Oportun Financial (OPRT) - 2022 Q4 - Annual Report

Digital Banking and Financial Products - The acquisition of Digit on December 22, 2021, has enabled the company to offer a comprehensive suite of digital banking products, resulting in members saving over $8.9 billion since 2015[22] - The digital banking platform aims to provide lower-cost financial products compared to market alternatives, focusing on financial inclusion[26] - The Oportun Mobile App integrates credit and digital banking products, enhancing member engagement and retention[24] - The Direct product utilizes AI to manage members' finances, ensuring savings goals are met while providing traditional checking account features[47] - Digit's savings product has helped members increase their liquid savings by approximately 50% on average after one year of use, contributing to over $8.9 billion saved since 2015[46] Loan Products and Performance - The average loan size for personal loans originated in 2022 was $4,189, with a weighted average term of 38 months and an APR of 32.0%[40] - Secured personal loans range from $2,525 to $18,000, with an average loan size of $8,304 and a weighted average term of 49 months and an APR of 28.3%[42] - The Oportun® Visa® Credit Card, launched in December 2019, offers credit lines from $300 to $3,000, with an average APR of 29.8% as of December 31, 2022[43] - The company utilizes over 9.2 billion data points in its risk model development, allowing it to score 100% of applicants seeking loans, thus minimizing risk and expanding its member base[27] - The average life of loans is impacted by scheduled amortization, charge-offs, and prepayments, providing insights into loan performance[364] Employee Engagement and Culture - Approximately 82% of employees participated in the 2022 engagement survey, with 85% reporting satisfaction and 89% expressing pride in working at Oportun[64] - Oportun has been recognized as a Greater Bay Area's Top Workplace for four consecutive years, highlighting its commitment to employee satisfaction and engagement[65] - The company has nine employee resource groups focused on various communities, promoting a culture of diversity and inclusion[12] - 70% of the Board identifies as women or members of an underrepresented group, reflecting a strong commitment to diversity and inclusion[12] - The total rewards program includes competitive salaries, annual bonuses, equity awards, and comprehensive benefits to support employee well-being[12] Business Strategy and Growth - The company plans to invest in scaling marketing capabilities and expanding its Lending as a Service partnerships to increase its member base[33] - Oportun has established partnerships for its Lending as a Service model, including collaborations with DolEx and Sezzle, expanding its reach to new members[49] - The company’s strategy includes enhancing product offerings and providing a unified mobile experience to increase member lifetime value[32] Financial Health and Compliance - A non-cash goodwill impairment charge of $108.5 million was recognized for the year ended December 31, 2022, due to a sustained decline in share price[364] - Remaining cumulative charge-offs are estimates of principal payments not expected to be repaid, adjusted based on historical loan performance and future credit expectations[364] - The company is subject to various federal and state regulations, including oversight by the Consumer Financial Protection Bureau (CFPB) and compliance with the Dodd-Frank Act[54] - Oportun's technology infrastructure is designed for high availability and security, with a comprehensive cybersecurity program in place to protect data and systems[58] - The company has not filed any patent applications for its proprietary risk model or underwriting process, considering them trade secrets[61] Workforce and Operational Changes - As of December 31, 2022, Oportun employed 3,000 full-time and 235 part-time employees, with a 10% reduction announced in February 2023, affecting around 155 employees[66] - The transition to a remote-first policy in 2021 has allowed for greater flexibility and access to a wider talent pool[12] - The company regularly benchmarks compensation against market practices to ensure competitiveness in employee rewards[12]