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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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, 2022
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)
Delaware45-3361983
State or Other Jurisdiction of
Incorporation or Organization
I.R.S. Employer Identification No.
2 Circle Star Way
San Carlos,CA94070
Address of Principal Executive OfficesZip Code
(650) 810-8823
Registrant’s Telephone Number, Including Area Code

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.0001 par value per shareOPRTNasdaq Global Select Market
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes      No 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes     No 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Smaller reporting company
Accelerated filer
Emerging growth company
Non-accelerated filer
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).  Yes     No 
The number of shares of registrant’s common stock outstanding as of November 2, 2022 was 33,192,703.



TABLE OF CONTENTS
PART I ‑ FINANCIAL INFORMATION
PART II ‑ OTHER INFORMATION

2


PART I ‑ FINANCIAL INFORMATION

Item 1. Financial Statements

OPORTUN FINANCIAL CORPORATION
Condensed Consolidated Balance Sheets (Unaudited)
(in thousands, except share and per share data)
September 30,December 31,
20222021
Assets
Cash and cash equivalents$175,857 $130,959 
Restricted cash96,350 62,001 
Loans receivable at fair value2,991,334 2,386,807 
Interest and fees receivable, net30,605 20,916 
Capitalized software and other intangibles, net139,069 131,181 
Goodwill 104,014 
Right of use assets - operating32,080 38,403 
Other assets74,699 72,344 
Total assets$3,539,994 $2,946,625 
Liabilities and stockholders' equity
Liabilities
Secured financing$365,147 $393,889 
Asset-backed notes at fair value 2,238,331 1,651,706 
Acquisition and corporate financing241,838 114,092 
Lease liabilities40,149 47,699 
Other liabilities105,416 135,358 
Total liabilities2,990,881 2,342,744 
Stockholders' equity
Common stock, $0.0001 par value - 1,000,000,000 shares authorized at September 30, 2022 and December 31, 2021; 33,460,161 shares issued and 33,188,138 shares outstanding at September 30, 2022; 32,276,419 shares issued and 32,004,396 shares outstanding at December 31, 2021
7 6 
Common stock, additional paid-in capital540,890 526,338 
Retained earnings14,525 83,846 
Treasury stock at cost, 272,023 shares at September 30, 2022 and December 31, 2021
(6,309)(6,309)
Total stockholders’ equity549,113 603,881 
Total liabilities and stockholders' equity$3,539,994 $2,946,625 
See Notes to the Condensed Consolidated Financial Statements.

3


OPORTUN FINANCIAL CORPORATION
Condensed Consolidated Statements of Operations (Unaudited)
(in thousands, except share and per share data)
Three Months Ended September 30,
Nine Months Ended September 30,
2022202120222021
Revenue
Interest income$232,115 $145,444 $632,007 $401,224 
Non-interest income17,961 13,640 58,591 31,427 
Total revenue250,076 159,084 690,598 432,651 
Less:
Interest expense26,671 10,574 57,452 36,241 
Net decrease in fair value(76,422)(8,987)(135,935)(26,457)
Net revenue146,983 139,523 497,211 369,953 
Operating expenses:
Technology and facilities56,113 34,226 158,090 100,274 
Sales and marketing21,781 32,102 88,690 79,743 
Personnel39,959 29,039 114,514 84,412 
Outsourcing and professional fees18,620 13,348 50,112 40,762 
General, administrative and other14,401 2,686 44,698 22,862 
Goodwill impairment108,472  108,472  
Total operating expenses259,346 111,401 564,576 328,053 
Income (loss) before taxes(112,363)28,122 (67,365)41,900 
Income tax expense (benefit)(6,536)5,143 1,956 8,652 
Net income (loss)$(105,827)$22,979 $(69,321)$33,248 
Net income (loss) attributable to common stockholders$(105,827)$22,979 $(69,321)$33,248 
Share data:
Earnings (loss) per share:
Basic$(3.21)$0.82 $(2.12)$1.19 
Diluted$(3.21)$0.75 $(2.12)$1.11 
Weighted average common shares outstanding:
Basic33,010,107 28,167,686 32,688,988 27,982,273 
Diluted33,010,107 30,503,773 32,688,988 30,059,675 
Notes to the Condensed Consolidated Financial Statements.
4


