Oportun Financial Corp 10-Q for FY2021 Q2

Oportun Financial Corp (OPRT)

10-Q 2021-08-06 For: 2021-06-30

Added on April 07, 2026

About this 10-Q

Oportun Financial Corp filed this 10-Q on August 6, 2021, covering the quarter ended June 30, 2021 (FY2021 Q2).

Headline figures

Quarter ended June 30, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $138.25M; down 3.1% from $142.71M a year earlier
Net income: $7.25M; compared with a net loss of $34.25M a year earlier
Diluted EPS: $0.24; compared with -$1.26 a year earlier

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Delaware		45-3361983
State or Other Jurisdiction of Incorporation or Organization		I.R.S. Employer Identification No.

2 Circle Star Way
San Carlos,	CA	94070
Address of Principal Executive Offices		Zip Code


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.0001 par value per share	OPRT	Nasdaq Global Select Market


Large accelerated filer	☐	Smaller reporting company	☒
Accelerated filer	☒	Emerging growth company	☐
Non-accelerated filer	☐


TABLE OF CONTENTS
GLOSSARY

PART I ‑ FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	5
	Condensed Consolidated Balance Sheets	5
	Condensed Consolidated Statements of Operations and Comprehensive Income	6
	Condensed Consolidated Statements of Changes in Stockholders' Equity	7
	Condensed Consolidated Statements of Cash Flow	9
	Notes to the Condensed Consolidated Financial Statements	10
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	44
Item 4.	Controls and Procedures	44

PART II ‑ OTHER INFORMATION
Item 1.	Legal Proceedings	45
Item 1A.	Risk Factors	45
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	73
Item 3.	Defaults Upon Senior Securities	73
Item 4.	Mine Safety Disclosures	73
Item 5.	Other Information	73
Item 6.	Exhibit Index	74

Signature		75


Term or Abbreviation						Definition
30+ Day Delinquency Rate						Unpaid principal balance for our owned loans and credit card receivables that are 30 or more calendar days contractually past due as of the end of the period divided by Owned Principal Balance as of such date
Active Customers						Number of customers with an outstanding loan or an active credit card serviced by us at the end of a period. Active Customers include customers whose loans are owned by us or loans and accounts that were originated under an Oportun affiliated program and that we service. Customers with charged-off accounts are excluded from Active Customers
Adjusted EBITDA						Adjusted EBITDA is a non-GAAP financial measure calculated as net income (loss), adjusted for the impact of our election of the fair value option and further adjusted to eliminate the effect of the following items: income tax expense (benefit), stock-based compensation expense, depreciation and amortization, certain non-recurring charges, origination fees for Fair Value Loans, net and fair value mark-to-market adjustments
Adjusted Earnings Per Share ("EPS")						Adjusted EPS is a non-GAAP financial measure calculated by dividing Adjusted Net Income by adjusted weighted-average diluted common shares outstanding
Adjusted Net Income						Adjusted Net Income is a non-GAAP financial measure calculated by adjusting our net income (loss), for the impact of our election of the fair value option, and further adjusted to exclude income tax expense (benefit), stock-based compensation expense, and certain non-recurring charges
Adjusted Operating Efficiency						Adjusted Operating Efficiency is a non-GAAP financial measure calculated by dividing adjusted total operating expenses (excluding stock-based compensation expense and certain non-recurring charges) by total revenue
Adjusted Return on Equity ("ROE")						Adjusted Return on Equity is a non-GAAP financial measure calculated by dividing annualized Adjusted Net Income by average total stockholders’ equity


Aggregate Originations						Aggregate amount disbursed to borrowers and credit granted on credit cards during a specific period. Aggregate Originations exclude any fees in connection with the origination of a loan
Annualized Net Charge-Off Rate						Annualized loan and credit card principal losses (net of recoveries) divided by the Average Daily Principal Balance of owned loans and credit card receivables for the period
AOCI						Accumulated other comprehensive income (loss)
APR						Annual Percentage Rate
Asset-Backed Notes at Fair Value (or "Fair Value Notes")						All asset-backed notes issued by Oportun on or after January 1, 2018
Average Daily Debt Balance						Average of outstanding debt principal balance at the end of each calendar day during the period
Average Daily Principal Balance						Average of outstanding principal balance of owned loans and credit card receivables at the end of each calendar day during the period
Board						Oportun’s Board of Directors


