approval process[41]. - The bank partner model allows OppFi to facilitate loan products while managing customer acquisition, underwriting, and servicing, enhancing operational efficiency[46]. - OppFi's technology-driven platform enables scalability and cost efficiency, allowing it to serve consumers nationwide without physical store costs[44]. Workforce and Corporate Structure - As of December 31, 2024, OppFi employed approximately 445 full-time employees, reflecting a commitment to building a diverse and talented workforce[100]. - The company has implemented a compliance management system to adhere to consumer protection laws, minimizing compliance-related risks[94]. - Noncontrolling interests held by Members were 74.4% and 83.0% of the economic ownership percentage of OppFi-LLC as of December 31, 2024 and 2023, respectively[557]. Capital and Investments - The company has established a robust system for servicing costs, default rates, and prepayment rates, which are critical for accurate financial forecasting and risk management[479]. - The company issued 1,508,113 shares under the equity incentive plan in 2024[500]. - Stock-based compensation expense rose to$ 5,270,000 in 2024, compared to $4,067,000 in 2023[503]. - The company incurred transaction costs of approximately$ 0.7 million related to the acquisition of a 35% equity interest in Bitty Holdings, LLC[531]. - The Company has determined that all entities subject to the consolidations guidance are VIEs for which it is the primary beneficiary as of December 31, 2024[517]. Debt and Financing - The company has a borrowing capacity of $525 million as of December 31, 2024, with total outstanding borrowings of$ 318.758 million[581]. - The company recorded charge-offs of $205.755 million in 2024, down from$ 220.895 million in 2023, representing a reduction of 6.4%[571]. - The accrued expenses increased to $32.411 million in 2024 from$ 22.006 million in 2023, marking a significant rise of 47.4%[573]. - The maturity date of the revolving line of credit was extended from April 15, 2025, to October 16, 2026, and the applicable margin rate increased from 7.25% to 7.45%[588]. - The Twelfth Amendment requires OppFi-LLC to repay outstanding principal in installments of $20.0 million on March 31, 2025, and$ 10.0 million on the last day of each subsequent fiscal quarter[591].