OPORTUN FINANCIAL CORPORATION
Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited)
(in thousands, except share data)
For the Nine Months Ended September 30, 2022
Common Stock
SharesPar Value Additional Paid-in CapitalRetained EarningsTreasury StockTotal Stockholders' Equity
Balance – January 1, 202232,004,396 $6 $526,338 $83,846 $(6,309)$603,881 
Issuance of common stock upon exercise of stock options505,945 1 (4,749)— — (4,748)
Stock-based compensation expense— — 7,467 — — 7,467 
Vesting of restricted stock units, net of shares withheld296,552 — (2,327)— — (2,327)
Net income— — — 45,663 — 45,663 
Balance – March 31, 202232,806,893 $7 $526,729 $129,509 $(6,309)$649,936 
Issuance of common stock upon exercise of stock options32,345 — 78 — — 78 
Repurchase of stock options(2,706)— (28)— — (28)
Stock-based compensation expense— — 7,642 — — 7,642 
Vesting of restricted stock units, net of shares withheld63,064 — (273)— — (273)
Net loss— — — (9,157)— (9,157)
Balance – June 30, 202232,899,596 $7 $534,148 $120,352 $(6,309)$648,198 
Issuance of common stock upon exercise of stock options5,261 — 29 — — 29 
Stock-based compensation expense— — 7,666 — — 7,666 
Vesting of restricted stock units, net of shares withheld283,281 — (953)— — (953)
Net loss— — — (105,827)— (105,827)
Balance – September 30, 202233,188,138 $7 $540,890 $14,525 $(6,309)$549,113 

See Notes to the Condensed Consolidated Financial Statements.



5


OPORTUN FINANCIAL CORPORATION
Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited)
(in thousands, except share data)
For the Nine Months Ended September 30, 2021
Common Stock
SharesPar Value Additional Paid-in CapitalRetained EarningsTreasury StockTotal Stockholders' Equity
Balance – January 1, 202127,679,263 $6 $436,499 $36,432 $(6,309)$466,628 
Issuance of common stock upon exercise of stock options33,526 — 307 — — 307 
Stock-based compensation expense— — 5,088 — — 5,088 
Vesting of restricted stock units, net261,794 — (2,794)— — (2,794)
Net income— — — 3,019 — 3,019 
Balance – March 31, 202127,974,583 $6 $439,100 $39,451 $(6,309)$472,248 
Issuance of common stock upon exercise of stock options10,114 — 159 — — 159 
Stock-based compensation expense— — 5,366 — — 5,366 
Vesting of restricted stock units, net49,227 — (442)— — (442)
Net income— — — 7,250 — 7,250 
Balance – June 30, 202128,033,924 $6 $444,183 $46,701 $(6,309)$484,581 
Issuance of common stock upon exercise of stock options139,096 — 2,140 — — 2,140 
Stock-based compensation expense— — 4,868 — — 4,868 
Vesting of restricted stock units, net211,902 — (2,977)— — (2,977)
Net income— — — 22,979 — 22,979 
Balance – September 30, 202128,384,922 $6 $448,214 $69,680 $(6,309)$511,591 

See Notes to the Condensed Consolidated Financial Statements.
6


OPORTUN FINANCIAL CORPORATION
Condensed Consolidated Statements of Cash Flow (Unaudited)
(in thousands)
Nine Months Ended September 30,
2022

2021
Cash flows from operating activities
Net income (loss)$(69,321)$33,248 
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization34,624 20,390 
Goodwill impairment108,472  
Fair value adjustment, net135,935 26,457 
Origination fees for loans receivable at fair value, net(17,699)(9,070)
Gain on loan sales(5,708)(17,083)
Stock-based compensation expense20,752 14,542 
Other, net32,183 37,609 
Originations of loans sold and held for sale(50,643)(136,285)
Proceeds from sale of loans56,800 151,924 
Changes in other assets and other liabilities(86,052)(18,004)
Net cash provided by operating activities159,343 103,728 
Cash flows from investing activities
Originations of loans(2,178,675)(1,113,515)
Proceeds from loan sales originated as held for investment247,943  
Repayments of loan principal1,055,113 817,843 
Capitalization of system development costs(36,824)(18,508)
Other, net(3,434)(2,561)
Net cash used in investing activities(915,877)(316,741)
Cash flows from financing activities
Borrowings under secured financing1,687,050 895,535 
Borrowings under asset-backed notes, acquisition and corporate financing967,761 867,251 
Repayments of secured financing(1,717,050)(615,994)
Repayments of asset-backed notes, acquisition and corporate financing(87,253)(875,007)
Payments of deferred financing costs(6,503) 
Net payments related to stock-based activities(8,224)(3,607)
Net cash provided by financing activities835,781 268,178 
Net increase in cash and cash equivalents and restricted cash79,247 55,165 
Cash and cash equivalents and restricted cash, beginning of period192,960 168,590 
Cash and cash equivalents and restricted cash, end of period$272,207 $223,755 
Supplemental disclosure of cash flow information
Cash and cash equivalents$175,857 $168,407 
Restricted cash96,350 55,348 
Total cash and cash equivalents and restricted cash$272,207 $223,755 
Cash paid for income taxes, net of refunds$(3,944)$2,048 
Cash paid for interest$51,509 $36,582 
Cash paid for amounts included in the measurement of operating lease liabilities$7,772 $13,802 
Supplemental disclosures of non-cash investing and financing activities
Right of use assets obtained in exchange for operating lease obligations$2,831 $6,677 
Non-cash investments in capitalized assets$2,577 $1,960 
Non-cash financing activities$2,325 $1,121 
See Notes to the Condensed Consolidated Financial Statements.
7