Cost of Debt						Annualized interest expense divided by Average Daily Debt Balance
Customer Acquisition Cost (or "CAC")						Sales and marketing expenses, which include the costs associated with various paid marketing channels, including direct mail, digital marketing and brand marketing and the costs associated with our telesales and retail operations divided by number of loans originated and new credit cards activated to new and returning customers during a period
Emergency Hardship Deferral						Any receivable that currently has one or more payments deferred and added at the end of the loan payment schedule in connection with a local or wide-spread emergency declared by local, state or federal government
Fair Value Loans (or "Loans Receivable at Fair Value")						All loans receivable held for investment that were originated on or after January 1, 2018. Upon the adoption of ASU 2019-05 as of January 1, 2020 all loans receivable held for investment are reported in this line item for all prospective reporting periods
Fair Value Pro Forma						In order to facilitate comparisons to periods prior to January 1, 2018, certain metrics included in this document have been shown on a pro forma basis, or the Fair Value Pro Forma, as if we had elected the fair value option since our inception for all loans originated and held for investment and all asset-backed notes issued

Fair Value Notes (or "Asset-Backed Notes at Fair Value")						All asset-backed notes issued by Oportun on or after January 1, 2018
FICO® score or FICO®						A credit score created by Fair Isaac Corporation

GAAP						Generally Accepted Accounting Principles

Leverage						Average Daily Debt Balance divided by Average Daily Principal Balance

Loans Receivable at Fair Value (or "Fair Value Loans")						All loans receivable held for investment that were originated on or after January 1, 2018. Upon the adoption of ASU 2019-05 as of January 1, 2020 all loans receivable held for investment are reported in this line item for all prospective reporting periods
Managed Principal Balance at End of Period						Total amount of outstanding principal balance for all loans and credit card receivables, including loans and receivables sold, which we continue to service, at the end of the period
Net Revenue						Net Revenue is calculated by subtracting interest expense from total revenue and adding the net increase (decrease) in fair value
Operating Efficiency						Total operating expenses divided by total revenue
Owned Principal Balance at End of Period						Total amount of outstanding principal balance for all loans and credit card receivables, excluding loans and receivables sold, at the end of the period


Term or Abbreviation						Definition
Portfolio Yield						Annualized interest income as a percentage of Average Daily Principal Balance
Principal Balance						Original principal balance reduced by principal payments received and principal charge-offs to date for our personal loans. Purchases and cash advances, reduced by returns and principal payments received and principal charge-offs to date for our credit cards
Return on Equity						Annualized net income divided by average stockholders' equity for a period


Secured Financing						Asset-backed revolving debt facility
VIEs						Variable interest entities
Weighted Average Interest Rate						Annualized interest expense as a percentage of average debt


	June 30,		December 31,
	2021		2020
Assets
Cash and cash equivalents	$	138,429	$	136,187
Restricted cash	219,540		32,403
Loans receivable at fair value	1,726,914		1,696,526






Interest and fees receivable, net	13,049		15,426
Right of use assets - operating	35,968		46,820

Other assets	87,583		81,689
Total assets	$	2,221,483	$	2,009,051

Liabilities and stockholders' equity
Liabilities
Secured financing	$	—	$	246,385
Asset-backed notes at fair value	1,613,649		1,167,309


Lease liabilities	45,682		49,684

Other liabilities	77,820		79,306
Total liabilities	1,737,151		1,542,684
Stockholders' equity


Common stock, $0.0001 par value - 1,000,000,000 shares authorized at June 30, 2021 and December 31, 2020; 28,305,947 shares issued and 28,033,924 shares outstanding at June 30, 2021; 27,951,286 shares issued and 27,679,263 shares outstanding at December 31, 2020	6		6
Common stock, additional paid-in capital	444,183		436,499

Accumulated other comprehensive loss	(249)		(261)
Retained earnings	46,701		36,432
Treasury stock at cost, 272,023 shares at June 30, 2021 and December 31, 2020	(6,309)		(6,309)
Total stockholders’ equity	484,332		466,367
Total liabilities and stockholders' equity	$	2,221,483	$	2,009,051


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Revenue
Interest income	$	128,589	$	136,086	$	255,780	$	286,786
Non-interest income	9,665		6,621		17,787		19,349
Total revenue	138,254		142,707		273,567		306,135
Less:
Interest expense	12,163		15,110		25,667		31,471