OPORTUN FINANCIAL CORPORATION
Notes to the Condensed Consolidated Financial Statements (Unaudited)
September 30, 2022

1.Organization and Description of Business

Oportun is a financial technology company and digital banking platform driven by its mission to provide inclusive, affordable financial services that empower its members to build a better future. Oportun Financial Corporation (together with its subsidiaries, "Oportun" or the "Company") takes a holistic approach to serving its members and views as its purpose to responsibly meet their current capital needs, help grow its members' financial profiles, increase their financial awareness and put them on a path to a financially healthy life. With its acquisition of Hello Digit, Inc. ("Digit") on December 22, 2021, the Company can now offer access to a comprehensive suite of digital banking products, offered either directly or through partners, including lending, savings and investing powered by A.I. and tailored to each member's goals to make achieving financial health automated. The Company's credit products include personal loans, secured personal loans and credit cards. The Company's digital banking products include automated savings, digital banking, long-term investing and retirement savings. The Company is headquartered in San Carlos, California. The Company has been certified by the United States Department of the Treasury as a Community Development Financial Institution ("CDFI") since 2009.

Segments

Segments are defined as components of an enterprise for which discrete financial information is available and evaluated regularly by the chief operating decision maker ("CODM") in deciding how to allocate resources and in assessing performance. The Company’s Chief Executive Officer and the Company's Chief Financial Officer are collectively considered to be the CODM. The CODM reviews financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance. The Company’s operations constitute a single reportable segment.

2.Summary of Significant Accounting Policies

Basis of Presentation ‑ The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"). These statements are unaudited and reflect all normal, recurring adjustments that are, in management's opinion, necessary for the fair presentation of results. The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. Certain prior-period financial information has been reclassified to conform to current period presentation. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. As such, the information included in this Quarterly Report on Form 10-Q should be read in conjunction with the audited consolidated financial statements and the related notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2021 (the "Annual Report"), filed with the Securities and Exchange Commission ("SEC") on March 1, 2022.

Use of Estimates ‑ The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and the reported amounts of income and expenses during the reporting period. These estimates are based on information available as of the date of the condensed consolidated financial statements; therefore, actual results could differ from those estimates and assumptions.

Accounting Policies - There have been no changes to the Company's significant accounting policies from those described in Part II, Item 8 - Financial Statements and Supplementary Data in the Annual Report, except for the new accounting pronouncements subsequently adopted as noted below.

Recently Adopted Accounting Standards

None.



8


3.Earnings (Loss) per Share

Basic and diluted earnings (loss) per share are calculated as follows:
Three Months Ended September 30,Nine Months Ended September 30,
(in thousands, except share and per share data)2022202120222021
Net income (loss)$(105,827)$22,979 $(69,321)$33,248 
Net income (loss) attributable to common stockholders$(105,827)$22,979 $(69,321)$33,248 
Basic weighted-average common shares outstanding33,010,107 28,167,686 32,688,988 27,982,273 
Weighted average effect of dilutive securities:
Stock options 1,451,687  1,351,288 
Restricted stock units 884,400  726,114 
Diluted weighted-average common shares outstanding33,010,107 30,503,773 32,688,988 30,059,675 
Earnings (loss) per share:
Basic$(3.21)$0.82 $(2.12)$1.19 
Diluted$(3.21)$0.75 $(2.12)$1.11 

The following common share equivalent securities have been excluded from the calculation of diluted weighted-average common shares outstanding because the effect is anti-dilutive for the periods presented:
Three Months Ended September 30,Nine Months Ended September 30,
2022202120222021
Stock options3,456,494 1,597,130 3,596,792 2,229,446 
Restricted stock units4,696,244  4,285,771 15,102 
Total anti-dilutive common share equivalents8,152,738 1,597,130 7,882,563 2,244,548 

4.Variable Interest Entities

Variable interest entities ("VIEs") are legal entities that either have an insufficient amount of equity at risk for the entity to finance its activities without additional subordinated financial support or, as a group, the holders of equity investment at risk lack the ability to direct the entity's activities that most significantly impact economic performance through voting or similar rights, or do not have the obligation to absorb the expected losses or the right to receive expected residual returns of the entity.

For all VIEs in which we are involved, we assess whether we are the primary beneficiary of the VIE on an ongoing basis. In circumstances where we have both the power to direct the activities that most significantly impact the VIEs performance and the obligation to absorb losses or the right to receive the benefits of the VIE that could be significant, we would conclude that we are the primary beneficiary of the VIE, and we consolidate the VIE. In situations where we are not deemed to be the primary beneficiary of the VIE, we do not consolidate the VIE and only recognize our interests in the VIE.

Consolidated VIEs

As part of the Company’s overall funding strategy, the Company transfers a pool of designated loans receivable to wholly owned special-purpose subsidiaries ("VIEs") to collateralize certain asset-backed financing transactions. For these VIEs where the Company has determined that it is the primary beneficiary because it has the power to direct the activities that most significantly impact the VIEs’ economic performance and the obligation to absorb the losses or the right to receive benefits from the VIEs that could potentially be significant to the VIEs the VIEs assets and related liabilities are consolidated with the results of the Company. Such power arises from the Company’s contractual right to service the loans receivable securing the VIEs’ asset-backed debt obligations. The Company has an obligation to absorb losses or the right to receive benefits that are potentially significant to the VIEs because it retains the residual interest of each asset-backed financing transaction in the form of an asset-backed certificate. Accordingly, the Company includes the VIEs’ assets, including the assets securing the financing transactions, and related liabilities in its condensed consolidated financial statements.

Each consolidated VIE issues a series of asset-backed securities that are supported by the cash flows arising from the loans receivable securing such debt. Cash inflows arising from such loans receivable are distributed monthly to the transaction’s lenders and related service providers in accordance with the transaction’s contractual priority of payments. The creditors of the VIEs above have no recourse to the general credit of the Company as the primary beneficiary of the VIEs and the liabilities of the VIEs can only be settled by the respective VIE’s assets. The Company retains the most subordinated economic interest in each financing transaction through its ownership of the respective residual interest in each VIE. The Company has no obligation to repurchase loans receivable that initially satisfied the financing transaction’s eligibility criteria but subsequently became delinquent or a defaulted loans receivable.

9


The following table represents the assets and liabilities of consolidated VIEs recorded on the Company’s Condensed Consolidated Balance Sheets (Unaudited):
September 30,December 31,
(in thousands)20222021
Consolidated VIE assets
Restricted cash$82,712 $41,803 
Loans receivable at fair value2,924,567 2,267,205 
Interest and fee receivable29,748 19,869 
Total VIE assets3,037,027 2,328,877 
Consolidated VIE liabilities
Secured financing (1)
368,000 398,000 
Asset-backed notes at fair value 2,238,331 1,651,706 
Acquisition financing (1)
104,764 116,000 
Total VIE liabilities$2,711,095 $2,165,706 
(1) Amounts exclude deferred financing costs. See Note 9, Borrowings for additional information.

5.Loans Held for Sale and Loans Sold

Structured Loan Sales - On March 31, 2022, the Company participated in a securitization whereby the Company and funds managed by Ellington Management Group both contributed collateral and were co-sponsors of the transaction, which totaled $400.0 million in issued asset-backed notes. As part of the securitization, the Company sold loans to OPTN Funding Grantor Trust 2022-1 ("Grantor Trust") through the issuance of amortizing asset-backed notes secured by a pool of its unsecured and secured personal installment loans. The Company also sold its share of the residual interest in the pool (collectively referred to as the "2022-1 transaction"). The Company's continued involvement in the unconsolidated VIEs is in the form of servicer of these loans. The Company does not have variable interest in the Grantor Trust or the issuer established for this transaction. The sold loans were accounted for under the fair value option and had an aggregate unpaid principal balance of approximately $227.6 million, a cumulative fair value mark of $15.9 million and unpaid interest of $1.5 million. The Company received $245.0 million of net proceeds and by selling both its notes and residual interest, the Company derecognized these loans from its Consolidated Balance Sheets.