Net decrease in fair value	(5,902)		(81,482)		(17,470)		(147,951)
Net revenue	120,189		46,115		230,430		126,713

Operating expenses:
Technology and facilities	33,124		31,512		66,048		62,286
Sales and marketing	23,748		20,060		47,641		44,887
Personnel	28,546		27,681		55,373		53,263
Outsourcing and professional fees	14,789		11,123		27,414		24,741
General, administrative and other	10,179		2,640		20,176		6,453
Total operating expenses	110,386		93,016		216,652		191,630

Income (loss) before taxes	9,803		(46,901)		13,778		(64,917)
Income tax expense (benefit)	2,553		(12,653)		3,509		(17,368)
Net income (loss)	$	7,250	$	(34,248)	$	10,269	$	(47,549)
Change in post-termination benefit obligation	6		5		12		(112)
Total comprehensive income (loss)	$	7,256	$	(34,243)	$	10,281	$	(47,661)

Net income (loss) attributable to common stockholders	$	7,250	$	(34,248)	$	10,269	$	(47,549)

Share data:
Earnings (loss) per share:
Basic	$	0.26	$	(1.26)	$	0.37	$	(1.75)
Diluted	$	0.24	$	(1.26)	$	0.34	$	(1.75)
Weighted average common shares outstanding:
Basic	28,004,699		27,233,394		27,888,029		27,125,054
Diluted	30,050,847		27,233,394		29,836,089		27,125,054


For the Six Months Ended June 30, 2021
	Common Stock Warrants	Common Stock
		Shares	Par Value		Shares	Par Value		Additional Paid-in Capital		Accumulated Other Comprehensive Income (Loss)		Retained Earnings		Treasury Stock		Total Stockholders' Equity
Balance – January 1, 2021		—	$	—	27,679,263	$	6	$	436,499	$	(261)	$	36,432	$	(6,309)	$	466,367
Issuance of common stock upon exercise of stock options		—	—		33,526	—		307		—		—		—		307



Stock-based compensation expense		—	—		—	—		5,088		—		—		—		5,088



Vesting of restricted stock units, net		—	—		261,794	—		(2,794)		—		—		—		(2,794)


Change in post-termination benefit obligation		—	—		—	—		—		6		—		—		6


Net income		—	—		—	—		—		—		3,019		—		3,019
Balance – March 31, 2021		—	$	—	27,974,583	$	6	$	439,100	$	(255)	$	39,451	$	(6,309)	$	471,993

Issuance of common stock upon exercise of stock options		—	—		10,114	—		159		—		—		—		159



Stock-based compensation expense		—	—		—	—		5,366		—		—		—		5,366



Vesting of restricted stock units, net		—	—		49,227	—		(442)		—		—		—		(442)


Change in post-termination benefit obligation		—	—		—	—		—		6		—		—		6


Net income		—	—		—	—		—		—		7,250		—		7,250
Balance – June 30, 2021		—	$	—	28,033,924	$	6	$	444,183	$	(249)	$	46,701	$	(6,309)	$	484,332


For the Six Months Ended June 30, 2020
	Convertible Preferred and Common Stock Warrants	Common Stock
		Shares	Par Value		Shares	Par Value		Additional Paid-in Capital		Accumulated Other Comprehensive Income (Loss)		Retained Earnings		Treasury Stock		Total Stockholders' Equity
Balance – January 1, 2020		23,512	$	63	27,003,157	$	6	$	418,299	$	(162)	$	76,679	$	(6,119)	$	488,766
Issuance of common stock upon exercise of stock options		—	—		3,161	—		20		—		—		—		20



Stock-based compensation expense		—	—		—	—		4,151		—		—		—		4,151



Vesting of restricted stock units, net		—	—		137,479	—		(813)		—		—		—		(813)

Cumulative effect of adoption of ASU 2019-05		—	—		—	—		—		—		4,835		—		4,835
Change in post-termination benefit obligation		—	—		—	—		—		(117)		—		—		(117)


Net loss		—	—		—	—		—		—		(13,301)		—		(13,301)
Balance – March 31, 2020		23,512	$	63	27,143,797	$	6	$	421,657	$	(279)	$	68,213	$	(6,119)	$	483,541