Other Loan Sales - The Company enters into agreements to sell certain populations of its loans from time to time. The sold loans were accounted for under the fair value option. In April 2022, the Company sold loans that had an aggregate unpaid principal balance, including unpaid interest and fees, of approximately $16.3 million, and a cumulative fair value mark of $(14.1) million. The Company received $2.2 million of net proceeds (the "Q2 2022 Loan Sale"). During the third quarter of 2022, the Company sold loans that had an aggregate unpaid principal balance, including unpaid interest and fees, of approximately $22.2 million and a cumulative fair value mark of $(21.1) million. The Company received $0.7 million of net proceeds and has recorded a receivable of $0.4 million in Other assets on the Condensed Consolidated Balance Sheets (Unaudited) as of September 30, 2022 (the "Q3 2022 Loan Sales"). The loan sales qualified for sale accounting treatment and the Company derecognized these loans from its Consolidated Balance Sheets at the end of the quarter in which the loans were sold.

Whole Loan Sale Program In November 2014, the Company entered into a whole loan sale agreement with an institutional investor. Pursuant to the agreement, the Company sold at least 10% of its unsecured loan originations, with an option to sell an additional 5%, subject to certain eligibility criteria and minimum and maximum volumes. The Company chose not to renew the arrangement and allowed the agreement to expire on its terms on March 4, 2022.

The originations of loans sold and held for sale during the three months ended September 30, 2022 was insignificant. Servicing revenue during the same time period was $5.3 million. The gain on sale recorded during the three months ended September 30, 2022 was insignificant as a result of our whole loan sale agreement expiring on March 4, 2022. The originations of loans sold and held for sale during the three months ended September 30, 2021 was $61.3 million and the Company recorded a gain on sale of $7.3 million and servicing revenue of $3.3 million.

The originations of loans sold and held for sale during the nine months ended September 30, 2022 related to our loan sale program was $50.6 million and the Company recorded a gain on sale of $5.7 million and servicing revenue of $15.5 million. The originations of loans sold and held for sale during the nine months ended September 30, 2021 was $136.3 million and the Company recorded a gain on sale of $17.1 million and servicing revenue of $9.3 million.

6.Acquisition

On December 22, 2021, the Company completed its acquisition of Hello Digit, Inc. (or "Digit"). Digit is a digital banking platform that provides automated savings, banking and investing tools. Digit members can keep and integrate their existing bank accounts into the platform, or they can make Digit their primary banking relationship by opening new accounts via Digit’s bank partner. By acquiring Digit, Oportun further expanded its A.I. and digital banking capabilities, adding to its services to provide its members a holistic offering built to address their financial needs. The total consideration the Company provided for Digit, which consisted of cash and equity, was approximately $205.3 million.

The Company recognized acquisition and integration related costs of approximately $8.1 million in the three months ended September 30, 2022 and $22.4 million in the nine months ended September 30, 2022 which are included in the General, administrative and other expense in the Condensed Consolidated Statements of Operations (Unaudited).
10



7.
Capitalized Software, Other Intangibles and Goodwill

Capitalized software, net consists of the following:

September 30,December 31,
(in thousands)20222021
Capitalized software, net:
System development costs$122,998 $84,550 
Acquired developed technology48,500 48,500 
Less: Accumulated amortization(70,104)(45,433)
Total capitalized software, net$101,394 $87,617 

Capitalized software, net

Amortization of system development costs and acquired developed technology for three months ended September 30, 2022 and 2021 was $9.0 million and $4.4 million, respectively. System development costs capitalized in the three months ended September 30, 2022 and 2021 were $13.8 million and $7.5 million, respectively.

Amortization of system development costs and acquired developed technology for nine months ended September 30, 2022 and 2021 was $24.7 million and $11.7 million, respectively. System development costs capitalized in the nine months ended September 30, 2022 and 2021 were $39.2 million and $19.9 million, respectively.

Acquired developed technology was $48.5 million and is related to the acquisition of Digit on December 22, 2021.

Intangible Assets

The gross carrying amount and accumulated amortization, in total and by major intangible asset class are as follows:

September 30,December 31,
(in thousands)20222021
Intangible assets:
Member relationships$34,500 $34,500 
Trademarks6,426 6,364 
Other3,000 3,000 
Less: Accumulated amortization(6,251)(300)
Total intangible assets, net$37,675 $43,564 

Amortization of intangible assets for the three months ended September 30, 2022 was $2.0 million. There were no intangible assets subject to amortization for the three months ended September 30, 2021.

Amortization of intangible assets for the nine months ended September 30, 2022 was $6.0 million. There were no intangible assets subject to amortization for the nine months ended September 30, 2021.

Expected future amortization expense for intangible assets as of September 30, 2022 is as follows:

(in thousands)Fiscal Years
2022 (remaining three months)$(1,998)
2023
(7,950)
2024(7,798)
2025(4,929)
2026(4,929)
2027(4,929)
Thereafter(4,780)
Total
$(37,313)

Goodwill

The Company recorded goodwill of $104.0 million arising from the acquisition of Digit on December 22, 2021. The Company recorded increases to goodwill of $4.3 million and $4.5 million, during the three and nine months ended September 30, 2022, respectively, as part of the
11


twelve-month measurement period. These increases were primarily due to changes in deferred taxes resulting from the filing of Digit's pre-acquisition tax returns.

Goodwill represents the difference between the purchase price and the estimated fair value of identifiable assets acquired and liabilities assumed. The Company performs impairment tests related to its goodwill on an annual basis or when certain triggering events or circumstances are identified that would more likely than not reduce the estimated fair value of the goodwill below its carrying amount.

In response to a sustained decline in the Company’s share price primarily driven by macroeconomic conditions, the Company conducted a quantitative test of its goodwill as of September 30, 2022. The Company considered the income approach, the guideline public company multiples approach and the market approach in determining a fair value for the Company which was determined to be the only reporting unit for purposes of testing the goodwill. Given the uncertain macroeconomic environment there was a wide range of indications of fair value across the approaches. Although the corresponding value was the lowest in the range, the Company utilized the market approach because it was based on market observable inputs. The market approach estimates fair value using the market capitalization of the Company as a basis.

As of September 30, 2022, the market capitalization plus the estimated control premium was less than the carrying value of the Company. As a result, the Company recognized a non-cash pre-tax impairment charge of $108.5 million during the three and nine months ended September 30, 2022 to write down the carrying value of goodwill. The non-cash impairment charge is included in Goodwill impairment in the Condensed Consolidated Statements of Operations (Unaudited) for the three and nine months ended September 30, 2022. There were no goodwill impairment charges during the three and nine months ended September 30, 2021 because the Company did not have a goodwill balance as of September 30, 2021.

The following table represents the changes in goodwill since December 31, 2021:

(in thousands)Goodwill
Balance as of December 31, 2021$104,014 
Measurement adjustments during period
4,458 
Impairment(108,472)
Balance as of September 30, 2022
$ 

8.Other Assets

Other assets consist of the following:
September 30,December 31,
(in thousands)20222021
Fixed assets
Total fixed assets$45,794 $44,100 
Less: Accumulated depreciation(36,352)(34,185)
Total fixed assets, net$9,442 $9,915 
Other Assets
Loans held for sale42 491 
Prepaid expenses25,057 25,355 
Deferred tax assets1,869 3,923 
Current tax assets17,978 13,330 
Other20,311 19,330 
Total other assets$74,699 $72,344 

Fixed Assets

Depreciation and amortization expense for the three months ended September 30, 2022 and 2021 was $1.3 million and $1.3 million, respectively, and for the nine months ended September 30, 2022 and 2021 it was $3.8 million, and $8.7 million, respectively.

12


9.Borrowings

The following table presents information regarding the Company's Secured Financing facilities:

September 30, 2022December 31, 2021
Variable Interest EntityFacility Amount
Maturity Date (1)
Interest RateBalanceBalance
(in thousands)
Oportun CCW Trust (1)
$150,000 December 1, 2023
Variable (1)
$76,456 $40,108 
Oportun PLW Trust600,000 September 1, 2024
LIBOR (minimum of 0.00%) + 2.17%
288,691 353,781 
Total secured financing$750,000 $365,147 $393,889 
(1) The interest rate on the Secured Financing - CCW facility is LIBOR (minimum of 1.00%) plus 6.00% on the first $18.8 million of principal outstanding and LIBOR (minimum of 0.00%) plus 3.41% on the remaining outstanding principal balance.

The following table presents information regarding asset-backed notes:
September 30, 2022
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 (4)
(in thousands)
Asset-backed notes recorded at fair value:
Oportun Issuance Trust (Series 2022-2)$400,000 $410,212