Issuance of common stock upon exercise of stock options		—	—		22,407	—		79		—		—		—		79



Stock-based compensation expense		—	—		—	—		4,972		—		—		—		4,972


Issuance of common stock upon exercise of warrants		(23,512)	(63)		10,972	—		253		—		—		(190)		—
Vesting of restricted stock units, net		—	—		153,624	—		(17)		—		—		—		(17)


Change in post-termination benefit obligation		—	—		—	—		—		5		—		—		5


Net loss		—	—		—	—		—		—		(34,248)		—		(34,248)
Balance – June 30, 2020		—	$	—	27,330,800	$	6	$	426,944	$	(274)	$	33,965	$	(6,309)	$	454,332


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands, except share and per share data)	2021		2020		2021		2020
Net income (loss)	$	7,250	$	(34,248)	$	10,269	$	(47,549)


Net (loss) income attributable to common stockholders	$	7,250	$	(34,248)	$	10,269	$	(47,549)

Basic weighted-average common shares outstanding	28,004,699		27,233,394		27,888,029		27,125,054
Weighted average effect of dilutive securities:
Stock options	1,327,358		—		1,301,088		—
Restricted stock units	718,790		—		646,972		—

Diluted weighted-average common shares outstanding	30,050,847		27,233,394		29,836,089		27,125,054

Earnings (loss) per share:
Basic	$	0.26	$	(1.26)	$	0.37	$	(1.75)
Diluted	$	0.24	$	(1.26)	$	0.34	$	(1.75)


	June 30,		December 31,
(in thousands)	2021		2020
Consolidated VIE assets
Restricted cash	$	204,895	$	23,726
Loans receivable at fair value	1,579,458		1,580,061

Interest and fee receivable	11,752		14,191
Total VIE assets	1,796,105		1,617,978
Consolidated VIE liabilities
Secured financing (1)	—		246,994
Asset-backed notes at fair value	1,613,649		1,167,309

Total VIE liabilities	$	1,613,649	$	1,414,303


	June 30, 2021
Variable Interest Entity	Initial note amount issued (1)		Initial collateral balance (2)		Current balance (1)		Current collateral balance(2)		Weighted average interest rate(3)		Original revolving period
(in thousands)
Asset-backed notes recorded at fair value:
Oportun Issuance Trust (Series 2021-B)	$	500,000	$	512,759	$	502,435	$	519,757	2.05	%	3 years
Oportun Funding XIV, LLC (Series 2021-A)	375,000		383,632		375,965		392,701		1.79	%	2 years
Oportun Funding XIII, LLC (Series 2019-A)	279,412		294,118		284,144		300,251		3.46	%	3 years
Oportun Funding XII, LLC (Series 2018-D)	175,002		184,213		175,899		188,106		4.50	%	3 years
Oportun Funding X, LLC (Series 2018-C)	275,000		289,474		275,206		295,723		4.39	%	3 years

Total asset-backed notes recorded at fair value	$	1,604,414	$	1,664,196	$	1,613,649	$	1,696,538


	December 31, 2020
Variable Interest Entity	Initial note amount issued (1)		Initial collateral balance (2)		Current balance (1)		Current collateral balance(2)		Weighted average interest rate(3)		Original revolving period
(in thousands)
Asset-backed notes recorded at fair value:
Oportun Funding XIII, LLC (Series 2019-A)	$	279,412	$	294,118	$	283,299	$	299,237	3.46	%	3 years
Oportun Funding XII, LLC (Series 2018-D)	175,002		184,213		178,182		187,570		4.50	%	3 years
Oportun Funding X, LLC (Series 2018-C)	275,000		289,474		279,171		294,710		4.39	%	3 years
Oportun Funding IX, LLC (Series 2018-B)	225,001		236,854		226,653		241,237		4.18	%	3 years
Oportun Funding VIII, LLC (Series 2018-A)	200,004		222,229		200,004		226,242		3.83	%	3 years
Total asset-backed notes recorded at fair value	$	1,154,419	$	1,226,888	$	1,167,309	$	1,248,996


	June 30, 2021			December 31, 2020
	Minimum	Maximum	Weighted Average (2)	Minimum	Maximum	Weighted Average
Remaining cumulative charge-offs (1)	5.15%	50.93%	7.59%	7.83%	61.26%	10.03%
Remaining cumulative prepayments (1)	—	44.54%	35.07%	—	38.92%	31.11%
Average life (years)	0.17	1.25	0.77	0.17	1.29	0.80
Discount rate	—	—	6.54%	—	—	6.85%


1.			Organization and Description of Business


2.			Summary of Significant Accounting Policies


5.			Loans Held for Sale


	June 30,		December 31,
(in thousands)	2021		2020
Fixed assets
Computer and office equipment	$	12,043	$	11,182
Furniture and fixtures	8,892		11,019
Purchased software	2,025		1,992
Vehicles	53		53
Leasehold improvements	20,114		29,543
Total cost	43,127		53,789
Less: Accumulated depreciation	(32,899)		(37,939)
Total fixed assets, net	$	10,228	$	15,850

System development costs:
System development costs	$	68,354	$	55,943
Less: Accumulated amortization	(35,879)		(28,524)
Total system development costs, net	$	32,475	$	27,419


Loans held for sale	1,463		1,158
Prepaid expenses	16,458		17,241
Deferred tax assets	1,921		1,716
Tax assets and other	25,038		18,305
Total other assets	$	87,583	$	81,689


	June 30, 2021
	Carrying value		Estimated fair value		Estimated fair value
(in thousands)					Level 1		Level 2		Level 3
Assets
Cash and cash equivalents	$	138,429	$	138,429	$	138,429	$	—	$	—
Restricted cash	219,540		219,540		219,540		—		—

Loans held for sale (Note 5)	1,463		1,463		—		—		1,463
Liabilities
Accounts payable	2,155		2,155		2,155		—		—


(in thousands)	Operating Leases
Lease expense
2021 (remaining six months)	$	7,526
2022	13,416
2023	11,621
2024	9,541
2025	7,554
2026	1,682
Thereafter	278
Total lease payments	51,618
Imputed interest	(4,210)
Total leases	$	47,408

Sublease income
2021 (remaining six months)	$	(870)
2022	(896)




2023 and thereafter	—
Total lease payments	(1,766)
Imputed interest	40
Total sublease income	$	(1,726)

Net lease liabilities	$	45,682
Weighted average remaining lease term	4.1 years
Weighted average discount rate	4.18		%


Topic
Forward-Looking Statements						21
Overview						22

Key Financial and Operating Metrics						24
Historical Credit Performance						26
Results of Operations						28
Fair Value Estimate Methodology for Loans Receivable at Fair Value						34
Non-GAAP Financial Measures						35
Liquidity and Capital Resources						40
Off-Balance Sheet Arrangements						43
Critical Accounting Policies and Significant Judgments and Estimates						43
Recently Issued Accounting Pronouncements						43


	As of or for the Three Months Ended June 30,						As of or for the Six Months Ended June 30,
(in thousands of dollars, except CAC)	2021			2020			2021			2020
Key Financial and Operating Metrics
Aggregate Originations	$	433,039		$	157,642		$	768,277		$	590,401
Active Customers	684,843			676,830			684,843			676,830
Customer Acquisition Cost	$	153		$	413		$	177		$	232
Managed Principal Balance at End of Period	$	1,872,841		$	1,938,383		$	1,872,841		$	1,938,383


30+ Day Delinquency Rate	2.5		%	3.7		%	2.5		%	3.7		%
Annualized Net Charge-Off Rate	6.4		%	10.6		%	7.5		%	9.8		%
Operating Efficiency	79.8		%	65.2		%	79.2		%	62.6		%
Adjusted Operating Efficiency	70.0		%	60.0		%	69.5		%	58.6		%
Return on Equity	6.1		%	(29.4)		%	4.4		%	(20.3)		%
Adjusted Return on Equity	14.2		%	(29.9)		%	12.4		%	(15.3)		%


Other Useful Metrics
Number of Loans Originated	154,994			48,193			269,664			191,343
Average Daily Principal Balance	$	1,596,320		$	1,736,474		$	1,610,471		$	1,799,308
Owned Principal Balance at End of Period	$	1,630,644		$	1,642,564		$	1,630,644		$	1,642,564


	Year of Origination
	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016	2017	2018	2019	2020
Net lifetime loan losses as of June 30, 2021 as a percentage of original principal balance	7.7%	8.9%	5.5%	6.4%	6.2%	5.6%	5.6%	6.1%	7.1%	8.0%	8.2%	10.0%*	8.6%*	1.3%*
Outstanding principal balance as of June 30, 2021 as a percentage of original amount disbursed	—%	—%	—%	—%	—%	—%	—%	—%	—%	—%	0.2%	4.7%	29.4%	75.9%
Dollar weighted average original term for vintage in months	9.3	9.9	10.2	11.7	12.3	14.5	16.4	19.1	22.3	24.2	26.3	29.0	30.0	32.0


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands of dollars)	2021		2020		2021		2020
Revenue
Interest income	$	128,589	$	136,086	$	255,780	$	286,786
Non-interest income	9,665		6,621		17,787		19,349
Total revenue	138,254		142,707		273,567		306,135
Less:
Interest expense	12,163		15,110		25,667		31,471

Total net decrease in fair value	(5,902)		(81,482)		(17,470)		(147,951)
Net revenue	120,189		46,115		230,430		126,713
Operating expenses:
Technology and facilities	33,124		31,512		66,048		62,286
Sales and marketing	23,748		20,060		47,641		44,887
Personnel	28,546		27,681		55,373		53,263
Outsourcing and professional fees	14,789		11,123		27,414		24,741
General, administrative and other	10,179		2,640		20,176		6,453
Total operating expenses	110,386		93,016		216,652		191,630
Income before taxes	9,803		(46,901)		13,778		(64,917)
Income tax expense (benefit)	2,553		(12,653)		3,509		(17,368)
Net income (loss)	$	7,250	$	(34,248)	$	10,269	$	(47,549)


	Three Months Ended June 30,						Period-to-period Change				Six Months Ended June 30,						Period-to-period Change
(in thousands, except percentages)	2021			2020			$		%		2021			2020			$		%
Revenue
Interest income	$	128,589		$	136,086		$	(7,497)	(5.5)	%	$	255,780		$	286,786		$	(31,006)	(10.8)	%
Non-interest income	9,665			6,621			3,044		46.0	%	17,787			19,349			(1,562)		(8.1)	%
Total revenue	$	138,254		$	142,707		$	(4,453)	(3.1)	%	$	273,567		$	306,135		$	(32,568)	(10.6)	%
Percentage of total revenue:
Interest income	93.0		%	95.4		%					93.5		%	93.7		%
Non-interest income	7.0		%	4.6		%					6.5		%	6.3		%
Total revenue	100.0		%	100.0		%					100.0		%	100.0		%


	Three Months Ended
	Jun 30, 2021		Mar 31, 2021		Dec 31, 2020		Sep 30, 2020		Jun 30, 2020		Mar 31, 2020
Weighted average portfolio yield over the remaining life of the loans	30.28	%	30.25	%	30.17	%	30.50	%	30.78	%	30.74	%
Less: Servicing fee	(5.00)	%	(5.00)	%	(5.00)	%	(5.00)	%	(5.00)	%	(5.00)	%
Net portfolio yield	25.28	%	25.25	%	25.17	%	25.50	%	25.78	%	25.74	%
Multiplied by: Weighted average life in years	0.769		0.778		0.796		0.775		0.797		0.903
Pre-loss cash flow	19.43	%	19.64	%	20.03	%	19.75	%	20.54	%	23.25	%
Less: Remaining cumulative charge-offs	(7.59)	%	(8.60)	%	(10.03)	%	(10.61)	%	(12.73)	%	(14.56)	%
Net cash flow	11.84	%	11.04	%	10.00	%	9.14	%	7.81	%	8.69	%
Less: Discount rate multiplied by average life	(5.03)	%	(5.17)	%	(5.45)	%	(6.07)	%	(7.04)	%	(11.54)	%
Gross fair value premium (discount) as a percentage of loan principal balance	6.81	%	5.87	%	4.55	%	3.07	%	0.77	%	(2.85)	%
Less: Accrued interest and fees as a percentage of loan principal balance	(0.87)	%	(0.92)	%	(1.06)	%	(1.15)	%	(1.35)	%	(1.11)	%
Fair value premium (discount) as a percentage of loan principal balance	5.94	%	4.95	%	3.49	%	1.92	%	(0.58)	%	(3.96)	%
Discount Rate	6.54	%	6.65	%	6.85	%	7.84	%	8.84	%	12.78	%


	Three Months Ended June 30, 2021 (1)		Three Months Ended June 30, 2020			Period-to-period Change in FVPF (1)
(in thousands)	As Reported			As Reported		FV Adjustments		FV Pro Forma		$		%
Revenue:
Interest income	$	128,589		$	136,086	$	—	$	136,086	$	(7,497)	(5.5)	%
Non-interest income	9,665			6,621		—		6,621		3,044		46.0	%
Total revenue	138,254			142,707		—		142,707		(4,453)		(3.1)	%
Less:
Interest expense	12,163			15,110		(190)		14,920		(2,757)		(18.5)	%

Net decrease in fair value	(5,902)			(81,482)		(9,409)		(90,891)		84,989		(93.5)	%
Net revenue	120,189			46,115		(9,219)		36,896		83,293		225.8	%
Operating expenses:
Technology and facilities	33,124			31,512		—		31,512		1,612		5.1	%
Sales and marketing	23,748			20,060		—		20,060		3,688		18.4	%
Personnel	28,546			27,681		—		27,681		865		3.1	%
Outsourcing and professional fees	14,789			11,123		—		11,123		3,666		33.0	%
General, administrative and other	10,179			2,640		—		2,640		7,539		285.6	%
Total operating expenses	110,386			93,016		—		93,016		17,370		18.7	%
Income (loss) before taxes	9,803			(46,901)		(9,219)		(56,120)		65,923		117.5	%
Income tax expense (benefit)	2,553			(12,653)		(2,570)		(15,223)		17,776		116.8	%
Net income (loss)	$	7,250		$	(34,248)	$	(6,649)	$	(40,897)	$	48,147	117.7	%


	Six Months Ended June 30, 2021 (1)		Six Months Ended June 30, 2020			Period-to-period Change in FVPF (1)
(in thousands)	As Reported			As Reported		FV Adjustments		FV Pro Forma		$		%
Revenue:
Interest income	$	255,780		$	286,786	$	—	$	286,786	$	(31,006)	(10.8)	%
Non-interest income	17,787			19,349		—		19,349		(1,562)		(8.1)	%
Total revenue	273,567			306,135		—		306,135		(32,568)		(10.6)	%
Less:
Interest expense	25,667			31,471		(682)		30,789		(5,122)		(16.6)	%

Net decrease in fair value	(17,470)			(147,951)		2,246		(145,705)		128,235		88.0	%
Net revenue	230,430			126,713		2,928		129,641		100,789		77.7	%
Operating expenses:
Technology and facilities	66,048			62,286		—		62,286		3,762		6.0	%
Sales and marketing	47,641			44,887		—		44,887		2,754		6.1	%
Personnel	55,373			53,263		—		53,263		2,110		4.0	%
Outsourcing and professional fees	27,414			24,741		—		24,741		2,673		10.8	%
General, administrative and other	20,176			6,453		—		6,453		13,723		212.7	%
Total operating expenses	216,652			191,630		—		191,630		25,022		13.1	%
Income (loss) before taxes	13,778			(64,917)		2,928		(61,989)		75,767		122.2	%
Income tax expense (benefit)	3,509			(17,368)		1,057		(16,311)		19,820		121.5	%
Net income (loss)	$	10,269		$	(47,549)	$	1,871	$	(45,678)	$	55,947	122.5	%


	June 30, 2021 (1)		December 31, 2020			Period-to-period Change in FVPF (1)
(in thousands)	As Reported			As Reported		FV Adjustments		FV Pro Forma		$		%
Cash and cash equivalents	$	138,429		$	136,187	$	—	$	136,187	$	2,242	1.6	%
Restricted cash	219,540			32,403		—		32,403		187,137		577.5	%
Loans receivable (1)	1,726,914			1,696,526		—		1,696,526		30,388		1.8	%
Other assets	136,600			143,935		—		143,935		(7,335)		(5.1)	%
Total assets	2,221,483			2,009,051		—		2,009,051		212,432		10.6	%
Total debt (2)	1,613,649			1,413,694		—		1,413,694		199,955		14.1	%
Other liabilities	123,502			128,990		682		129,672		(6,170)		(4.8)	%
Total liabilities	1,737,151			1,542,684		682		1,543,366		193,785		12.6	%
Total stockholder's equity	484,332			466,367		(682)		465,685		18,647		4.0	%
Total liabilities and stockholders' equity	$	2,221,483		$	2,009,051	$	—	$	2,009,051	$	212,432	10.6	%


Components of Fair Value Mark-to-Market Adjustment (in thousands)	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Fair value mark-to-market adjustment on Fair Value Loans	$	17,809	$	63,055	$	39,371	$	(92,070)
Fair value mark-to-market adjustment on asset-backed notes	2,013		(108,226)		3,537		33,519
Fair value mark-to-market adjustment on credit card derivative	(250)		—		$	(296)	—
Total fair value mark-to-market adjustment	$	19,572	$	(45,171)	$	42,612	$	(58,551)


	Three Months Ended June 30,				Six Months Ended June 30,
Adjusted EBITDA (in thousands)	2021		2020		2021		2020
Net income (loss)	$	7,250	$	(34,248)	$	10,269	$	(47,549)
Adjustments:
Fair Value Pro Forma net income adjustment (1)	—		(6,649)		—		1,871
Income tax expense (benefit)	2,553		(15,223)		3,509		(16,311)
COVID-19 expenses (2)	—		2,437		—		3,041
Depreciation and amortization	5,970		5,103		11,302		9,761
Stock-based compensation expense	5,366		4,972		10,454		9,123

Retail network optimization expenses	4,874		—		12,673		—
Impairment (3)	3,324		—		3,324		—
Origination fees for Fair Value Loans, net	(5,255)		3,274		(6,677)		4,816
Fair value mark-to-market adjustment	(19,572)		45,171		(42,612)		58,551
Adjusted EBITDA (4)	$	4,510	$	4,837	$	2,242	$	23,303


	Three Months Ended June 30,						Six Months Ended June 30,
Adjusted Net Income (Loss) (in thousands)	2021			2020			2021			2020
Net income (loss)	$	7,250		$	(34,248)		$	10,269		$	(47,549)
Adjustments:
Fair Value Pro Forma net income adjustment (1)	—			(6,649)			—			1,871
Income tax expense (benefit)	2,553			(15,223)			3,509			(16,311)
COVID-19 expenses (2)	—			2,437			—			3,041
Stock-based compensation expense	5,366			4,972			10,454			9,123

Retail network optimization expenses	4,874			—			12,673			—
Impairment (3)	3,324			—			3,324			—
Adjusted income (loss) before taxes	23,367			(48,711)			40,229			(49,825)
Normalized income tax expense (benefit)	6,403			(13,584)			11,023			(13,917)
Adjusted Net Income (Loss) (4)	$	16,964		$	(35,127)		$	29,206		$	(35,908)
Income tax rate (5)	27.4		%	27.9		%	27.4		%	27.9		%


	As of or for the Three Months Ended June 30,						As of or for the Six Months Ended June 30,
(in thousands)	2021			2020			2021			2020
Return on Equity	6.1		%	(29.4)		%	4.4		%	(20.3)		%
Adjusted Return on Equity
Adjusted Net Income (Loss)	$	16,964		$	(35,127)		$	29,206		$	(35,908)
Fair Value Pro Forma average stockholders' equity (1)	$	478,163		$	472,576		$	475,350		$	470,955
Adjusted Return on Equity	14.2		%	(29.9)		%	12.4		%	(15.3)		%


Debt Facility	Scheduled Amortization Period Commencement Date	Interest Rate	Principal (in thousands)
Secured Financing	10/1/2021	LIBOR (minimum of 0.00%) + 2.45%	$	—
Asset-Backed Securitization-Series 2021-B Notes	5/1/2024	2.05%	500,000
Asset-Backed Securitization-Series 2021-A Notes	3/1/2023	1.79%	375,000
Asset-Backed Securitization-Series 2019-A Notes	8/1/2022	3.46%	279,412
Asset-Backed Securitization-Series 2018-D Notes	12/1/2021	4.50%	175,002
Asset-Backed Securitization-Series 2018-C Notes	10/1/2021	4.39%	275,000



			$	1,604,414


			OPORTUN FINANCIAL CORPORATION
			(Registrant)

Date:	August 6, 2021	By:	/s/ Jonathan Coblentz
			Jonathan Coblentz
			Chief Financial Officer and Chief Administrative Officer
			(Principal Financial and Accounting Officer and duly authorized signatory of the Registrant)